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Tuesday, March 31, 2015

Outstanding State or Federal acks

updated 3-31-2015

The following have outstanding acks older than five days old. We proactively work with the states to clear up these acks.

If you can view the return in the Return Query tool on the support site, then we have the return and no action is needed.

2014 returns
MA business, NJ business and CA business efile acks from March 21st
1099s- a small number of acks from March 23th and more from March 25th - 30th

2013 returns
Current, with the exception of a small number (less than 10 returns) from various days in the past week.

2012 returns
All current, with the exception of a small number (less than 4 returns) from various days in the past week.

Monday, March 30, 2015

Free tax research trials end tomorrow 3/31

Free tax research trials end tomorrow 3/31

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Weekly Report from Washington, D.C.,(Mar. 30, 2015)

Weekly Report from Washington, D.C.,(Mar. 30, 2015)

The House is expected to take up a series of bills that address IRS oversight and repeal the estate tax when lawmakers return from a two-week recess on April 13. The IRS, meanwhile, issued guidance during the week of March 23 addressing the Employee Plans Compliance Resolution System (EPCRS), rollovers of airline payment amounts and the Standard Industry Fare Level (SIFL) mileage rates.


EPCRS. The IRS has issued a revenue procedure designed to improve and update Employee Plans Compliance Resolution System (EPCRS)—the comprehensive system of correction programs for sponsors of retirement plans under Code Secs. 401(a)403(a)403(b)408(k), or 408(p)—by making limited modifications and clarifications to Rev. Proc. 2013-12, I.R.B. 2013-4, 313, (Rev. Proc. 2015-27TAXDAY, 2015/03/30, I.4).
LITC Grants. The IRS has announced the recipients of the Low-Income Taxpayer Clinic (LITC) matching grants for the 2015 grant year (IR-2015-61TAXDAY, 2015/03/30, I.3). The IRS has awarded nearly $10.25 million in matching grants to 132 organizations for the current grant year.
Rollovers of Airline Payment Amounts. The IRS has issued guidance for how taxpayers must report rollovers of airline payment amounts under recently enacted P.L. 113-243, which amended certain provisions of the FAA Modernization and Reform Act of 2012 (Announcement 2015-13TAXDAY, 2015/03/30, I.2). The guidance provides, among other things, that qualified airline employees who received airline payment amounts should include the full amount on Form 1040 for the year of receipt and back it out on Line 21. .
IRS Tax Tips. The IRS has reminded taxpayers that it releases daily tax tips during filing season that are available on (IR-2015-59TAXDAY, 2015/03/27, I.1). The easy-to-read tips cover a wide range of tax topics intended to help taxpayers during the 2015 tax filing season such as information on money-saving tax credits and deductions that can be easy to overlook.
SIFL Rates. The IRS has released the applicable terminal charge and the SIFL mileage rates for determining the value of noncommercial flights on employer-provided aircraft in effect for the first half of 2015 for purposes of the taxation of fringe benefits (Rev. Rul. 2015-6TAXDAY, 2015/03/27, I.2). For flights taken during the period from January 1, 2015, through June 30, 2015, the terminal charge is $45.52, and the SIFL rates are: $.2490 per mile for the first 500 miles, $.1898 per mile 501 through 1,500 miles, and $.1825 per mile over 1,500 miles.
IRS Webinar/Identity Theft. The IRS has improved its strategies for preventing and detecting tax-related identity theft and for providing assistance to identity theft victims, said officials from the IRS stakeholder liaison office during a March 26 IRS webcast (TAXDAY, 2015/03/27, I.5). Specific examples of procedural improvements include the new IRS policy to delay releasing tax refunds until after it has verified third-party income information, new screening filters to detect false returns, and the new limitation on the number of direct deposits of tax refunds that can be made into one account.
IRS Webinar/Retirement Plans. Many types of retirement plans can make loans to plan participants, but some cannot, IRS officials explained during a March 26 IRS webinar on retirement plan loans to participants (TAXDAY, 2015/03/27, I.6). Plans prohibited from making participant loans include individual retirement accounts (both traditional and Roth) and IRA-based plans such as SEPs, SARSEPs and SIMPLE IRAs, Anita Bower, Office of Communications and Liaison, IRS Tax-Exempt/Government Entities Division, stated.
2014 IRS Data Book. The IRS released the 2014 Data Book, a snapshot of Service activities for fiscal year 2014. The report describes activities conducted by the IRS from October 1, 2013, to September 30, 2014, and includes information concerning returns filed, taxes collected, enforcement, taxpayer assistance and IRS budget and workforce (IR-2015-58TAXDAY, 2015/03/25, I.1).
IRS Fact Sheet/Right to Representation. The IRS has released a fact sheet providing information on a taxpayer’s right to retain representation (FS-2015-17TAXDAY, 2015/03/25, I.2). This is one of several taxpayer rights that are discussed in IRS Publication 1, Your Rights as a Taxpayer. Taxpayers have the right to retain an authorized representative to represent them in their dealings with the IRS.
Eligibility Waiver/Libya and Yemen. The IRS has announced a waiver for any individual who failed to meet the eligibility requirements of Code Sec. 911(d)(1) because adverse conditions in a foreign country precluded the individual from meeting the requirements for the 2014 tax year (Rev. Proc. 2015-25TAXDAY, 2015/03/25, I.3). Qualified individuals may exempt from taxation their foreign earned income and housing cost amounts.
Per Diem Travel Rates. The U.S. State Department has released a listing of maximum travel per diem allowances for travel in foreign areas (TAXDAY, 2015/03/25, I.4). The rates apply to all government employees and contractors, and are effective as of April 1, 2015.
Field Attorney Advice/Debentures and Straddles. The IRS Chief Counsel has released a Field Attorney Advice memorandum that addressed whether an issuer of aggregate original principal amount exchangeable senior debentures created a straddle by issuing the debentures and holding the corresponding reference shares (TAXDAY, 2015/03/24, I.1). Also addressed is whether the issuer may deduct interest attributable to the debentures.
Online Tax Help Tools. More taxpayers are using the information and tools on, to help them in preparing their returns. Tools include "Where’s My Refund," which enables taxpayers to track the status of their refunds, the IRS "Get Transcript" application, the tool allowing requests for electronic filing PINs and more (IR-2015-57TAXDAY, 2015/03/23, I.1).

