IR-2014-116: IRS, National Tax Groups Offer Help Selecting a Tax Preparer; Tips, New Web Page Unveiled
WASHINGTON — With the filing season approaching, the Internal Revenue Service joined with national tax organizations to provide people with new options to get information and tips on selecting tax professionals and avoiding unscrupulous preparers.
The effort includes new information available at IRS.gov/chooseataxpro, including a list of consumer tips for selecting a tax professional. There will also be a new gateway page with links to national non-profit tax professional groups, which can help provide additional information for taxpayers seeking the right type of qualified help.
“The tax return represents one of the biggest financial transactions of the year for many Americans, whether they are getting a refund or paying a tax bill,” IRS Commissioner John Koskinen said. “Filling out tax returns accurately is critically important. Between tax law changes and tax scams circulating, it’s more important than ever for people who need professional assistance to select wisely and carefully.”
Koskinen was joined at a Washington press conference Thursday with members of several national tax professional organizations that represent hundreds of thousands of tax professionals across the nation.
More than 140 million tax returns were filed last year, and more than half of with them were prepared with the help of a paid return preparer.
For the upcoming filing season, some taxpayers may want to get help with the new provisions of the Affordable Care Act, and tax professionals provide one of several options available. The vast majority of people will only have to check a box on their federal income tax return to indicate they had health coverage, but others have Marketplace coverage with tax credits, have exemptions or need them, or may have to make a payment because they could afford to buy health insurance but chose not to. Tax professionals will be able to help guide taxpayers through what they need to do in these circumstances. Commercial software programs will be able to help, too.
There are some basic tips taxpayers can keep in mind when selecting a tax professional. These include:
- Select an ethical preparer. Taxpayers entrust some of their most vital personal data with the person preparing their tax return, including income, investments and Social Security numbers.
- Make sure the preparer signs the return and includes their Preparer Tax Identification Number (PTIN). All paid prepares are required to have a valid PTIN.
- Review your tax return and ask questions before signing. The taxpayer is ultimately legally responsible for what’s on their tax return, regardless of whether someone else prepared it.
- Never sign a blank tax return. This is a clear red flag when a taxpayer is asked to sign a blank tax return. The preparer can put anything they want on the return – even their own bank account for the tax refund.
To help taxpayers navigate the different types of professional tax help available, the IRS updated IRS.gov/chooseataxpro, a page that explains the different categories of professionals. Taxpayers will also find a new partner page that provides links to the web sites of national organizations of tax professionals, with additional details about the groups, including state and local organizations or representatives.
Organizations in the listing or attending the press briefing include:
- National Association of Enrolled Agents;
- National Society of Tax Professionals;
- National Association of Tax Professionals;
- National Society of Accountants;
- National Conference of CPA Practitioners;
- The American Institute of Certified Public Accountants;
- The American Association of Attorney-Certified Public Accountants; and
- The Council for Electronic Revenue Communication Advancement
“Tax professionals are a vital link with American taxpayers, and without them we could not run the nation’s tax system,” Koskinen said. “Taxpayers have many options for their taxes, ranging from using software to selecting a tax professional. If someone needs professional assistance, I urge people to take a few minutes to review the tips at IRS.gov/chooseataxpro. We want taxpayers to understand the different types and categories of tax return preparers available to help them with their tax issues.”
In January, the IRS also plans to launch a new Directory of Federal Tax Return Preparers with Credentials and Select Qualifications on the IRS website to help taxpayers verify credentials and qualifications of tax professionals. The Directory will be a searchable, sortable database with the name, city, state and zip code of credentialed return preparers as well as those who have completed the requirements for the new IRS Annual Filing Season Program (AFSP) which includes having a valid 2015 Preparer Tax Identification Number (PTIN).
In 2010, the IRS launched the Tax Return Preparer Initiative that requires anyone who prepares any federal tax return for compensation to obtain a PTIN from the IRS. In 2014 the IRS issued about 677,000 PTINs. Currently, anyone with a valid PTIN can prepare and sign federal tax returns they prepare.
For more information, see:
Expired Tax Law Rules Extended – President Expected to Sign
Late last evening, the Senate passed the bill that extends, through the end of 2014, several key tax provisions that had otherwise expired at the end of 2013. It is expected to be signed by the President next week. These tax provisions include the following:
Business Tax Extenders
The Act extended the following business related tax credits and deductions through 2014:
• Bonus depreciation has been extended through 2014, allowing an additional first year deduction of 50 percent of the cost of the equipment.
• The Section 179 rules have been extended allowing for the expense of $500,000 on acquired property for business use.
• The exclusion from capital gains tax of 100 percent of small business stock sold by an individual.
• The practice of making a reduction in S corporation basis equal to the shareholders share of the adjusted basis of a charitable contribution.
• Reduction in S corporation recognition period for built-in gains tax to five years rather than 10 years.
• The Work Opportunity Tax Credit for hiring of military veterans and other qualified individuals
• The Research Tax Credit
• New Markets Tax Credit
• Enhanced deduction for charitable contributions of food inventory
Energy Tax Extenders
The Act extends through 2014 a number of energy credits and provisions that expired at the end of 2013. Some of the items extended include:
• Credit for nonbusiness energy efficiency property, extended one year.
• Biodiesel and renewable diesel credits are extended.
• The renewable electricity production credit. This includes the wind production tax credit.
• The above the line deduction for Energy efficient commercial buildings has been extended.
Individual Tax Rates
• All current individual marginal tax rates are retained (10, 15, 25, 28, 33 and 35 percent) including the recent increased top rate of 39.6 percent.
School Teacher Expenses Deduction
• Elementary and Secondary teachers can take an above-the-line deduction of $250 in out-of-pocket expenses for educational items for their classroom.
Deduction for State and Local Sales Taxes:
• Taxpayers are allowed an itemized deduction for state and local sales taxes.
• Taxpayers have to choose between deducting state income taxes or deducting state and local sales taxes.
• For the sales tax deduction, they can either keep track of their expenses or use the tables that the IRS provides.
Deduction for Qualified Tuition and Expenses
• This above the line deduction is extended through 2014.
• Taxpayers with income of up to $130,000 (joint) or $65,000 (single) can claim a deduction for up to $4,000 in expenses.
• For taxpayers with income over $130,000 but under $160,000 (joint) and over $65,000 but under $80,000 (single) can take a deduction up to $2,000.
• Taxpayers with income over those amounts are precluded from taking advantage of this deduction.
Mortgage Insurance Deductibility
Homeowners can deduct mortgage interest premiums as though they were mortgage interest payments.
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