Issues Closed in Calendar Year 2016 Sorted by Subject
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Forms, Publications & Products
IMRS Issue 16-0002178 - Fact Sheet 2006-26 conflicts with Revenue Procedure 2010-51
Issue: FS 2006-26, Car and Truck Expense Deduction Reminders, states a taxpayer can't use the standard mileage rate if the taxpayer uses the car for hire, e.g., taxis. Per Rev. Proc. 2010-51, the IRS changed the rule; it's now allowed. A practitioner suggested changing the fact sheet
Response: Thank you for bringing this to our attention. Fact Sheet 2006-26, Car and Truck Expense Deduction Reminders on IRS.gov has included an update about Rev. Proc. 2010-51.
Policy, Practice & Procedures
IMRS Issue 17-0002185 - Disclosure of Form 5227, Split-Interest Trust Information Return
Issue: A practitioner requested a copy of Form 5227 using Form 4506-A, Request for Public Inspection or Copy of Exempt or Political Organization IRS Form, but only received a copy of Form 5227 without the attachments.
Response: Inaccurate procedures caused this issue. The IRS updated the procedures to prevent this from happening again.
IMRS Issue 16-0002158 - Phone assistors giving incorrect phone number to Wisconsin taxpayers
Issue: The deputy director of the Wisconsin Department of Revenue notified the IRS that its phone assistors are incorrectly giving Wisconsin taxpayers the general phone number instead of the refund number for checking their state refunds.
Response: The IRS posted an alert for phone assistors to ensure they use the refund number rather than the general number when providing Wisconsin taxpayers the phone number to check their state refunds.
IMRS Issue 16-0002131 - Private Delivery Services
Issue: A practitioner seeks clarification on whether private delivery services should use the addresses on IRS.gov for sending extensions and payments also.
Response: Thank you for bringing this issue to our attention. IRS updated the web page with a statement that private delivery services should use the addresses for the delivery of returns, extensions and payments.
IMRS Issue 16-0002130 - Levy on retirement accounts
Issue: Because pension and retirement plans provide for the taxpayer’s future welfare, the IRS should only levy these assets after following certain procedures. One item to consider is a payment agreement. Per its policy on payment agreements, Collection recommends rejection if there's sufficient equity or cash available to fully pay the taxes or to make a significant partial payment of the taxes and the payment is not received by a certain date. Equity in pension and retirement accounts must be considered when making this decision. Could the Service revise its policy and waive the 10 percent penalty when liquidating a retirement account to resolve a delinquent tax account?
Response: IRC 72(t)(2)(A)(vii) provides for a 10 percent additional tax on early distributions from qualified retirement plans except if the money is withdrawn because of a notice of levy served on the retirement account. The IRS can't waive the 10 percent tax, and since it is not a penalty, abatement for reasonable cause doesn't apply. The IRS issued guidance on June 14, 2016, that allows the taxpayer to request a levy on their retirement account. (See IPU 16U1064 issued 06-14-2016 for IRM 18.104.22.168.)
IMRS Issue 16-0002129 - IRS disclosure of PTIN holders and enrolled agents' email addresses
Issue: Stakeholders have asked that IRS discontinue the release of enrolled agents and PTIN holders' email addresses through FOIA.
Response: Chief Counsel, Disclosure and the Return Preparer Office identified application information that could legally be withheld under FOIA and IRC 6103. While there's public interest and need for practitioners' business telephone and email information, the IRS doesn't share, and has even gone to court to protect, personal information such as tax return information and home telephone numbers. Tax professionals are trusted partners and protecting their personal information is critical. While we can’t legally withhold all application information, we’ve added ways for tax professionals to provide business contact information and still maintain personal privacy, including:
- Changing the “Permanent Mailing Address” section on the PTIN application to “Personal Mailing Address.” This change clarifies that the information is personal and exempt from public disclosure under FOIA rules.
- Allowing a post office box in the “Business Mailing Address” section on the PTIN application. PTIN holders may now enter a P.O. Box as their business address.
IMRS Issue 16-0002126 - Update Customer Satisfaction Surveys page on IRS.gov
Issue: An internal stakeholder requests the addition of surveys about taxpayer compliance burden to the Customer Satisfaction Surveys landing page on IRS.gov.
Response: IRS updated the Customer Satisfaction Surveys page with surveys about taxpayer compliance burden. The revised page description indicates the page provides a listing of current and recent IRS sponsored surveys on customer satisfaction and taxpayer compliance burden.
IMRS Issue 16-0002113 - Letter 2675-C, Power of Attorney Termination Response
Issue: A practitioner suggests a change in language for Letter 2675-C, Power of Attorney Termination Response, which the IRS sends to the client in response to a withdrawn POA. Taxpayers are often confused by this letter, believing their representative is breaking the client/practitioner relationship and will not be doing business with them any longer. This results in unnecessary calls to both the IRS and the practitioner. The practitioner suggests that the IRS add to the letter:
- A clear statement indicating the response doesn't necessarily mean the practitioner is discontinuing other routine services that don't require a power of attorney
- A description of routine services not affected by withdrawal of the power of attorney
Response: Thank you for your suggestion to revise Letter 2675-C. When IRS processes a withdrawal/revocation of representation, it's required to notify all affected parties by sending Letter 2675-C to the taxpayer and practitioner. The Letter 2675-C only addresses the action taken by the IRS relative to a withdrawal/revocation. Since the IRS doesn't know whether the practitioner will continue to offer services that don't require a power of attorney, the practitioner should communicate directly with the taxpayer on those matters
IMRS Issue 16-0002112 - Request to include mailing address on CP23 notices
Issue: At a recent liaison meeting, practitioners voiced concern that Notice CP23 doesn't state clearly where taxpayers should write if they disagree. The practitioners suggested that future revisions direct taxpayers to use the address listed on page one at the top, left-hand side of the notice.
