Another
early BUZZ.
*
Jason Dinesen gives his take on what I discussed in my THE TAX PROFESSIONAL
post “Is There Any Real Value to the RTRP Competency Test?” in “No To Additional Preparer Testing, Yes To CPE Requirements” at DINESEN TAX TIMES.
“I’ve written before
that I don’t think CPAs or attorneys should be required to take the RTRP exam
to prepare tax returns. I stand by that belief, even though I am in the
minority among people who aren’t a CPA or an attorney (I’m an enrolled agent).
But I do think CPAs
and attorneys should be required to show continuing education in the tax field.
Currently, the IRS doesn’t require this of CPAs and attorneys.”
Jason
and I both agree that the RTRP test does not have much value. And we both agree that CPAs and attorneys who
want to prepare 1040s for compensation should be required to take the same 15
hours per year in federal taxation as “previously unenrolled” RTRPs (actually
13 hours – since CPAs are already required to take 2 hours in ethics annually,
I think). We also agree that if a test
is to be given there should be “grandfathering” for experienced preparers.
Where
we part company concerns the CPA and attorney exemption from the test. If a test is going to be required, it should
be applied equally to all those who want to prepare 1040s for
compensation. CPAs and attorneys should
not be exempt. They should, however, be
covered by any “grandfathering” provisions.
The
bottom line (on which I believe we both agree) – do away with the test
requirement and require all PTIN holders to take at least 15 hours of CPE in
federal taxation annually.
*
Lori Montgomery of THE WASHINGTON POST warns that “AMT Could Keep 60 Million Taxpayers from Filing Returns till March, Delaying Refunds” –
“Nearly half of U.S. taxpayers would be
unable to file their 2012 returns — or receive their refunds — until at least
late March if Congress fails to enact legislation by the end of this year to
restrain the alternative minimum tax”.
The
item quotes IRS Acting Commissioner Steven T. Miller’s recent letter to Sen.
Orrin G. Hatch –
“The IRS would likely be able to open the 2013
tax filing season with minimal delays for most taxpayers {if Congress passes new legislation
before the end of the year}.”
“However, if there is no AMT patch enacted by
the end of the year there would be serious repercussions for taxpayers.
Without an AMT patch,
about 28 million taxpayers would be faced with a very large, unexpected tax
liability for the current tax year {2012}. In
addition, in order to allow time for the IRS to make the programming changes
necessary to conform our processing systems to reflect expiration of the AMT
patch and the credit ordering rules, the IRS would, at minimum, need to
instruct more than 60 million taxpayers that they may not file their tax
returns or receive a refund until the IRS completes the necessary systems
changes.”
“Because of the magnitude and complexity of
the changes, it is entirely possible that these taxpayers would not be able to
file until late March 2013, if not even later. Tens of millions of these
taxpayers would unexpectedly have to pay additional income tax for 2012,
leaving them with a balance due return or a much smaller refund than expected.”
The
item ends with –
“If the AMT is not patched, those hit with
the tax could see an average increase of $3,700 in their 2012 tax bills,
according to estimates by the nonpartisan Tax Policy Center.”
I
expect you know what I would like to say here – but I promised!
*
The recent issue of NATP’s “Taxpro Monthly” included an item titled “Taxpayer
Denied the ‘Turbo Tax’ Defense”.
The
item discussed Brenda F Bartlett v.
Commissioner, TC Memo 2012-254 (the highlight is mine) -
“The court sustained the IRS determination as
to both the tax and penalty. It stated
that while it was apparent that a portion of the information entered by the
taxpayer into the Turbo Tax program was incorrect, the error was not the result
of software computations. They reminded
her that Turbo Tax is only as good as
the information entered – in other words, garbage in, garbage out.”
Another
one of many examples of the fact that no
tax preparation software is a substitute for knowledge of the Tax Code, and no
tax preparation software is a substitute for the services of a trained tax
professional!
*
TaxGirl Kelly Phillips Erb tells us that what happens in Vegas does not
necessarily stay in Vegas in her post “Janeane Garofalo Finds Out She's Been Married... For 20 Years” at FORBES.COM.
An
interesting story with a potential tax consequence.
*
Another effect of the inaction of Congress.
USA TODAY reports that “Stocks at 4-Month Lows as Fiscal Cliff Looms”.
Please
do not panic. Actually now is a good
time to buy. As the article points out –
“Meanwhile, some stocks are getting
reasonably priced, says Karl Mills of Jurika, Mills and Keifer. ‘Some really good
companies are getting cheap,’ he says.”
*
The TAX RESOLUTION BLOG post “Your Tax Problem and the National Debate over Tax Increase” by Dean Alexander makes some very good points -
“Now the President is going to try to raise
taxes on what he claims to be ‘the rich’. I think he is misguided. The ones
that the Obama guys call rich are a couple of engineers who happen to both work
and each one makes over a hundred thousand dollars. Is this the nouveau rich
that Obama calls rich? Hardly!!”
And
–
“The nation does need both the increase of
revenue and reduction of expenses. But raising revenue should not necessarily
increase taxes. The reduction of expenses does not mean that we throw the poor
under the bus.”
And
–
“The country needs fundamental original
thinking that accommodates the few such as the elderly and the disabled that
cannot fend for themselves and at the same time fanatically balances its income
and expenses which we call the budget. In a family with children, you balance
the budget but you feed your children and send them to the doctor. It is a
matter of an honest dialogue and smart allocation of resources.”
It
is hard to use the words “honest” and “smart” when it comes to Congress (sorry –
I couldn’t resist).
*
A good reminder from Arden Dale at THE WALL STREET JOURNAL – “For IRS, Charities Must Say More Than Thank You” –
“When a charity receives a gift, it needs to
say more than a simple thank you.
The Internal Revenue
Service requires that a donor produce a record from the charity to show a gift
over $250 had no strings attached. A thank you note can be a good enough
record, as long as it includes the magic words: ‘No goods or services were
received in exchange for the contribution’.
Without that phrase on
paper, donors stand to lose their write-offs, and end up with penalties to boot.”
Cover
your arse - make sure any receipt or acknowledgement you receive from a charity
to which you have contributed contains the magic words!
TTFN
No comments:
Post a Comment