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Dear members —
Believe it or not, we are nearly halfway through the 13-week extension to the regular filing season. If you are looking for a reason to celebrate, that is the best we have. Well, that and a formal IRS announcement regarding the long-awaited arrival of e-filing for (some) amended returns (more below). Either of those should justify champagne.
I referenced filing season volumes last week. The statistics for the week ended May 22 shows an uptick in paid preparer returns and number of returns received. I continue to believe nothing inspires like a deadline, and the statistics post-July 15 will be much more meaningful for any macro assessment of how paid preparers fared this season (by the numbers at least; I already know most are exhausted and, frankly, a little cranky (not that I blame them)).
The soon-to-be-launched website, an investment in the future of this organization, continues to progress. Member surveys and member consultation, as well as professional consultants, helped inform its construction look and feel, and significant staff effort is bringing home version 1.0. The website will be dynamic, not static, and will evolve over time.
I close with two NAEA operations reminders. The first is that the May 15, 2020, board meeting continues tomorrow at 11:00 A.M. EDT. We are sending a separate email with details. Further, the nominations window is open. Nominating Committee chair, Angela Radic, EA, is encouraging members to submit online board nominations to NAEA's board, either as president-elect or treasurer, or as a director. Awards Committee chair Kerry Freeman, EA, is also encouraging online awards nominations for all eight annual awards (details here).
It is your association and even small actions — a nomination, an answer to a Facebook post, attending the virtual board meeting — make a difference in our community.
Robert Kerr, EA
Executive Vice President
Haste Makes Waste ...
The buzz this week is around IRS's use of prepaid debit cards for EIP.
The reason for the buzz is recipients in some cases believe the cards are junk mail, and in other cases, believe the cards are part of some scam.
NAEA reached out to IRS HQ to share informally what our members are seeing. IRS has issued this press release, referencing now ubiquitous FAQs, which may help. The Atlanta Journal Constitution AARP and NBC News.
The real deal: Treasury is sending some four million people EIP debit cards in plain white envelopes. IRS stated a different bureau (Fiscal Services) is deciding who receives debit cards, and made clear the EIP Card is managed by Money Network Financial, LLC, and issued by Treasury's financial agent, MetaBank, N.A.
Amended Returns and e-File: Where Have You Been all My Life?
In what will certainly rank in E@lert's top 10 IRS press releases (we know, normal people do not think this way), IRS announced yesterday that later this summer taxpayers will be able to file Form 1040-X electronically. Kelly Phillips Erb provides context (re: claims for refund and superseding returns, for instance). Please note:
This should come in handy for the raft of amended returns EAs will file to clean up the mess people made when entering information in IRS's non-filer product in an effort to receive EIP.
- only TY19 Forms 1040 and 1040-SR (aside: is anyone filing an SR?) are eligible; and
- IRS receives roughly 3 million amended returns a year.
Otherwise, here is a summary of what legislative, regulatory, and tax administration issues since last we wrote:
- The House yesterday passed an extension to the 8-week window in which businesses are required to spend PPP funds. Senate is out of session, but could pass next week by unanimous consent.
- Small businesses may apply for PPP loan forgiveness. CNBC's Darla Mercado reviews the loan forgiveness questions remaining for many.
- A Taxpayer Advocate Service (TAS) attorney advisor this week suggested IRS will "struggle" to answer all questions on relief payments, despite a dedicated phone line to address them.
- Speaking of TAS and EIP, Kay Bell reports in her blog, Don't Mess with Taxes, TAS has issued a memo revising case acceptance criteria to exclude cases involving EIPs. The memo includes exceptions, proving to E@lert it is a true tax-related document ...
- IRS released the following guidance: Notice 2020-35 (postponing certain time-sensitive deadlines for IRAs, employment taxes, exempt organizations, and others due to COVID-19) and Notice 2020-41 (COVID-19-adjusted beginning of construction for sections 45 and 48). KPMG unpacks the former.
