2013-06-21 TaxE-alert: CPAs Protest Changes Relating to IRS’s E-Services 


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      AICPA
    June 21, 2013
    Tax Section News
     
      Exclusive Tax Section member communications  
     
    In This Issue
        TOP NEWS  
    CPAs Protest Changes Relating to IRS’s E-Services
    AICPA Proposes Simplified Methods for Computing 3.8% Net Investment Income Tax
    AICPA Requests Clarification from IRS on Conversion of Disregarded Entities to Partnerships
    FinCEN Allows Third Parties to E-file FBARs for Clients
    Long Awaited IRS Guidance – Most Mexican Land Trusts are not Treated as Trusts for U.S. Purposes
    Other Tax News from the Journal of Accountancy
    TOOLS & RESOURCES
    Time is Running Out to Verify Clients’ Foreign Accounts
    Help Clients See What They Pay All Year
    Skipping an Engagement Letter Can be Risky
      UPCOMING EVENTS
    AICPA Advanced Estate Planning Conference
    The 2013 Conference on Doing Business in Brazil
    2013 Tax Planning With the New Tax Law – Avoiding Unintended Consequences (Rebroadcast)
    Updates on the “Repair” Regulations
    Tax Related Identity Theft:  2-Part Webinar Series
    Should You Trust a Trust as an IRA Beneficiary?
    Financial Planning and Tax Considerations for Non-Traditional Couples
    Tax Reform: Thoughts, Predictions & Overall Analysis
     

    TAX POWER HOUR

    Discounted CPE option available for the Tax Power Hour

    Scheduled Topics:

      7/18: Paperless Office Workflows
      8/15: Staff Training Tips & Guidelines
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    Upcoming Events
     

    2013 Tax Planning With the New Tax Law – Avoiding Unintended Consequences (Rebroadcast)
    Postponed to July, updated registration information coming soon

    Updates on the “Repair” Regulations
    June 26, 1pm – 2pm ET
    (Rebroadcast July 25)

    Registration Options:
    - Discounted CPE (1 hour)
    - Rebroadcast (1 hour)
    - Free (without CPE)

    Tax Related Identity Theft 2-Part Webinar Series:

    Part 1:  Avoiding Being Part of the Problem
    July 2, 1pm – 2pm ET

    Part 2:  Repairing a Stolen Identity
    July 17, 3pm – 4pm ET

    Registration Options:
    - Series (Part 1 & Part 2): Discounted CPE (2 hours)
    - Part 1: Discounted CPE (1 hour)
    - Part 1: Free (without CPE)
    - Part 2: Discounted CPE (1 hour)
    - Part 2: Free (without CPE)

    Should You Trust a Trust as an IRA Beneficiary?
    July 10, 1pm - 2pm ET
    (Rebroadcast August 8)

    Registration Options:
    - Discounted CPE (1 hour)
    - Rebroadcast (1 hour)
    - Free (without CPE)

    AICPA Advanced Estate Planning Conference
    July 15 – 17, 2013
    Baltimore, MD

    Financial Planning and Tax Considerations for Non-Traditional Couples
    July 15, 1pm - 2:45pm ET

    Registration Options:
    - Discounted CPE (2 hours)
    - Free (without CPE)

    SAVE THE DATE!  Implementing the New Tax Practice Quality Control Guide
    Registration links coming soon. July 16, 1pm - 2pm ET
    Impact of the New 3.8 Percent Tax on Net Investment Income on Individuals and Pass-through Entities
    July 17, 1pm - 2pm ET
    (Rebroadcast August 6)

    Registration Options:
    - Discounted CPE (1 hour)
    - Rebroadcast (1 hour)
    - Free (without CPE)

    The 2013 Conference on Doing Business in Brazil
    July 18 – 19, 2013
    Orlando, FL
    Tax Reform: Thoughts, Predictions and Overall Analysis
    July 24, 1pm - 2pm ET
    Registration Options:
    - Discounted CPE (1 hour)
    - Free (without CPE)
    Introduction to Consolidated Tax Returns
    July 31, 1:30pm – 3pm ET
    (Rebroadcast August 13)

    Registration Options:
    - Discounted CPE (1.5 hours)
    - Rebroadcast (1.5 hours)
    - Free (without CPE)