By Jeff Carlson and Jennifer Cordaro, Wolters Kluwer News Staff

Saturday, March 28, 2015

IRS MeF system unavailable Sunday 1am until 11am EST

The IRS notified vendors and EROs that their MeF efile system will be unavailable this Sunday, March 29th, from 1am to 11am
SFS customers may continue sending efiles to us, which we will hold until IRS is ready for us to send after 11am.

See the Quick Alert message below:

IRS Quick Alert Mar 25, 2015
Subject: Extended Maintenance Window for the MeF Production and ATS Environments

The MeF maintenance build window is being extended on Sunday, March 29, 2015. The system will be unavailable from 1:00 a.m. until 11:00 a.m., Eastern.

The build will deploy critical system updates. This extended window affects the MeF Production and ATS Environments.

Thank you in advance for refraining from accessing the MeF Production and ATS Systems during this period.

Return Query tool shows reject code, description, and data field causing the reject

Best Practices for Tracking Your E-filed Returns - Login Is Required on the Solution Center

Click Return Status and log in. Under Return Query click Search.

Enter the SSN or EIN of the return and click Search. (Tax Year will default to the current tax year.)

The first screen displays General Information, including federal e-file and bank product status.
Click the other links for information on the state e-file(s), refund disbursement and reject codes.

When you click Reject History, you will see a list of all rejects for this return. Click the Reject
Code link to see the detailed message that explains the reason the return was rejected.
It also displays the actual value entered in the field of the form causing the rejection.

