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Thursday, July 24, 2014

Customer Care- closing at 5pm Thursday for a company event

The Customer Care department will close today (Thursday July 24th) at 5pm for a company event.
We re-open at 8am Friday.

Monday, July 21, 2014

Get Up-To-Date with our CCH ACA Webinar

ACA Webinars at a reduced price
Like it or not, the Affordable Care Act (ACA) will impact your clients, both individuals and businesses. As their trusted advisor on tax matters, are you prepared to ensure compliance? Don't let your clients be surprised by ACA penalties on their income tax. Learn what you need to know to advise your clients now to help them avoid the penalties and consequences of the Affordable Care Act. 

The next ACA webinar is coming up on Friday, July 18 and covers the individual and employee mandates. 

Learn more about CCH ACA Webinars
Register for the July 18 ACA Webinar
The next Bookkeeping Webinar Series starts in September
Do you want to increase revenue and the professional services you offer? We can help. Through a partnership with theAmerican Institute of Professional Bookkeepers (AIPB), the SFS Education team is offering a series of webinars that covers all aspects of bookkeeping and prepares participants to take the Certified Bookkeeper exam. Learn more

Visit Us at a Trade Show
We are participating in a variety of professional shows this summer, in addition to IRS Tax Forums. At both NATP Tax Forum & Expos in September, SFS Vice Presidents Kerri Gibson and Shannon Bond will present "Common Sense Marketing." Come join us.Professional Show Schedule
Complimentary TaxWise Software Webinars
Do you need current training on your TaxWise software? We are offering a series of free webinars during the summer. Click the link below to view available webinars, dates and times. Register Here
Get certified to represent your clients before the IRS. 
Learn more

IRS Maintenance July 20th weekend

CCH SFS continued receiving efiles this past weekend, but held them Friday 6pm thru Monday morning, July 21st.  We will resume sending to IRS Monday morning, once we confirm they are ready to receive.

a portion of the IRS Quick Alert is shown below:

The MeF Sunday maintenance build window is being extended on Sunday, July 20, 2014. The system will be unavailable from 1:00 a.m. until 9:00 a.m., Eastern. The build will deploy critical system updates. This extended window impacts the MeF Production and ATS Environments.

CCH Weekly Report from Washington, D.C.,(Jul. 21, 2014)

In a flurry of activity during the week of July 14, the House approved legislation that would: provide tax incentives to boost charitable giving in the U.S.; fund the Treasury, IRS and other government agencies and provide a short-term fix to finance the Highway Trust Fund. Senators, meanwhile, responded to Treasury correspondence regarding the growing trend of corporate inversions and also asked for the Treasury’s assistance in providing tax relief for money market funds before the Securities and Exchange Commission (SEC) establishes rules requiring certain mutual funds to adopt a floating net asset value (NAV). Meanwhile, the IRS issued regulations regarding mixed straddles, information reporting for passport applicants and the allocation and apportionment of interest expense by corporations that own a 10-percent or greater interest in a partnership.


House. The House passed legislation on July 17 that would provide tax incentives to boost charitable giving in the U.S. (TAXDAY, 2014/07/18, C.1). By a vote of 277 to 130, lawmakers approved the America Gives More Bill (HR 4719), introduced by House Ways and Means Committee Rep. Jack Reed, R-N.Y. The bill, estimated to lower federal revenues by $16.2 billion over the 2014-2024 period, combines five separate tax bills.

Deputy Attorney General James Cole told the House Oversight and Government Reform Subcommittee on Economic Growth, Job Creation, and Regulatory Affairs on July 17 that the Department of Justice’s (DOJ) investigation into the IRS’s mishandling of applications for tax-exempt status is ongoing (TAXDAY, 2014/07/18, C.3). Cole did not give details of the DOJ probe, citing the need to protect continuing law enforcement activities and the department’s desire not to prejudice potential witnesses.

House lawmakers on July 16 completed three days of debate on and amendments to the Financial Services and General Government Appropriations Bill, 2015 (HR 5016) (TAXDAY, 2014/07/17, C.1). The measure, approved by lawmakers in a 228-to-195 vote, provides $21.3 billion in annual funding for the Treasury Department, the Judiciary, the Small Business Administration, the Securities and Exchange Commission and several other agencies. Lawmakers approved several amendments to limit funding for the IRS.

