irs

the future as the irs sees it

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businessman pressing a "future" concept buttonbut will it work?

by 卡塔尔世界杯常规比赛时间

uh-oh. the internal revenue service is developing a “future state” plan that it says will transform the way the service interacts with taxpayers.

many components in the plan will may well ease the processing of filing returns, the issuing of refunds, and the identification and resolution of problems. but the tax advocate service – an independent part of the irs that defends and assists taxpayers – warns that key components of the plan are going to aggravate taxpayers and make it more difficult to find answers and resolve issues.

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get set for refund delays at irs

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flow chart of refund return processing in irs integrity & verification operation
flow chart of refund return processing in irs integrity & verification operation (click for larger version)

false positives for fraud can drag things out 11 weeks … or longer.

by 卡塔尔世界杯常规比赛时间

tax preparers might do well to prepare their clients for possible delays due to automated inefficiencies at the internal revenue service, according to a report from the tax advocate service.

the delays, which have been reported as a serious problem since 2003, are caused by automatic freezing of refunds when the irs’s pre-refund wage verification (also known as income wage verification) identifies suspected false wages and withholding.

the fundamental problem is that the false positive rate for the electronic fraud detection system in 2015 was a staggering 35 percent. that’s not a whole lot better than random identification would be.

the problem extends to the taxpayer protection program, which is grappling with identity theft. there the false positive rate leaped from 19.8 percent in 2014 to 36.2 percent in 2015.

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if you thought tax season 2015 was bad…

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…the irs says 2016 could be even worse.

irs projects even worse taxpayer service for the 2016 filing season (fy 2015).
irs projects even worse taxpayer service for the 2016 filing season (fy 2015).

by 卡塔尔世界杯常规比赛时间

the 2015 filing season was akin to a tale of two cities, according to the irs’s own watchdog.

“for the majority of taxpayers who filed their returns and did not require irs assistance, the filing season was generally successful,” according to the report issued to congress by the national taxpayer advocate’s office headed by nina olson. “for the segment of taxpayers who required help from the irs, the filing season was by far the worst in memory.”

meanwhile, olson urges congress to undertake “fundamental tax reform,” pass a “taxpayer’s bill of rights” law, and boost irs funding.

“everyone is in collective denial about what inadequate funding for the irs means to taxpayers,” olson says. read more →

will obamacare penalties kill your small business clients?

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drug in syringe on white background

fines run $100 per day, per employee.

by stephen l. nelson, cpa
and elizabeth c. nelson, cpa
small business and the affordable care act

by now, many of your small business clients understand they don’t have to provide employees with health insurance. the employer mandate starts when a firm employs 50 or more full-time-equivalent employees.

but here’s an awkward follow-up question: do your small business clients understand that many of the aca’s rules still apply to them and that they may still be vulnerable to the aca’s 4980d excise tax penalty—which runs $100 per day per employee?

learn more: small businesses and the affordable care act: what every tax practitioner needs to know (55-page pdf digital download)

can we talk irc code sections?

people sometimes hear references to the 4980d penalty and scoff, say you can’t believe everything you hear on talk radio or read at some blog. so let’s look at the actual internal revenue code section in question.

here are the first few sentences of irc sec 4980d: read more →

irs predicts ‘challenging’ 2016

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irs commissioner john koskinen
koskinen

budget cuts remain a concern.

by 卡塔尔世界杯常规比赛时间 research

no matter what you think of your 2015 tax season, the irs thinks it had it worse.

commissioner john koskinen testified about the season before the house ways and means committee’s subcommittee on oversight, and said even opening on schedule was a “major accomplishment” because of additional preparation needed for the affordable care act and the foreign account tax compliance act, as well as a system update reflecting december’s tax extender legislation. read more →

tax pros do 59% of e-filing as season nears end

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receipts, processing, refund numbers all down.

with only five days left in the tax season, the irs had received more than 110.7 million individual tax returns and processed 108 million of them. the april 10 data showed receipts down 1.8 percent from 2014 and processing down 2.1 percent. processing for 2015 continued in the same range, at 97.5 percent.

related: have fun this tax season! | tax preparation fees: the national averages [infographic] | irs form 3115: a sin and a travesty | how to get paid faster this tax season | accountants see solid business gains in 2015 | as market share slips away, accountants look beyond the 1040 | irs emerges as major tax season competitor | tax pros losing market share to self-filers read more →

irs defanged by 20 years of budget cuts

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irs criminal prosecutions over the past 20 years / trac

prosecutions down 16 percent in 2014.

budget cuts are clearly undermining  the nation’s ability to collect tax revenue and enforce tax laws, widening already gaping budget holes, 卡塔尔世界杯常规比赛时间 data show.

for instance, tax prosecutions, which peaked during the early clinton administration, bottomed during the bush administration. read more →

tax pros losing market share to self-filers

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do the math: pro market shrinks by 2 points.

the nation’s tax professionals have e-filed fewer than 44 million returns through march 21, off 1.3% or 571,000 returns, from the same point past year, while self-filers are running 5.9% ahead of last year, having transmitted 31.7 million returns.

do the math and you’ll find professionals’ 60% share of the e-filing market last year has slipped to about 58% – a seemingly small amount that, nevertheless, translates into hundreds of thousands of returns and millions in lost revenues. it’s a trend that shows no sign of slowing or reversing, according to 卡塔尔世界杯常规比赛时间 analysis.

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