     
    Next Tax Power Hour
     

    Paperless Office Workflows
    July 18 from 1pm – 2pm ET

    Should you scan first or scan last?  That is the age-old question when it comes to paperless office workflows.  This month, we have a tax practitioner that operates a "paperless" practice who will take us step by step through their paperless workflows.  We will walk through the entire cycle from document receipt to the conversion of paper documents into electronic records to the creation of electronic workpapers.  We will also hear how to manage a paperless return preparation and review cycle, along with electronic delivery of tax returns.  Whether you are a paperless firm and want to compare your process to other firms, or you still prepare on paper then scan at the end and you are looking for tips to become a "less paper" firm, this installment of the Tax Power Hour will help you.  As always, the Tax Power Hour is available free (without CPE) for Tax Section members!

     

     
     
     
    Top News
     
    CPAs Protest Changes Relating to IRS’s E-Services

    The IRS recently announced it is retiring the Disclosure Authorization (Power of Attorney) and Electronic Account Resolution options on e-services on August 11, 2013.  The IRS states that the retirement is due to the low usage of the program for these two services.

    The AICPA has received numerous e-mails and telephone calls from state societies and members since the announcement.  Tax practitioners are most concerned about the submission of the Power of Attorney forms.  Currently, tax practitioners can electronically submit a Power of Attorney form and obtain tax transcripts for clients using e-services almost immediately, which is especially helpful during busy season.  CPAs are now concerned that they will be forced to call the IRS’s Practitioner Hotline and be subject to long wait times to obtain the same information.

    We are having discussions with the IRS and expressing our concerns with the decision.  We will keep you informed about any additional information we receive from the IRS, as well as any follow-up actions the Service decides to take in reaction to practitioners’ concerns.

    AICPA Proposes Simplified Methods for Computing 3.8% Net Investment Income Tax

    The AICPA made recommendations to the IRS regarding the Net Investment Income Tax (REG-130507-11).  The AICPA recommended that the IRS implement a simplified method and a safe harbor method for computing net investment income upon disposition of interests in pass-through entities, as the method proposed by the regulations is complex and impractical.

    The AICPA comments address many other controversial issues in the proposed regulations, including the lack of clear guidance on the definition of trade or business (non-passive or passive) with respect to rental real estate activities and the exclusion of various losses/expenses that are properly allocable under Chapter 1 of the code (e.g. section 165 losses, capital loss and suspended passive loss carryovers).  For more information, see the Journal of Accountancy article.

    The AICPA also has a detailed 2-page summary of the provisions of the tax (prepared by Robert Keebler) as part of its Health Care Reform Resources Center.

    AICPA Requests Clarification from IRS on Conversion of Disregarded Entities to Partnerships

    The AICPA Partnership Taxation Technical Resource Panel recommended that the IRS issue additional guidance regarding the conversion of disregarded entities to partnerships with respect to Revenue Ruling 99-5. The issues that the AICPA requested clarification from the IRS include the treatment of liabilities upon conversion of a disregarded entity to a partnership and the treatment of non-recognition transactions that result in the conversion of a disregarded entity to a partnership.  

    FinCEN Allows Third Parties to E-file FBARs for Clients

    The Financial Crimes Enforcement Network (FinCEN) recently revised their Bank Secrecy Act E-Filing FAQs, and third party preparers (including CPAs and attorneys) can now e-file the IRS Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts, (FBAR) on behalf of clients.  This is a welcome move, considering mandatory e-filing of the FBAR is slated to begin July 1, 2013.  A prior notice revealed that FinCEN was considering permitting third party preparers to e-file the FBAR on behalf of clients.  Previous FAQs explicitly prohibited CPAs and attorneys from e-filing on behalf of their clients. 

    Long Awaited IRS Guidance – Most Mexican Land Trusts are not Treated as Trusts for U.S. Purposes

    On June 6th, the IRS released long-awaited guidance (Rev. Rul. 2013-14), which provides that certain Fideicomisos, or Mexican Land Trust arrangements (“MLT”), are not treated as trusts for U.S. tax purposes, under Treasury Regulation Section 301.7701-4(a).  This ruling is similar to a 2012 ruling (PLR 201245003), except the new ruling provides guidance that MLTs with similar facts to the taxpayer in Rev. Rul. 2013-14 will not be taxed as a trust.  This also relieves certain MLTs from the need to protectively file Forms 3520, Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts, and 3520-A, Annual Information Return of Foreign Trust With a U.S. Owner.  See the AICPA foreign trust reporting webpage for more information on MLTs and related AICPA requests to IRS.

