IMRS Monthly Overview – December 2013
The IMRS Monthly Overview provides synopses of some of the issues received and/or closed by the Issue Management Resolution System staff during the past month. The Monthly Overview informs the public about the work of IMRS and highlights issues that we think would be of most interest to external stakeholders. When the Monthly Overview is posted to IRS.gov, a tweet goes out to Twitter followers of @IRStaxpros. Please sign up if you would like to be notified.
RECENTLY CLOSED ISSUES
Forms and Publications
IMRS Issue 14-0001873 – Correction to Publication 946, How to Depreciate Property
Issue: A stakeholder asked if the 2013 revision of Publication 946 will incorporate changes to asset classes 48.11 through 48.14 that refer to Federal Communications Commission Part 31 and various accounts to define telecommunications equipment by type. Part 31 no longer exists and has been moved into Part 32.
Response: The IRS revised Publication 946 and incorporated the FCC changed parts and various account numbers used to define telecommunications equipment. The upcoming revision of Publication 946 for tax year 2013 returns will reflect the changes. Thank you for bringing the corrections to our attention.
Policy, Practice, Procedures
IMRS Issue 14-0001883 – Electronic Filer Identification Number verification
Issue: Practitioners are receiving requests from their software companies for copies of their EFIN certificates. Is the IRS requesting this information? What documentation is acceptable verification of an EFIN?
Response: In 2011 the IRS began looking at companies using EFINs that were not associated with their firm. Some uses were inadvertent, but others were used to e-file fraudulent returns. IRS took the following steps to mitigate the incorrect use of EFINs:
- Conducted outreach with large software developers and transmitters in 2011 and 2012 to educate them on the importance of verifying the identity of the EFIN owners for whom they transmit returns. This requirement is in Publication 3112, IRS e-file Application and Participation.
- Conducted outreach through industry calls and other avenues, stressing the importance of validating the owners of EFINs
- Issued Quick Alerts on the correct usage of EFINs that also provided the following items and methods as options for verifying the identity of the owner:
- EFIN acceptance letter
- Copy of e-file application summary page showing the company name and EFIN status
- Use of the Electronic Return Originator Locator to find providers, keeping in mind that providers have the option of not being listed on the locator
- Call e-help to verify the EFIN is valid
- Posted frequently asked questions to IRS.gov in 2012 regarding the correct usage of the EFINs, including how to verify ownership
Some firms have had the same EFIN for years and may not need verification; however, it is important to verify the true owners of the EFINs for new firms.
IMRS Issue 13-0001829 – Forms 2848, Power of Attorney, Executed by One Spouse
Issue: A tax practitioner requested clarification concerning Form 2848, Power of Attorney and Declaration of Representative, after a tax assistor advised him both spouses on a married filing joint return must sign before information may be disclosed.
Response: The Form 2848 instructions state spouses or former spouses who filed a joint return must submit separate Forms 2848 even if authorizing the same representative(s) to represent them. This does not mean that one spouse cannot grant authority for a representative to act on their behalf for all tax related issues specified on the Form 2848 regarding their taxpayer identification number. It isn’t necessary for both spouses to have a POA on file with the same representative for that representative to have authority to act on behalf of one spouse only. The IRS apologizes for the service the practitioner received and will share additional guidance and clarification for joint filer representation with the toll free assistors.
IMRS Issue 13-0001848 – Powers of Attorney for LLCs
Issue: Stakeholder Liaison requested posting guidance on IRS.gov for powers of attorney for limited liability companies. It’s often difficult for the business and/or the practitioner to know who should sign the POA since different types of person(s) can sign a POA for an LLC depending on its election to be a corporation, partnership or disregarded entity.
Response: Guidance on who in an LLC should sign a POA can be found on IRS.gov by searching “Powers of Attorney for LLCs”.
IMRS Issue 13-0001777 - Employment Verification Contacts
Issue: A stakeholder contacted the IRS concerned about a phone call from someone claiming to be with the IRS. The caller requested information about the employer’s tax identification number and wage and withholding information for employees.
Response: Business owners may receive a call or fax request from IRS employees as part of the IRS’ strategies on detection, resolution and prevention of improper refunds. The IRS employee may request verification of income and/or withholding information reported to the IRS through other means.
If business owners receive such a call or fax and are not comfortable providing the information, they should contact the IRS customer service line at 1-800-829-4933 to verify the validity of the call or fax prior to providing any information.
IMRS Issue 14-0001882 – Unsolicited refunds of application fees from Practitioner Tax Identification Number (PTIN) renewals
Issue: Tax practitioners are confused over receiving refunds of their paid PTIN application/renewal fees.
Response: The Return Preparers Office discovered some double payments for prior years. These payments are unrelated to and can’t be automatically applied to the current year renewal. Pressing the "submit" button multiple times while on the payment screen caused the duplicate payments. The system was upgraded to prevent future double payments. Practitioners who were due refunds were sent an email from Tax_ProPTIN@irs.gov advising them it was on the way.
IMRS Issue 13-0001817 – Interactive Tax Assistant
Issue: A local practitioner asked whether a written response by the Interactive Tax Assistant (ITA) qualifies as written advice under Section 6404(f) of the Internal Revenue Code for the abatement of tax and penalties.
Response: A penalty or addition to tax must be abated under section 6404(f) if an officer or employee of the Service acting in an official capacity gives the taxpayer erroneous advice in writing, provided the advice is given in response to a taxpayer’s specific written request, the taxpayer supplies accurate and adequate information and the taxpayer reasonably relies on the advice. See also, Treas. Reg. 301.6404-3(a) and (b).
The terminology used in section 6404(f) suggests a level of formal interaction between the taxpayer and the Service that is absent from the ITA process. The statute requires the taxpayer to make a “specific written request” that includes adequate and accurate information, and that the erroneous advice be furnished to the taxpayer by an officer or employee of the Internal Revenue Service, acting in an official capacity. A taxpayer’s answers to a series of automated questions, most of which are yes/no questions, is not the kind of specific written request contemplated by section 6404(f). Additionally, the computer-generated response is not written advice furnished by an IRS officer or employee acting in an official capacity. Disclaimers have been added to the answer page of each ITA topic.
IMRS Issue 14-0001867 - CP14, First Notice of Balance Due
Issue: Mid-Atlantic Area practitioners suggested a statement be added to the CP-14 notice to address when an installment agreement has already been submitted for the tax period listed on the notice.
Response: Thank you for your suggestion regarding CP-14 notices. The CP-14 was revised to include a bullet addressing installment agreements previously established for the same tax period. The bullet reads: If you already have an installment or payment agreement in place for this tax year, then continue with that agreement.
NOTE: Current and previous reports are also available on this site. The monthly overviews are posted for this year 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.