Issues Closed in Calendar Year 2013 Sorted by Subject
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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 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.
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 13-0001829 – 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 13-0001809 – Use of e-Fax by campus AUR
Issue: Tax practitioners want to know whether the Brookhaven Automated Underreporter Unit (AUR) has implemented e-Fax. If it has, practitioners would like to receive the e-Fax number as well as information about how the process works. If e-Fax has not yet been implemented, practitioners are asking that it be adopted with a projected date of implementation.
Response: All AUR campuses use e-Fax. Campus e-Fax numbers are included on AUR notices with the “to contact us” information. When a fax is sent using e-Fax, it goes to a centralized AUR campus clerical area for printing and handling. Also, tax examiners in AUR are assigned individual e-Fax numbers that may be used during telephone calls. Tax examiners can provide callers with their designated e-Fax numbers, which enables direct fax receipt notifications via email.
IMRS Issue 13-0001734 – Duplicate notices to representative of joint taxpayers
Issue: Following IRS guidelines for filing Form 2848, Power of Attorney and Declaration of Representative, a tax practitioner filed separate Forms 2848 with the IRS for married taxpayers. Both spouses checked the box on Forms 2848 to request that he receive copies of correspondence, and he now receives two copies of the same notice (one for each taxpayer). The practitioner would like the Service to consider issuing only one copy of the notice to the representative to reduce paper and postage costs for the government.
Response: Thank you for your suggestion. Because joint return filers must each complete and submit separate Forms 2848 for the IRS Centralized Authorization File, the IRS is required to send copies of notices for each taxpayer to the representative, if the box is checked. Representatives who would like to receive only one copy of notices sent to married clients should ask that only one of the clients check the box requesting that notice copies be sent to the representative.
IMRS Issue 13-0001730 – Disallowance of education credits on Form 1098-T
Issue: CP 2000 and other IRS notices are being issued to taxpayers who claimed education credits. The notices advise taxpayers that the credit is disallowed because the amount paid to the educational institution cannot be determined. The amount cannot be determined because Form 1098-T only provides information in box 2 (amount billed) with no information in box 1 (amount paid). Taxpayers would like to provide information about amounts paid to educational institutions with their filed returns instead of receiving notices requesting the information.
Response: Verification of amounts billed is not adequate to verify American Opportunity Tax Credits (AOTC) or the tuition/fees deduction. Being billed does not verify that any amount was paid. Both the AOTC and the tuition/fees deduction require that amounts be paid. As long as universities continue to report billed amounts in Box 2 of Form 1098-T instead of paid amounts in Box 1, which is their right per the reporting requirements, the IRS will need to verify the amounts paid.
The IRS’ ability to view attachments beyond those currently transcribed is limited, so asking a taxpayer to submit an additional attachment at filing will only increase taxpayer burden and frustration when they are later sent a CP2000 to verify amounts. As the Automated Underreporter program is a post-filing Compliance program there should be no processing delay associated with an AUR notice. As previously stated, if colleges and universities report amounts billed rather than amounts paid, subsequent correspondence is necessary to validate the paid amounts used in computing the education credits and the tuition and fees deduction. The need for validating these credits and the deduction became more apparent when the Treasury Inspector General for Tax Administration (TIGTA) issued audit report 2011-41-083, Billions of Dollars in Education Credits Appear to be Erroneous. This audit surmised that education credits are a large area of questionable compliance and the Service committed to verifying the deduction.
IMRS Issue 13-0001722 – AUR Closing Notice, CP 2005, issued without taxpayer/client names specified
Issue: A stakeholder reported that his firm received 130 CP 2005, Automated Underreporter Closing Notices, including only clients’ social security numbers and not their names. The company has no way of cross-referencing SSNs to client names to determine which clients received notices resolving their AUR issues. There is no line for the taxpayer’s name on the CP 2005. The stakeholder would like to know why these letters do not specify taxpayers' names.
Response: The IRS would like to thank our stakeholders for bringing this issue to our attention. We apologize for any inconvenience this has caused. The IRS added a second name line for the taxpayer’s name, beginning with notices dated Oct. 29, 2012.
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 12-0001683 – CP 2000 AUR extensions
Issue: A practitioner would like the Automated Underreporter Unit to extend taxpayer response time from thirty days to sixty days.
