The WVPAA Bean Counter

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1 The WVPAA Bean Counter 990 e-file Offline, Due Date Extended Forms 990, 990-EZ, 990-PF, and 1120-POL normally due and or extended until those dates, are now due March 30, 2012, the IRS announced with Notice The part of the e-filing system that processes e-filed tax-exempt organizations was offline in Jan 2012 & will be offline until Feb 29, The IRS has granted and stipulated a new deadline to either paper file or e-file the aforementioned specific 4 returns on or before March 30, Attach a statement to that effect to the filed return or attach a Copy of IRS Notice , issued Dec 2011, which explains the extended due date in greater detail. RTRP Exam News Take Your Test Based Upon 2011 Tax Law: NSA Executive VP John Ames has some advice for exam candidates. The IRS will be updating the test in early April 2012 based upon 2011 Code, the very same Code you ve just spent hours and hours using during tax season. Consider taking the exam in May or June since you ve just had a cram course. The test is currently based upon ancient 2010 law. Who Must Test: A paid tax return preparer must take the Registered Tax Return Preparer competency test and meet the other requirements for becoming a Registered Tax Return Preparer unless the tax return preparer is a: Volume 1 Issue 2 February 2012 Other Newsy Bits: Clients affected by Ponzi Scheme? Consult Revenue Ruling and Revenue Procedure or check out IRS Q&A for investors in and treatment of distributions from trustee or receiver IRS Taxpayer Guide to Identity Theft IRS has many e-news Subscriptions; subscribe at: newsroom/index.html VITA volunteers are not RTRPs. They are not paid preparers. They do have to pass a certification test. Certified Public Accountant, attorney, or an Enrolled Agent; Supervised preparer, which is an individual who: 1. Does not, and is not required to, sign a tax return as paid preparer, 2. Works at a firm at least 80 percent owned by CPAs, attorneys or Enrolled Agents, and 3. Is supervised by a CPA, attorney or Enrolled Agent Newsletter Contents: More Innocent Spouses Qualify for Relief 2 Adoption Credit Raised on 2011 Returns 2 Nonprofits & WV Sales Tax 2 Preparer who does not, for compensation, prepare, or assist in the preparation of, all or substantially all of any Form 1040 series return. For purposes of this exemption, Forms 1040-PR and 1040-SS are not Form 1040 series returns. RTRP Test: The test is on Form 1040 Series and Ethics. It is a 120 question test lasting 2.5 hours. The cost is $ As of January 23, 2012 there are only 2 exam sites in WV, South Charleston and Morgantown. RTRPs Have Limited Taxpayer Representation Rights: Representation Rights afforded to RTRPs will be limited to representation before certain IRS officers and employees and only in connection with returns they have signed. Ohio To Launch Tax Amnesty Program 2 IRS e-services - Have You Tried Them Lately? 3 Tax Season Diversion 4-5 Useful Resources 5 Upcoming CPE 6 Form 2848: It s Different! 6

