Tax ethics and standards

Mandatory language for consents to disclose, use taxpayer information modified

In Rev. Proc. 2013-14, the IRS has provided guidance to tax return preparers about the format and content of taxpayer consents to disclose and consents to use tax return information and modified the mandatory language required on each taxpayer consent. The guidance applies to individuals filing a return in the

Rules on use, disclosure of taxpayer information finalized

The IRS on Wednesday issued final regulations under Sec. 7216 that govern the circumstances in which tax return preparers can disclose or use certain limited tax return information (T.D. 9608). The regulations finalize with minor changes rules that were issued in 2010 as temporary and proposed regulations (T.D. 9478 and

Managing public PTIN information

Once the IRS began requiring tax return preparers to register and obtain preparer tax identification numbers (PTINs), third parties began requesting their registration information because much of the information was subject to public release under the Freedom of Information Act (FOIA). These third parties have in some cases published this

IRS proposes changes to Circular 230 rules governing written tax advice

On Friday, the IRS released proposed regulations that would eliminate the complex rules in Circular 230 governing covered opinions (REG-138367-06). To replace the covered opinion rules, the proposed regulations would expand the requirements for written advice under Circular 230, Section 10.37. The proposed regulations would also make several other changes

TIGTA: IRS encourages employees to ignore ITIN fraud

The Treasury Inspector General for Tax Administration (TIGTA) released a report on Wednesday in which it confirmed allegations from IRS employees that their supervisors were urging them to ignore potential fraud in a program that reviews and verifies applications for individual taxpayer identification numbers (ITINs) (TIGTA Rep’t No. 2012-42-081). ITINs

Eleventh Circuit says PTIN user fees are valid

The Eleventh Circuit held that the fee the IRS charges to issue preparer tax identification numbers (PTINs) to tax return preparers, who are required to use the PTINs on returns they prepare, is valid because the PTIN confers a special benefit on the preparers: the privilege to prepare tax returns

The reach of Circular 230

While discussions about Circular 230 usually focus on the standards it imposes relating to tax returns and opinions, the breadth and scope of Circular 230 also affects day-to-day business operations of tax practitioners relating to fees, client solicitations, marketing and advertising, and the management of client files and records. A

Preparer fingerprinting delayed

The IRS will delay and reconsider its fingerprinting requirement for tax return preparers, IRS Commissioner Doug Shulman told the AICPA National Tax Conference in November. “We have decided to hold off fingerprinting while we consider issues that have been raised and have further discussions with interested parties,” Shulman said during

IRS: Tax preparers who want to prepare 2011 returns must renew PTINs

The IRS is sending information letters to tax return preparers who have not yet renewed their preparer tax identification numbers (PTINs) for the 2012 filing season. (The IRS system was, at this writing, not able to issue new PTINs.) The IRS started sending the letters last week and will continue

Taxpayer advocate cites underfunding as cause of IRS’ most serious problems

The national taxpayer advocate, Nina Olson, in her annual report to Congress for 2011, cited the IRS’ lack of adequate funding, expanding workload and overreliance on automation as the most serious problems facing taxpayers. She said that, as a result, the IRS cannot adequately meet the needs of taxpayers, cannot

IRS PTIN system continues to accept 2011 renewals

The IRS online system to apply for a new preparer tax identification number (PTIN) is back up and running after a two-week hiatus for maintenance. In addition, the system is continuing to accept 2011 PTIN renewals even though the Dec. 31, 2011, renewal deadline has passed. The IRS has also

IRS audits of small business software files

Tax practitioners have always been cautious with the records they provide to the IRS in an audit to control the depth of an IRS inquiry. But IRS agents are starting to request client backup files from small business accounting software such as QuickBooks and Peachtree, and many practitioners are concerned

New law, proposed regs heighten EITC preparer due diligence

The Sec. 6695(g) penalty for failure by preparers to exercise due diligence with respect to the earned income tax credit (EITC) increased from $100 to $500 effective for returns required to be filed after Dec. 31, 2011. The measure was enacted in late October as part of the U.S.-Korea Free

PTIN procedures detailed

Update: Since this item was published, the IRS started accepting renewals after the Dec. 31 deadline. See “IRS PTIN system continues to accept 2011 renewals,” Jan. 10, 2012. Return preparers who needed to renew their preparer tax identification number (PTIN) for the 2012 tax preparation season should have done so

Shulman Announces Delay in Fingerprinting Requirement

The IRS will delay and reconsider its fingerprinting requirement for tax return preparers, IRS Commissioner Doug Shulman told the AICPA National Tax Conference on Tuesday. “We have decided to hold off fingerprinting while we consider issues that have been raised and have further discussions with interested parties,” Shulman said during

PTIN System Opens for 2012 Renewals

The IRS on Thursday announced that it has opened its preparer tax identification number (PTIN) registration system to accept renewals for the 2012 filing season (IR-2011-105). Preparers are required to renew their PTINs annually and must do so before Jan. 1, 2012. Among the changes this year, CPAs will be

Practitioners Raise Concerns About Fingerprinting Proposal at IRS Hearing

The IRS heard a consistent chorus at a hearing Friday on proposed fees (REG-116284-11) for fingerprinting of registered tax return preparers and nonsigning staff at CPA firms: The IRS’ proposal is duplicative, expensive and can be done in a better way. The fees, estimated to cost $60 to $90 per

Client Tax Fraud and the CPA

Your client just called and left the following message: “I answered the door at my home today, and an agent who said he was from the IRS Criminal Investigation Division wanted to ask me some questions. What should I do?” While you may never get a call from a client

IRS Finalizes Circular 230 Regulations

The IRS issued final regulations (TD 9527) implementing components of its initiative to register and regulate all paid tax return preparers. The regulations, which finalized proposed regulations issued in August 2010 (REG-138637-07) revise Circular 230. Paid preparers of all or substantially all of certain tax returns and claims for refunds

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How tax reform will impact individual taxpayers

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