January 20, 2012

Also in This Issue . . .

  • e-File for Individuals Reopened After Unscheduled Maintenance
  • IRS Mission Creep Becoming Unmanageable?
  • Concern Grows Over Proposed National Internet Sales Tax Legislation
  • Congress Mulls Action on Disclosures of Tax Information
  • Never Underestimate the Value of Quality Customer Service
  • Fees for EA Exam Increase in 2012
  • EA Renewal Update
  • RTRP Testing Ongoing; Testing Sites to Expand
  • Important PTIN Reminders
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Here’s Some Social Security Info for Those Retiree Inquiries!

by Jon A. Hayes, TaxPreparerConnections.com

We know you’re starting to get those important questions from clients on retirement, and we’ve got a great download for you in today’s newsletter:

Social Security Information for 2012!

Here’s some quick overview information to go along with that download:

— Don’t send a client into a local Social Security Office unless the issue is very important or dire. The best way to initiate contact is by calling the toll free national number at 1-800-772-1213. Operators are on duty from 7 a.m. until 7 p.m. on business days.

If a client has to visit a local Social Security Office, their normal hours are 9 a.m. to 3 p.m. Monday through Thursday. Select offices may be open on Fridays.

— the Social Security Office website at www.socialsecurity.gov is the best source for information. The handout shows various areas on the site with important information you can quickly navigate to if a client has questions you can’t quickly answer.

Finally, here is a list of Social Security’s Employer Liaison Officers and their contact information (the list is also included in the downloadable handout):

Boston – CT, ME, MA, NH, RI, VT
Regina Bachini @ 617-565-2895
fax 617-565-4814

New York – NJ, NY, PR, VI
Tyrone Benefield @ 212-264-1117
fax 212-264-2071

Philadelphia – DE, DC, MD, PA, VA, WV
Frank O’Brien @ 215-597-4632
fax 215-597-2989

Atlanta – AL, FL, GA, KY, MS, NC, SC, TN
Kirk Jockwell @ 404-562-1315
fax 404-562-1313

Chicago – IL, IN, MI, MN, OH, WI
Paul Dieterle and Patricia Hayes @ 312-575-4244
fax 312-575-4245
paul.dieterle@ssa.gov   patricia.a.hayes@ssa.gov

Kansas City – IA, KS, MO, NE
Kelli Chappelow @ 816-936-5657
fax 816-936-5951

Denver – CO, MT, ND, SD, UT, WY
Carolyn Sykes @ 303-844-2364
fax 303-844-7320

Dallas – AR, LA, NM, OK, TX
Debbie Forsythe @ 866-592-2802 x11213

San Francisco – AZ, CA, GU, HI, NV, AS
Ray Arquero @ 510-970-8247
fax 510-970-8101

Seattle – AK, ID, OR, WA
Tim Beard @206-615-2125
fax 206-615-2643

Tax News . . .

IRS e–File System for Individuals Reopened After Unscheduled Maintenance

The IRS e-file system for individuals is now operating at 100 percent after initially coming back on line on January 17 and experiencing lengthly upload delays after accepting individual and business returns. The system was taken off line without notification on January 18 to fix the problems and returned again to full function on January 19. The IRS admits to not notifying the public of the January 18 action and vows to better communicate information in the future.

IRS “Mission Creep” Becoming Unmanageable?

As we reported last week, National Taxpayer Advocate Nina Olson delivered her annual report to Congress on the IRS and warned of growing problems with an increase in electronic services to take up the growing void in customer service caused by IRS budget cuts.

This week, the IRS began offering qualified employees a $25,000 cash bonus if they accept an early retirement offer. The goal is to entice 400 workers to do so. Some members of Congress are questioning the action while stopping short of saying they should re-visit the adopted cuts. Others are worried that the IRS will have additional duties dumped into its lap as President Obama begins consolidating and eliminating various government departments and bureaucracies to draw down debt.

Why decrease the workforce that generates the revenues for government to operate? Wouldn’t it be smarter to increase that workforce to insure all revenues (taxes) are paid?

Commander Spock of Star Trek fame would probably say, “Humans are an illogical species.”

Related article of interest: GAO Finds IRS Needs More Self-Service Tax Tools

Concern Grows Over Proposed National Internet Sales Tax Legislation

A new bill making its way through Congress has the potential to change the world of e-commerce quite drastically and hurt the viability of small businesses across the country to compete in a growing sector of our economy.

Currently, online sellers are required to charge sales tax when the end customer resides in a state in which the retailer has a physical presence, or “nexus.” The Marketplace Fairness Act aims to change that. If passed, this law would require online sellers to charge sales tax regardless of where they have a physical presence.

