Wednesday, May 8, 2019

Don Barg, TSCPA Relations with the IRS committee, requests that any issues for the IRS Stakeholder Liaison be forwarded to him. "These can be issues for the local business operating units or any type of issue you are incurring with IRS policies, practices or procedures in general."

Contact Don at dbarg@barg-henson.com



First Friday Hot Issues Summary –May 3, 2019

We Want You to Know

Tax Reform
We are pleased to announce the release of Tax Cuts and Jobs Act: A comparison for large businesses and international taxpayers. This side-by-side comparison for large and international taxpayers can help taxpayers understand the changes and plan accordingly. This is a companion piece to the comparison for businesses released last fall.

IRS revises EIN application process
On May 13, the IRS officially will change the application for an EIN to require that a “responsible party” be an individual with an SSN or ITIN. This requirement will apply to both the paper application (Form SS-4) and the online EIN application.

See News Release IR-2019-58 for more information.

Mark Your Calendars for our Upcoming Webinars

  • May 16 - Understanding Bankruptcy from an IRS Perspective
  • May 30 - Understanding the Qualified Business Income Deduction (199A)
  • June 6 – Foreign Earned Income Exclusion
  • June 13 – U.S. Taxation of Employees of Foreign Governments and International Organizations
  • June 19 – U.S. Territories Self-Employment Tax
  • June 27 – Tax Residency Status

Watch the Webinars for Tax Professionals page for registration information.

Posting soon!

Follow-ups from prior meetings:

Delayed Correspondence

Issue: Practitioner reported that he received correspondence that was dated several days before the envelope postmark date.

Response: This was correspondence generated by an individual employee and not systemically. They did not realize the date was old when they posted the letter. They have been advised to be more aware in the future.

Status: Closed.

 

Issue with Private Collection Agencies

Issue: The practitioner wanted to know what authority allows the Private Debt Collectors to request delinquent returns.

Response: The IRS has a contract under IRC 6103(n) with the Private Collection Agency (PCA) for the PCA to attempt to collect outstanding unpaid tax debts in accordance with 6306(b)(1), including executing an installment agreement or other payment arrangement.  Pursuant to this contract, the IRS may disclose to the PCA such return information as is reasonably necessary to enable the PCA to perform the contract.  To assist the PCA in identifying taxpayers who may be eligible for an installment agreement or other payment arrangement, the IRS discloses to the PCA certain information about unfiled tax returns.

Status: Closed.

Application of Payments

Issue: Practitioner was concerned because levy payments were not being applied to the oldest period.

Response: Levy payments must be applied to the periods listed on the levy. It is possible there are additional periods not listed on the levy. In addition, payments are to be applied in the best interest of the government. Generally, this means they will be applied to the period with the oldest assessment. This is usually the oldest return date, but not necessarily.

In this case, a substitute for return (SFR) was filed for one period and tax assessed. The taxpayer filed original returns for that period and an earlier period. When processing the taxpayer’s submission, the SFR assessed amount was reduced but the assessment date remains the same. Therefore, this was the oldest assessment.

Status: Closed. 

Transcript Delivery to the SOR

Issue: Practitioner asked an ACS Customer Service Representative to send an account transcript to his Secure Object Repository (e-Services secure mailbox). The CSR asked him for the client-specific “code.” The CSR was unable to explain what they meant by client-specific code and the practitioner did not receive the transcript.

Response: Per IRM 21.2.3.5.3 Selecting a Delivery Method (paragraph 3), the CSR needs the representative’s e-Services user name.

(That the “code” was the user name was confirmed by another representative who said this had worked for her.)

We have asked that CSRs be advised to ask for the user name.

Status: Closed.

 

New Issues:

Issue with Private Collection Agencies

Issue: The practitioner wanted to know if PCAs can offer installment agreements and what criteria they use to grant them.  

Response: Yes, PCAs can offer the taxpayer an installment agreement providing for full payment of such amount during a period not to exceed 5 years. See IRC 6306(b)(1)(B) and IRM 5.19.1.5.21.6, Installment Agreements Granted by Private Collection Agencies.

Status: Closed.

 

Transcript Delivery to the SOR

Issue: Practitioner wanted to know if their authorization needed to be processed before a CSR can deliver transcripts to their e-Services secure mailbox (SOR).

Response: No. Per IRM 21.2.3.5.3 (paragraph 4): To use this particular delivery method, the authorized representative must be in the Centralized Authorization File (CAF) database, and the CAF Status must indicate "good standing." The Form 8821 or Form 2848 does not need to be received by the CAF unit and processed before you can fulfill the transcript request.

Status: Closed

 

Transcript Request Limit

Issue: Why is there still a limit of only 10 transcripts when they are no longer being faxed?

Response: The number of pages that can be faxed is limited based on the file size of the request and cannot exceed the Outlook Exchange size limit of 10 MB. Due to the length of time to process each page on the receiving end, a recommended page limit is 100 pages. There are no page limitations for delivery to the SOR. See IRM 21.2.3.4.

The limitation of 10 transcripts per taxpayer is a policy of Practitioner Priority Services. See IRM 21.3.10.4.4 Transcript Requests.

Status: Closed.

Form 1099-DIV Included Income Eligible for Qualified Business Income Deduction

Issue: Practitioner was surprised to find that dividends her client received were eligible for the qualified business income deduction under IRS 199A.

Response: Box 5 of Form 1099-DIV is used by REITs and RICs to report amounts that may be eligible for the QBI deduction, but some amounts reported in box 5 may be ineligible for the deduction. For more information see the Tax Cuts and Jobs Act, Provision 11011 Section 199A - Qualified Business Income Deduction FAQs (question 26).

Status: Closed.

 

Information on IRS.gov Regarding Transcript Delivery to the SOR

Issue: Practitioners suggested having more information posted to IRS.gov regarding this new procedure.

Response: The following information is posted to IRS.gov:

Action: Let us know what additional information you feel is needed, the type of vehicle you think would be most helpful (update to existing page, fact sheet, tax tip, news release, other) and any pages where you feel a link to the current information would be helpful.

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