Wednesday, August 14, 2019

Don Barg, TXCPA 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 – August 2, 2019

We Want You to Know

Tax Reform

Don’t forget to check the IRS.gov Tax Reform pages regularly for the latest information.

Registration Open for our August Regional Practitioner Meetings

Check Practitioner Local Liaison Meetings and Seminars on IRS.gov for cities and dates:

Early Release Draft Form 1040-SR

Form 1040-SR U.S. Tax Return for Seniors

The Bipartisan Budget Act, enacted on February 9, 2018, required the IRS to create a tax form for seniors. Taxpayers age 65 or older will have the option to use this new form when they file their 2019 federal income tax return in 2020.

To make any additional improvements to this initial draft, the IRS is now accepting comments at WI.1040.Comments@IRS.gov. The 30-day comment period ends August 15, 2019.

 

Early Release Draft Form 1099-NEC

Form 1099-NEC Nonemployee Compensation 2020

This is an early release of a new form for reporting non-employee compensation paid in 2020. You can submit comments about draft or final forms, instructions, or publications at IRS.gov/FormsComments.

 

Follow-ups from prior meetings:

Early Release Draft Form 1040 and Related Schedules

Issue: Tax partners expressed dissatisfaction with the 2018 version of Form 1040.

Response: On July 11, the IRS released an early release draft for the 2019 Individual Income Tax Return.

Form 1040 U.S. Individual Income Tax Return

Form 1040 (Schedule 1) Additional Income and Adjustments to Income

Form 1040 (Schedule 2) Additional Taxes

Form 1040 (Schedule 3) Additional Credits and Payments

This current draft revision of the 2019 Form 1040 is a result of feedback gathered by IRS and Treasury over the past year while working closely with tax partners, stakeholders and taxpayers.

Changes include:

  • Signature block moved to the second page
  • Third-Party Designee section moved above signature block. (Entry for PIN included)
  • Consolidated schedules

Action: To make any additional improvements to this initial draft, the IRS is now accepting comments at WI.1040.Comments@IRS.gov. The 30-day comment period ends August 15, 2019.

 

Authorization Not Accepted - Illegible

Issue: Practitioners report authorizations being returned because they are illegible. The document was legible when they faxed it, is there a problem with IRS printing the faxes?

Response: All authorizations received via EFAX are printed. Both paper and toner are replaced as needed. Unfortunately, some received faxes are illegible and can’t be processed and must be returned for resubmission.

Status: Closed.

 

Gift Tax Transcripts

Issue: Practitioner wanted to know if they could get transcripts of gift tax returns further back than 6 years? What if they don’t know when the returns were filed or even if any returns were filed. Is that a problem?

Response: Yes, transcripts for gift tax returns are available for more than just the last 6 years. The Frequently Asked Questions on Gift Taxes page on IRS.gov answers many common questions about Gift Tax issues, including detailed instructions on how to secure a gift tax return account transcript. It also includes instructions on securing transcripts when it is not known which years a gift tax return was filed.

Status: Closed.

 

Form 433-H Installment Agreement Request and Collection Information Statement

Issue: Practitioner noticed a new form on IRS.gov: Form 433-H Installment Agreement Request and Collection Information Statement. He wanted to know when this form needed to be submitted instead of other collection information statements.

Response: The form indicates it is to be used to request an installment agreement when the taxpayer earns wages and their liability is either greater than $50,000 or cannot be paid within 72 months.

Action: Issue is being elevated for an official answer to when this form should be used.

Status: Open.

New Issues:

Form 1040-SR

Issue: Practitioners wanted to know:

  • When filing a married filing joint return, do both taxpayers have to be over 65?
  • Are taxpayers over 65 required to use Form 1040-SR?

Action: We will continue to research this question.

Status: Open.

Direct Debit Payments – Insufficient Funds

Issue: Practitioners wanted to know what happens if the taxpayer is on a direct debit installment agreement and there are insufficient funds in the account.

Response: The IRS will issue a notice CP166. The notice advises:

We’ll make a second attempt to withdraw your payment. If there are insufficient funds at that time, you may default on your agreement, interest will increase, and additional penalties may apply.

See Understanding your CP166 Notice for more information.

Status: Closed.

 

Record of Forms W-2 filed by the Employer

Issue: Practitioner needs to recreate a client’s payroll records. How can he get a record of the Forms W-2 he filed with Social Security?

Action: While a record of W-2s filed by the employer is not available through TDS,

Customer Service Representatives on either the Practitioner Priority Service line (866-860-4259) or Business and Specialty Tax Line (800-829-4933) can initiate a request for these transcripts.

Status: Closed.

 

Notice CP282

Issue: Practitioner reported that partnerships with foreign partners are receiving CP282 advising them they may have an additional filing requirement. The notice is sent even though the forms mentioned in the notice have already been filed. Can the IRS check to see if the proper forms have been filed before sending this notice?

Action: We will elevate your concern.

Status: Open.