A short-term patch to finance the federal Highway Trust Fund (HTF) was approved by the House on July 15 by a vote of 367 to 55 (TAXDAY, 2014/07/16, C.1). The House passed the Highway and Transportation Funding Bill of 2014 (HR 5021), which would provide funding through May 2015, paid for by provisions affecting pensions, customs user fees and transfers of revenue from other federal trust funds. Ways and Means member Earl Blumenauer, D-Ore., failed to win House approval for a plan to extend the HTF only until December 2014, thereby forcing Congress to address the issue at a faster pace.

Senate. Sen. Michael F. Bennet, D-Colo., and Rep. Ed Perlmutter, D-Colo., on July 11 urged the IRS to waive a 10-percent penalty for paying federal withholding taxes in cash for marijuana sales businesses because they cannot use banks for their business receipts (TAXDAY, 2014/07/15, C.1). In a letter to IRS Commissioner John Koskinen signed by both lawmakers, the lawmakers noted that cannabis retailers have little choice in the matter because banks refuse to do business with them.

The Senate Finance Committee on July 15 considered the nomination of Cary Pugh to be a judge on the U.S. Tax Court (TAXDAY, 2014/07/17, C.2). Pugh, a former IRS employee and member of the Finance Committee Democratic tax staff, is expected to receive swift approval. Ranking member Orrin G. Hatch, R-Utah, said Pugh developed a reputation as a problem solver, accomplishing much in the legislative arena in a relatively short period of time.

Senate lawmakers are pressing the Treasury Department to provide tax relief for money market funds before the SEC establishes rules requiring certain mutual funds to adopt a floating NAV (TAXDAY, 2014/07/18, C.4). Two Democratic senators said they have heard concerns that, under current law, the tax recordkeeping costs of a floating NAV could deter investors from using institutional money market mutual funds for cash management.

The Senate Foreign Relations Committee on July 16 approved tax treaties with Spain and Poland, and Committee Chairman Robert Menendez, D-N.J., said he plans to take the tax protocols to the Senate for ratification (TAXDAY, 2014/07/18, C.2). However, an aide to Sen. Rand Paul, R-Ky., said that Paul plans to block their approval as he has done recently with five other tax treaties. Paul, who has blocked tax treaties with foreign countries for the past four years, opposes their ratification because he believes they would lead to allowing the IRS to share information of customers at U.S. banks with foreign countries.


Corporate Inversions. Congressional correspondence focused on the issue of how to stop corporate inversions. Treasury Secretary Jack Lew wrote to the House and Senate leadership asking that lawmakers take action to prevent the growing trend of corporate inversions (TAXDAY, 2014/07/17, T.1). In addition, Sen. Charles E. Grassley, R-Iowa, received a response from the Treasury Department regarding his request asking the Treasury to complete a study of corporate inversions mandated by lawmakers 10 years earlier (TAXDAY, 2014/07/17, T.2). In a letter dated July 14, Treasury Assistant Secretary for Legislative Affairs Alastair Fitzpayne informed Grassley that it was necessary for the Treasury Department to finalize regulations under Code Sec. 7874 before undertaking the study.

FATCA. The Treasury has posted to its website two jurisdictions that have reached agreements in substance on Model 1 FATCA agreements (TAXDAY, 2014/07/14, T.1). Those jurisdictions are Anguilla and Uzbekistan.


August 2014 AFRs. The IRS has provided various prescribed rates for federal income tax purposes for August 2014 (Rev. Rul. 2014-19; TAXDAY, 2014/07/21, I.4).

Research Expenditures. Final regulations were adopted that amend the definition of "research and experimental expenditures" under Code Sec. 174 (T.D. 9680; TAXDAY, 2014/07/21, I.1). In particular, these final regulations provide guidance on the treatment of amounts paid or incurred in connection with the development of tangible property, including pilot models.

Mixed Straddles. Final regulations and amended temporary regulations under Code Sec. 1092 were adopted relating to identified mixed straddles established after August 18, 2014 (T.D. 9678; TAXDAY, 2014/07/18, I.1). The final regulations explain how to account for unrealized gain or loss on a position held by a taxpayer prior to the time the taxpayer establishes a mixed straddle using straddle-by-straddle identification.

Information Reporting. The IRS has released final regulations under Code Sec. 6039E providing rules concerning information reporting by U.S. passport and permanent resident applicants and requiring certain federal agencies to provide certain information to the IRS (T.D. 9679; TAXDAY, 2014/07/18, I.2). The final regulations adopt the proposed regulations with minor revisions.

Backup Withholding. Revised procedures were issued for individual payees who are required to obtain validation of Social Security numbers (SSNs) from the Social Security Administration (SSA) to prevent or stop backup withholding following receipt of a second backup withholding notice ("B notice") from a payor within a three-year period (Rev. Proc. 2014-43; TAXDAY, 2014/07/18, I.4). Under the revised procedures, effective on or after August 1, 2014, in response to a second B notice, an individual payee may prevent, or, if already started, stop backup withholding by providing the payor with a copy of a Social Security card with his or her correct name and SSN.

