IRS Unveils Initiative to Solve Processing Problems

BY MICHAEL LYNCH

The IRS announced that, beginning with the 2001 filing season, taxpayers will be able to check off a box on form 1040 and designate a paid individual tax return preparer to resolve processing-related issues. IR 2000–23 says the designee will be able to speak directly to IRS customer service representatives to resolve issues. The preparer’s authority will be limited to matters arising during the processing of a specific return, such as math error notices and information about payments and refunds. Currently, practitioners (attorneys, CPAs and enrolled agents) and other paid preparers need a power of attorney (form 2848) in order to discuss any tax return problems with the service.

According to the IRS, approximately 8 million pieces of correspondence regarding processing problems are sent out annually to taxpayers during tax season. With the introduction of the “checkbox initiative,” it expects it can resolve 90% of these issues through telephone contact with the paid preparers.

This new system does not eliminate the need for a taxpayer to sign form 2848. A power of attorney will still be required for examination matters, underreported income, appeals and collection notices.

In the future, the IRS hopes to expand the program to cover taxpayers—whether small business owners or the poor, elderly or non-English-speaking—who now rely on relatives to prepare their returns.

—Michael Lynch, Esq., professor of tax accounting
at Bryant College, Smithfield, Rhode Island.

SPONSORED REPORT

Year-end tax planning and what’s new for 2016

Practitioners need to consider several tax planning opportunities to review with their clients before the end of the year. This report offers strategies for individuals and businesses, as well as recent federal tax law changes affecting this year’s tax returns.

QUIZ

News quiz: IRS warning on cyberattacks and a change in pension rules

Once again, the IRS sounds the alarm about a threat from cyberthieves. See how much you know about this and other recent news with this short quiz.

CHECKLIST

Bolster your data defenses

As you weather the dog days of summer, it’s a good time to make sure your cybersecurity structure can stand up to the heat of external and internal threats. Here are six steps to help shore up your systems.