With a new tax season just launched and a new commissioner, John Koskinen, firmly ensconced at the IRS, taxpayers aren’t the only ones with questions tax preparers have some of their own.
Tax Pro Today asked a number of preparers to share the questions they’d ask Koskinen, if given the chance. The questions (and comments) they shared covered everything from improving IRS help lines and certification, to realistic accountability for due diligence and the service’s role in offering some tax breaks.
June Lynham Pina, EA (Massachusetts-based AmeriTax): “When does the IRS plan to introduce a searchable directory of Enrolled Agents? What plan is afoot to make methodology between the IRS and the tax practitioner community easier to use? And when does the time of the tax practitioner become as valuable as that of the service? Ninety-minute hold times would destroy any other business.”
Twila Midwood, EA (Advanced Tax Centre, Rockledge, Fla): “Why are tax professionals under Circ. 230 held more responsible for taxpayers’ returns? These requirements on tax professionals are lending themselves toward auditing client records, rather than a mere due-diligence aspect. Recordkeeping of client documentation is fast becoming a burden on tax professionals . It appears that the tone of the IRS is that we should review every piece of documentation supporting client deductions and maintain copies as part of due diligence.”
Robert Flach, (The Wandering Tax Pro): “Do you think that the IRS should be administering social welfare and other government programs like the Earned Income Tax Credit, the refundable Child Tax Credit, Obamacare and the various education tax benefits, or is the only job of the IRS, and the Form 1040, to raise the money necessary to fund the government?”
Kristin Roberts, EA (The Roberts Tax Group, Torrington, Conn.): “Politicians spout off about tax benefits of new tax laws only to discover that when [the laws are] implemented, the benefits aren't so wonderful. How would the commissioner close that gap? Tax laws, especially many credits, are written so poorly that the taxpayer does not take the credit and, in some cases, the tax professional is so unsure of the position, that they won’t take it, either.”
Stephen DeFilippis, EA (DeFilippis Financial Group, Wheaton, Ill.): “Can we please improve the CP-2000 and other notices? Currently they state amount due by ’ even though it has not yet been determined if the allegations on the notice are correct. Especially troublesome are notices for 529 distributions. Many taxpayers, fearing the power of the IRS, will pay these amounts even though they don’t owe them. These notices need to be substantially revised.”
Sherry Whah, EA (Sherry Whah EA & Associates, Anchorage, Alaska): “The practitioner priority and taxpayer assistance phone lines are insufficient to handle the calls to resolve taxpayer problems. The continued hold for two to three hours is totally unacceptable and does nothing to encourage compliance and case resolution. What does the commissioner propose to resolve this problem? Also, the National Research Program results have estimated the under-reporting non-compliance by larger corporations is in the mid-billions range. They state they are aware of the problem but action and resolutions are shortsighted and the problem is growing. What is the service’s approach to resolve this?”
Alan Pinck, EA (A. Pinck &Associates, San Jose, Calif.): “Would you push Congress for a bigger budget so you can provide more taxpayer and practitioner outreach, which has been dwindling away over the past few years? Will you bring back the ability for practitioners to file POAs and deal with problem resolutions on e-services?”
Frank St. Onge, EA (Total Financial Planning LLC, Brighton, Mich.): “How do we get the preparer population to be licensed (RTRP at a minimum) so that the paid preparers have been properly schooled and passed an exam? I am not suggesting that everyone be an EA or CPA, but they do need to show proficiency in the tax rules if they are going to be paid and they need continuing education about the tax law.
“Why is the IRS trying to make the paid preparer the first step in the audit process? My examples: the level of detail they are asking us for with EITC documentation and the new details for the Schedule D to report cost basis for investment trades.
“How do we get to fairer and less-complicated tax rules? While I recognize that this is a congressional issue, I am sure the IRS has input on the rules that need to be in the tax law. By fairer,’ I point to the way hedge fund managers are taxed versus how my income on the same type of management of investments for my clients is taxed. By complex,’ I point to the new rules on the investment income tax one article ran 26 pages to explain the variables that need to be addressed to determine the amount of income that will be taxed at the new rate.”
Susan Floyd (Egner's Tax Service, Paducah, Ky.): “What is the fix for the underground economy rampant in our country today? And when can we get out of administering welfare payments (such as the EIC)?”