That's Why We Are Here
NAEA's advocacy team worked closely with several members (hat tips this week to Jessie Seaman, EA, and David Miles, EA) to determine the state of IRS operations and weigh in with IRS on issues of note.
Here is the rundown on IRS operations:
Also, we heard the following from a member who specializes in representation:
- CAF fax lines are still down, no faxing new Forms 2848 or 8821.
- Primary focus of returning IRS employees has been reviewing physical mail and faxes, and we guess they are still catching up.
- PPS lines are open for live calls and they generally accept faxed Forms 2848 and 8821 if not on the CAF. Transcripts may be requested and will be sent to representative's SOR mailbox.
- ACS is open, but will only speak to representatives with Form 2848 (not Form 8821).
- ROs and Offer Examiners are back on the job for the most part.
- Collections, with limited exceptions, is stayed until July 15.
- The e-Help Desk is accepting calls from representatives with issues with e-Services.
We're starting to get regular pushback from IRS personnel about digital signatures. The result is they basically terminate the call. We reference the digital signature memo, but it's almost as if they think we're trying to trick them. A service center employee said the memo was guidance for ROs only and ended the call despite the memo being addressed, literally, to: FOR ALL SERVICES AND ENFORCEMENT EMPLOYEES and referencing the deviation as applicable to IRS employees (without specificity) multiple times.
The advocacy team reached out to senior collection staff and others at IRS HQ just to send up a flare. We are reasonably confident this will be addressed and appreciate the dialog we were able to have.
Through NAEA's relationship with Wolters Kluwer, you have the ability to find in one place state tax filing relief. Once you log in through NAEA's website, you will see "Coronavirus/COVID-19 Pandemic," and immediately beneath that, you will have access to a document that updates in real time.
Aside from our own resources, you may want to consider the following:
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Everything but the Kitchen Sink
Since last we spoke, the single speaker E@lert would like to see headline NatCon21 is featured in Texas Monthly as America's therapist; the NCAA Football Oversight Committee will recommend a six-week preseason camp (go Buckeyes!); and, in case you have any screen time at all with your beloved (or alone), the top 100 films streaming on Netflix.
Here is what E@lert is streaming: A lot of 60s music, including Jefferson Airplane, Ray Charles, and the Stones (and good grief Jagger was young). Else, we are remembering how much we love Car Talk on NPR.
Otherwise, please consider this list of tax-related items, curated for America’s Tax Experts®:
- File under "how mortifying": Three disgraced former KMPG audit partners caught cheating on internal training exams have been disciplined by the SEC.
- IRS issued a statement of work focused on virtual currency and tax compliance. TaxLaw360 (subscription required) is reporting, "IRS is shopping around for contractors to consult on virtual currency examinations, and the agency's pitch to potential partners shows that it will be leaning hard on data analytics to police the tax compliance of virtual currency users."
- NPR's All Things Considered suggests nearly half of U.S. households' income has fallen because of coronavirus.
- IRS issued FAQs for alien individuals claiming the medical condition exception for 2020. Some individuals may have intended to leave the country but were unable to because of COVID-19.
- A June 30 deadline looms large for businesses with 2018 NOLs. We thought this analysis interesting.
- Keith Fogg, in his Procedurally Taxing blog, takes a run at a recent why jurisdiction matters in innocent spouse cases.
- There is money stuck in your dependent care account. The New York Times addresses the obvious question: "Now what?"
"Always carry champagne! In victory, one deserves it, in defeat one needs it."
— attributed to Napoléon Bonaparte (1769 – 1821), French military leader and emperor
Contributions to NAEA PAC are governed by federal law. Only U.S. nationals (citizens and green-card holders) who are NAEA members in good standing may contribute to NAEA PAC. Contributions are voluntary and not deductible for federal or state income tax purposes. Corporate contributions are not permitted. We are required to use our best efforts to collect and report the name, mailing address, occupation and name of employer of individuals who contribute $200 or more in a calendar year. Individual contributions are limited to $5,000 per year.
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NAEA E@lert | Volume 2: Issue 10
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