Friday, November 5, 2010


As previously mentioned, I attended the National Association of Tax Professionals’ annual day-long year-end tax-update class, recently retitled “The Essential 1040”, at Bally’s in Atlantic City on Wednesday.

The class I attended was actually one part of a 4-day “TAXPRO Symposium” offered at several selected locations (one of which is always Atlantic City) each year. However, the NATP conference in Austin TX had blown my education budget for the year, and my interest in and the potential value to my practice of the topics covered on the other 3 days did not justify the added expense.

Each year the update class discusses the new numbers for exemptions, deductions, credits, and phase-outs for the current year’s (in this case 2010) Form 1040, new tax legislation passed during the year, provisions of previous years’ legislation that affect the current year’s 1040, and various other new developments (i.e. Tax Court rulings, IRS rulings and regulations, etc).

It usually also includes a brief coverage of one of two specific tax topics of interest – this year “Energy Credits” and “HSAs, Long-Term Care Contracts, and Viatical Settlements” were included in the text but there was only time to review Energy Credits. And this year, thanks to the new CPE requirements of the tax return preparer regulation regime, the 2 hours of Ethics were back (thankfully this had been omitted from the last couple of year-end classes).

It has been a while since I sat through and/or actually paid attention to an “ethics” presentation. Truth be told, Wednesday’s session was somewhat informative and helpful. While I think that 2 hours of required ethics preaching each and every year is a waste of time, I can see the advantage of a 1 hour update every other year or so. And, of course, if there are new developments in this area, as with the recent regulations regarding disclosure of client information, these items should certainly be included in an annual update.

I was happy to have what I discussed in detail in my earlier posts on “My Obligations” (Part I and Part II) confirmed in the text –

A practitioner, when advising a client to take a position on a tax return, document, affidavit, or other paper submitted to the IRS, or preparing or signing a tax return as a preparer, generally may rely in good faith, without verification, upon information furnished by the client.

The practitioner may not, however, ignore the implications of information furnished to, or actually known by, the practitioner, and must make reasonable inquiries if the information as furnished appears to be incorrect, inconsistent with an important fact or another factual assumption, or incomplete

During the course of the day the answer to questions from the “students” on items discussed provided by the excellent instructor was very often “I don’t know”. The instructor begged us not to write in the evaluation forms that she didn’t know anything because, truthfully, it was not her fault.

The reason for giving such as answer is two-fold. The first culprit is Congress – which has not yet passed any extender bills for tax benefits that expired on December 31, 2009, or will expire on December 31, 2010. Usually the discussion of current year numbers includes most of the same numbers for the following tax year, in this case 2011. But, with the exception of the very few COLAs recently announced by the IRS, these numbers are not yet known for sure. All that the text, and the instructor, could tell is what the 2011 numbers could be if no action is taken by the cafones in Washington.

The textbook for the annual update class has always contained draft copies of the current year’s IRS forms and schedules. This year the only draft form that was available was the actual 2010 Form 1040 – and it had two lines under adjustments to income that were merely identified as “RESERVED”, awaiting the anticipated (hopefully correctly so) passage of an extenders bill.

As a brief aside - the NJ chapter officers present and I both commented that the date of this particular class was much earlier than usual – last year it was offered during the first week of December – and that this was especially unfortunate this year. We also noted that attendance was noticeably down this year – probably for this reason.

Secondly, the IRS has not issued specific regulations, either proposed or final, to interpret the wishes of Congress concerning several of the items from new legislation, several of which affect future tax years.

Some of the unanswerable questions concerned the two separate decisions by Congress to increase the volume of 1099-MISC information returns required to be issued by businesses and landlords. This is a clear indication that the idiots did not stop to consider the potential ramifications and burdens of these decisions before including them in legislation and voting on them.

All in all the NATP did its usual good job of reviewing what will be in effect for 2010 returns – as best it could under the circumstances.

This was the first year that the Symposium was held at Bally’s. It was at Caesar’s Palace (I believe the same owner) the last two years. I stayed at Bally’s for 2 nights, attracted by the $69.00 per night advertised room rate. Unfortunately this advertised rate did not add the additional almost $20.00 in taxes, including what appeared to be an “Atlantic City luxury tax”. My room, on the 20th floor, was a good size and well-appointed, with an ocean view and comfortable bed, so I guess I can’t complain.

My only comments –

It seems to me that the fancier or more upscale the hotel the smaller the number of channels available on the television. I have been at motels at the Jersey shore that offered 100 channels – while Caesar’s and Bally’s have only about 30-40 choices, including 2 Spanish and 2 Japanese channels. As there was nothing to do but eat and gamble (I limit myself to $20.00 at the slots) – no shows offered on Tuesday or Wednesday – I ended up watching tv. I did, however, discover a new cable channel – Universal HD, which had reruns of TJ HOOKER one night.

Similarly, the more upscale the hotel the more meager the continental breakfast offering. All we got was fruit (not melons) and 2 kinds of muffins. I have attended classes at a Howard Johnsons that put out a real feast for breakfast.

I will talk about some of the items that we learned in class in Monday’s post.


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