IMRS Hot Issues



First Friday Hot Issues Summary – January 10, 2014

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Follow-ups from prior issues:

S-Corp Extension Forms Not Processed

Issue: S-Corp extension forms 7004 were not accepted if the election is coming with the initial tax return (Simplified method for late S corporation election Rev Proc2013-30)

Response: Until Form 2553 has been received an approved, the business is considered a Form 1120 filer. Attempting to file an extension for an 1120S before the election is made may be the source of the problem.

Action: Please let us know:

▪ How often you hear of this problem

▪ If you have the problem even though you requested an extension for Form 1120 (not 1120S)

We need to know the exact nature of the problem and how pervasive it is to determine our course of action.

How to Report Phishing Attempts

Issue: Practitioner received a contact from someone purporting to be from the IRS. The situation did not appear to be legitimate and they wanted to know how to report the instance.

Response: Information on what to do when a suspicious IRS-related communication is received can be found on under Report Phishing (search term phishing). The chart includes information on what to do under various circumstances and even includes resources for non-IRS suspicious emails.

Status: Closed.

2014 Changes to Practitioner Priority Services

Effective January 6, 2014, the IRS will limit Practitioner Priority Service to responding only to requests from tax professionals who are actively working with their clients to resolve tax account issues. We will no longer be able to respond to account information requests from tax practitioners or other third parties for non-tax matters, such as transcript requests for monitoring client financial history, made via our live telephone applications. Please see the Practitioner Priority Service ® page on for more information.

An overview of the taxpayer service changes for the 2014 filing season can be found on

To find hours of operation and services provided at your local Taxpayer Assistance Office click on "Services Provided" before you go. To find your local office go to Contact Your Local IRS Office on under Help & Resources.

Form 944 Filing Requirement

Issue: Practitioner is working with a business that has a Form 944 filing requirement even though their payroll liability is in excess of the limit for this program. How can the filing requirement be changed?

Response You must file Form 944 if the IRS has notified you to do so, unless you contact the IRS to request to file quarterly and received written confirmation that your filing requirement was changed. You must file Form 944 even if you have no taxes to report (or you have taxes in excess of $1,000 to report) unless you filed a final return.

To request a change in the filing requirement for the current calendar year you must make the request by either calling the IRS by April 1 of the current year, or by sending a written request, postmarked by March 15 of the current year. Contact information is in the Instructions for Form 944.

The IRS will send a written notice that the filing requirement has been changed. If you do not receive this notice, you must file Form 944 for the current calendar year. See Rev. Proc. 2009-51, 2009-45 I.R.B. 625, for additional information.

Status: Closed.

New Issues:

Processing Powers of Attorney (Two Issues)

Issue: When Disclosure Authorization was discontinued last summer, we heard the Service was working to replace it with a better online solution. Is there an update on when the new application will be available or do authorizations still need to be submitted either by fax or by mail?

Response: We have not received an update on any new applications for submitting authorizations. Form 2848 and 8821 must be submitted either by fax or by mail.

Status: Closed.

Issue: How long is it taking to input the authorizations to the Centralized Authorization File?

Response: Authorizations are processed first in first out within 10 calendar days of receipt in the CAF Unit.

There are five essential elements for Forms 2848 and 8821 which can be found in IRM 21.3.7.5.1 – Form 2848, Power of Attorney and Declaration of Representative and Form 8821, Taxpayer Information Authorization Overview. In most cases, if one of the essential elements is not present, the authorization must be returned to the taxpayer (not the representative). When an authorization is returned, the Customer Service Representative inputs an issue to Accounts Management Services on the taxpayers account with a brief explanation of why the form was rejected. If the taxpayer calls the appropriate toll-free number the CSR can provide them with the explanation. (The representative cannot do this as they do not have a valid authorization.)

Status: Closed.

Processing Amended Returns

Issue: It seems to be taking longer to process amended returns.

Response: As a result of the significant increase in the number of amended returns filed this year. The IRS has extended the normal 8 to 12 weeks processing time to 16 weeks. We apologize for any inconvenience this may cause. You can use Where's My Amended Return? to follow the status of Form 1040X for the current year and up to three prior tax years. Be advised, it can take up to 3 weeks from the date you mailed it to show up in our system. IRS telephone assistors will not be able to provide additional information while your amended return moves through processing.

There is no need to call our toll-free number unless “Where’s My Amended Return?” specifically indicates that you should call.

Status: Closed.

Installment Agreement Confirmations Not Sent to Representative

Issue: Copies of Letter 3217C, Installment Agreement Accepted: Terms Explained and Letter 1962C, Installment Agreement Reply to Taxpayer are not automatically being sent to the taxpayer’s POA.

Action: We will research this to determine the current procedures and how to proceed.

Certified Volunteers

Issue: VITA and TCE volunteers are referred to as IRS-certified. Circular 230 § 10.30 Solicitation specifically prohibits Enrolled Agents from using the term “certified.” Examples of acceptable descriptions for enrolled agents are “enrolled to represent taxpayers before the Internal Revenue Service,” “enrolled to practice before the Internal Revenue Service,” and “admitted to practice before the Internal Revenue Service.” This makes it appear that VITA volunteers are more qualified than Enrolled Agents to handle tax preparation.

Action: Thank you for your comment, we will raise the issue.

Notice Related to Form 1099-K

Issue: Client received a notice questioning whether all Merchant Card and Third Party network transactions were properly reported on the return. This was not designated an examination. It was very time-consuming and frustrating to resolve.

Response: Information on New Notices Related to Form 1099-K can be found on the Third Party Reporting Information Center - Information Documents site.

Action: We will elevate your concerns.

Small Business/Self-Employed Division Leadership

Question: Who will be taking over as Commissioner of SBSE now that Faris Fink has retired?

Response: Karen Schiller will replace Faris Fink as the new commissioner and Mary Beth Murphy will become the new deputy commissioner.

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