    Other Tax News from the Journal of Accountancy
    • Oral surgeon cannot deduct expenses for traveling between home and job (06/12/13)
    • Staffing, succession emerge as top CPA firm concerns (06/11/2013)
    • Indoor tanning tax final regulations issued (06/10/2013)
    • How have CPAs responded to regulatory overload? (06/06/2013)
    AICPA TOOLS & RESOURCES
     
    Time is Running Out to Verify Clients’ Foreign Accounts

    The deadline for the Treasury Department to receive a Report of Foreign Bank and Financial Accounts (FBAR) is June 30, and the penalties for noncompliance can be large. CPAs may need to do some digging with clients, who may not realize they are subject to file an FBAR. Tax practitioner Gary Howard points out a few things to look out for that can be easily overlooked in this latest AIPCA Insights blog

    Help Clients See What They Pay All Year

    Once clients are more aware of the taxes they pay, they start thinking differently about a lot of things...such as whether to pay off a mortgage early, whether to change jobs or start a new business, and how to plan and save for retirement. Help them get a clearer picture of all the taxes they pay throughout the year with this Total Tax Insights Calculator one-pager – a great financial planning discussion starter.

    Skipping an Engagement Letter Can be Risky

    Are you using engagement letters for ALL of your client engagements?  Statistics gathered by CNA insurance found:

    • The failure to use an engagement letter was a contributing factor in the filing of a lawsuit against a CPA in 59% of all tax claims currently being litigated.
    • In 2012, 45% of all CPAs who reported tax claims failed to use an engagement letter.

    The AICPA Tax Practice Guides and Checklists Task Force website has sample engagement letters that can help you mitigate your risks!

    UPCOMING EVENTS
     
    AICPA Advanced Estate Planning Conference

    July 15 - 17, 2013, Baltimore, MD

    Want to know more about the world of estate planning?  At this conference, you will receive technical updates and technical training on estate, gift and inheritance planning.  Interactive sessions, classroom discussions and case studies provide the latest material with in-depth coverage on estate planning issues.  Leave the conference prepared to effectively provide for your clients’ estate plans. 

    The 2013 Conference on Doing Business in Brazil

    July 18 - 19, 2013, Orlando, FL

    Is your firm or client currently doing business in Brazil? Are you considering expanding your current business operations into Brazil?  It is essential to have a keen understanding of the latest legal, regulatory, tax, accounting, economic and cultural issues that you or your clients will encounter.  Our speakers at this conference will give you the information you need to help your firm and your clients understand business operations and international business rules in this ever expanding country and to stay ahead of the learning curve and the competition!

    taxpowerhour

    2013 Tax Planning With the New Tax Law - Avoiding Unintended Consequences (Rebroadcast)

    The rebroadcast of this webcast has been postponed and will be rescheduled for some time in July.  Check the CPE and Events website for a registration link.

    Updates on the “Repair” Regulations

    June 26, 1pm - 2pm ET (Rebroadcast July 25)

    Need to know the latest developments on the "Repair" Regulations?  This session will cover the Temporary Regulations previously issued by the IRS that will take effect for tax years beginning on or after Jan. 1, 2014, and their potential impact on taxpayers.  Our panelists will discuss many related topics, including the type of taxpayer affected, method change rules and, of course, possible changes in the much anticipated Final Regs. to be issued later in 2013.

    Tax Section members have the option of attending this event free, without CPE.
    Tax Related Identity Theft:  2-Part Webinar Series

    Join us for this two part series on how to protect your clients and what to do if they become a victim of identity theft.  These events are available individually or as a series.  Tax Section members have the option of attending Part 1 and Part 2 free, without CPE.

    Part 1 - Tax Related Identity Theft:  Avoid Being Part of the Problem
    July 2, 1pm - 2pm ET

    This session will discuss what a CPA's role is in protecting client information from tax related identity theft and how clients can be at risk.