Response: Approximately 65 percent of taxpayers respond to CP 2000 notices within 30 days. The Service allows for a period of time to elapse to ensure it has received all responses before initiating a "no response" action, which is generally the issuance of a Statutory Notice of Deficiency. At any time prior to the issuance of Statutory Notices of Deficiency, taxpayers can request and be granted an extension of time to reply. When the Service cannot work a case within 45 days of receiving a taxpayer response, a courtesy letter is sent acknowledging receipt of the response. It generally takes an average of three months to thoroughly review a response and initiate the next case action.
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
IRS Issue 13-0001828 – Form 8888, Allocation of Refund and Tax Preparation Fees
Issue: A stakeholder liaison requested an article for e-News for Tax Professionals to remind tax professionals about proper allocation of clients’ refunds.
Response: The Sept. 6, 2013, edition of e-News for Tax Professionals includes a reminder that taxpayers may direct their refunds to more than one account at a bank or other financial institution in the United States using Form 8888, Allocation of Refund (PDF). However, they may not request deposit of their refunds to accounts that are not in their names, such as their tax preparers' accounts. Regulations in Circular No. 230 (PDF) state that a practitioner who prepares tax returns may not endorse or otherwise negotiate any check issued to a client by the government in respect of a federal tax liability. For more information, visit Frequently Asked Questions about Splitting Federal Income Tax Refunds on IRS.gov.
IMRS Issue 13-0001758 – Mandatory electronic filing of the Report of Foreign Bank and Financial Accounts (FBAR)
Issue: Tax practitioners expressed concerns about the lack of publicity and clarity with regard to the FBAR e-file mandate.
Response: The FBAR page on IRS.gov has been updated to more prominently note the mandatory e-filing requirement for FBARs, effective July 1, 2013. On June 29, 2011, FinCEN announced that all FinCEN forms must be filed electronically with certain exceptions. The FBAR was granted a general exemption from mandatory electronic filing through June 30, 2013. E-filing is a quick and secure way for individuals to file FBARs. Filers receive an acknowledgement of each submission. For more information about FBAR e-filing, read the FinCEN news release. Additional information is located on the FinCEN Web page.
IMRS Issue 13-0001731 – Request to include a tweet on IRS news releases
Issue: A stakeholder suggested that IRS news releases include a tweet for the news release at the end. This would allow organizations to get the information out to its members via Twitter in a more expeditious manner.
Response: The IRS uses social media tools to share the latest information on tax changes, initiatives, products and services. You can connect with the IRS through various social media tools including Twitter. IRS tweets include tax-related announcements, news for tax professionals and hiring initiatives.
News releases on IRS.gov contain three icons at the top right-hand corner of the news release: a heart, a plus sign and a printer. When the middle '+' icon is selected, a Bookmark & Share drop-down menu appears, listing many social media platforms including Twitter. When users select Twitter, a tweet for the news release is provided. If you need further clarification, please contact your local stakeholder liaison
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:
IMRS Issue 12-0001608 – Outreach request for oil and gas industry
Issue: An oil and gas boom in parts of the United States has resulted in new royalty payments, payments for leasing land and rental income for many taxpayers. A stakeholder liaison requested outreach information addressing potential income for taxpayers.
Response: IRS.gov and various publications contain helpful information about these tax issues. Stakeholder liaisons received resources to help them quickly point stakeholders to appropriate sources for information on estimated tax payments, business expenses, taxable income, room rentals, etc. In addition, the IRS issued a fact sheet, Tips on Reporting Natural Resource Income (FS-2013-6), which posted to IRS.gov April 11. Additionally, e-News for Tax Professionals had a recent article with a link to the fact sheet.
IMRS Issue 12-0001592 – Request to post tip-reporting video to the IRS Video Portal
Issue: Please post Publication 3374, Reporting Tip Income, the Jill and Jason Show, on the IRS Video Portal. It will be available to more employers and cost less than mailing DVDs.
Response: The IRS Video Portal contains video and audio presentations on topics of interest to small businesses, individuals and tax professionals. You will find video clips of tax topics, archived versions of live panel discussions and webinars, as well as audio archives of tax practitioner phone forums. The IRS recently posted Reporting Tip Income, the Jill and Jason Show to the portal: search “Reporting Tip Income” at IRSvideos.gov.