Annual Filing Season Program. The IRS reiterated on July 17 that it has the authority to implement its new the Annual Filing Season Program (AFSP) (IR-2014-75; TAXDAY, 2014/07/18, I.5). In a statement provided to CCH, the Service called the AFSP "a reasonable attempt to address the difficult problems of return preparer competency." On July 15, the American Institute of Certified Public Accountants (AICPA) filed suit in federal district court seeking to enjoin the IRS from moving forward with the AFSP (TAXDAY; 2014/07/16, J.4).

Post-Windsor Guidance. IRS officials reviewed the guidance relating to the IRS’s approach to same-sex marriages—specifically, with respect to qualified retirement plans—following the U.S. Supreme Court’s June 26, 2013, ruling in E.S. Windsor, 2013-2 ustc ¶50,400, 2013-2 ustc ¶60,667, which struck down Section 3 of the Defense of Marriage Act (DOMA). Officials discussed Rev. Rul. 2013-17, I.R.B. 2013-38, 201, and Notice 2014-19, I.R.B. 2014-17, 979, in particular.

NTA Mid-Year Report to Congress. National Taxpayer Advocate Nina E. Olson has released her mid-year report to Congress, emphasizing the importance of taking steps to give meaning to the recently adopted Taxpayer Bill of Rights, issuing refunds to victims of return preparer fraud, continuing to make improvements to the Exempt Organizations area, and expanding the recently announced voluntary return preparer certification program to include competency testing (IR-2014-78; TAXDAY, 2014/07/17, I.1).

2-Percent Floor on Trust and Estate Deductions. The IRS has amended regulations adopted in May (TAXDAY, 2014/05/09, I.1) that provide guidance for determining which costs incurred by estates and nongrantor trusts are subject to the 2-percent floor for miscellaneous itemized deductions under Code Sec. 67(a) (T.D. 9664; TAXDAY, 2014/07/17, I.2). The regulations have been amended to apply to tax years beginning on or after January 1, 2015, as opposed to May 9, 2014.

Interest Expense by Corporations. Final regulations were adopted and temporary regulations removed and amended under Code Sec. 861 addressing the allocation and apportionment of interest expense by corporations that own a 10-percent or greater interest in a partnership (T.D. 9676; TAXDAY, 2014/07/16, I.1). The regulations also cover the allocation and apportionment of interest expense using the fair market value method.

PTIN/EFIN Surrender. The IRS Office of Professional Responsibility (OPR) and the Department of Justice (DOJ) are collaborating on procedures to facilitate the surrender of Preparer Identification Numbers (PTINs) and Electronic Filing Identification Numbers (EFINs) when permanent injunctions for all tax return preparation, and/or criminal convictions are obtained against unlicensed/unenrolled return preparers (TAXDAY, 2014/07/16, I.2).

PPACA. Practitioners and government officials discussed several exemptions from the individual mandate to acquire minimum essential health coverage during a July 15 IRS Tax Talk Today program (TAXDAY, 2014/07/16, I.3). Officials also discussed a few transition rules for applicable large employers relating to the calculation of penalties under Code Sec. 4980H.

TTINs. The IRS has adopted final regulations allowing the use of a truncated taxpayer identification number (TTIN) on payee statements and certain other documents instead of a taxpayer’s Social Security number (SSN), individual taxpayer identification number (ITIN), adoption taxpayer identification number (ATIN), or employer identification number (EIN) (T.D. 9675; TAXDAY, 2014/07/15, I.1).

Return Information. The IRS has released temporary and proposed regulations authorizing the disclosure of certain types of return information to the Census Bureau pursuant to Code Sec. 6103(j)(1) (T.D. 9677; NPRM REG-120756-13; TAXDAY, 2014/07/15, I.2). The items now authorized to be disclosed include: (1) from Form 1040, U.S. Individual Income Tax Return, processing: Electronic Filing System Indicator, Return Processing Indicator, and Paid Preparer Code, and (2) from Form 1098, Mortgage Interest Statement: Payee/Payer/Employee Taxpayer Identification Number, Payee/Payer/Employee Name, Street Address, City, State, ZIP Code, Posting Cycle Week, Posting Cycle Year, and Document Code.


