On USDA Requests that CPAs Verify Taxpayers’ AGI:
The U.S. Department of Agriculture’s Farm Service Agency recently sent letters to taxpayers who receive certain farm subsidies requesting them to certify their income by one of several methods, including by their CPA. In order to qualify for these programs, the participants need to meet certain adjusted gross income (AGI) requirements. Many AICPA members have been asked to certify taxpayers’ average AGI within 30 days of receipt of the letter.
The USDA letters present CPAs with difficult problems – including possible legal liability and professional standards issues. We discussed the problems with insurance providers, and we are working with the FSA to agree on alternative language for the letters that will meet the needs of the FSA requirements and AICPA members.
FSA officials have informed us that local FSA offices will grant extensions of time to those that request the extension until a resolution for the alternative language is met. If the extension is denied, members should reach out to the national FSA headquarters. In the meantime, we encourage members to follow their insurance provider’s guidance, consult a lawyer and consider a representation letter between them and their client. We are discussing alternative language with FSA that would address these concerns.
On Capital Gains Reporting:
Does this call of help sound familiar? “We have received examples of 1099s with 45 - 50 page gain/loss statements which are all mixed, and the broker refuses to provide a spreadsheet or any additional subtotal information in a downloadable format requiring a lot of detail tracking before filling in the tax return. Has anyone had success in dealing with this?” The new Form 8949 rolled out for the 2012 tax season (replacing the Schedule D-1) was designed to allow the IRS to compare what brokers report on the 1099B with what the taxpayer reports as the cost of the security.
Members notified us of several issues that complicated compliance, such as the example above from LinkedIn in which it was unclear how to determine what information needed to be reported. (This issue drew the highest number of comments from members of the Tax Practitioners’ LinkedIn group during the season). To learn more about it and what AICPA is doing, check out our dedicated page on this issue.