How To Contact A Cpa

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1 Minutes IRS/Practitioner s Liaison Committee An IRS/Practitioner s Liaison Committee Meeting was held on July 24, The Georgia Society of CPAs hosted the meeting at offices located at 3353 Peachtree Road NE Suite 400, Atlanta, GA. Danny Smith, Co-Chairperson, called the meeting to order at 9 am. The attendees were as follows: PHONE FAX Shirl Bishop EA Recording Secretary [email protected] Audrey Griffin EA GAEA [email protected] Kathleen Collins EA GAEA [email protected] Jeffrey H Kess State Bar [email protected] Richard C Litwin Atlanta Bar [email protected] Harold A Stamey GAATP [email protected] Laurie Conner Jarrett NSTP [email protected] William P Blakeslee NSTP [email protected] Larry Nichols GSCPA [email protected] Brad Dickson GSCPA [email protected] Catherine Cleaveland Kennesaw SU [email protected] Tad Ransopher GA State Un [email protected] Angie Napier AAA-CPAs [email protected] Bo Jackson AAA-CPAs [email protected] Danny C Smith IRS SL [email protected] Kathy Frederick IRS SL [email protected] Tammy Coleman-Jones IRS SL [email protected] Melanie Burroughs IRS-Atl Campus [email protected] LaDebra Carter IRS TAS [email protected] Paul Mayberry IRS-SBSE/Exam [email protected] Luann Finkelstein IRS TIGTA [email protected] Zeke Reid IRS Collection [email protected] Pete Fishman, Chairman, could not attend this meeting due to his wife s illness. We wish him and his family the best and a speedy recovery to his wife. Shirl Bishop, Recording Secretary, had previously ed the minutes of the prior meeting to all members for their review. The minutes were approved. Danny Smith, IRS-Senior Tax Specialist, Stakeholder Liaison, welcomed everyone to the meeting and asked all attendees to introduce themselves to the rest of the group. Danny informed the group that one of our prior members, Sam Grubbs, died shortly after tax season. He also announced that the NATP members could not attend this meeting because NATP is having their annual conference this week. Danny passed out a handout that included a page on upcoming events. All practitioners can find a list of future events by going to the IRS website and he encourages practitioners to attend these events whenever possible. He also encourages all practitioners to subscribe to e-news and these notices will come automatically. He announced that on September 11, 2007, at 2pm there will be a Tax Talk Today entitled Campus Compliance Services and You. Page 1 of 6

