Minutes IRS/Practitioner s Liaison Committee

Transcription

1 Minutes IRS/Practitioner s Liaison Committee An IRS/Practitioner s Liaison Committee Meeting was held on October 23, The Georgia Society of CPAs hosted the meeting at offices located at 3353 Peachtree Road NE Suite 400, Atlanta, GA. Pete Fishman, Chairman, called the meeting to order at 8:30 am. The attendees were as follows: PHONE FAX R Peter Fishman Chariman fish1276@aol.com Shirl Bishop EA Recording Secretary sbishopea@aol.com Chet Burgess EA GAEA brookwoodtax@mindspring.com Kathleen Collins EA GAEA kathleencollins9049@msn.com Jeffrey H Kess State Bar jkess@gomeldavis.com Richard C Litwin Atlanta Bar rlitwin@litwinlaw.net Patti M Richards Atl Bar/IRSAC prichards@richardslawfirm.com Harold A Stamey GAATP harold@hstameycpa.com Laurie Conner Jarrett NSTP connersatl@aol.com William P Blakeslee NSTP wpblakeslee@aol.com Larry Nichols GSCPA LNichols@LWNCPA.com Joel L Pascaner GSCPA jpascaner@bermanllc.com Catherine Cleaveland Kennesaw SU mcleave1@kennesaw.edu Angie Napier AAA-CPAs angienapier@kpmg.com Bo Jackson AAA-CPAs bjackson@tjgcpa.com Ben Tallman EA GA-NATP tallmanstax@comcast.net Rob Casey EA GA-NATP robkc1943@yahoo.com Willard Timm GSU LITC lawwnt@langate.gsu.edu Craig McLaughlin IRS craig.mclaughlin@irs.gov Kathy Frederick IRS SL Kathy.Frederick@irs.gov Tammy Coleman-Jones IRS SL tammy.coleman-jones@irs.gov George Harris IRS SL george.w.harris@irs.gov Rod McArthur IRS rod.mcarthur@irs.gov Jackie Jefferson IRS jackie.jefferson@irs.gov Sandra H. Adams IRS sandra.h.adams@irs.gov Rose Richardson Browne IRS rose.r.browne@irs.gov Debra Daigle IRS-Appeals debra.a.daigle@irs.gov John J Ranero IRS-Appeals john.j.ranero@irs.gov Dawn Escobar IRS dawn.m.escobar@irs.gov Melissa Chedotal IRS-TIGTA melissa.chedotal@tigta.treas.gov Pete Fishman, Chairman, called the meeting to order and asked that everyone introduce themselves to the other attendees. Shirl Bishop, Recording Secretary, had previously ed the minutes of the prior meeting to all members for their review. The minutes were approved. PAGE 1 OF 5

