Tax season

The Internal Revenue Service touted Earned Income Tax Awareness Day as a way to raise consciousness about the credit for low-income taxpayers as the economic crisis forces more Americans into lower tax brackets.

Over 33 million callers could not reach the Internal Revenue Service’s toll-free assistance number last year to ask about economic stimulus payments, and the IRS could get swamped again this year with calls.

The House has approved an $819 billion economic stimulus package despite unanimous Republican opposition.

The continuing economic slowdown means that tax preparation and tax planning will be more critical than ever, and this will be reflected in the questions that taxpayers will ask of their preparers during tax season."Economic uncertainty, coupled with tax law changes, will make this season busier than normal," said Mark Albrecht, CEO of XCM Solutions LLC, a provider of workflow and automation solutions. "Staffing and workload challenges will be even more acute."

On Dec. 16, 2008, the Internal Revenue Service released the long-awaited final tax return preparer regulations. Although they had been expected to be issued in November, they were further delayed by the changes to Code Sec. 6694 included in the Emergency Economic Stabilization Act of 2008. In addition to the final regulations, the agency also promulgated Notice 2009-5, providing some interim guidance for the 2008 tax filing season, and Revenue Procedure 2009-11, updating the list of IRS forms that are subject to the preparer penalties.The final regulations do not differ significantly from the proposed regulations, but make several changes in response to comments received. The interim guidance responds to the statutory changes made by the Emergency Economic Stabilization Act and can be relied on by tax return preparers until final guidance is issued. Tax return preparers will want to make sure that they are familiar with these new requirements to avoid penalties as the 2008 tax return season gets underway.

Taxpayers in Delaware, Illinois, New York and Rhode Island who file paper returns will be sending them to different Internal Revenue Service centers this year.