Forms, Publications & Products
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.
IMRS Issue 13-0001853 – Publication 5067, Voluntary Classification Settlement Program At-a-Glance
Issue: A Stakeholder Liaison requested that Publication 5067, Voluntary Classification Settlement Program At-a-Glance, be made available on IRS.gov. The VCSP provides an opportunity for taxpayers who are currently treating their workers (or a class or group of workers) as independent contractors or other nonemployees to reclassify their workers as employees for employment tax purposes for future tax periods with partial relief from federal employment taxes.
Response: Publication 5067 (PDF) is now available from the Forms and Publications page on IRS.gov for sharing with interested clients.
IMRS Issue 13-0001844 – Page numbers for information document request transcripts
Issue: A practitioner asked whether page numbers can be added to transcripts received for wage and investment income information.
Response: The request will be considered along with other suggested enhancements to transcripts.
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 13-0001817 – 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, are 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 13-0001813 – Practitioner is receiving client’s notices in Spanish
Issue: A practitioner received an IRS notice for a client in Spanish. The practitioner does not read or speak Spanish. The practitioner suggests that all notices issued in Spanish include an English translation.
Response: Spanish language notices are sent to taxpayers based on filing conditions. If the taxpayer files a Spanish language form, such as forms 940PR, 1040PR, etc., then IRS will issue notices in Spanish. IRS systems don't allow for sending practitioner copies in a language different than the notice sent to the taxpayer.
IRS notices display a CP number in the upper-right corner. Generally, the CP number of Spanish notices begins with a 6, 7 or 8. These numbers correspond directly to their English equivalents as follows:
|Spanish CP#||English CP#|
Example: for the Spanish CP 621, the English version is the CP 521
Search Understanding Your IRS Notice or Letter to view the notices in English. In the future, each Spanish notice on IRS.gov will include a link to the English version. Your Stakeholder Liaison local contact can assist further.
IMRS Issue 13-0001790 – Delays processing acceptance agents applications
Issue: Effective Jan.1, 2013, the IRS updated procedures affecting the Individual Taxpayer Identification Number (ITIN) application process. The IRS has also taken steps to improve the ITIN Acceptance Agent Program. Practitioners are concerned about the delayed processing of new and renewing acceptance agent applications. They also request that a separate designation be made on IRS.gov to distinguish a Certifying Acceptance Agent (CAA) from an Acceptance Agent (AA).
Response: Although acceptance agent applications were accepted during the interim period, no new or renewing applications were approved. With the release of the final changes to the AA Program, applications will be processed on a first-in, first-out basis. Those who submitted a renewing application that was not rejected can continue to operate under the old agreement until the new agreement is finalized.
The acceptance agents lists now include an asterisk to distinguish the AAs from the CAAs.
IMRS Issue 13-0001781 – Social Security Number Elimination and Reduction Program
Issue: To prevent possible disclosures, a stakeholder asked if taxpayer identifying numbers can be printed as Xs or asterisks on IRS notices so only the last four digits show.
Response: In May 2007, the Office of Management and Budget issued Memorandum M-07-16 (PDF), Safeguarding Against and Responding to the Breach of Personally Identifiable Information, requiring all federal agencies to take steps to eliminate or reduce the use of social security numbers to protect taxpayers from identity theft. In response to the requirement, the IRS has made significant strides in eliminating or reducing the use of SSNs within its systems, forms, notices and letters through its Social Security Number Elimination and Reduction Program. The use of SSNs has been reduced or eliminated on approximately 20.4 million notices. Notices requesting payment present unique challenges due to the need to accurately post funds to a specific account. The SSN remains the primary identifier for posting funds; however, plans are in place to mask the SSN as soon as alternatives for accurately posting payments are deployed. For more information, refer to the What are we doing to protect taxpayer privacy? page on IRS.gov.
IMRS Issue 13-0001780 – Difficulty obtaining payoff calculator statements
Issue: A CPA firm continues to have problems using the Memphis Practitioner Priority Service (PPS) to obtain a payoff calculator statement for clients' accounts. They are informed that PPS is not allowed to send the payoff calculator statement; it can only give information verbally.
Response: Telephone assistors are not restricted from providing taxpayers or their authorized representatives copies of payoff calculator worksheets. The IRS will address this issue with all PPS telephone assistors.
