Topics Include: An IRS 2020 Summary, Technology at the Forefront, New Smart Form Availability, and a Paper Check Reduction Program
Tax Chair, Stephen Mankowski, CPA, recently attended the monthly IRS Meeting.
General Updates and 2020 Summary
November was our last meeting for 2020 and we’re all hoping for a better 2021, even though next year will likely start out as virtual. To kick-off awareness for next tax season, November 30-December 4 is the 5th annual tax security awareness week, which is urging heightened security against fraudsters.
Here are some highlights from this year, as well as a look ahead:
- The IRSAC (Internal Revenue Service Advisory Council) meeting was held virtually for the first time ever; its 2020 briefing book can be viewed here.
- The new IRS Fraud Enforcement Office, led by Damon Rowe, helped the IRS identify fraud within the SBA submissions, in addition to other Covid-19 related fraud. Fraud enforcement ID theft has been enhanced and helps protect employers and their employment taxes.
- The IRS has Included a QR code on CP14 Notices to allow for easy payment and installment agreements.
- The SB/SE (Small Business/Self-Employment Division) continues to focus on the expanding virtual currency arena.
- In the final weeks of 2020, the IRS is continuing to increase its multi-lingual push with forms, publications and social media work.
- All of this, while the IRS continues to make progress on its backlog of returns and mail.
In the Works
- The SB/SE Fiscal Year 2021 Focus will continue with its priorities—compliance, leveraging technologies, and developing its workforce, 90% of whom are teleworking.
- The IRS will continue looking at high income filers and using data analytics to ensure compliance. Trust fund recovery penalties continue to be an issue.
- The IRS is keeping an eye on the burgeoning marijuana industry now that there are eleven states where marijuana is legal for recreational use.
- The IRS has started “A Closer Look” with various IRS executives discussing what they have going on within their various departments.
Office of Professional Responsibility (OPR) Update
Taxpayer Digital Communication (TDC) access will be different, but accessible through e-Services. Drafts of Tax Information Authorization Form 8821 and Power of Attorney Form 2848 are available and being reviewed. Older forms will be accepted through April 15, 2021. The new forms should be released in December in conjunction with a webinar on secure access and TDC. Form 2848 will be a “smart” form when released in December with Form 8821 coming soon. This should help reduce systemic issues with the forms.
The Final Agency Decisions page is available here. This shows practitioners who were disciplined by the IRS and the punishment issued. Also, OPR has released several publications in Spanish, including Circular 230, Publication 947, and the new Forms 2848 and 8821.
U.S. Department of the Treasury: Paper Check Reduction
Paper checks have inherent costs and expenses, and the IRS is looking to reduce these costs, where possible. Over 50% of all paper checks are tax refunds. The IRS e-refund team is working with the U.S. Department of the Treasury on its paper check reduction program. Over 70% of papers refunds were from paid preparer e-filed returns. Many of these checks are for younger taxpayers who need to be made aware of the direct deposit option. Approximately 60% of paper refunds are sent to single filers and 50% of paper refunds go to taxpayers with AGI under $50K. Many taxpayers are aware of paper check issues with the EIP (Economic Impact Payments) not being direct deposit. If there is a second round of EIP, direct deposit would certainly alleviate this problem.
Happy holidays and look for my next report at the end of January 2021.
The National Conference of CPA Practitioners (NCCPAP) is a professional organization comprised of Certified Public Accountants practicing in the United States. In addition to serving as a forum for education, networking, and community impact, NCCPAP also advocates for its clients. NCCPAP influences tax administration and tax policy by regularly meeting with Internal Revenue Service representatives, state taxing authorities, and elected officials. NCCPAP members represent over one million businesses and individual clients. The organization is headquartered in Woodbury, NY. For more information visit, www.NCCPAP.org.