A federal district court judge on July 10 ordered the IRS to submit to the court a written declaration under oath in the next 30 days about what happened to former IRS employee Lois Lerner’s "lost" emails and any other computer records reportedly lost by the Service (TAXDAY, 2014/07/15, J.6). The ruling follows a petition by Judicial Watch, a conservative, nonpartisan educational foundation, for a status conference to discuss the IRS’s failure to fulfill a Freedom of Information Act (FOIA) request for Lerner’s emails that the IRS says it lost (Judicial Watch v. IRS, No. 1:13-cv-1559).

The mortgage interest deduction (MID), the second largest federal tax break at $69-billion per year, has failed to accomplish its intended purpose of expanding homeownership for the middle class and, instead, has encouraged higher levels of debt and borrowing by households that can already afford a home, according to a new study by the Mercatus Center at George Mason University (TAXDAY, 2014/07/16, M.3). The report found that 64 percent of the benefits, as measured by effective tax reduction, go to households earning more than $100,000.

A six-month investigation by the Center for Public Integrity (CPI) has revealed that the Tea Party scandal, combined with Congress systematically stripping the IRS of resources and clout over decades, has led to an Exempt Organizations Division that has all but quit regulating politically active nonprofits in any consistent, demonstrable way (TAXDAY, 2014/07/16, M.2). The investigative report quotes an IRS Exempt Organizations Division staffer who said that the division stalled on refusing 501(c)(4) status to groups applying for the tax-exempt designation out of fear of further reprisals.

By Jeff Carlson, Stephen K. Cooper and Jennifer Cordaro, CCH News Staff

Friday, July 11, 2014

CCare Bulletin: New IRS Continuing Education Program Announced

New Voluntary IRS Annual Filing Season Program Announced; IRS Announces a Three Deposit Limit; Easily Navigate the Customer Care Phone System

New Voluntary IRS Annual Filing Season Program Announced
On June 26, the IRS unveiled a new program that allows those tax professionals without professional credentials to receive recognition for aspiring to a higher level of professionalism. This new voluntary program, the Annual Filing Season Program (AFSP), provides a record of completion when tax professionals complete the required amount of continuing education (CE) for the year. Those willing to participate must obtain 18 hours of CE that includes a six hour federal tax law refresher course with a test. To learn more about the new AFSP, click the links below. 

Learn more about the program
Read the news release from the IRS
IRS Announces a Three Deposit Limit
In an effort to combat fraud and identity theft, the IRS is introducing new procedures that will go into effect January 2015. These procedures will limit the number of refunds electronically deposited into a single financial account or pre-paid debit card to three. The fourth and subsequent refunds automatically will convert to a paper refund check and be mailed to the taxpayer. 

Learn more about the new deposit limit
Easily Navigate the Customer Care Phone System
Need help navigating the Customer Care phone system? For your convenience, we have posted a phone menu "tip sheet" to help you get to the right Customer Care representative quicker.

View the Customer Care phone menu tip sheet

Backup Your Returns
Have you backed up your returns since the end of tax season? If not, there is no better time than now. You will find instructions in the Knowledge Library, Answer ID 1578. Go there now
Extended and Late Returns
Remember to keep TaxWise up-to-date as you prepare and e-file extended and late returns. You can easily check for updates using Get Program Updates and Get Module Updates on the Communications menu. Or download updates from theTaxWise Solution Center.
Visit Us at a Trade Show
We are participating in a variety of professional shows this summer, in addition to IRS Tax Forums. At both NATP Tax Forum & Expos in September, SFS Vice Presidents Kerri Gibson and Shannon Bond will present "Common Sense Marketing." Come join us.Professional Show Schedule

Monday, July 7, 2014

IRS announces a three-deposit limit on refunds deposited to a single account.

IRS announces a three-deposit limit on refunds deposited to a single account.  Read the full details here: 

If you have been using Form 8888 to direct tax preparation fees to your own account, contact your account representative for an affordable alternative.

In an effort to combat fraud and identity theft, new IRS procedures effective January 2015 will limit the number of refunds electronically deposited into a single financial account or pre-paid debit card to three.

The fourth and subsequent refunds automatically will convert to a paper refund check and be mailed to the taxpayer.

Taxpayers also will receive a notice informing them that the account has exceeded the direct deposit limits and that they will receive a paper refund check in approximately four weeks if there are no other issues with the return. Taxpayers can track their refunds at Where’s My Refund?

The vast majority of taxpayers will not be affected by this limitation, and we would encourage taxpayers and tax preparers to continue to use direct deposit. It is the fastest, safest way for taxpayers to receive refunds.

The direct deposit limit will prevent criminals from easily obtaining multiple refunds. The limit applies to financial accounts, such as bank savings or checking accounts, and to prepaid, re-loadable cards or debit cards.

