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lbanks — Tue, 09 Feb 2010 15:29:55 GMT

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Individual Quick Alerts for Tax Professionals

lbanks — Sun, 31 Jan 2010 14:09:05 GMT

Authorized IRS e-file Providers must not submit electronic returns to the IRS prior to the receipt of all Forms W-2, W-2G, and 1099-R from the taxpayers.

If taxpayers are unable to secure and provide a correct Form W-2, W-2G, or 1099-R, Providers may submit the electronic return only after securing Form 4852, Substitute for Form W-2, Wage and Tax Statement, or Form 1099-R, Insurance Contracts, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs etc. in accordance with the use of that form. This is the only time Providers should submit an electronic return with information from pay stubs or Leave and Earning Statements (LES).

The IRS monitors Authorized IRS e-file Providers for compliance with this and other IRS e-file rules and requirements. The IRS conducts monitoring visits to ensure compliance with Revenue Procedure 2007-40 and with IRS e-file rules and requirements included in IRS e-file publications.

The IRS may warn or sanction Providers that violate IRS e-file rules and requirements. Sanctions may be a written reprimand, suspension of one to two years or expulsion from participation from IRS e-file depending on the seriousness of the infraction. The IRS categorizes the seriousness of infractions as Level One, Level Two, and Level Three. Providers may appeal sanctions through the Administrative Review Process. Additional information regarding sanctioning is available at irs.gov in Publication 3112, IRS e-file Application and Participation.

Individual & Business QuickAlerts for Tax Professionals

lbanks — Sun, 31 Jan 2010 14:06:23 GMT

The acceleration of Income Tax Benefits for Charitable Cash Contributions for Relief of Victims of Earthquake in Haiti (P.L. 111-126 (H.R. 4462)) enacted on Friday, Jan 22, 2010, allows taxpayers who itemize deductions on their 2009 return to qualify for this special tax relief.

Any cash contribution made after Jan 11, 2010, and before Mar 1, 2010 for the relief of victims in areas affected by the Jan 12, 2010 earthquake in Haiti are eligible to claim the contribution as if they made it Dec 31, 2009.

The new law applies to cash (as opposed to property) contributions. The contributions must be made specifically for the relief of victims in areas affected by the Jan 12 earthquake in Haiti.

Taxpayers have the option of deducting these contributions on either their 2009 or 2010 returns but not both.

Taxpayers donating to Haiti relief by using their cell phone text messaging service may use a telephone bill showing the name of the donee organization, the date of the contribution, and the amount of the contribution as meeting the recordkeeping requirements of Code section 170(f)(17).

More details can be found in the IRS news release IR-2010-12 issued on Jan 25, 2010.

Individual Quick Alerts for Tax Professionals

lbanks — Sun, 31 Jan 2010 14:04:50 GMT

Error Reject Code 1132 occurs when the amount of the Economic Recovery Payment reported on Line 10 of the Schedule M does not match a data file that identifies if an agency (SSA, RRB or VA) issued an Economic Recovery Payment to the taxpayer(s) in 2009.

If the taxpayer cannot recall if they received the payment, advise the taxpayer to contact their respective agency to resolve the discrepancy before resubmitting the return claiming the Making Work Pay and Government Retiree Credits.

- Social Security Administration: Toll-free number is 800-772-1213. General ERP inquiries can be answered by the SSA Web site: http://www.ssa.gov/recovery/.

- Veterans Administration: Toll-free number is 800-827-1000. General ERP inquiries can be answered by going to the VA Web site: http://www4.va.gov/recovery/.

- Railroad Retirement Board: Go to the RRB Web site at http://www.rrb.gov/recovery/ for more details.

If the taxpayer contacts the agency and a discrepancy did occur, then the agency must provide the taxpayer with a letter confirming the discrepancy. These taxpayers should not claim the Making Work Pay and Government Retiree Credits when filing their original return, but instead will need to file an amended return to claim the Making Work Pay and Government Retiree Credits. They must attach a copy of the agency letter confirming the discrepancy.

Individual Quick Alerts for Tax Professionals

lbanks — Sun, 31 Jan 2010 14:03:57 GMT

We have received numerous e-file returns in which the Form 1040, Schedule M was completed incorrectly causing high fallout to the Error Resolution System (ERS). E-file returns that fallout to ERS may cause a delay in the processing for 2 to 3 weeks. The YES and NO boxes should be checked per the Schedule M line instructions. If the NO box is checked on line 10 or line 11 of the Schedule M, please do not enter an amount on either line.

On a joint return, if both spouses received an economic recovery payment in 2009, check the YES box and enter $500 on line 10 of the Schedule M. Then, if both spouses received a government pension or annuity in 2009, check the YES box and enter -0- on line 11.

On a joint return, if only one spouse received an economic recovery payment in 2009, check the YES box and enter $250 on line 10 of the Schedule M. Then, if the other spouse received a government pension or annuity in 2009, check the YES box and enter $250 on line 11.

On other than a joint return, if the taxpayer received an economic recovery payment in 2009, check the YES box and enter $250 on line 10 of the Schedule M. Then, if the taxpayer also received a government pension or annuity in 2009, check the YES box and enter -0- on line 11.

Important message about computing the Recovery Rebate Credit

lbanks — Tue, 10 Feb 2009 08:38:34 GMT

The only way to avoid a delay in taxpayers' refunds is to put the correct amount on the appropriate Recovery Rebate Credit line for Forms 1040, 1040A or 1040EZ. Any other choice, either an incorrect amount, leaving the Recovery Rebate Credit line blank or entering a zero (unless that is the correct amount) will guarantee a refund delay.

Why?

During processing, the IRS compares the amount entered on line 70 (1040) (line 42 for 1040A, line 9 for 1040EZ) to our records, if there is a match the IRS processes the refund without delay. If the figures do not match, the return is moved to a manual process in the IRS' error resolution function during which time the correct RRC is computed and is then added (or

subtracted) from a taxpayer's refund or balance due.

How long is the delay?

At present, the manual process to compute the correct refund amount and adjust the tax return is taking 1-2 days. The IRS has taken several steps to ensure the minimum possible delay for refunds that end up in this manual process. We anticipate that, even in high-volume periods, the maximum delay as a result of an incorrect amount on line 70 (1040) (line 42 for 1040A, line 9 for 1040EZ) will be less than a week.

How can taxpayers ensure they put the correct amount on line 70 (Form 1040) (line 42 for Form 1040A, line 9 for Form 1040EZ)?

To ensure the reported amount for the recovery rebate credit is correct, the taxpayer or preparer should use the IRS' application "How Much Was My Stimulus Payment?" located on IRS.gov to compute the entry on line 70 (1040) (line 42 for 1040A, line 9 for 1040EZ).

NTS Discussion Web / Quick Alerts/Announcements / IRS Quick Alearts

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Individual Quick Alerts for Tax Professionals

Individual & Business QuickAlerts for Tax Professionals

Individual Quick Alerts for Tax Professionals

Individual Quick Alerts for Tax Professionals

Important message about computing the Recovery Rebate Credit