2 Sandra H. Adams, IRS-Georgia Governmental Liaison, assumed her position the first of September. Most of her career with the IRS has been in exam, employment tax, excise tax, and a few other areas. Government Liaison is under the function of Communication Liaison and Disclosure and a large part of her job is communicating the key messages of the IRS to others. They are under the SBSE Operating Division but work with all the other divisions of the IRS very closely. The Government Liaison Mission Statement is: The Governmental Liaison and Disclosure Division provides over-site and education to IRS and its external partners to ensure protection of taxpayer and employee confidentiality rights while addressing the public s right to access information and through partnerships with federal, state, and local governmental agencies to simplify the ability of taxpayers to meet their tax obligations and to focus on customer service, integrity, and fairness to all. They partner with other governmental agencies and assist in the role of tax compliance. They are responsible for two programs one is the congressional affairs program and the other is to partner with external government agencies. Sandra s role in the congressional affairs program (CAP) is to maintain and develop relationships with the entire congressional delegation (2 Senators and 13 Representatives) for the state of Georgia. She answers tax questions and makes sure the IRS key messages are delivered to their offices along with making sure they are provided with links so they can provide that information to their constituents. Her office does not handle tax account information and she will pass those questions on to the correct function within the IRS. Her office meets with the local congressional staffers throughout the year and holds seminars. A large part of what they do falls in the category of external governmental agencies where they partner with state tax agencies, federal agencies non-tax state agencies, and some local agencies. They hold periodic meetings and provide information including IRS key issues to build the relationship and enhance tax compliance. They also share information with these agencies. Non-tax state agencies include the GA Dept of Banking and Finance and the GA Real Estate Commission. Recently they sent information to these agencies regarding the tax implications of the large number of foreclosures in the State of Georgia and some information on tax relief that might be available for those that qualify. Memorandums of Understanding (MOU) are secured with these agencies in order to carry out compliance in the Excise Tax and the Bank Secrecy Act and other areas as well. One of their biggest jobs is overseeing the Governmental Liaison Data Exchange Program. IRS ensures that taxpayer data is secure in this exchange program and there are guidelines that must be followed. All agencies must provide the IRS with a Safeguard Procedures Report which outlines procedures which will ensure that the data is safe. All data is sent on a Need-To-Know basis. In order to be a part of this Governmental Liaison Data Exchange Program, the agency must enroll annually. The Georgia Department of Revenue and the Georgia Department of Labor along with other states receive transmissions from the specific IRS staff to designated persons at that agency. These transmissions include the master file information, examination reports (usually transmitted within 45 days), 1099 matching information, CP2000 notices, levy information, etc. These state agencies also provide the IRS with information which includes levy and student loan information and IRS refunds can be attached. They are trying to enter into a MOU with the State Department of Labor as it relates to Questionable Employment Tax Practices (QETP). Practitioner Comment: It would be helpful if GA Department of Revenue could receive the GA withholding amounts from the W2s that are filed with the Social Security Administration. Practitioner Comment: It would be helpful if the EIN could be listed on the DOL reports so payments can be matched. Rod McArthur, Territory Manager, Employment Tax Policy, is the Territory Manager for Employment Tax Mid- States Territory. The IRS Enterprise Wide Employment Tax Program began early last year after realizing there were significant issues regarding employment taxes. The tax gap is significant and employment taxes are believed to be $15 Billion in reporting compliance and $5 Billion in payment compliance and those numbers may be higher. This means there will be a definite focus on employment taxes and this program brought together all functions of the IRS where there is now a more coordinated effort in the dealing with this issue. They followed the NRP sequence for filing compliance, reporting compliance, and payment compliance. By doing this, they were able to identify key issues within each area: Promoting Front End Compliance including investigating the EIN. It was discovered that businesses were running up their trust fund taxes, closing the business, opening another business, applying for another EIN, and starting the process all over because an EIN can be obtained very quickly. The IRS would like to install a compliance check on the front end of this process. PAGE 2 OF 5

3 Increasing Third Party Information Reporting is another way to promote compliance. Tipping has long been an area of non-compliance. The gaming industry in Las Vegas has been targeted and the IRS has entered into agreements with all the major casinos to report tips on the W2. They will move onto Atlantic City next to set up agreements with those casinos. Leveraging Federal and State Relationships and setting up memorandums of understanding with other agencies is a way of increasing compliance. The IRS has 29 states that have agreed to sign this agreement to exchange information. The agreement will include provisions to do side-by-side audits with these agencies. Leveraging Current Processes will allow the IRS to streamline, get current, and get more efficient. A major area to work is employment tax area. Receipts from employment taxes are very significant and two thirds of their resource time is spent in this area. The area of non-filers of employment taxes is now being worked at the campuses and that leaves more time in the field for more complicated cases. They found a large number of churches that have employees but are not reporting. Focus Coverage by Work Streams has identified all the work streams that deal with employment taxes and focus on those areas of compliance. Research is being done by industry, work stream, and other ways to determine where the problems are. They are working on an automated tool that will allow them identify employment tax cases. They have found cases where the employer will file W2s but not file the 941 returns and they have a database that identifies these employers. Cash payments is an area that has been a problem and they are working with the Bank Secrecy Act, pawn shops, and check cashing establishments to trace. Worker reclassification is an area where the IRS and the states continue to target specific industries. Tip reporting continues to be a problem area and they are reviewing the 941 Form to help simplify this reporting. Officer compensation is an area where they are looking at returns and the preparers to promote compliance and proper classification of officer transactions. They are hiring personnel to look at these areas they currently have about 110 people. To summarize, the IRS is strongly looking at the employment tax issues and preparers should be talking with their clients and asking the proper questions. Form 4137 has been replaced with Form 8919 to correct the e-file problems. If you have case issues, call Brian Word, Manager for the State of GA, at Rod s phone number is but he suggested a call to Brian first. Employment tax issues are a regular subject on Tax Talk Today. Kathy Frederick, Senior Stakeholder Liaison, reported on Issue Management Resolution System (IMRS) issues. -In a prior meeting, someone asked if the 1040NR returns would be eligible for e-filing this tax season and Kathy reported that currently there is no plan to make it available. -E-Service passwords can be revalidated online and no longer will they need to be mailed to practitioners. -All Circular 230 practitioners are now eligible for e-services and the e-filing requirement has been eliminated. -There is a webpage on IRS.gov that explains all the implications of foreclosure reporting. -Individual taxpayers who pay estimates via EFTPS will no longer receive vouchers and those taxpayers who do not pay via EFTPS will receive all vouchers at one time. Paid preparer returns, software prepared returns, e-filed, and e- paid returns will no longer receive paper vouchers by mail. -E-Service error list can now be found for reference and online tutorials are available. If you receive an error message on e-services and cannot resolve, please Keith.I.Wallace@irs.gov to discuss. -In January, taxpayers can pay tax, penalty, and interest electronically. -The Form 2553 can now be filed along with the first tax return for an S Corporation election. The requirement for filing the 2553 by the 15 th day of the second month still stands, thus, you must have reasonable cause for filing later. (See Rev. Proc ) Practitioner Question: When applying for an on-line EIN for a tax exempt organization, a power of attorney is necessary but an EIN is necessary for filing for a power of attorney. This problem cannot be resolved. Also the creators of the organization do not want to put their social security numbers as responsible parties. What can be done? Practitioner Question: Has anyone heard if the extenders be accepted by the IRS again this year? Practitioner Question: Can you raise the issue that the K-1 entities (Partnerships, etc) be given the same due date as the corporate returns on extension (Sept 15 th ) so the K-1s can be received in a more timely manner? PAGE 3 OF 5

