By Ken Berry
Well before this year's Super Bowl, the Internal Revenue Service (IRS) has kicked off the 2012 tax return season with a series of five new Fact Sheets that were released the first week of January. In them, the IRS relates recent changes, improvements, free services, and other issues that are relevant to both taxpayers and practitioners. Here's a brief summary.
In an article published by AccountingWEB on January 4, we informed our readers that in FS-2012-1, the IRS announced that 2011 federal income tax returns don't have to be filed until Tuesday, April 17, 2012. The article also discusses e-file and Free File, IRS assistance options, a new virtual service pilot program, and more.
Also of significance in FS-2012-1: capital gain and loss transactions must now be reported on new Form 8949. Schedule D is to be used only as a summary sheet. In addition, Form 1099-B, issued by brokers, will show the taxpayer's basis in some instances, making it easier for taxpayers to fill out Form 8949. See the instructions for Form 8949 and Schedule D for details. This new reporting rule is being phased in over three years.
The Fact Sheet also includes reminders relating to homebuyer credits, energy credits, the alternative minimum tax (AMT), standard mileage rates for travelers, and other tax items of note.
In this Fact Sheet, the IRS points out the wide range of free services it currently offers, many of which are available online and by smartphone. The IRS website has been updated to make it more user-friendly, and it provides visitors numerous links to forms and instructions for filing taxes.
With the IRS providing easy access to a wealth of information, it's up to you to go the "extra mile" to show why taxpayers should use your services this year. Don't miss opportunities to tout your expertise. One marketing idea is to send your own "reminder" to clients and prospects as soon as possible.
The IRS is increasing its use of social media to communicate about various tax initiatives, products, and services. These social media platforms include a phone application – IRS2Go – as well as YouTube, Twitter, and Facebook. Short audio files and transcripts can be found in the Multimedia Center and as podcasts on iTunes. Next year, the IRS plans to offer even more features for its IRS2Go phone app. The app is free and available for iPhones and Androids.
According to the IRS, e-filing with direct deposit remains the fastest way for taxpayers to receive their refunds. Refunds are generally issued within twenty-one days or less if the return is filed accurately and no review is needed. But the IRS says it's increasing scrutiny of tax returns in an effort to detect fraud, so delivery may be delayed slightly. Taxpayers can check the progress of their refunds by using the "Where's My Refund" tool on the IRS website or the IRS2Go phone app.
Finally, the IRS has issued some tips on choosing a tax return preparer. It recommends that taxpayers obtain the following information:
- The tax return preparer's qualifications.
- The tax return preparer's history with the Better Business Bureau or any disciplinary actions and licensing issues with the state boards of accountancy for certified public accountants, the state bar associations for attorneys, and the IRS Office of Enrollment for enrolled agents.
- The tax return preparer's fee structure.
- The tax return preparer's availability in case any questions arise.
As a professional tax return preparer, you must sign any returns you prepare, include your Preparer Tax Identification Number (PTIN), and give the taxpayer a copy of the return.
Remember that competition is fierce and more taxpayers may be inclined to take advantage of free services. By itself, doing top-quality work is no longer sufficient. Think of ways to separate yourself from the pack this tax return season.