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 13-0001775 – Notices to taxpayers that appear to be from the IRS
Issue: Tax professionals in several states reported that their clients received “Notices of Tax Lien Investigation“ by mail that appears to be from the IRS. The notices offer to settle their accounts or request immediate contact to discuss lien filing on their accounts.
Response: The IRS does not mail (or fax) notices with this title. This information was referred to the Treasury Inspector General for Tax Administration. The allegations described constitute potential criminal violations of United States Code, Title 18, and are within the criminal investigative jurisdiction of TIGTA, Office of Investigations. All information of this type should be immediately referred to TIGTA using one of the methods below:
By Online Form or email to Complaints@tigta.treas.gov
Remember: if you submit your complaint via the online form or email, it is possible - though unlikely - that others could read it since the Internet is not secure.
By phone, call toll free: 800-366-4484
Treasury Inspector General for Tax Administration
P.O. Box 589
Ben Franklin Station
Washington, DC 20044-0589
If you receive an email claiming to be from the IRS that contains a request for personal information, forward the full original email to us at email@example.com. For more information about what to do if you receive a suspicious IRS-related communication, search “phishing” on IRS.gov.
IMRS Issue 13-0001759 – Estimated tax penalty relief for tax year 2012
Issue: Generally, taxpayers can opt not to make their fourth quarter estimated tax payment on Jan. 15 and avoid the estimated tax penalty if they file their returns and pay the tax by Jan. 31. Tax practitioners are asking whether the IRS is considering any automatic relief for assessing the estimated tax penalty for taxpayers who did not make their fourth quarter estimated tax payment by Jan.15 and intended to file and pay by Jan. 31 but may not have done so because of the delayed start to the filing season and release of some forms.
Response: A request for penalty waiver should be completed by checking Box A in Part II on Form 2210 and attaching an explanation with a list of forms that were not available for making the deposit or filing the return. These requests will be considered on a case-by-case basis.
IMRS Issue 13-0001754 – Delayed start for filing season – relief for farmers and fishermen
Issue: Farmers and farm return preparers request an extension to the March 1 deadline to file and pay taxes due on their 2012 Forms 1040 because the schedules they use will not be available until late February or early March 2013.
Response: The IRS announced in IR-2013-7 that it will issue guidance in the near future to provide relief from the estimated tax penalty for farmers and fishermen unable to file and pay their 2012 taxes by the March 1 deadline due to the delayed start for filing tax returns.
IMRS Issue 13-0001747 – Tax treatment of federally issued loans on casualty loss deduction in disaster situations
Issue: If an individual receives a loan from the Small Business Administration for the full amount of losses incurred as a result of a federally declared disaster, does this preclude the claiming of a casualty loss deduction?
Response: A low-interest disaster loan from the SBA loan must be repaid and therefore does not reduce the casualty loss amount. However, amounts of the loan, if any, which are cancelled or forgiven are included in gross income in the year of cancellation. Additionally, insurance or other reimbursements received that are not required to be repaid will reduce the casualty loss. Additional information on this issue as well as other aspects of federal disaster relief efforts can be found on the IRS website. See Frequently Asked Questions under the category of SBA loans.
IMRS Issue 13-0001736 – Paper mailing of EFTPS password
Issue: A tax practitioner would like to know why, when registering online for the Electronic Federal Tax Payment System, the password must be mailed out via paper.
Response: Thank you for your inquiry. The IRS has been reviewing the process of EFTPS enrollments, specifically the time it takes to complete enrollment. The IRS is required to mail the PIN letter to the taxpayer’s address of record, which may be different from the primary contact information entered in the EFTPS enrollment. This is a security measure to notify taxpayers if a third party has enrolled them in EFTPS. If taxpayers need to make a payment before receiving their PIN letter, they can call EFTPS customer service 48 hours after completing the enrollment. If the enrollment is active, the customer service agent can take a payment over the phone.
Practitioners can become EFTPS batch providers by downloading the batch provider software from www.eftps.gov and registering through the software. It takes up to 10 days to receive Master PINs for this software. Practitioners can enroll any client for whom they have payment authority. Once we verify that the taxpayer’s information matches IRS records, the practitioner can initiate a payment. This is usually done within 24 hours of the enrollment.