    Part 2 - Tax Related Identity Theft:  Repairing a Stolen Identity
    July 17, 3pm - 4pm ET

    In this session, we will discuss what to do if your client becomes a victim of identity theft and how to help them through the problem/process.

    Should You Trust a Trust as an IRA Beneficiary?

    July 10, 1pm - 2pm ET (Rebroadcast August 8)

    When is it a good idea to name a trust as an individual retirement (IRA) account beneficiary? What are the advantages and disadvantages of naming a spouse, an adult child, or a grandchild as the beneficiary? This webinar will answer these questions and more! You will learn how the use of IRAs and trusts can be used together and their impact on clients’ estate taxes.

    Tax Section members have the option of attending this event free, without CPE.

    Financial Planning and Tax Considerations for Non-Traditional Couples

    July 15, 1pm - 2:45pm ET

    Regardless of the pending Supreme Court’s decision, CPA financial planners and tax practitioners need to be prepared to advise their clients on the tax and financial planning implications facing non-traditional couples.  Robin Knowles and Jonathan Horn will discuss the Supreme Court’s decision and what it means for your clients and how federal and state law will apply to estate, retirement, income tax, health and welfare benefits plans. 

    Tax Section members have the option of attending this event free, without CPE.
    Impact of the New 3.8 Percent Tax on Net Investment Income on Individuals and Pass-through Entities

    July 17, 1pm – 2pm ET (Rebroadcast August 6)

    How does the new 3.8% Medicare tax on investment income affect your individual and pass-through clients?  Our presenters will walk through all aspects of the tax, including who is subject to it, how it is calculated, the type of income subject to the tax and the impact of the tax on grouping elections under section 469 and on dispositions of S corporation and partnership interests.

    Tax Section members have the option of attending this event free, without CPE.

    Tax Reform: Thoughts, Predictions & Overall Analysis

    July 24, 1pm - 2pm ET

    What is new in tax reform in Washington?  Our webinar, offered by the AICPA Tax Section, offers you insights on Congress's latest tax reform efforts.  A panel of AICPA's thought leaders on tax reform will share their thoughts, predictions and analysis of the likelihood for sound tax policy and effective tax administration in the near future.

    Tax Section members have the option of attending this event free, without CPE.

    Coming Up on the Tax Power Hour
    taxpowerhour

    July 18:  Paperless Office Workflows (1 hour discounted CPE):  Coming up next month, we will examine the paperless office.  Should you scan first or scan last?  That is the age-old question when it comes to paperless office workflows.  This month, we have a tax practitioner that operates a "paperless" practice who will take us step by step through their paperless workflows.  We will walk through the entire cycle from document receipt to the conversion of paper documents into electronic records to the creation of electronic workpapers.  We will also hear how to manage a paperless return preparation and review cycle, along with electronic delivery of tax returns.  Whether you are a paperless firm and want to compare your process to other firms, or you still prepare on paper then scan at the end and you are looking for tips to become a "less paper" firm, this installment of the Tax Power Hour will help you.  Also available free (without CPE) for Tax Section members!

    August 15:  Staff Training Tips & Guidelines (1 hour discounted CPE):  People are the biggest asset in CPA firms.  What is your process for training staff - from orientation to annual busy season training to long-term advancement and staff development?  We will walk through the issues and offer some strategies to help you develop a defined staff training and development program.  Not only will we discuss firm roles and expectations, but also accountabilities and motivational programs you may want to consider putting in place so your staff are not just maintaining skills, but thriving and growing along with your firm.  Also available free (without CPE) for Tax Section members!

    Save the Dates!  Registration links will be available soon!
    · September 19:  Answering Questions on Tax Returns - Risks & Requirements
    · October 17:  Solo Practitioner Procedures
    · November 14:  Gearing Up for Tax Season
    · December 19:  Tax Return Engagement Letters

    The Tax Power Hour is our the monthly Tax Section webcast that focuses on strategies to help tax practitioners save time, reduce stress and run an efficient practice through practical discussions on topics such as Practice Management, Business Development, Leveraging Technology and more.  Speakers are tax practitioners and other experts sharing their advice and best practices to help make you more profitable.

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