Anotherearly BUZZ.
*Jason Dinesen gives his take on what I discussed in my THE TAX PROFESSIONALpost “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 beforethat I don’t think CPAs or attorneys should be required to take the RTRP examto prepare tax returns. I stand by that belief, even though I am in theminority among people who aren’t a CPA or an attorney (I’m an enrolled agent).
But I do think CPAsand attorneys should be required to show continuing education in the tax field.Currently, the IRS doesn’t require this of CPAs and attorneys.”
Jasonand I both agree that the RTRP test does not have much value. And we both agree that CPAs and attorneys whowant to prepare 1040s for compensation should be required to take the same 15hours per year in federal taxation as “previously unenrolled” RTRPs (actually13 hours – since CPAs are already required to take 2 hours in ethics annually,I think). We also agree that if a testis to be given there should be “grandfathering” for experienced preparers.
Wherewe part company concerns the CPA and attorney exemption from the test. If a test is going to be required, it shouldbe applied equally to all those who want to prepare 1040s forcompensation. CPAs and attorneys shouldnot be exempt. They should, however, becovered by any “grandfathering” provisions.
Thebottom line (on which I believe we both agree) – do away with the testrequirement and require all PTIN holders to take at least 15 hours of CPE infederal 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 beunable to file their 2012 returns — or receive their refunds — until at leastlate March if Congress fails to enact legislation by the end of this year torestrain the alternative minimum tax”.
Theitem quotes IRS Acting Commissioner Steven T. Miller’s recent letter to Sen.Orrin G. Hatch –
“The IRS would likely be able to open the 2013tax filing season with minimal delays for most taxpayers {if Congress passes new legislationbefore the end of the year}.”
“However, if there is no AMT patch enacted bythe 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 taxliability for the current tax year {2012}. Inaddition, in order to allow time for the IRS to make the programming changesnecessary to conform our processing systems to reflect expiration of the AMTpatch and the credit ordering rules, the IRS would, at minimum, need toinstruct more than 60 million taxpayers that they may not file their taxreturns or receive a refund until the IRS completes the necessary systemschanges.”
“Because of the magnitude and complexity ofthe changes, it is entirely possible that these taxpayers would not be able tofile until late March 2013, if not even later. Tens of millions of thesetaxpayers would unexpectedly have to pay additional income tax for 2012,leaving them with a balance due return or a much smaller refund than expected.”
Theitem ends with –
“If the AMT is not patched, those hit withthe tax could see an average increase of $3,700 in their 2012 tax bills,according to estimates by the nonpartisan Tax Policy Center.”
Iexpect you know what I would like to say here – but I promised!
*The recent issue of NATP’s “Taxpro Monthly” included an item titled “TaxpayerDenied the ‘Turbo Tax’ Defense”.
Theitem discussed Brenda F Bartlett v.Commissioner, TC Memo 2012-254 (the highlight is mine) -
“The court sustained the IRS determination asto both the tax and penalty. It statedthat while it was apparent that a portion of the information entered by thetaxpayer into the Turbo Tax program was incorrect, the error was not the resultof software computations. They remindedher that Turbo Tax is only as good asthe information entered – in other words, garbage in, garbage out.”
Anotherone of many examples of the fact that notax preparation software is a substitute for knowledge of the Tax Code, and notax preparation software is a substitute for the services of a trained taxprofessional!
*TaxGirl Kelly Phillips Erb tells us that what happens in Vegas does notnecessarily stay in Vegas in her post “Janeane Garofalo Finds Out She's Been Married... For 20 Years” at FORBES.COM.
Aninteresting 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”.
Pleasedo not panic. Actually now is a goodtime to buy. As the article points out –
“Meanwhile, some stocks are gettingreasonably priced, says Karl Mills of Jurika, Mills and Keifer. ‘Some really goodcompanies 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 raisetaxes on what he claims to be ‘the rich’. I think he is misguided. The onesthat the Obama guys call rich are a couple of engineers who happen to both workand each one makes over a hundred thousand dollars. Is this the nouveau richthat Obama calls rich? Hardly!!”
And–
“The nation does need both the increase ofrevenue and reduction of expenses. But raising revenue should not necessarilyincrease taxes. The reduction of expenses does not mean that we throw the poorunder the bus.”
And–
“The country needs fundamental originalthinking that accommodates the few such as the elderly and the disabled thatcannot fend for themselves and at the same time fanatically balances its incomeand expenses which we call the budget. In a family with children, you balancethe budget but you feed your children and send them to the doctor. It is amatter of an honest dialogue and smart allocation of resources.”
Itis 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 tosay more than a simple thank you.
The Internal RevenueService requires that a donor produce a record from the charity to show a giftover $250 had no strings attached. A thank you note can be a good enoughrecord, as long as it includes the magic words: ‘No goods or services werereceived in exchange for the contribution’.
Without that phrase onpaper, donors stand to lose their write-offs, and end up with penalties to boot.”
Coveryour arse - make sure any receipt or acknowledgement you receive from a charityto which you have contributed contains the magic words!
TTFN
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