IMRS Monthly Overview - October 2011
IMRS Issue 12-0001529 – Practitioner Priority Service
Issue: A tax practitioner complained about long wait times and incorrect or incomplete responses that practitioners have been receiving when calling the Practitioner Priority Service Hotline.
Policy, Practice, Procedures
IMRS Issue 11-0001527 – Posting date for failure to pay penalty abatement
Issue: When the IRS abates the failure to pay penalty, the date posted to the IRS computer system for the abatement is often the date the abatement was processed instead of the date the penalty was originally assessed. The result is that the IRS collects interest on abated penalties from the date of assessment to the abatement posting date.
IMRS Issue 11-0001512 – E-file of married-filing-joint returns without spouse’s Individual Taxpayer Identification number
Issue: A stakeholder requested an e-file programming change for next season to allow a U.S. citizen to file Form 1040 as married filing separately without having the return reject because an Individual Taxpayer Identification number was not entered for a spouse who is ineligible to be granted an ITIN (because the secondary spouse has no federal filing requirement).
Response: We anticipate a change to the e-file system to allow these types of returns in January 2012 for tax year 2011. Please note that we do not yet have specifics on the parameters of the programming and that other restrictions may apply which could result in the prevention of returns being e-filed.
IMRS Issue 11-0001502 - Access to Practitioner Priority Service (PPS) line for Canadian tax professionals
Issue: A CPA working for a Canadian firm located in Canada raised the concern that the Practitioner Priority Service line is a toll-free number not accessible from outside the United States. This firm has many clients who are U.S. citizens and residents. Although they realize that the use of e-Services might be a viable alternative, the CPAs in his firm would like to have the same services available to them that are available to their counterparts in the U.S. Is it possible to secure a long-distance telephone number for the PPS?
Response: Customer service representatives on the International Line, 267-941-1000, already assist overseas practitioners representing their clients. While this line is not dedicated for practitioners' use, the contact representatives who staff it have the same skills as the agents who staff the Practitioner Priority Service. Funding is not currently available to establish a toll number for international practitioners to contact the Practitioner Priority Service. The potential for an initiative of this kind depends upon factors such as budget, programming resources and policy decisions.
IMRS Issue 11-0001473 – Self-employment tax on returns claiming a self-employed health insurance deduction
Issue: The IRS issued notices incorrectly adjusting the SE tax of taxpayers claiming the SE health insurance deduction and accepted returns that computed the SE tax incorrectly. Will the IRS be reviewing returns that may have been computed incorrectly?
Response: If you believe the IRS incorrectly recalculated or incorrectly denied a deduction taken for the self-employed health insurance deduction or any other deduction, submit an amended return along with an explanation of what you believe to be the correct amounts. If a refund was issued as a result of IRS changes, whenever possible return the uncashed check along with the amended return and your explanation citing why it is being returned. If the refund was direct-deposited, the original bank routing information should be provided.
All items reported on tax returns are subject to review at any time. This can be done when the return is being processed or through an audit at a later date. However, it is always beneficial to advise us as soon as possible if you feel an error was made so that it can be corrected. Early detection and correction can avoid additional interest and penalty charges, where applicable. Taxpayers may contact the IRS for further assistance with any of the above actions. Tax professionals can call the toll-free Practitioner Priority Hotline at (866) 860-4259 for guidance.
Policy, Practice & Procedures
IMRS Issue 08-0000840 – Bankruptcy trustee notices
Issue: Bankruptcy trustees are receiving notices for balance due and/or delinquent returns after a bankruptcy is closed, sometimes many months after closure.
Response: IRS Tips for Bankruptcy Trustees was published on IRS.gov on June 17, 2011, and offers some helpful tips for bankruptcy trustees who receive IRS collection notices.
IMRS Issue 11-0001462 – Form 2848 processing problems
Issue: A tax professional reported problems processing a Form 2848 with several pages that was faxed to the Centralized Authorization File unit. In addition, several tax professionals reported Form 2848 processing delays of more than ten days.
Response: We apologize for the unfavorable experience you had with getting powers of attorney timely processed through the CAF processing sites. It appears that you took the necessary steps to get a multi-page authorization processed by following the guidelines outlined in the Form 2848 instructions. To address this issue going forward, we reminded the CAF function employees at all three CAF sites that faxed pages that are clearly marked to stay together should not be separated. We also alerted the examiners to this issue and reminded them that they should take steps to locate missing pieces of information before taking any rejection action. We continue to track and monitor receipts and closures at all CAF sites. None of the sites was reporting inventory over ten days old at the time of the issue submission. We apologize for the delay.
IMRS Issue 11-0001460 - Correspondence from Appeals not sent to all representatives listed on Form 2848
Issue: A practitioner stated that when a case is forwarded to Appeals and there are two or more representatives’ names listed on the Form 2848, correspondence is only sent to the representative whose name is listed first. The correspondence should be sent to all listed representatives per the instructions on Form 2848.
Response: We agree that Appeals should send correspondence to all representative(s) listed on Form 2848 if Line 7 is completed indicating such, but our current case management inventory system only sends it to the first listed representative. Unfortunately, due to programming resource issues, our system cannot be re-programmed. Appeals will review the Service-wide Internal Revenue Manual to determine if our policies need to be revised and/or clarified. We are reminding our Appeals workforce to follow the instructions designated on the Form 2848 and that any computer limitations do not remove the Appeals employee’s responsibility to provide information to all of the taxpayer's authorized representatives.
Communication and Outreach
IMRS Issue 11-0001507, Reminder of tax deposit responsibility for employers who use third-party payroll providers
Issue: A stakeholder liaison requested outreach to remind employers who use third-party payroll providers that they are ultimately responsible for the deposit and payment of federal tax liabilities.
Response: The IRS issued Special Edition Tax Tip 2011-05, Three Tips for Employers Outsourcing Their Payroll, on Sept. 2, 2011.
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 local stakeholder liaison.