NEW IMRS ISSUES
Campus
IMRS 09-0001023 – Correspondence Examination
Issue: Tax professional called the IRS to request an extension of time to provide documentation requested for a correspondence examination. The examiner informed him they never provide an extension. He would like clarification of the procedure.
IMRS 09-0001038 – Automated UnderReporter Program
Issue: Tax professionals note that the CP2000 does not clearly state that it is a 30-day letter and that failure to reply timely will result in a Notice of Deficiency. They request we revise the letter to state this clearly.
Forms, Publications, Products
IMRS 09-0001031 – Notification of Internal Revenue Manual (IRM) Changes
Issue: Tax professional requests IRS develop a system to provide notification of changes to the IRM, including a summary of the specific changes.
Policy & Procedure
IMRS 09-0001048 – Minimum Tax Credit
Issue: Tax professionals report that, when the IRS performs an examination, they do not recognize or adjust the current year deficiency to allow available carryover of the Minimum Tax Credit.
RECENTLY CLOSED ISSUES
Campus
09-0001016 – Letter 147C, EIN Previously Assigned
Issue: Practitioner reports the IRS will no longer fax a copy of Letter 147C to authorized representatives, and this is causing a negative impact on his clients.
Response: Updated instructions have been provided to our employees clearly instructing them to fax the 147C letter to taxpayers and/or their authorized representatives.
09-0000928 – Balance Due Notices
Issue: Preparers advise that balance due notices are being generated when the return is e-filed and a check is mailed shortly afterwards.
Response: Balance due notices issued for electronically filed returns with checks being mailed for the amount owed has been a recurring issue. When an electronically filed return posts and a corresponding payment is not in the system, a notice is automatically generated. Since a payment mailed the same day as the return is e-filed takes additional time to post, notice issuance has increased as the number of returns filed electronically has increased. In the past several years, IRS has taken steps to prevent this from happening during the peak filing season. Beginning in June 2009, all balance due notices will be delayed for two weeks to allow any payments mailed to post. This should greatly reduce the number of erroneous notices. We have recently become aware that some notices may be issued when payments have been made using EFTPS. Again, there is a short lag time as the information is transferred from EFTPS to the IRS and, because of the timing, a notice may be issued. The reprogramming in June 2009 should eliminate this situation as well. Please note that all balance due notices state: If you have already paid your tax in full or arranged for an installment agreement, please disregard this notice. Therefore, if a payment has been sent, no further action is needed unless a second notice is received. These notices may also be avoided by using Electronic Funds Withdrawal for the tax due, interest and penalties. We apologize for the inconvenience this has caused for taxpayers and their preparers and are hopeful that as of June 2009, systemic changes will greatly reduce the number of these notices.
E-Services
IMRS 06-0000220 – E-Services
Issue: Tax professionals with a Form 8821, Tax Information Authorization, are not able to use e-Services Transcript Delivery Services.
Response: Transcripts cannot be requested through e-Services with a Form 8821, Tax Information Authorization. Form 4506T, Request for Transcript of Tax Return, is the appropriate form for the taxpayer or representative to use for the sole purpose of securing a transcript. E-Services, created for "limited use" by third parties to carry out their responsibilities for their clients, does not include Form 8821 transcript requests. In addition, as stated on Form 2848, Power of Attorney and Declaration of Representative, it should not be used by the taxpayer to simply authorize a third party to receive a transcript of their tax information. At this time, there are no plans to allow transcript requests via Form 8821. Practitioners who have access to e-Services and hold a valid authorization may call the PPS and request transcripts be delivered to their Secure Object Repository (SOR).
Forms, Publications & Products
IMRS 09-0001017 – Excise Tax Resources
Issue: Stakeholders complain that it is difficult to locate excise tax information on IRS.gov.
Response: The excise tax landing page is now one of the top search results on IRS.gov using the terms ‘excise tax’ or ‘excise.’ In addition, we published an article in e-News for Tax Professionals and in e-News for Small Businesses highlighting the materials.
IMRS 07-0000623 – Employer ID Numbers (EINs) for Limited Liability Companies
Issue: Stakeholders request guidance or outreach on changes to EIN procedures for single member LLCs (disregarded entities) with employees.
Response: Headliner 252, Disregarded Entities for Purposes of Employment Taxes was issued November 2008.
IMRS 08-0000817 – Payments
Issue: Stakeholders report difficulty finding instructions for sending in paper payments when Form 1041 is filed electronically.
Response: The Tax Professionals’ page on IRS.gov is now updated to include all payment options for electronic filers.
Policy & Procedure
IMRS 08-0000906 – Collection Transportation Standards
Issue: Practitioners would like to see transparency as it pertains to Collection Transportation Standards. They feel the IRS has failed to provide a clear statement of their assumption of the number of commuting miles driven by each taxpayer in setting the operating expense allowances.
Response: The Allowable Living Expense (ALE) standards are used to reduce subjectivity in determining what a taxpayer may claim as basic living expenses necessary to avoid hardship, when the taxpayer must delay full payment of delinquent taxes. Use of the standards is very important in maintaining public confidence that IRS administers the tax law in a way that is fair to both individuals who are delinquent in paying their taxes, and fair to the vast majority of compliant taxpayers who pay on time. The standard allowances provide consistency and fairness in collection determinations by incorporating average expenditures for taxpayers in similar geographic areas.
Vehicle Operating standards are based on actual consumer expenditure data obtained from the United States Bureau of Labor Statistics which are adjusted with Consumer Price Indexes to allow for projected increases throughout the year. (These CPI are used to adjust all ALE standards.) Vehicle operating standards are not based on average commuting distances. Fuel costs, which are part of vehicle operating costs, have a separate fuel price adjustment which is based on Energy Information Administration data which allows for projected fuel price increases. Although recent analysis of EIA data shows that fuel prices have increased, actual consumption has decreased, resulting in only a slight increase in overall expenditures.
While one set of standards cannot fit every individual circumstance, IRS employees are empowered to deviate from the ALE structure when warranted to address those taxpayers who document necessary living expenses in excess of current allowances.
The collection financial standards, available via IRS.gov, provide the following explanation: “If the IRS determines that the facts and circumstances of a taxpayer’s situation indicate that using the standards is inadequate to provide for basic living expenses, we may allow for actual expenses. However, taxpayers must provide documentation that supports a determination that using national and local expense standards leaves them an inadequate means of providing for basic living expenses.”
NOTE: Current and previous reports can be accessed from the Tax Professionals page on IRS.gov. (The Monthly Overviews are posted for the periods January 2007 through the current month. You can also access the 2007 Closed Issues Sorted by Subject and the Issues Closed in Calendar Year 2008 Sorted by Subject report on the same page.) We invite you to raise your issues/concerns with your local liaison representative. A listing of Stakeholder Liaison (SL) Local Contacts can be found at IRS.gov, keywords “Stakeholder Liaison (SL) Local Contacts,” or follow the link on the IMRS page. This list is also available for downloading.
|