However, the limitation may affect some taxpayers, such as families in which the parent’s and children’s refunds are deposited into a family-held bank account. Taxpayers in this situation should make other deposit arrangements or expect to receive paper refund checks.

The new limitation also will protect taxpayers from preparers who obtain payment for their tax preparation services by depositing part or all of their clients’ refunds into the preparers’ own bank accounts. The new direct deposit limits will help eliminate this type of abuse.

Direct deposit must only be made to accounts bearing the taxpayer’s name. Preparer fees cannot be recovered by using Form 8888 to split the refund or by preparers opening a joint bank account with taxpayers. These actions by preparers are subject to penalty under the Internal Revenue Code and to discipline under Treasury Circular 230 (also, see Circular 230 Tax Professionals page).

IR-2014-76: Unused ITINS to Expire After Five Years; New Uniform Policy Eases Burden on Taxpayers, Protects ITIN Integrity

Unused ITINS to Expire After Five Years; New Uniform Policy Eases Burden on Taxpayers, Protects ITIN Integrity
WASHINGTON — Individual Taxpayer Identification Numbers (ITINs) will expire if not used on a federal income tax return for five consecutive years, the Internal Revenue Service announced today. To give all interested parties time to adjust and allow the IRS to reprogram its systems, the IRS will not begin deactivating ITINs until 2016.
The new, more uniform policy applies to any ITIN, regardless of when it was issued. Only about a quarter of the 21 million ITINs issued since the program began in 1996 are being used on tax returns. The new policy will ensure that anyone who legitimately uses an ITIN for tax purposes can continue to do so, while at the same time resulting in the likely eventual expiration of millions of unused ITINs.
Developed in consultation with taxpayers, their representatives and other stakeholders, the new policy replaces the existing one that went into effect on Jan. 1, 2013.
Under the old policy, announced in November 2012, ITINs issued after Jan. 1, 2013 would have automatically expired after five years, even if used properly and regularly by taxpayers. Though ITINs issued before 2013 were unaffected by that change, the IRS said at the time that it would explore options for deactivating or refreshing the information relating to these older ITINs.
ITINs play a critical role in the tax administration system and assist with the collection of taxes from foreign nationals, resident and nonresident aliens and others who have filing or payment obligations under U.S. law. Designed specifically for tax administration purposes, ITINs are only issued to people who are not eligible to obtain a Social Security Number.
Under the new policy:
  • An ITIN will expire for any taxpayer who fails to file a federal income tax return for five consecutive tax years.
  • Any ITIN will remain in effect as long as a taxpayer continues to file U.S. tax returns. This includes ITINs issued after Jan. 1, 2013. These taxpayers will no longer face mandatory expiration of their ITINs and the need to reapply starting in 2018, as was the case under the old policy.
  • To ease the burden on taxpayers and give their representatives and other stakeholders time to adjust, the IRS will not begin deactivating unused ITINs until 2016. This grace period will allow anyone with a valid ITIN, regardless of when it was issued, to still file a valid return during the upcoming tax-filing season. 
  • A taxpayer whose ITIN has been deactivated and needs to file a U.S. return can reapply using Form W-7. As with any ITIN application, original documents, such as passports, or copies of documents certified by the issuing agency must be submitted with the form. 

Further details, including information on how and when taxpayers with expired ITINs will be notified, will be posted on at a later date.