How to read validation errors and track efiles

Important e-Filing Tips
Run diagnostics to view diagnostic errors AND validation errors. Diagnostic and validation errors are two separate notifications that must be cleared to create the e-file. Learn more about these errors

Pick up your e-File acknowledgements (acks). Be sure to check for acks after critical deadlines. This will allow you to view and fix any rejects within the allotted time frame.

You can also schedule automatic ack retrieval through your TaxWise program. The Schedule Ack Retrieval feature allows TaxWise to automatically connect to the Electronic Filing Center and pick up any available acknowledgements. To learn more about this option, access Help in the TaxWise program.

NOTE: Be sure to track your e-filed returns and see the exact field causing the IRS reject. Click here for instructions

You may also find this app useful- the IRS2Go app

The Internal Revenue Service today announced the release of IRS2Go 5.0, an update to the only official IRS smartphone application, compatible with both Apple and Android devices.

Download IRS2Go free of charge for Android devices from the Google Play Store or from the Apple App Store for Apple devices.  Use it to check your refund status, watch the IRS YouTube channel, find free tax preparation help, get IRS news as soon as it's released, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs.

Wednesday, March 25, 2015

ACA: some marketplace consumers received a 1095-A form that listed an incorrect benchmark plan premium amount

Updated 3-25-2015
On March 20 the Department of the Treasury is expanding the relief it announced previously on February 24, which will mitigate any harm to tax filers. If you enrolled in Marketplace coverage, received an incorrect Form 1095-A, and filed your return based on that form, you do not need to file an amended tax return. The IRS will not pursue the collection of any additional taxes from you based on updated information in the corrected forms.  This relief applies to tax filers who enrolled through the Federally-facilitated marketplace or a state-based marketplace. 

As before, you still may choose to file an amended return.  Treasury intends to provide additional information to help tax filers determine whether they would benefit from filing amended returns.  You also may want to consult with you tax preparers to determine if you would benefit from amending.  For more information on the Treasury announcement, see Treasury’s statement and consumer FAQs.

Posted 2-20-2015 ACA: some marketplace consumers received a 1095-A form that listed an incorrect benchmark plan premium amount. 
Updated 2-25-2-15 
CMS is currently engaged in an outreach program to contact impacted policy holders who received an incorrect Form 1095-A. Those forms showed an incorrect SLCSP amount that was based on 2015 amounts instead of 2014.

Last week, an automated outbound calling campaign was directed at policy holders  At the same time, email messages were sent to those same affected policy holders. CMS asks that recipients carefully review the information and be sure that the email message is not accidentally discarded as spam or a phishing attempt.

A follow-up calling campaign is being conducted this week in an effort to contact the remaining policy holders. Additionally, those policy holders who log in to their online account will receive a notification of the error.

Incorrect Forms 1095-A

The IRS estimates that 50,000 of the 800,000 that received a Form 1095-A with an incorrect SLCSP have already filed their tax returns
·         The 50,000 taxpayers who already filed their tax return using an incorrect SLCSP benchmark from their Form 1095-A will not be required to file an amended return.
·         Taxpayers who received more premium tax credit than they should have as a result of the Form 1095-A reporting error will not have to pay the additional amount back.
·         Taxpayers who are entitled to an additional premium tax credit as a result of the Form 1095-A reporting error can opt to file an amended return to get their additional funds if they wish. 
·         The relief only applies to the 50,000 taxpayers that already filed.  The 750,000 that have not filed their tax return as still being told to wait until the received their corrected Form 1095-A in March (date of issuance still TBD)

Corrected 1095A Forms
Centers for Medicare & Medicaid Services (CMS)
CMS completed the initial mailing of 1095-A forms to consumers a couple of weeks ago. The majority of Marketplace consumers received correct 1095-As, but some marketplace consumers received a 1095-A form that listed an incorrect benchmark plan premium amount. Consumers with affected forms will begin receiving updated 1095-A forms in early March. 