2 Danny announced that the GA CPAs have compiled a 2007 Georgia Practitioner Survey again this year. They have done this in the past and the Liaison Committee has devoted its January meeting to the discussion of the survey results. We intend to do this again in next January and Danny asked that all practitioners take this survey as soon as possible while the events of tax season are fresh on your mind. THE SURVEY WILL CLOSE ON OCTOBER 31, You can find the survey online at.. You can review the results at Larry Nichols, CPA, offered to accept any other additional topics from practitioners which may be inserted into future surveys. His address is [email protected] Danny also covered the June 2007 IMRS Monthly Overview. All IMRS issues are on the IRS website and you can search by topic or review the issues raised each month. The current overview covers new issues and recently closed issues. When you have an issue that you would like to have raised in the future, please contact Kathy Frederick at [email protected] or Tammy Coleman-Jones at [email protected] An IMRS issue raised at the last Liaison Meeting pertained to the filing of Power of Attorney forms. The complaint was when two POA forms were faxed to Memphis the IRS personnel were only recording one of them. The IRS resolved this by having a meeting with the employees and now more care is taken to review ALL documents that are received via fax in the future. Another issue raised at the last meeting covered the centralizing of Offers in the campuses. The practitioner felt that this is a mistake because the campus personnel do not seem to have the training or the knowledge necessary to determine the value of a small business nor how to handle very difficult 1040 issues. This lack of knowledge leads to cases being taken to Appeals and time wasted for both the IRS and the taxpayer/representative. Kathy Frederick said that she included this issue in one of her monthly reports to headquarters. Another IMRS issue pertained to e-services forgotten passwords. Practitioners complained that if they forgot their password, they could not get online verification and an immediate issuance of a password or PIN. The response from the IRS was that due to security procedures and concerns, immediate online verifications and password submission could not be provided. You must repeat the Authentication and Confirmation process using the Forgotten Password or PIN link. If it has been more than 14 days since the online registration and the practitioner has not received the confirmation code via postal mail, the practitioner should call the e-services help desk at Danny was promised that in the next upgrade this issue would be reviewed. To continue this discussion, practitioners at today s meeting also complained that their password needs to be changed periodically and if the practitioner does not use e-services very often, they may forget to change the password and then cannot get into e-services when needed. Also, when returning to a prior POA, your original password or PIN is required before proceeding. If you have changed your password and/or PIN, then you must go back and find the former password and/or PIN or be forced to begin the process again. This is a terrific burden and practitioners want to know why this is a necessary practice. No other websites require that passwords be changed periodically. Danny also passed out an IRS Telephone Directory for Practitioners. Danny sent this electronically to Shirl and she has attached them to the end of these minutes. Danny also announced that he has been promoted to a new position with IRS Headquarters and will no longer be attending our Liaison Meetings. Kathy Frederick and Tammy Coleman-Jones will be leading our Liaison Meetings in the future. Congratulations and Thank you, Danny, for everything you have done for the Georgia IRS/Practitioner Liaison Committee. Page 2 of 6

3 Danny said that a preview meeting was held prior to today s meeting which is called the Stakeholder Relationship Management Local Council. The different IRS organizations are represented at this meeting and they discuss the issues that need to be presented to the liaison members. Danny announced that the new Governmental Liaison is Sandra Adams. Danny apologized for the fact that so many departments did not attend the meeting today. Paul Mayberry, Examination Territory Manager, is the manager of all the Georgia revenue agents and tax compliance office auditors and he reported on the SBSE exam division in the State of Georgia. They have a lot of new agents now and it is a learning experience and a real challenge. Paul 13 groups of revenue agents in the Georgia which include 125 agents and 13 managers. There are 4 new managers with less than one year of experience and approximately 50 trainee agents. The current total training process is 18 months for all areas. If practitioners are experiencing situations where agents are lacking, he would like to be contacted so he can address the problems. He stresses communication between the agent and the taxpayer/representative in order to keep the process moving. Paul has a very large territory and there is a possibility that his territory might be split during the next year which will allow him to manage more efficiently. Currently Collection has two managers but Exam only has one manager. A new group has just been begun in Smyrna and they will be hiring a small number in August for Savannah (4 agents), Valdosta (2 agents), and Columbus (3 agents). They are looking at Gainesville, Augusta and Athens as well. Paul would like to see some staffing in the Peachtree City or the airport area. His staff has been reduced in the past and congress is now allowing them to hire again on a consistent basis but the vacancies must be filled in the Metro area before he can hire for the surrounding areas because there is more work in the metro area. Having filled those positions, he is now free to hire outside the Metro area. They are adding some compliance officers as well. By not having the IRS present in the field, this encourages non ethical preparers to thrive. Some preparers are now filing returns with a refund rate of 98%. Whenever congress sees the economy in a deficit situation, they turn to the IRS to bring in more money. Next year they are scheduled for four periods of hiring. Congress is also very nervous about the Tax Gap and the amount of money that goes unreported. September is the end of the Flow-Through NRP phase. There were 5, S returns nationwide and 50, returns. That data has gone in and the DIF formulas have been updated. There will be another 1040 phase this October (13,000 returns nationwide) and another 13,000 nationwide in 2008 and 2009 as well. The data base will be updated so that only the returns that need to be audited will be selected. The exam emphasis for 2008 will be on high income taxpayers, Schedule Cs (heavily), high income non-filers, Partnerships and S Corp returns. They plan for around 8,000 audits in Georgia next year. The Tax Gap is getting higher and higher-$345 Billion in 2001 dollars. $27 Billion is non-filers, $33 Billion is nonpaying, and $285 Billion is under-reporting. The largest gap is the Schedule C filers who do not report income and there is a 46% compliance rate if the income is not reported to the IRS on a The IRS cannot audit the tax gap away but increased compliance presence, assistance from the practitioner community, and legislative change can decrease the tax gap. There are 16 legislative proposals in the 2008 budget. Three of the sixteen proposals have been adopted. One proposal deals with employment taxes, trust fund taxes, and collection due process. Another proposal deals with preparer penalties. Danny Smith pointed out that these proposals are sent to the practitioner community via e-news which is another reason everyone should sign up. All the proposals can also be found on the Tax Gap Website. Some of the proposals that have not passed yet deal with subcontractor payments and SSN matching, requirements that 1099s be issued to corporations when payments are more than $600, increased penalties for failure to file information returns, and failure to file tax return criminal penalties. GAO shopped 19 different tax preparation locations (unlicensed preparers) where they took with them their tax records including some self employment income of a significant amount. Ten or the nineteen practitioners said not to report the self employment income. GAO recommended that the Commissioner of the IRS conduct necessary research to determine the extent to which paid preparers live up to their responsibility to prepare accurate and complete tax returns based on the information they receive from their clients. Page 3 of 6