2 Page 2 The WVPAA Bean Counter More Innocent Spouses Qualify for Relief Notice proposing a new revenue procedure, posted on IRS.gov, revises the threshold requirements for requesting equitable relief and revises the factors used by the IRS in evaluating these requests. The factors have been revised to ensure that requests for innocent spouse relief are granted under section 6015(f) when the facts and circumstances warrant and that, when appropriate, requests are granted in the initial stage of the administrative process. The new guidelines are available immediately and will remain available until the finalized revenue procedure is published. The IRS will immediately begin using these new guidelines when evaluating equitable relief requests. Adoption Credit Limit Raised for 2011 Returns The Affordable Care Act raises the maximum adoption credit to $13,360 per child, up from $13,170 in 2010 and $12,150 in The adoption tax credit is refundable for tax year 2011, meaning that eligible taxpayers can get it even if they owe no tax for that year. In general, the credit is based on the reasonable and necessary expenses related to a legal adoption, including adoption fees, court costs, attorney s fees and travel expenses. Income limits and other special rules apply. In addition to attaching Form 8839, Qualified Adoption Expenses, eligible taxpayers must include with their 2011 paper tax return one or more adoption-related documents to avoid delaying their refund. Taxpayers may also be asked, after filing their returns, to substantiate any qualified adoption expenses they paid. Non-Profits and WV Sales & Use Tax Non-Profit organizations are NOT exempt from the Sales & Use Tax by reason of their Non-profit status alone but must meet the very specific requirements contained in the sales and use tax laws and legislative regulations. Non-profit organizations which do not meet these requirements are required to pay tax on their purchases and collect and remit tax on their sales (unless their purchases or sales are exempt under some other provision of the law). All sales and purchases are presumed to be taxable. It is the responsibility of both the person making a purchase and the person making a sale to prove that the purchase or sale is for an exempt purpose. Read more about these requirements on WV Publication TSD-320. Ohio Launches General Tax Amnesty Program The General Tax Amnesty provisions of H.B. 153 will be available beginning May 1, 2012 for many businesses with overdue liabilities in any of the following taxes: commercial activity, corporation franchise, sales, gross receipts of a natural gas company or a combined electric and gas company, motor fuel, cigarette or other tobacco products, dealers in intangibles, employer withholding and school district employer withholding. General Tax Amnesty also applies to taxes owed by individual taxpayers including: pass-through entity, personal income, school district income, and estate. The amnesty program applies to qualifying delinquent taxes which were due and payable as of May 1, During the program, the OH Department of Taxation is authorized to forgive penalty and 50% of the interest resulting from certain taxes that were underreported or unreported that remain unpaid. To qualify for amnesty, full payment of the taxes and applicable interest must be made by June 15, Questions:

3 Volume 1 Issue 2 Page 3 IRS e-services: Have You Tried Them Lately? e-services is a suite of web-based products that will allow tax professionals and payers to conduct business with the IRS electronically. These services are available 24 hours a day, 7 days a week via the internet. e-services is not available to the general public. Only approved IRS business partners as noted below, are eligible to participate in e-services. All tax professionals who register are eligible to use the following e-services: Registration Online e-file Application Electronic Return Originators (ERO) who have e-filed five or more accepted returns are eligible to use these incentive products: Disclosure Authorization (DA) Electronic Account Resolution (EAR) Transcript Delivery System (TDS) Note: Since November 1, 2007, all Circular 230 Practitioners who qualified as Attorneys, Certified Public Accountants, or Enrolled Agents have had unlimited access to the incentive products listed above whether they e-filed their client returns or not. Reporting Agents who are accepted IRS e-file providers, are eligible to use the following Reporting Agent e-services products: Electronic Account Resolution (EAR) Transcript Delivery System (TDS) Payers of income subject to backup withholding are eligible to use: Taxpayer Identification Number (TIN) Matching Application Interactive TIN Matching Bulk TIN Matching TDS improvements went live January 9, 2012! TDS was re-engineered to upgrade equipment and software, to improve processing, and increase capacity. You will continue to access TDS through e-services, using your existing username and password. The same transcript request options will be available. What changed? Your e-services mailbox, previously called a "Secure Object Repository" (SOR), is now a "Secure Mailbox". A check box to generate a cover letter will only be present for fax and postal mail delivery options. The "Next" button used to move to the next screen is renamed "Continue". What benefits changed because of the re-engineering? Screens are defined more clearly. Taxpayer and product information combined to one page. Most commonly used forms as default. Ability to set tax year range (beginning and ending). Ability to submit multiple tax forms in one request. Ability to add and submit more than one taxpayer in same request. Taxpayer Identification Number will default to SSN. If you are not already registered for e-services from the IRS, why not give it a try? Go to and click on Tax Professionals and then click Registration Services, or click the link in this newsletter. Register on for e-services and reap the benefits.