Marketplace consumers concerned about the status of their 1095-A forms should take the following actions:
1.      You can find out if you are affected by logging in to your account at You will see a notice message that will let you know if your form was or was not affected.  A majority of tax filers with Marketplace coverage through that received a 1095-A– about 80 percent – will find that their form was not affected by this issue and will be able to file their taxes with their current form.
2.      Wait to file if your form was affected. It’s best to wait to file your tax return until you receive your corrected 1095-A Form from the Marketplaces.  New forms are being sent from the Marketplace beginning in early March. When your corrected form is ready, we’ll also send a message to your Marketplace account on
3.      If you need to file now, use our tool. If you can’t wait, and want to find the correct amount of the second lowest cost Silver plan that applied to your household in 2014, you have 2 options: 1) You can use this tool to find that amount, or 2) You can call the Marketplace Call Center at 1-800-318-2596 (TTY: 1-855-889-4325) and they can help.
A blog post about corrected 1095 A forms is available here:

Accounting Today reports that approximately 800,000 taxpayers who received health care coverage through the federal insurance marketplace were sent the wrong information on their Form 1095-A and are being urged to wait to file their taxes until the first week of March when they receive the correct information from the federal government.

Great deal on online research products

Flash Sale - Tuesday & Wednesday Only
Two Days Only - March 24th & 25th. Order your online research tools and receive 30% off. Call your Account Manager at 800-495-4626 to claim your discount. Don't miss this deal - buy today and have access to your online content through October 31, 2016.
IntelliConnect® - Free Trial
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Save time with a tour of your IntelliConnect trial
Once you've accessed your trial, take this short tour to help you navigate your IntelliConnect subscription. Complete the tour, and you'll receive your choice of one complimentary research product below - good through Dec. 31, 2015:
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Live Conference
Don't miss the upcoming CCH webinars - including our newly added live seminar/webcast:

Tangible Property Regulations Live Conference
Friday, May 1
9:45 AM - 6:00 PM Eastern

Register for the live conference by March 27, 2015 to qualify for an early bird discount of 15%. Use promo code: USTPCXYY9842 during check-out.

Learn more about upcoming webinars here.

Tuesday, March 24, 2015

5405 rejects F1040-0428 or F1040-0429

Updated 3-24-2015 
If your return is rejected for the 5405 form (Reject F1040-0428 or 0429) after March 21st, then we encourage you to contact IRS to ask them for guidance in determining the reject cause.

Updated 2-28-2015 
IRS has another correction planned for the weekend of Mar 21st.
If you are still seeing these rejects, hold the return until March 23rd and then resend.
5405- Checking Box 3e is the scenario we are seeing most often still.

Problem- the return is rejected for  F1040-0428 or F1040-0429, which references Form 5405 First Time Homebuyer Installment

IRS was seeing a high number of these rejects, so they made MeF changes Feb 8th weekend.
You can now resend these returns.

Updated 2-12-2015 
We are still seeing some rejects, especially as related to box 3e, so we are researching further with IRS.

F1040- 428
The e-File database indicates a First Time Homebuyer Installment Payment is due for the Primary SSN. Include amount on Line 60b, 'FirstTimeHmByrRepaymentAmt' of Form 1040 and attach Form 5405 if required.

The e-File database indicates a First Time Homebuyer Installment Payment is due for the Spouse SSN. Include amount on Line 60b, 'FirstTimeHmByrRepaymentAmt' of Form 1040 and attach Form 5405 if required.

Monday, March 23, 2015

Weekly Report from Washington, D.C.,(Mar. 23, 2015)

The House for the third time approved legislation ensuring that emergency services volunteers are not counted as full-time employees by the IRS under the employer mandate of the Patient Protection and Affordability Care Act (PPACA) (P.L. 111-148). IRS Commissioner John Koskinen again described the negative impact continued decreased funding is having on the Service and its abilities to assist taxpayers and carry out its duties. The Service released guidance that extends for an additional year the temporary relief provided in Notice 2014-5, I.R.B. 2014-2, 276, for certain closed defined benefit pension plans, as well as guidance providing information on a taxpayer’s right to confidentiality.