4 Total individual audits nationwide have increased over 16% to 1.3 million over the last few years-the highest number since Audits of individuals with income over $1 million increased 33% to 17,000; audits of individuals with income over $100,000 increased 18% to over 257,000; S Corp audits increased 34% to 14,000; Partnership audits increased 15% to 10,000; levies increased by 36% to 3.7 million; and liens increased by 29% to 630,000. Zeke Reid, IRS Collection Manager, manages the IRS Collection Officers. Fiscal year 2008 budget includes funding government treasury tax strategy to increase tax compliance by minimizing additional taxpayer burden. The IRS enforcement programs are aimed at deterring taxpayers inclined to evade their responsibility while vigorously pursuing those who violate tax laws. The budget also increases funding to improve compliance by increasing front line enforcement resources. The 2008 budget calls for approximately 900 new revenue officers to be hired nationwide in three waves-october, January and June. Georgia will be getting 4 new revenue officers in Savannah and 1 in Decatur in October. In January, Georgia will get 4 in Columbus, 2 in Albany, and 2 in Valdosta. One of the legislative proposals in the President s 2008 budget will impact on the collection process. The proposal is to amend the Collection Due Process procedures for employment tax liabilities to provide an exception to the requirement for pre-levy CDP proceedings in the case of levies issued to collect federal employment taxes. The taxpayer will be provided an opportunity for a CDP hearing within a reasonable period of time after the levy. Currently all taxpayers, both personal and business, have a right to a CDP hearing before a notice of levy is issued. Zeke addressed an issue that was raised by a practitioner regarding continuous notice of levy on wages. The instructions on the Form 668W state that the levy remains in effect for all wages and salaries until the IRS sends you a release of levy. The practitioner stated that there is great potential for the employer to withhold excess money from the employee if the IRS is not monitoring the payments. Zeke said that the revenue officer may hold the case if the levy is expected to be satisfied in a short period of time. Example: If the case is going to be paid off in six months, an ROA can monitor the case. If six months of payments will not satisfy the levy, then it is sent to a central location and is monitored in Philadelphia. A release of levy is sent from that location when the levy is satisfied. Field collection employees can close their case when the payments are expected to be long term. Once the field collection employee closes the case, it is sent to the centralized case processing for monitoring. This unit is responsible for releasing the levy when it is satisfied. Zeke suggested that if the levy is putting significant hardship on the taxpayer, perhaps the taxpayer/representative should contact the Taxpayer Advocate. Zeke said that Dawn Escobar, IRS Collection Territory Manager, sent an inquiry to the headquarters program manager asking for clarification of procedures for monitoring and releasing of levies by the centralized case processing division. Here is that response: Accounts that are being paid by continuous levy payments are either manually or systemically monitored to ensure that the levy is released timely in order to prevent refund situations. When the levy is full paid, or one month prior to the last Collection Statute Expiration Date, a levy release is issued. Please refer to Internal Revenue Manual below for specific guidance that pertains to this issue ( ) Full Paid Continuous Wage Levy Accounts CSCO Processing (1) It is imperative that the wage levy be released immediately when the account becomes full paid. We must prevent payments from continuing to be sent which causes a credit balance and refund situation each month. Problems have also been encountered where credits from levy payments have been held by IRS until after the RSED expires. Zeke further stated that there has been a policy change concerning Installment Agreements. When working with a revenue officer in field collections, please be aware that the dollar threshold for in-business trust fund installment agreements has been changed from $1,500 to $10,000. Other criteria for qualifying for this type of agreement are: Balance due must be paid within 24 months Taxpayer must be current in his filings and FTD payments No financial statement is required A lien determination must be made by the revenue officer Revenue officer must make a field call to view business assets Page 4 of 6