Supporters of this bill are working under the premise that virtual e-commerce retailers, like Amazon, have an unfair advantage over local mom-and-pop shops because they can sell products in many states without charging sales tax. (Technically, the end customers are supposed to report and pay “use tax” on these items, but less than 1 percent actually do.)

What this argument misses is that there are millions of small businesses that sell on these major e-commerce Web sites, in addition their own Web sites. It certainly is fair to require them to charge sales tax in their own state, just as small businesses on Main Street are required to do. What isn’t fair is to make them manage, track, collect and then remit sales tax for thousands of local jurisdictions that have different rules and regulations.

A business on Main Street can easily manage its sales tax because it only needs to learn the local regulations. But an online small business would have tens of thousands of different rates that they might need to charge depending on the jurisdiction of the buyer and what they bought. Read More

Congress Mulls Disclosures of Tax Information

The Government Accountability Office has provided Congress with a guide for screening and assessing proposals to disclose confidential tax information to specific parties for certain purposes.

The GAO report, which was drawn up for Sen. Max Baucus, D-Mont., the chairman of the Senate Finance Committee, and Sen. Charles Grassley, R-Iowa, the ranking Republican member of the Senate Judiciary Committee, noted that the Internal Revenue Service receives a great deal of personal information about individuals and businesses.

“While taxpayers are required to provide this information to IRS under penalty of fine or imprisonment, confidentiality of information reported to IRS is widely held to be a critical element of taxpayers’ willingness to provide information to IRS and comply with the tax laws,” said the report. “As a general rule, anything reported to IRS is held in strict confidence.” Read More

Practice Builder Tips

Five Keys to Successful Customer Service

by Joanne Hayes, Tax Preparer Connections

You can work hard to bring new customers in the door, but if you are not giving them a quality product and good customer service, they won’t stay. The essence of good customer service is forming a relationship with customers – a relationship that that individual customer feels that he would like to pursue.

When it comes to preparing taxes that relationship is very important. Your customer needs to know they can trust you and rely on you. And when they have confidence in you, they are more apt to refer you, which brings in more business.

People want to feel heard, important and appreciated. Here are 5 key ways you can make your clients feel like they are getting the best tax service out there.

1. Don’t make promises you can’t keep

If you let your client know you will have something ready for them by Thursday, have it ready by Thursday.

It’s easy to promise the world up front because you want to please your client. But that can get you in trouble. Nothing annoys people more than a broken promise, no matter what your excuse is.

Instead tell them you’ll have it ready by Friday, but try and get it ready for Thursday. That way if something comes up, you have some room to still meet your deadline. But if you finish early and let them know it’s ready early, you have over delivered on your promise. Read More

Here are some great practice builder and management articles we’ve run this fall that can help you better manage the upcoming tax season:

Early Season Tax Letter to Clients
(PDF Sample Only)

Early Season Tax Letter to Clients
(Text File copy & paste)

Using Engagement Letters

Dealing with Collections: Get Paid!

Yearend 1040 Client Letter

‘Must Ask’ 1040 Interview Questions

Checklist: Preparing for an IRS Audit

Tax Preparer Regulation

Fee for EA Exam Increased

Effective for 2012, the fee to take the Special Enrollment Examination to become an EA has increased from $101 to $105 per part.

EA Renewal Update

All correct and complete Form 8554 for renewals with SSNs ending in four, five or six that were submitted before November 28, 2011, have been processed and cards issued. All remaining Forms 8554 require further research. The Return Preparer Office (RPO) will begin processing renewals for SSNs ending in seven, eight, nine or none no later than January 30, 2012.

RPO is also working to process new applications on Form 23. The new applications inventory should be current and back to the normal 60-day response time by January 30, 2012.

RTRP Testing Ongoing; Site Expansion Coming

Hundreds of tax preparers have taken the RTRP exam and a substantial number of others are scheduled to take the test in the upcoming weeks.

The beta phase of the exam is expected to be complete by March. This means, the IRS expects to provide test scores to those who have already tested and will begin to implement same-day results by approximately March.

With the test moving out of the beta phase, an additional 30 testing sites should be open in the next few weeks.

IRS Extends PTIN Renewals Deadline

While all Preparer Tax Identification Numbers from last tax season expired on December 31, the Internal Revenue Service said its PTIN system would continue to accept renewals after the 12-31 deadline.

The IRS said that anyone who has experienced technical difficulties attempting to renew should review these online troubleshooting tips. In January, the IRS plans to send additional guidance to individuals with expired PTINs.

PTIN System Outage for 1st Time Applicants

The Preparer Tax Identification Number system is not available for new PTIN applications until January 9, 2012 at 9:00 a.m. The system outage does not affect existing PTIN holders wishing to renew for 2012.

First-time PTIN applicants should click here for directions on applying while the online system is down.

PTIN Renewal Continues
Click Here to Register or Renew Your PTIN

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