In testimony before the House Appropriations Subcommittee on Financial Services and General Government, IRS Commissioner John Koskinen reiterated his view that significant reductions in the IRS budget are "undermining the agency’s ability to continue to deliver on its mission" (TAXDAY, 2015/03/19, C.3). Describing the impact of budget cuts on the IRS’s FY 2015 operations, Koskinen said that the IRS delayed critical IT investments of more than $200 million, delaying replacement of aging IT systems that need modernizing to protect taxpayer data, combat identify theft, address noncompliance and fight against cyber-attacks. Koskinen also noted that the IRS will not have to shut down for two days to close its fiscal year (FY) 2015 budget gap (TAXDAY, 2015/03/20, I.8).
Taxpayer reminders. The IRS issued the following reminders for taxpayers regarding certain upcoming deadlines and other notable dates:
  • Retirees who turned 70-1/2 during 2014 may need to begin receiving required minimum distributions (RMDs) from individual retirement accounts (IRAs) and workplace retirement accounts by Wednesday, April 1, 2015 (IR-2015-55TAXDAY, 2015/03/20, I.1);
  • The IRS will host a free webinar on Wednesday, March 25 at 2:00 p.m. ET, that is designed to help individuals and small businesses understand tax payment options, including options for resolving complex collection cases (IR-2015-56TAXDAY, 2015/03/20, I.2);
  • For those who cannot pay their 2014 taxes by April 15, the IRS listed several "quick and easy solutions" that include Online Payment Agreements and offers-in-compromise, among other relief programs (IR-2015-53;TAXDAY, 2015/03/19, I.5);
  • Taxpayers who receive requests from the IRS to verify their identities can use to complete the task (IR-2015-54TAXDAY, 2015/03/19, I.6);
  • Taxpayers can request an automatic six-month extension of time to file, and can do so online by using the Free File link on the IRS website to request an extension on Form 4868 in just a few minutes (IR-2015-51;TAXDAY, 2015/03/18, I.1);
  • The IRS has issued a reminder to taxpayers that they have until April 15, 2015, to contribute to an IRA for 2014 (IR-2015-50TAXDAY, 2015/03/17, I.3);
  • Taxpayers planning to claim deductions for charitable donations made in 2014 must make sure they have the records they need before filing their 2014 returns (IR-2015-48TAXDAY, 2015/03/16, I.1).
Fact Sheet/Alternative Tax Payments. The IRS has released a fact sheet reminding taxpayers of the different methods they can use to pay their taxes, particularly if they cannot pay the full amount owed (FS-2015-19TAXDAY, 2015/03/20, I.3). In that case, the taxpayer should file the return on time and pay as much as possible, which will reduce penalties and interest.
Temporary Relief/Closed DB Pension Plans. The IRS has extended for an additional year the temporary relief provided in Notice 2014-5, I.R.B. 2014-2, 276, for certain closed defined benefit pension plans (Notice 2015-28;TAXDAY, 2015/03/20, I.4). For plan years beginning before 2017, a plan that includes a closed defined benefit plan that was closed before December 13, 2013, and that satisfies certain conditions, to demonstrate satisfaction of the nondiscrimination-in-amount requirement of Reg. §1.401(a)(4)-1(b)(2) on the basis of equivalent benefits.
Population Figures. State and local housing credit agencies that allocate low-income housing tax credits and states and other issuers of tax-exempt private activity bonds have been provided with a listing of the proper population figures to be used when calculating the 2015 caps (Notice 2015-23TAXDAY, 2015/03/20, I.5).
IRS/Private Industry Hold Identity Theft Meeting. The IRS and leaders from the private tax preparation industry are already strategizing for how to curb stolen tax refund identity theft in the next filing season and beyond, Koskinen said during a March 19 press briefing in Washington, D.C. (TAXDAY, 2015/03/20, I.9). The IRS and private industry leaders met for two hours prior to the briefing to share open, candid discussion ideas for combatting identity theft and presenting a "united front to create powerful deterrent effect on fraud," he noted.