5 Zeke said their emphasis for the fiscal year is over-age cases and staying in touch with the taxpayer/representative in order to close cases sooner, high dollar cases, stand alone TDIs, and fraud in the tax gap area. He said that he has lost four revenue officers in the last month and a half due to promotions. This causes cases to sit until he can find someone else to work them. Practitioner Question: A client had an interview with a revenue officer regarding a trust fund recovery penalty. The revenue officer said that this client would not be assessed. The client did not get anything in writing substantiating the decision. Zeke said they are not like exam which issues closing letters, but he offered to investigate the matter. Perhaps this is an area which should be reviewed by headquarters. Melanie Burroughs, Department Manager, Atlanta Accounts Management, Taxpayer Relations Department, said that her responsibility at the campus is to assist with processing issues or concerns and she welcomes practitioners to contact her with any processing matters. She is representing the Atlanta Campus for the Submission Processing, Accounts Management, and Compliance functions. LaDebra Carter, Taxpayer Advocate Service, said that sometimes taxpayers come to the advocate office because of delays and many times this is in the area of field exam and field collections. When they investigate the issue, the response is often that the delay is due to staffing and they are trying to work with exam and collections to resolve that issue. LaDebra pointed out that TAS is a free service and they are there to help as an advocator and mediator with the Internal Revenue Service. Practitioner Comment: A taxpayer contacted TAS to obtain an installment agreement. The advocate employee delayed for a period of time before telling the taxpayer that a financial statement was needed. Meanwhile ACS levied the wife s wages for three months, and the wife lost her job, while the taxpayer waited for the advocate to resolve the issue. This could possibly have been avoided if the Advocate employee had requested the financial statement when the taxpayer first contacted TAS. Luann Finkelstein, IRS-Treasury Inspector General for Tax Administration (TIGTA), said they investigate allegations of misconduct concerning IRS employees and threats to the IRS, but they do not investigate tax fraud which is handled by Criminal Investigation. TIGTA handles investigations of practitioners who are doing things that are questionable. There is a link to the TIGTA website from OTHER BUSINESS AND QUESTIONS: Practitioner Question: Will there be more audits in the Estate and Gift tax area? Danny said that staffing in this area had been reduced in the past but currently they are seeing an increase in Estate and Gift tax returns so this area may need to be looked at. Practitioner Comment: This practitioner has been seeing audits in the employment tax area where the auditor is looking for transactions that can be reclassified as wages thus requiring the preparation of amended 941, W2 and W3 returns. The auditor is assessing a 25% federal withholding tax rate on these wages and informing the taxpayer that he has until a certain date to amend the payroll tax returns and W2/W3 forms. The 25% withholding could result in a refund when the taxpayer amends his personal income tax return. Some of the auditors are looking at officer compensation but bypassing the payroll tax issues and putting it on the officer s 1040 and assessing self-employment tax. The practitioners here today questioned this shortcut in handling the situation. Paul Mayberry said that they are auditing a large number of S Corp returns where there is little or no officer compensation. The employment tax audit group is in place and they are hiring. The practitioner is also seeing audits where independent contractors are being reclassified as employees and the IRS auditor is adjusting one year with the requirement that the business owner sign a Closing Agreement that going forward the contractors will be W2 employees. This offer is only being made to business owners who filed the required 1099 forms. Other practitioners agreed that this procedure could collect a great deal of taxes and reduce the Tax Gap. Page 5 of 6