IR-2014-75: New IRS Filing Season Program Unveiled for Tax Return Preparers

New IRS Filing Season Program Unveiled for Tax Return Preparers
Voluntary program to focus on continuing education for unenrolled preparers
WASHINGTON —  The Internal Revenue Service announced today that guidance will soon be issued outlining a new voluntary program designed to encourage education and filing season readiness for paid tax return preparers. The program will be in place to help taxpayers during the 2015 filing season.
The Annual Filing Season Program will allow unenrolled return preparers to obtain a record of completion when they voluntarily complete a required amount of continuing education (CE), including a course in basic tax filing issues and updates, ethics, and other federal tax law courses.
"This voluntary program will be a step to help protect taxpayers during the 2015 filing season,” said IRS Commissioner John Koskinen. “About 60 percent of tax return preparers operate without any type of oversight or education requirements. Our program will give unenrolled return preparers a way to stay to up-to-date on tax laws and changes, which we believe will improve service to taxpayers.”
Tax return preparers who elect to participate in the program and receive a record of completion from the IRS will be included in a database on that will be available by January 2015 to help taxpayers determine return preparer qualifications.
The database will also contain information about practitioners with recognized credentials and higher levels of qualification and practice rights. These include attorneys, certified public accountants (CPAs), enrolled agents, enrolled retirement plan agents (ERPAs) and enrolled actuaries who are registered with the IRS.
“It’s also important to note this program is not to replace the important tax work done by certified public accountants, enrolled agents and attorneys,” Koskinen said. “Tax professionals with recognized credentials will be publicly listed on, and we plan to help inform taxpayers about the professional options available.”
Anyone who prepares all, or substantially all, of any federal tax return or refund claim for compensation is required to obtain a preparer tax identification number (PTIN). The pending guidance will also explain that tax return preparers with a valid PTIN who do not obtain a record of completion as part of the Annual Filing Season Program, or are not an attorney, CPA, enrolled agent, ERPA, or enrolled actuary, may still prepare tax returns, but will not be included in the public directory.
In 2011, the Treasury Department and the IRS issued regulations that mandated testing and CE for paid tax return preparers and created a Registered Tax Return Preparer (RTRP) credential. The RTRP designation was for preparers with valid PTINs, who passed an IRS competency test and completed 15 hours of CE.
Earlier this year, the Court of Appeals for the D.C. Circuit upheld the lower court’s determination that the IRS regulations from 2011 mandating competency testing and CE for paid tax return preparers were invalid. The IRS continues to believe regulation of paid tax return preparers is important for the proper functioning of the U.S. tax system. To that end, the Administration’s Fiscal Year 2015 Budget includes a proposal to explicitly authorize the IRS to regulate all paid tax return preparers.
Prior to the 2013 court decision, over 62,000 return preparers passed an IRS-administered competency test and completed the requirements to become Registered Tax Return Preparers. The Annual Filing Season Program will exempt RTPRs and others who have successfully completed certain recognized national or state tests from the filing season refresher course that will be required for other participants.
The Annual Filing Season Program will be an interim step to help taxpayers and encourage education for unenrolled tax return preparers. The IRS will assess the feasibility of administering a uniform voluntary examination in future years in order to ensure basic return preparer competency.
Annual Filing Season Program – Record of Completion Requirements
In general, non-exempt return preparers with a valid PTIN for the program year will need to complete 18 hours of CE annually from IRS-approved CE providers to obtain an IRS record of completion. The hours will need to include:
  • 6 hours of federal tax filing season refresher course (with a required comprehension test at completion)
  • 10 hours of federal tax law topics
  • 2 hours of ethics
For the first year, a transition rule will apply to prorate the required hours. For a return preparer to obtain a record of completion for the 2015 filing season, a total of 11 hours will need to be earned in 2014, including the six hour refresher course, three hours of other federal tax law topics, and two hours of ethics.
Once the official guidance is issued, IRS-approved CE providers will begin to offer qualifying federal tax filing season refresher courses. A list of all IRS-approved CE providers is available and includes a new column to indicate which providers are planning to offer the qualifying courses. The list is updated daily. For 2015, qualifying courses will be offered through December 31, 2014.
The IRS will begin issuing records of completion to those who have met the requirements in mid-October 2014 after the 2015 PTIN renewal season starts.
Consent to Circular 230 restrictions
As a prerequisite to receiving a record of completion, an individual will be required to consent to the duties and restrictions relating to practice before the IRS in subpart B and section 10.51 of Treasury Department Circular No. 230.
Modification to limited practice permissions
The pending guidance will also announce that effective for tax returns and claims for refunds prepared or signed after December 31, 2015, only unenrolled tax return preparers who have a record of completion under the Annual Filing Season Program for the calendar year of preparation and the calendar year of representation will be permitted to represent taxpayers before the IRS during an examination of a return that they signed or prepared. 

Attorneys, CPAs, and enrolled agents will continue to have unlimited representation rights and can represent clients before any office of the IRS.

IR-2014-72: IRS Adopts "Taxpayer Bill of Rights;" 10 Provisions to be Highlighted on, in Publication 1

IRS Adopts "Taxpayer Bill of Rights;" 10 Provisions to be Highlighted on, in Publication 1
WASHINGTON ― The Internal Revenue Service today announced the adoption of a "Taxpayer Bill of Rights" that will become a cornerstone document to provide the nation's taxpayers with a better understanding of their rights.

The Taxpayer Bill of Rights takes the multiple existing rights embedded in the tax code and groups them into 10 broad categories, making them more visible and easier for taxpayers to find on

Publication 1, "Your Rights as a Taxpayer," has been updated with the 10 rights and will be sent to millions of taxpayers this year when they receive IRS notices on issues ranging from audits to collection. The rights will also be publicly visible in all IRS facilities for taxpayers and employees to see.