New Exempt Organizations Strategy. The IRS Exempt Organizations (EO) Division is following a new, larger strategy that will enable it to be more effective and efficient, EO Director Tamera Ripperda told attendees on March 19 at the Washington Nonprofit Legal and Tax Conference (TAXDAY, 2015/03/20, I.10). "You’ll see a different Exempt Organizations," promised Ripperda, who has headed EO for 15 months.
TE/GE Realignment. The IRS’s recent realignment of some legal functions in the Tax-Exempt/Government Entities (TE/GE) Division is moving forward, Vicki Judson, division counsel and associate chief counsel, said on March 19 (TAXDAY, 2015/03/20, I.11). Judson described the realignment at the 2015 Washington Nonprofit Legal and Tax Conference in Washington, D.C.
IRS Statement/Preparer Misconduct. The IRS has issued a policy statement on assisting taxpayers who report tax return preparer misconduct (P-25-2TAXDAY, 2015/03/19, I.3). According to the statement, taxpayers will need to establish return preparer misconduct with proper documentation. Once preparer misconduct is established, the IRS will attempt to resolve any taxpayer account issues in a timely and appropriate manner.
AFRs for April 2015. Various prescribed rates for federal income tax purposes for April 2015 have been provided by the IRS (Rev. Rul. 2015-7TAXDAY, 2015/03/19, I.7).
Fact Sheet/Right to Confidentiality. The IRS has released a fact sheet providing information on a taxpayer’s right to confidentiality (FS-2015-15TAXDAY, 2015/03/18, I.2). Taxpayers have the right to expect that any information they provide to the IRS will not be disclosed unless authorized by the taxpayer or by law.
Audit Techniques Guide/Real Estate Property and COD. The IRS has released a new Audit Techniques Guide (ATG), Real Estate Property Foreclosure and Cancellation of Debt (TAXDAY, 2015/03/18, I.3). This guide discusses the tax consequences of losing real property to foreclosure, short sale, deed in lieu of foreclosure, and abandonment.
Free File Alliance. The IRS and Free File Inc., also known as the Free File Alliance, have announced a new five-year agreement that guarantees free, federal tax preparation software products for 70 percent of all taxpayers—currently individuals with income of $60,000 or less (IR-2015-52TAXDAY, 2015/03/18, I.4). As part of the agreement, software products released by members of the Alliance will provide for the free filing of federal returns as well as state returns for the 21 states plus District of Columbia that currently have their own partnerships with Alliance members.
Qualified Mortgage Bonds. The IRS has released guidance regarding the computation of the housing cost/income ratio by issuers of qualified mortgage bonds (QMBs) and mortgage credit certificates (MCCs) (Rev. Proc. 2015-23TAXDAY, 2015/03/17, I.1). State and local governments can issue QMBs and MCCs under Code Sec. 143(a) and Code Sec. 25(c)(1), with recipients subject to the income requirements of Code Sec. 143(f), expressed as a ratio of financing to median gross income.
Final Regulations/Wraparound Coverage. The Departments of Treasury, Labor and Health and Human Services have issued final regulations on employer-provided limited wraparound coverage qualifying as excepted benefits (T.D. 9714TAXDAY, 2015/03/17, I.2). Benefits that are excepted benefits are not subject to the group health plan requirements, including market reforms under the PPACA.
Priority Guidance Plan/Public Comments. The IRS has invited the public to suggest items that should be included on the 2015–2016 Priority Guidance Plan (Notice 2015-27TAXDAY, 2015/03/17, I.5). Recommendations can be submitted at any time during the year, but only those submitted by May 1, 2015, will be considered for inclusion on the original 2015-2016 Priority Guidance Plan.
FATCA IDES. In response to user inquiries, the IRS has developed an example, available on GitHub, that conforms to published guidelines on how to create an International Data Exchange Service (IDES) data packet and decrypt a notification (TAXDAY, 2015/03/16, I.2). IDES is a secure managed file transfer service that only accepts encrypted transmissions in "IDES data packet" format.

By Jeff Carlson and Jennifer Cordaro, Wolters Kluwer News Staff