Wednesday, January 27, 2010

WHAT’S THE BUZZ? TELL ME WHAT’S A HAPPENNIN’ – WEDNESDAY EDITION

Don’t forget to check out my daily tax tips column at MAINSTREET.COM.

* Also check out my NJ TAX PRACTICE BLOG post on “The IRS Answers Questions on Tax Preparer Regulation”.

* Check out the “Obama Tax Man” video over at ACCOUNTINGBLOCK.

* Russ Fox tells us in his post “Payroll Tax Companies & Registration of Tax Professionals” at TAXABLE TALK that, according to the IRS FAQ Page mentioned above, “California CTEC practitioners will have to take the new exam. It also appears that California isn’t going to be dropping the CTEC requirements, so tax practitioners who are not CPAs, EAs, or attorneys in California will have dual requirements.”

A CPA, whose initial competency test has minimal, if any, questions on 1040 preparation, does not have to take an exam in order to prepare federal income tax returns, but a tax professional licensed to prepare tax returns by the State of California, who has already taken a competency test in taxation, does. Real smart!

I must point out that I have no idea what is on the CTEC exam, but it certainly has more questions on the federal 1040 than the CPA exam.

* Speaking of the IRS FAQ Page – Joe Kristan has an interesting comment on one of the Q+As in his ROTH AND COMPANY TAX UPDATE BLOG post “Unanswered FAQ: Why Did They Hire H&R Block CEO To Write Them?” -

What is the required percentage to pass the competency test?

This has not been determined. Stay tuned to the IRS.gov Tax Professionals page for information on this issue.
{IRS answer}

Well above that required of Congresscritters, Treasury Secretaries and IRS Commissioners. {Joe’s response}”

* Joseph Henchman of the Tax Foundation weighs in on the subject of regulating tax professionals in the post “IRS Proposes Licensing Tax Preparers” at the TAX POLICY BLOG. One can’t argue with his bottom line -

The tax code is big, complex, and ever-changing. That is the problem, since it doesn't need be. No paid preparer knows every nook and cranny of tax law and if we truly graded people for competency, no one could pass. National Taxpayer Advocate Nina Olson, despite supporting the new regulations and optimistically assuming that they'll be minimal and one-time for each preparer, reveals that much of the complexity is due to each year's new credits, exemptions, and changing rules, and that we need tax reform.

Those pushing for more regulation and more centralization of tax preparation should instead focus their efforts on tax simplification
.”

* Stacie Clifford Kitts gives us a rerun of a “blast from the past” with her post “Seven Things Your Accountant Should Have Told You – a Good Post From the Past” at STACIE'S MORE TAX TIPS.

Seven good “things” – especially the last.

* Kay Bell reports on a really bad idea, for all parties involved (both IRS and taxpayers alike), in her post “Let the IRS Do Your Taxes for You”.

It sounds like a variation on BO’s ridiculous proposal for a “post card” tax return (check out my post “A Very Bad Idea”), which apparently is still floating around.

* And Kay gives good advice to those who choose to split the direct deposit of their federal refund to more than one account via Form 8888 in “Triple-Check Multiple Deposit Directions” at her EYE ON THE IRS blog at bankrate.com.

* TAX GIRL Kelly Phillips Erb has an interesting take on the recent action of Congress regarding donations to hurricane relief for Haiti in “Congress Wants You to Give to Haiti. But Just Haiti” that is certainly worth reading. To be honest, she makes a very good point.

TTFN