"The Taxpayer Bill of Rights contains fundamental information to help taxpayers," said IRS Commissioner John A. Koskinen. "These are core concepts about which taxpayers should be aware. Respecting taxpayer rights continues to be a top priority for IRS employees, and the new Taxpayer Bill of Rights summarizes these important protections in a clearer, more understandable format than ever before.”

The IRS released the Taxpayer Bill of Rights following extensive discussions with the Taxpayer Advocate Service, an independent office inside the IRS that represents the interests of U.S. taxpayers. Since 2007, adopting a Taxpayer Bill of Rights has been a goal of National Taxpayer Advocate Nina E. Olson, and it was listed as the Advocate’s top priority in her most recent Annual Report to Congress.

“Congress has passed multiple pieces of legislation with the title of ‘Taxpayer Bill of Rights,’” Olson said. “However, taxpayer surveys conducted by my office have found that most taxpayers do not believe they have rights before the IRS and even fewer can name their rights. I believe the list of core taxpayer rights the IRS is announcing today will help taxpayers better understand their rights in dealing with the tax system.”

The tax code includes numerous taxpayer rights, but they are scattered throughout the code, making it difficult for people to track and understand. Similar to the U.S. Constitution’s Bill of Rights, the Taxpayer Bill of Rights contains 10 provisions. They are:

1. The Right to Be Informed
2. The Right to Quality Service
3. The Right to Pay No More than the Correct Amount of Tax
4. The Right to Challenge the IRS’s Position and Be Heard
5. The Right to Appeal an IRS Decision in an Independent Forum
6. The Right to Finality
7. The Right to Privacy
8. The Right to Confidentiality
9. The Right to Retain Representation
10. The Right to a Fair and Just Tax System

Click here to access the webpage for full details

CCH Weekly Report from Washington, D.C.,(Jul. 7, 2014)

During a shortened week due to the Fourth of July holiday, President Obama asked lawmakers to pass legislation that would find an additional funding stream for transportation and infrastructure projects before the federal Highway Trust Fund runs out of revenues by the end of August. House Oversight and Government Reform Committee Chairman Darrell Issa, R-Calif., said former IRS official Lois Lerner was at the center of the Service’s effort to target Tea Party groups and deny tax-exempt status to certain applicants. In related news, the IRS and Treasury issued temporary and proposed regulations, as well as new procedures that provide guidance to organizations seeking recognition of tax-exempt status under Code Sec. 501(c)(3).

CCH Comment. Due to the short week, only developments between June 30 and July 2 are covered in today’s CCH Weekly Report from Washington, D.C.

White House

The president on July 1 called on Congress to pass legislation to fund the federal Highway Trust Fund (TAXDAY, 2014/07/02, W.1). During remarks before a cabinet meeting and also at a speech at the Key Bridge in Washington, D.C., the president said thousands of jobs depend on Congress acting to replenish the trust fund. The Department of Transportation (DOT) will begin slowing down reimbursements for federal highway projects, according to DOT Secretary Anthony Foxx, who said the administration favors paying for new highway funding with comprehensive tax reform.


Issa restated his complaints about the IRS’s mishandling of applications for tax-exempt status submitted by conservative political groups (TAXDAY, 2014/07/01, C.1). Appearing on CNN’s "State of the Union" program on June 29, Issa told host Candy Crowley that former IRS official Lois Lerner was at the center of the Service’s effort to target Tea Party groups. Moveover, he charged that Lerner’s attorney, William Taylor, has made misleading statements while defending his client. On the same program, Taylor said Issa and GOP lawmakers are using Lerner as a political scapegoat during an election year.


Letter to Lawmakers. In a June 23 letter to Rep. Marlin Stutzman, R-Ind., and six other GOP congressmen from Indiana, Treasury Assistant Secretary for Legislative Affairs Alastair M. Fitzpayne said the Patient Protection and Affordable Care Act (PPACA) (P.L. 111-148) is not forcing schools to cut employee work schedules to less than 30 hours to avoid providing coverage. Fitzpayne told the lawmakers that the vast majority of employers simply are not large enough to be subject to the employer responsibility requirements of the PPACA, and the vast majority of those that have at least 50 full-time employees already provide health coverage for their employees. The Treasury does not track compliance based on type of industry, Fitzpayne noted.

