IMRS Monthly Overview – March 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
Policy, Practice, Procedures
IMRS Issue 12-0001719 – CP2000 notices for self-employment tax
Issue: Several tax practitioners complained that they are receiving erroneous CP2000 notices for self-employment tax imposed on whatever amount is shown on line 21 of Form 1040.
Response: During full examinations, the Small Business and Self-Employed business unit found that income subject to self-employment tax was reported incorrectly on Line 21 (other income) of Form 1040 and no self-employment tax was paid. SB/SE recommended that the Automated Underreporter program pursue self-employment tax issues.
AUR tested self-employment tax cases for tax years 2006 through 2008, and verified that there was significant noncompliance. In an attempt to close the tax gap, AUR issues a notice proposing self-employment tax when it can’t determine whether income on Line 21 is subject to self-employment tax. When taxpayers receive a notice proposing self-employment tax and the proposal is incorrect, they should respond by explaining why self-employment tax is not applicable. We regret any burden on compliant taxpayers. We continuously analyze case results and are working to develop better business rules for all cases, including these self-employment tax cases. We also use all input to update both our operating procedures and training materials.
AUR tax examiners are required to review entries on the dotted line part of Line 21 on both electronic and paper tax returns; system availability became available for electronic returns beginning with tax year 2011. However, tax examiners are still unable to view written attachments at this time due to system compatibility issues. AUR is aware of this barrier and is working on a final resolution.
IMRS Issue 12-0001667 – Dropped calls by Practitioner Priority Service
Issue: A tax practitioner stated that calls to PPS are sometimes dropped and suggested that PPS assistors get contact information at the beginning of the call so they can call practitioners back if the call is dropped.
Response: Thank you for your comments and suggestion regarding the Practitioner Priority Service. While we agree that PPS should not drop calls, there is no information available that identifies occurrences of dropped calls on the PPS telephone lines. In the future, PPS may be better able to identify the root causes of dropped calls if users provide more information, such as the assistor name/identification number, date and time of call and the telephone number the call was made from. Meanwhile, we will continue to monitor this situation, so we can provide the best service possible.
Communication and Outreach
IMRS Issue 12-0001708 – Spanish products
Issue: An IRS stakeholder liaison requested that the Spanish products page on IRS.gov indicate which products are available online only. The liaison also requested the addition of Publication 4591, Small Business Federal Tax Responsibilities, and Publication 1518, IRS Tax Calendar for Small Businesses and Self-Employed, to the Small Business Publications in Spanish page.
Response: The request has been completed. Please visit http://www.irs.gov/Spanish/Publicaciones to identify which publications are available online only. Publication 4591 and Publication 1518 were added to the Small Business Publications in Spanish Web page: http://www.irs.gov/Spanish/Publicaciones-para-Pequeñas-Empresas.
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.