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Preparer Competency Examination Update – It’s Time to Put In Your 2Cents

Katherman Kitts & Co. LLP Certified Public Accountants

If you want to tell the IRS exactly what you think the content of the competency exam should be, now is the time.  Notice 2011-48 invites comments.

Notice 2011-48 invites public comments on the content and administration of the registered tax return preparer competency examination (competency examination).  The Treasury Department and the Internal Revenue Service have published final regulations (TD 9527, 76 FR 32286) under 31 CFR Part 10 that require certain individuals to pass a competency examination to become a registered tax return preparer.  The IRS has selected a vendor to support the IRS in developing and administering the competency examination for the Form 1040 series tax returns and accompanying schedules.

Notice 2011-48 will be published in Internal Revenue Bulletin 2011-26 on June 27, 2011.

Happy Valentines! A Gift of Tax Filing For Your Sweetheart

By Stacie Clifford Kitts, CPA

Feb. 14 is the magic filing date.

Well, I guess the IRS finally figured it out and reprogrammed their computer system to accommodate the new tax changes..  If  you file Schedule A that is you itemize, or you will take the hirer education tuition and fees deduction on Form 8917, or even the educator expenses deduction, you will be able to file your tax return (hopefully) starting on Valentines Day.  How romantic, a gift of tax filing for your sweetheart.

Read on for more info:

WASHINGTON — The Internal Revenue Service plans a Feb. 14 start date for processing tax returns delayed by last month’s tax law changes. The IRS reminded taxpayers affected by the delay they can begin preparing their tax returns immediately because many software providers are ready now to accept these returns.

Beginning Feb. 14, the IRS will start processing both paper and e-filed returns claiming itemized deductions on Schedule A, the higher education tuition and fees deduction on Form 8917 and the educator expenses deduction. Based on filings last year, about nine million tax returns claimed any of these deductions on returns received by the IRS before Feb. 14.

People using e-file for these delayed forms can get a head start because many major software providers have announced they will accept these impacted returns immediately. The software providers will hold onto the returns and then electronically submit them after the IRS systems open on Feb. 14 for the delayed forms.

Taxpayers using commercial software can check with their providers for specific instructions. Those who use a paid tax preparer should check with their preparer, who also may be holding returns until the updates are complete.

Most other returns, including those claiming the Earned Income Tax Credit (EITC), education tax credits, child tax credit and other popular tax breaks, can be filed as normal, immediately.

The IRS needed the extra time to update its systems to accommodate the tax law changes without disrupting other operations tied to the filing season. The delay followed the Dec. 17 enactment of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, which extended a number of expiring provisions including the state and local sales tax deduction, higher education tuition and fees deduction and educator expenses deduction.

Picking Apart the IRS’ Top 10 Tax Time Tips

By Stacie Clifford Kitts, CPA

The IRS has started their seasonal “Tax Tip” campaign.   I do like these tips.  They cover many of the general questions that taxpayers ask.   In the interest of having a little fun, let’s pick apart Tax Tip 2011-01

  1. Start gathering your records – I agree.  Waiting to the last minute can cost you deductions.  Lost receipts or forgotten documents are the bane of tax preparation. Give yourself time to get it together before the filing deadline gets here.
  2. Be on the lookout for w-2 and 1099’s – well duh IRS, this kind of falls into item number 1 don’t ya think?  If you are owed a 1099 or W2, these are delivered or mailed to you by January 31, 2011. So if it’s March and you don’t have your forms, better start making some calls because something is wrong.
  3. Use free file – This option is cool, but a bit deceiving.  Free file is a great product to prepare your federal income return if your income is less than $58,001.  Free file is sponsored by brand name – for profit- tax software companies.  So keep in mind, you still pay for the use of the software when you prepare your state tax return (only the federal part is prepared for free).
  4. IRS e-file – Personally I like efiling.  It is convenient, fast, accurate, and paperless.  Besides, here’s a heads up,  E-file is mandatory for some taxpayers.  It’s a new age, time to get on the ball and accept modern technological advances.
  5. Consider other filing options – Yes there are other options – you could prepare your return yourself (not recommended).  And, if you qualify, there are ways to get your return filed that don’t cost money.  Consider checking out your local VITA program.  The IRS Volunteer Income Tax Assistance Program (VITA) and the Tax Counseling for the Elderly (TCE) Programs offer free tax help for taxpayers who qualify.
  6. Consider direct deposit – I still get taxpayers who want to have their refund checks mailed to them.  I can’t really get my head around this one.  Generally, there isn’t  a good reason to have a check mailed versus having your refund direct deposited.
  7. Visit the IRS website again and again – okay, lots of helpful information here.  No reason not to.  I say, do it.
  8. Remember to checkout IRS publication 17. Well, yes if you want to learn all about income tax by all means here is a publication that will help.  Helpful stuff includes:  a) What’s new for 2010,  b) Reminder, c) When you should file a return, d) When to paper file vs. efile, c) Yada yada yada
  9. Review! Review! Review! – Well ya check for mistakes.  But people really, if you’re not a tax expert, you really aren’t going to know if you blew it.  Might I suggest you have a tax professional review your return before you file.
  10. Don’t panic! – Unless you want too of course – or waited until the last minute.  When all else fails, the IRS says you can give them a call at 800-829-1040.
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