4 Page 4 The WVPAA Bean Counter TAX SEASON DIVERSION Across 1. Personal or Dependency (9) 3. See 21 Across (5) 6. Money Back (6) 12. Type of IRA (11) 13. Schedule A Part I (7) 18. Form 8582 Activity Loss Limitations (7) 21. With 3 Across, Schedule D (7) 22. Adjustment to Income or Credit (7) /15, 06/15, 09/15, 01/15 (9) 26. Schedule B Part I (8) 27. Type of IRA (4) 29. Form 4562 Part VI (12) 32. Form 3903 (6) 33. Subject to 2% Floor (13) 34. See 35 Across (3) 35. With 34 Across, Alternative (7) 38. No Schedule A (8) 39. Form 1065 (11) 41. Schedule R Credit (7) 42. WV Combined & Use Tax (5)

5 Volume 1 Issue 2 Page 5 Down 1. Schedule E Part III (6) 2. Credit - Hope or Lifetime (9) 3. Reported on Form W-2G (8) 4. Health, Liability, E&O (9) 5. Reported on Form W-2 (5) 19. Schedule E Part I (6) 20. Compensation (12) 21. Contributions (10) 22. Schedule E Part III (5) 24. Form 4562 (12) The nice thing about doing a crossword puzzle is, you know there is a solution. - Stephen Sondheim 7. Reduces taxable income (9) 8. Adjustment for Payer, Income for Payee (7) 9. Early Withdrawal, for one (7) 10. Schedule B Part II (8) 11. Reported on Form W-2 (11) 14. S or C (11) 25. Schedule A (8) 28. Must have qualifying child to receive (4) 29. WV Starting Figure (3) 30. Deductible or Non-deductible (3) 31. Reported on Schedule C (8) 32. With 26 Across, Reported on Form 1098 (8) The problems of puzzles are very near the problems of life, our whole life is solving puzzles - Erno Rubik 15. Capital ones are limited (6) 16. Tax Reductions (7) 17. First-time (9) 36. Used since 1986 (5) 37. Schedule F (4) 40. Can elect to forego carry back period (3) Solution will appear in the next Bean Counter Useful Resources The WV Small Business Development Center has published a 128 page book entitled Going into Business in WV. It may be ordered from the WVSBDC or downloaded in.pdf format on the WVPAA website. Are You or Your Clients Subject to FLSA? Better to be safe than sorry. Large fines and penalties can be assessed if you are not in compliance. Check it out at West Virginia Undocumented Workers FAQ - What exactly is an undocumented worker? Why you, as an employer, should be concerned newsy_bits.htm When do you need to get a new EIN? You think you know? Are You SURE? Be sure, visit: Are you aware that there is a video tutorial, available on the WV Secretary of State s website at Business4WVOnlineTutorial.aspx, for you, or your clients, explaining how to file the WV Annual Reports online at You can check out what the WV Legislature is proposing to do to WV s tax laws by visiting Bill Status on their website: They ve been very busy this session, with both the House and Senate submitting bills left and right.

6 Page Quarrier Street PO Box Phone: fmsayre@hotmail.com West Virginia Public Accountants Association Protecting the interests of small accounting firms and individual practitioners. The WVPAA Bean Counter Upcoming CPE Opportunities 11 Hours: WVPAA Annual Meeting - June 21, June 24, 2012 Lakeview Resort and Conference Center Morgantown, WV CPE, Networking, Dining, Dancing, Golf Tournament, Tours 8 Hours: WVPAA Federal Issues Seminar - TBA (Usually September) Location: TBA 8 Hours: WVPAA State Issues Seminar - TBA (Usually October) Location: TBA W E RE ON THE WEB WWW. WVPAA. ORG 14 Hours Tax 2 Hours Ethics: WVPAA Sponsors PTI 1040 Update (Professional Tax Institutes, Inc) - TBA (Usually November) Location: TBA 8 Hours: 2013 Working Together Conference - TBA (Usually January) Location: University of Charleston, Geary Hall Ballroom Sponsored by: WVPAA, WVSCPA, WVTI, IRS, WV State Tax Department Form It s Different! In early December 2011, the IRS released changes to Form 2848, Power of Attorney. The major change that was made was to accommodate the RTRP designation of preparer. They also changed other things... No longer allowing JOINT return authorizations. Only 1 taxpayer, 1 TIN, and 1 signature per form. Requiring CPAs to provide their state license # POAs must check the box to receive copies of notices. POAs can no longer receive a client s refund check Addition of specific checkboxes to clearly authorize 1. Disclosure of tax return information to 3rd parties 2. Practitioner authorization to sign a client s return 3. Substituting or adding a representative How long will the IRS still accept the OLD Form 2848?. Unknown. It s been recommended that you use the new form in the future. All POAs in the CAF under the old form will be honored until they expire.