4 Craig McLaughlin, Stakeholder Liaison, Southeast Area Manager, invited all practitioners to attend the Phone Forums and Tax Talk Today. The Tax Talk Today programs are archived on the IRS website for later review. He recently met with officials in China and they told him that when a new business is opened in China and apply for a business license, they are required to purchase a government issued cash register to monitor the sales. In order to get the business to report all sales through the cash register, each customer is issued a receipt with a scratch off lottery ticket attached. If the customer does not win, he or she enters all receipts at the end of the month for a jumbo drawing. Another requirement in China is that after the taxpayer s income reaches an amount, they are required to have their tax return prepared by a professional. They have a flat tax rate of 17%. Rose Browne, Taxpayer Advocate Service, said that the National Taxpayer Advocate will be delivering the annual report to Congress and that report will be available shortly. She offered to help practitioners and individuals with issues that cannot be resolved through regular channels at the IRS. Dawn Escobar, Collection Territory Manager, said that the number one suggestion on customer satisfaction surveys continues to be the amount of time it takes to resolve issues. She asks her employees to take as many actions simultaneously as they can to speed up the process. She welcomes feedback on her collection groups. Her territory is hiring 25 new revenue officers this fiscal year. Debra Daigle, Appeals Officer, announced a couple of changes. One is in collection-due-process cases for businesses in business. If they have already had a case under a similar issue in the last two years, they will have post levy appeal rights not pre levy appeal rights. Another issue deals with post appeals mediation on offers. Test sites will be set up in four cities nationwide to test post appeals mediation in offers. The guidelines should be announced by January John Ranero, Appeals Officer, announced that his group will probably be providing the mediators for the mediation that Debra talked about. This will put an additional strain on his group and they are really squeezed for resources. He asked that practitioners be patient and be ready at the first conference to discuss issues and have documentation available to resolve the issue because additional conferences may not be available. Jackie Jefferson, Territory Manager, Taxpayer Assistance Centers, announced they are in the tax season readiness process and he will report further details in the January meeting. February 1 st will be the first day of actual filing of tax returns in the centers. Melissa Chedotal, TIGTA Special Agent in Charge, said they investigate IRS personnel but they also investigate allegations against tax preparers. She spoke about phishing websites that pose as the IRS website and offer taxpayers money via an . Of course, this is not the way IRS does business and if a taxpayer receives such an , it should be forwarded to them for investigation and the taxpayer should not give out any personal information. This past tax season the phishing websites were posing as the IRS Free File Website so please be sure you are on the correct website which is The returns were actually filed with the IRS, but the refunds were sent to another location. Melissa also said they are investigating payroll tax preparation companies who have collected payroll taxes and have not remitted them to the IRS. If you have information about these companies contact Melissa or Bernard Williams ( ) at TIGTA. R. Peter Fishman, Chairperson, thanked all the members for their support and hard work in getting the information from the Liaison meeting to their members. He stated that as a representative, each member is expected to attend all meetings and if a member is unable to attend, he or she should contact him or Shirl Bishop prior to the meeting with a substitute and each organization is responsible to appoint two people to represent them at each meeting. PAGE 4 OF 5

5 Pete announced that the next meeting will be on Tuesday, January 22, 2008 Please continue to submit topics for future meetings. If your members have concerns, please ask them to send you the information. Please submit your requests to Pete Fishman at or Shirl Bishop EA at no later than 30 days prior to the meeting date. Of course, you can submit items at anytime you do not have to wait until 30 days prior to the meeting. Please remember to share the minutes of this meeting with the members of your organization. The meeting was adjourned. PAGE 5 OF 5