IMRS Monthly Overview - January 2011
NEW IMRS ISSUES
Forms, Publications & Products
IMRS 11-0001410 – Income limitation amounts on Form W-4
Issue: A tax professional asked if the income limitation amounts, $40,000 ($10,000 if married), included in the second bulleted item under Line H of Form W-4 (Line G for W-4P) are correct.
IMRS 11- 0001411 – Withholding tax changes
Issue: A payroll professional questioned whether the IRS withholding tables are correct. He stated that workers expected that their take home pay would increase because of the 2% reduction in Social Security taxes, but applying the new published tax rates actually resulted in a reduction in take home pay for many people.
Communication & Outreach
IMRS 11- 0001409 – “Where to send payment” information needed on IRS.gov
Issue: A tax professional said that on the Tax Professional page on IRS.gov there used to be a section for “payments” under "where to file" on the left-side menu. He said that he frequently used that resource when sending in payments for clients. He noted that often cases are in the Collection queue or in uncollectable status and there are no notices to indicate where to send the payments. He asked if the IRS could restore this feature.
RECENTLY CLOSED ISSUES
IMRS 11-0001403 – Fax number on Letter 1058
Issue: A tax practitioner stated that Letter 1058 from ACS does not include the fax number for submitting the Form 12153, Request for a Collection Due Process or Equivalent Hearing, so it is not possible to fax the hearing request. The practitioner requested that the IRS include a fax number to better accommodate the response process.
Response: We believe this is a good idea. The Collection Due Process program was originally implemented on the basis that hearing requests would be submitted primarily by mail and that faxing would be reserved for those cases requiring an expedited filing, rather than used as a routine option. Adding fax numbers to the letter 1058/LT11 involves systemically linking the proper ACS support site location’s fax number with the taxpayer, the associated business operating division and the taxpayer’s state of residence.
Programming resources are limited and changes to the process are now taking up to two years. However, we will begin the process of determining if programming can be done in the future to systemically provide the proper fax number on the letter 1058/LT11. If we determine that the fax number can be added to the letter, it may result in ACS support sites receiving a significant increase in CDP requests via fax. Therefore, we will address staffing and equipment needs in the ACS sites to ensure they have the capacity to receive this increased fax volume.
In the interim, taxpayers or their representatives can obtain the appropriate fax number for submitting a CDP request by calling the number indicated on the letter 1058/LT11.
IMRS 11-0001400 – Correspondence audit contact number
Issue: A tax practitioner stated that the notices for two recent correspondence audits had generic contact phone numbers with only “Tax Examiner” listed as the contact person. The practitioner stated that he does not object to the IRS using generic phone numbers to handle these cases, but the workers who answer the phones should have the ability to handle an issue. If they can't, they should have a mechanism to either refer the call to the correct department or set up a callback. The case files should support the conclusions so the telephone operators can assist. The system should require callers to enter a case reference number and then use it to route them to the correct unit, or at least to the correct campus.
Response: Thank you for the feedback concerning our telephone service. Phone service was changed last July to ensure all calls are answered as quickly and completely as possible. Part of this change includes routing the call to the next available qualified assistor regardless of the assigned campus. As stated in this IMRS issue, a key component is the case documentation by the assigned examiner, which enables the assistor answering the phone to fully explain what is needed to the taxpayer. While this approach does not allow direct contact with the assigned examiner, our system has a mechanism in place to enable a phone assistor to leave case notes for the assigned examiner. Once the notes have been input to the system, an alert message can be sent to the assigned examiner if follow up action is required, including a call back to the taxpayer.
Based on your feedback we will review the process and reinforce appropriate procedures with our campus assistors. Thank you for bringing your concerns to our attention.
IMRS 11-0001391 – Amended returns for insurance company demutualizations
Issue: A practitioner filed several amended tax returns to claim refunds for taxpayers who had previously claimed no basis for the sale of their stock acquired in insurance company demutualizations after the Fisher case. The amended returns sent to the Fresno campus were processed and the refunds issued. The returns sent to Kansas City were not processed and no refunds were issued. Instead, Kansas City sent letters saying that the service was waiting pending the decision in the Dorrance vs. US case. The practitioner wants to know if there is Servicewide policy for processing amended returns claiming a basis for the sale of these stocks.
Response: Since a determination has not been made regarding these types of claims, the refunds should not have been issued. Internal Revenue Manual 21.5.3 contains the Servicewide policy, which should have been followed. We thank you for bringing this issue to our attention and apologize for any inconvenience.
Policy, Practice & Procedures
IMRS 10-0001301 – Social Security number masking
Issue: A tax practitioner would like to e-mail Form 8879, IRS e-file Signature Authorization, to clients for signature. The form is not sent anywhere, but is kept for three years by the practitioner e-filing the return. Because of identity theft concerns, the practitioner asked if it is permissible to mask the SSN by using "X"s and showing only the last four numbers.
Response: A pilot program regarding truncating of Social Security numbers is outlined in Notice 2009-93. This pilot addresses the mailing of information returns to the person whose SSN is being truncated. Because the SSNs on Forms 1040 and 8879 are being provided to the IRS as part of an income tax return filing, it is unlikely that the results from the pilot will be transferable. Therefore, the SSNs on these forms cannot be truncated at this time. As an alternative, the taxpayer can return Form 8879 by other electronic means, such as a Form 8879 that is posted on a secure Web site for the practitioner to access, as permitted under Rev Proc 97-22 and Treasury Regulations 1.6107-2T & 1.6695-1T.
Communication & Outreach
IMRS 10-0001301 – e-News for Payroll Providers
Issue: The IRS offers 17 different e-news subscription services for tax professionals and small businesses. However, none of these 17 subscription services is specifically targeted at payroll professionals. An electronic newsletter for payroll professionals is requested.
Response: The new e-News for Payroll Providers contains information about legislative changes, new employment tax procedures and other information specifically affecting federal payroll tax returns. This new e-mail service was a result of payroll provider requests elevated through the IMRS system.
NOTE: Current and previous reports are also available on this site. The Monthly Overviews are posted for the prior two years through the current month. You can also access reports for Issues Closed in Prior Years on the same page.
We invite you to raise your issues/concerns with your local stakeholder liaison.