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IMRS Monthly Overview – March 2014

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.


Forms and Publications

IMRS Issue 14-0001928 – Foreclosure review payments
Issue:  Practitioners asked how to report independent foreclosure review payments reported in box 3 on the 2013 Form 1099-MISC. Is guidance in Rev. Rul. 2014-2 on national mortgage settlement payments appropriate?   



IMRS Issue 13-0001856 – Requesting an Employer Identification Number for a Trust
Practitioner’s client was trustee of her living trust since its creation in 1989. She became incapacitated in 2013, requiring a change in the trustee. Although an EIN was not required for the new trustee in this case, the practitioner applied for one using the Online EIN Assistant on When prompted for the funding date of the trust, he entered 1989, the year the trust was created. This generated an IRS request for 23 years of trust returns. To eliminate confusion and minimize taxpayer burden, the practitioner suggests the Online EIN Assistant include information clarifying which date to enter when an EIN is required.

Response: Thank you for your suggestion. Changes to the Online EIN Assistant are prioritized. During the next update to the Online EIN Assistant, IRS will add a help topic providing clarification on the date that should be used for the “date trust funded” question and when an EIN is required due to a change in circumstances.

IMRS Issue 14-0001912 – Correspondence acknowledgement
Practitioners would like to receive an acknowledgement when they respond to notices/letters from the correspondence units.

Response: When a taxpayer response is received in Correspondence Examination, the taxpayer’s case is updated to indicate that a response has been received. Letter 3500, Interim Letter to Correspondence from Taxpayer, is systemically generated advising the taxpayer the IRS received the response and is working the case. The letter also provides an expected date for the reply/determination. If the examination is not completed by that date then Letter 3501, Second Interim Letter to Correspondence from Taxpayer, is generated.

When a valid Form 2848, Power of Attorney and Declaration of Representative, is on file for the taxpayer, copies of the acknowledgement letters are sent to the practitioner. If the power of attorney is received with the taxpayer’s reply, the examination file is noted. After the POA is validated and processed through the Centralized Authorization File, copies of the acknowledgement letters will be systemically generated to the practitioner.

Forms and Publications

IMRS Issue 14-0001880 – Form 8867, Paid Preparer’s Earned Income Credit Checklist
IRS should include questions on Form 8867 asking the taxpayer to certify that all income has been reported and the qualifying child has lived with the taxpayer for the required period of time.

Response: Complete and correct information is key to preparing any return; however, Form 8867 and IRC §6695(g) have specific information for the paid tax return preparer. IRS Counsel advised we cannot add taxpayer questions or attestations to Form 8867, and the taxpayer jurat on the entire Form 1040 is sufficient. IRS has considered some of your suggested changes and is currently exploring the possibility of enhancing Form 1040, Schedule EIC to include additional taxpayer questions about EITC eligibility. This approach would cover both the self-preparing taxpayer and the taxpayer using a return preparer.

Policy, Practice, Procedures

IMRS Issue 14-0001917 – IRS-certified designation
VITA and TCE volunteers are referred to as IRS-certified. Circular 230 Section 10.30 prohibits enrolled agents from using the term certified.  Allowing this designation makes it appear that VITA volunteers are more qualified than enrolled agents to handle tax preparation.

Response: The term IRS-certified is used only as a modifier to the word volunteer, i.e., IRS-certified VITA/TCE volunteer preparer. Upon completion of annual training, a volunteer preparer is required to pass a test with a score of 80 (out of 100) or higher to become certified. All volunteers who prepare or review returns and instruct tax law classes must be certified. To mitigate any concern of misrepresentation, partners may not alter the sequence of the term (i.e., IRS-certified VITA/TCE volunteer preparer).

IMRS Issue 14-0001885 – IRS request for combat zone dates
Combat Zone Notices (CP04) request military members to verify deployment dates when the Department of Defense provides this information to IRS on a monthly basis. Why request combat zone dates when DoD informs IRS about members in the combat zone?

Response: The IRS receives information from the DoD regarding their military personnel in combat zones. However, the information received does not account for everyone entitled to tax deferments, specifically military personnel who do not receive imminent danger pay and/or are only in a combat zone for less than 30 days. Therefore, when someone in the military notifies the IRS via their tax return that they are a combat zone participant and research shows they are not included in the information provided by DoD for that tax year, IRS issues the CP04 notice to the taxpayer. Taxpayers/practitioners should promptly respond to the notices to help IRS fully serve military personnel in combat zones.  

IMRS Issue 14-0001846 – Callbacks after dropped calls
Why do customer service representatives ask for the practitioners’ phone numbers if they are not going to call back when calls are dropped? They specifically say it is in case they get disconnected, but they rarely call back.

Response: CSRs answering incoming calls are unable to call representatives back. To research the issue further, please provide specific instances of when this is happening. Provide your local stakeholder liaison with the following:

  • Date and approximate time of call
  • Phone number called
  • Name and employee number of the CSR

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.

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Page Last Reviewed or Updated: 23-Oct-2014