IGA Update. The government of the Republic of Latvia and the United States have entered into a Model 1 intergovernmental agreement (IGA) to improve international tax compliance and to implement the Foreign Account Tax Compliance Act (FATCA) (P.L. 111-147) (TAXDAY, 2014/07/02, T.1). The Treasury also has posted to its website additional jurisdictions that have reached agreements in substance on Model 1 FATCA agreements. Earlier in the week, the Treasury Department also announced that the U.S. and China have reached an agreement in substance to implement a Model 1 FATCA IGA (TAXDAY, 2014/06/30, T.1).

Federal Tax Revenue. Federal tax revenues continue to grow at a record pace in fiscal year (FY) 2014, as the federal government’s total receipts for the fiscal year in May closed at $1,934,919,000,000, according to the monthly Treasury Statement and CNSNews (TAXDAY, 2014/07/01, T.1). Despite record revenue, the federal government still ran a deficit of $436.382 billion in the first eight months of the fiscal year, which began on October 1, 2013.


Longevity Annuity Contracts. The IRS has issued final regulations relating to the use of qualified longevity annuity contracts in tax-qualified defined contribution plans under Code Sec. 401(a) and Code Sec. 403(b) plans, individual retirement annuities and accounts (IRAs) under Code Sec. 408, and eligible governmental plans under Code Sec. 457(b) (T.D. 9673; TAXDAY, 2014/07/02, I.1). These regulations provide guidance necessary to comply with the required minimum distribution rules under Code Sec. 401(a)(9) and reporting requirements under Code Sec. 6047.

Form 1023-EZ. Temporary and proposed regulations, as well as new procedures, have been issued by the IRS and Treasury that provide guidance to organizations seeking recognition of tax-exempt status under Code Sec. 501(c)(3) (T.D. 9674, NPRM REG-110948-14, IR-2014-77, Rev. Proc. 2014-40; TAXDAY, 2014/07/02, I.2). The regulations allow the IRS to adopt a streamlined application process that eligible organizations may use to apply for recognition of exempt status.

Return Preparers. Guidance was released on the voluntary Annual Filing Season Program for tax return preparers (Rev. Proc. 2014-42; TAXDAY, 2014/07/01, I.4). Unenrolled tax return preparers will be allowed to represent taxpayers whose returns they prepared without the certificate of participation in the Annual Filing Season Program until December 31, 2015.

Annual Filing Season Program. The IRS has issued a set of frequently asked questions (FAQs) regarding the filing season program for return preparers (TAXDAY, 2014/07/02, I.3). The FAQs address what the program is, as well as who can participate.

Unused ITINs. The IRS has announced that individual taxpayer identification numbers (ITINs) will expire if not used on a federal income tax return for five consecutive years (IR-2014-76; TAXDAY, 2014/07/01, I.1). In order to give parties time to adjust and to allow the IRS to reprogram its systems, deactivation will not begin until 2016.

QI Withholding Agreement. Guidance was issued on entering into a qualified intermediary (QI) withholding agreement with the IRS and the final QI agreement (Rev. Proc. 2014-39; TAXDAY, 2014/06/30, I.1). A QI agreement allows a foreign intermediary to assume the withholding and reporting obligations for payments of income, such as interest, dividends and royalties, made to its account holders or payees through foreign intermediaries or flow-through entities.

IRS Strategic Plan. The IRS has released its 2014-2017 Strategic Plan, laying out its primary goals and objectives for the next four years (TAXDAY, 2014/06/30, I.3). The IRS plans to invest in its workforce and in technology and will concentrate on helping taxpayers resolve issues. It will also continue its efforts to root out tax fraud and other financial crimes.


Despite substantial economic and market gains, multiemployer pension plans covering about 1.5-million people are severely underfunded, threatening benefit cuts for current and future retirees, according to the FY 2013 Projections Report released on June 30 by the Pension Benefit Guaranty Corporation (PBGC) (TAXDAY, 2014/07/01, M.1). Senate Finance Committee Chairman Ron Wyden, D-Ore., immediately issued a statement expressing his concern over the shortfall. Wyden reiterated his commitment to resolving the issues surrounding multiemployer pension plans, and stated that he plans to work with committee members to address the issues in order to protect earned retirement benefits.

The PPACA increases marginal tax rates on labor by about six percentage points, according to the Tax Foundation in a June 24 blog post (TAXDAY, 2014/07/01, M.2). Economist Casey Mulligan, a professor in economics at the University of Chicago, said it is one of the largest tax increases in the last 70 years. The Foundation report pointed out that, in the case of the PPACA, Mulligan was referring to implicit marginal tax rates, or the extra taxes paid, and subsidies forgone, as the result of working.

By Jeff Carlson, Stephen K. Cooper and Jennifer Cordaro, CCH News Staff