6 Practitioner Question: Will 1040NR returns be eligible for e-filing next year? Kathy will report back at the next meeting. Danny encouraged everyone to sign up for e-news which frequently gives updates in this area. Practitioner Question: What information is actually transmitted when a return is e-filed? Danny said that the IRS website will give you the file layout of all the information that is transmitted. Practitioner Question: When I went into EFTPS.gov one day, I was redirected to EFTPS.com. Has there been a change? Kathy researched this question and found that EFTPS website has a new look and a new URL Thus will redirect to The services provided and the security of your transactions made using EFTPS will not be affected. The new look will simplify navigation, allowing you to make your Federal Tax payments more quickly and easily than before. Danny announced that the next meeting will be on Tuesday, October 23, 2007 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 [email protected] or Shirl Bishop EA at [email protected] 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. The IRS GA Telephone Directory Follows on the Next Four Pages Page 6 of 6

7 State Image Georgia Directory Small Business Self-Employed Stakeholder Liaison Division IRS TELEPHONE DIRECTORY for Practitioners 8/12/2007

8 Appeals Customer Service (Fresno) Appeals Account Resolution fax: Representatives Field Operation Team Manager John Ranero Field Operation Team Manager Debra Daigle Bankruptcy Cases Area Director Milton Alschuler Territory Manager Irene Toenyes Insolvency Manager - Group 3 Carla Williams Insolvency Manager - Group 4 Sheilia Syrkett Insolvency Manager - Group 2 James Austin Estate & Gift Area Director Aileen Condon Territory Manager Marty E Horn Large & Mid-Size Business (LMSB) (Financial Services) Territory Manager Michael Shepherd Lien Cases Federal Tax Lein Payoff

9 SB/SE Collection Division Area Director Gulf States Ellen Dolby Territory Manager Atlanta 3 Vernon Williamson Territory Manager South Ga. Dawn Escobar SB/SE Communications, Liaison and Disclosure, Disclosure Area Director Deborah Wan Territory Manager Mel Winburn SB/SE Communications, Liaison and Disclosure, Stakeholder Liaison National SL Field Director Rob Wilkerson Area Manager Southeast Area Craig McLaughlin SB/SE Examination Division Area Director Exam Glenn Henderson Territory Manager Atlanta Paul Mayberry SB/SE Specialty Programs Employment Tax Area Director Daniel Lauer (MI) Territory Manager Cheryl Beckman

10 Tax Exempt/Government Entities (TE/GE) Employee Plans Area Director Craig Bellanger Territory Manager Cleveland Parker Customer Account Services Taxpayer Advocate Local Taxpayer Advocate Rosetta Browne fax: Atlanta Processing Campus Wanda Carey TE/GE Exempt Organization Area Manager Joan T Hirsch (Dallas TX) Territory Manager Group 7953 Mary A. Epps :30 a.m. to 4:30 p.m. (Eastern) Wage & Investment Field Assistance Area Director Anita Hill Territory Manager Atlanta Jackie Jefferson Wage & Investment Stakeholder Partnership, Education & Communication Area Director James Rogers Territory Manager John Stubbs