IMRS Issue 13-0001732 – Daily limit on issuance of Employer Identification Numbers (EIN)
Issue: Tax practitioners request that the daily limit of one EIN per day per responsible party be changed back to five per day per responsible party.
Response: Thank you for taking the time to contact the IRS about revisiting the May 2012 policy change of issuing only one EIN per day to each responsible party. The IRS implemented this change due to a growing number of customers unable to access the system for true tax administration purposes. We experienced a large increase in requests for EINs for activities unrelated to tax administration. These requests frequently slowed or halted the processing of EINs. Because the majority of customers only need one EIN, the IRS made this policy change so the system can continue to efficiently process requests from those who must adhere to a tax-related requirement. Due to continuing concerns over this issue, the IRS must leave the policy in place. We apologize for any inconvenience this change may cause. We appreciate your feedback and will continue to monitor the EIN issuance process.
IMRS Issue 12-0001712 – Interest assessment on return filed by registered domestic partner in accordance with Chief Counsel Advice 201021050
Issue: A registered domestic partner who did not have an original filing requirement filed a return in accordance with CCA 201021050 to claim 50 percent of her partner's income and withholding, resulting in a balance due that was paid with the return. The IRS charged interest on the balance due. The taxpayer had no requirement to file a 2008 tax return, and all tax due was paid at the time the tax return was filed. Should interest be assessed or only accrue on any unpaid tax subsequent to the date of filing?
Response: Interest is statutory in nature, with no provisions for abatement due to reasonable cause. If the practitioner or taxpayer believes the facts support an abatement of interest under the law, then the correct avenue is for the taxpayer to file a claim for refund for the interest. The Service will evaluate the claim for abatement of interest. If the claim is disallowed, the taxpayer will still have appeal rights.
IMRS Issue 12-0001693 – Dual notices issued on joint returns
Issue: IRS currently issues two separate notices, one addressed to the surviving spouse and one addressed to the deceased spouse, when a joint return was filed and the taxpayers lived at the same address. This is the case even if the IRS knows one spouse is now deceased. It is suggested that this policy be changed so that the IRS issues only one notice addressed to the surviving spouse.
Response: Chief Counsel reviewed the suggested change and responded that current policy cannot be changed because two notices are required by statute. However, thank you for taking time to elevate this suggestion.
IMRS Issue 12-0001676 – Request for a streamlined process for tax practitioners to change addresses with all departments of the IRS
Issue: A tax practitioner suggested that the IRS have a central location to allow tax professionals to complete a change of address with ALL IRS departments. The tax practitioner recently moved both his home and office and had to separately change his address for his preparer tax identification number, enrolled agent, Centralized Authorization File, electronic filing identification number and personal residence.
Response: Thank you for your suggestion. Changing the address is currently a separate process for PTIN, EA, CAF, EFIN and personal accounts, and it is unlikely that this can be consolidated in the near future. A representative or appointee may submit Form 2848 (PDF), Form 8821 (PDF) or correspondence to update information on the CAF database.
IMRS Issue 12-0001595 – CP2000s regarding registered domestic partnerships
Issue: Electronically filed registered domestic partnership returns contain notes that cross-reference the partners' returns. The Automated Underreporter Program does not consider the notes and that results in the issuance of CP2000 notices (generally to the higher earning partner) questioning the amounts reported.
Response: We are aware of this issue. At the present time, electronically filed registered domestic partnership allocation worksheets are not processed or stored in a format that is conducive to retrieval and viewing by programs like the Automated Underreporter program. The Internal Revenue Service has taken actions to correct this situation and minimize taxpayer burden. A filter was created to identify returns filed in tax year 2011 by registered domestic partners in community property states to prevent erroneous underreporter notices from being issued to this taxpayer segment. The allocation worksheet has been converted to a new Form 8958, Allocation of Tax Amounts Between Certain Individuals in Community Property States. This form is available for tax year 2012. In addition, more electronic notes and attachments will be available for all programs, including AUR, for 2012 tax returns, due to electronic processing enhancements. Both the new form and the additional availability of electronic notes and attachments will enhance the AUR case selection. AUR examiners will be able to screen out cases if the income is properly reported on both returns without contacting either taxpayer or the return preparer. If you are contacted about tax years prior to 2012, please reply to the CP2000 with a printed copy of the allocation worksheet.