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IMRS Hot Issues

August 2014

New IRS Filing Season Program Unveiled for Tax Return Preparers

The Internal Revenue Service announced guidance outlining a new voluntary program designed to encourage education and filing season readiness for paid tax return preparers. The Annual Filing Season Program will allow unenrolled return preparers to obtain a record of completion when they voluntarily complete a required amount of continuing education (CE), including a course in basic tax filing issues and updates, ethics and other federal tax law courses. Tax return preparers who elect to participate in the program and receive a record of completion from the IRS will be included in a database on IRS.gov that will be available by January 2015 to help taxpayers determine return preparer qualifications. More information is available on IRS.gov by searching Fact Sheet-2014-8 and Revenue Procedure 2014-42 (PDF).

IRS Announces ITIN Policy Change

Individual Taxpayer Identification Numbers (ITINs) will expire if not used on a federal income tax return for any year during a period of five consecutive years. That is, the IRS will not deactivate an ITIN that has been used on at least one tax return in the past five years. The new policy applies to any ITIN, regardless of when it was issued. Under the old policy ITINs issued after Jan. 1, 2013 would have automatically expired after five years, even if used properly and regularly by taxpayers. To give all interested parties time to adjust and allow the IRS to reprogram its systems, the IRS will not begin deactivating ITINs until 2016. To keep current on ITIN issues, search "ITIN" on IRS.gov.

IRS Fights Fraud with New Direct Deposit Limits

In an effort to combat fraud and identity theft, new IRS procedures effective January 2015 will limit the number of refunds electronically deposited into a single financial account or pre-paid debit card to three. The fourth and subsequent refunds automatically will convert to a paper refund check and be mailed to the taxpayer. Taxpayers also will receive a notice informing them that the account has exceeded the direct deposit limits and that they will receive a paper refund check in approximately four weeks if there are no other issues with the return. The new limitation also will protect taxpayers from preparers who obtain payment for their tax preparation services by depositing part or all of their clients’ refunds into the preparers' own bank accounts. For additional information, search "Direct Deposit Limits" on IRS.gov.

Tax Scams Ongoing

Thieves don’t stop victimizing unsuspecting taxpayers with their scams after April 15. Identity theft, phone and phishing scams happen year-round. Those three top the IRS's 'Dirty Dozen' list of tax scams this year. For important information you should know about these common tax scams, search Avoid Summertime Tax Scams on IRS.gov.

Revised Circular 230

Treasury Department Circular No. 230 (6-2014) is now available.

Guidance on H-2A Visa Holders

For practitioners with concerns regarding H-2A Visa issues, new Publication 5144, Federal Income Tax and FICA Withholding for Foreign Agricultural Workers with an H-2A Visa (PDF) provides information for visa holders, employers, and return preparers.

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Page Last Reviewed or Updated: 22-Aug-2014