Response: The IRS made a programming change to revise the notice with the IRS return address. IRS scheduled implementation of the updated notice for January 2017. The new notice will say: You can contact us by mail at the address at the top of the first page of this notice. Be sure to include your Social Security number and the tax year and form number you are writing about.
Thank you for bringing this issue to our attention. We apologize for any inconvenience.
IMRS Issue 16-0002111 - Kansas City Return and Income Verification Services (RAIVS) unit fax number on Form 4506-T changed
Issue: A stakeholder notified the IRS that the fax number (816-292-6102) for the Kansas City RAIVS unit on Form 4506-T is no longer operational and has been changed to 855-821-0094. The stakeholder is requesting a revised form with the new phone number.
Response: Thank you for your inquiry. IRS is revising Forms 4506 and 4506-T and plans to add the new information. In the meantime, this notification alerts users of the change and has the new fax number.
IMRS Issue 16-0002080 - Request to consolidate installment agreement forms
Issue: Practitioners believe that installment agreement Forms 9465 and 433-D are practically identical and the IRS should consolidate them to reduce burden. The request stemmed from the submission of Form 9645 to the campus which resulted in an increased monthly payment determination or need to submit a Form 433-D to show a change from the original Form 9645.
Response: Thank you for your suggestion to consolidate these installment agreement forms.
Although taxpayers use both Forms 9465, Request for Installment Agreement, and 433-D, Installment Agreement, to establish installment agreements, the forms are not interchangeable.
Taxpayers can file Form 9465 separately or attach it to Form 1040 to request an installment agreement when they file their income tax returns. Some automated processes associated with the Form 9465 aid in expedited installment agreements meeting guaranteed or streamlined installment agreement criteria.
Occasionally, a taxpayer will file Form 9465 or Form 433-D to request an installment agreement that does not meet guaranteed or streamlined criteria because of the amount of the liability, the amount of the proposed monthly payment or the types of tax involved. When this occurs, the Service will send the taxpayer a letter:
- Advising of the monthly payment amount required to meet guaranteed or streamlined criteria
- Requesting a completed collection information statement based on the amount or type of tax liability
The taxpayer may choose to complete the collection information statement to provide the necessary information for the Service to consider the installment agreement as requested on the previously provided Form 9465.
Alternatively, if the taxpayer agrees to the monthly payment amount mentioned in the letter, they may complete the blank Form 433-D. Doing this amends their installment agreement proposal to the higher monthly payment amount required to meet guaranteed or streamlined criteria.
If the taxpayer owes $50,000 or less and their proposal meets streamlined criteria, tax practitioners or their clients also have the option to request an installment agreement using the Online Payment Agreement application.
The IRS appreciates the suggestion and has given it careful consideration but determined the current processes best serve the taxpayer and the Service to establish installment agreements efficiently
IMRS Issue 15-0002030 - Notification of possible income underreporting
Issue: Practitioners received notices for their businesses indicating they were not reporting all check and cash payments. They accept credit cards and run checks through TeleCheck Service which issues a Form 1099-K because the payments go through ACH. As a result, almost all of the payments they receive are reported on Forms 1099-K. They receive one Form 1099-K for credit card payments and a second for check payments. If an IRS employee had viewed their Forms 1099s, they would have seen that the TeleCheck Service payments were their check receipts. The practitioners believe IRS needs to reprogram its system to recognize that TeleCheck Services reported on a Form 1099-K are payments made by check. By not sending these notices for response, the Service and business owner would save time and money.
Response: The IRS recognizes the reporting of various electronic payment transactions on Forms 1099-K including electronic check conversions. The IRS is continually evaluating payments reported on Forms 1099-K and looking at new ways to use this data. The IRS appreciates the suggestion and will strive to identify payment transactions properly to minimize burden on taxpayers and the Service.
IMRS Issue 14-0001969 - Explanation for notice dates
Issue: Stakeholders are asking why they’re receiving notices about a week before the date on the notice.
Response: The IRS strives to send most notices for individual and business accounts six days before the notice date to give taxpayers more time to respond or make payments. The IRS sends a few notices as early as two weeks before the notice date.
IMRS Issue 14-0001914 - Suggestion for decreasing wait time on Practitioner Priority Service and other toll-free numbers
Issue: To eliminate wait time on the PPS line, add an option to the PPS menu that allows the practitioner to input the taxpayer’s Social Security number, tax period and notice or letter number and obtain an automatic 30-day extension of time to respond to the notice.
Response: When a practitioner calls the PPS line for an Automated Underreporter issue, the practitioner should select prompt five for AUR. Then the caller can select for W&I AUR or SB/SE AUR based on the phone number on the notice. Because of I technology priorities and funding, the IRS can’t reprogram the AUR system to allow a taxpayer or representative to request an automatic 30-day extension for CP 2000 notices.
IMRS Issue 13-0001826 - Alternative transcripts
Issue: Taxpayers request tax return transcripts for a number of reasons, including verification of their income to mortgage lenders for loan applications. Some lenders prefer a particular type of transcript that may not be available.
Response: A tax return must be processed before we can issue a tax return transcript. The time frame in which a return is processed depends on many factors, including when a taxpayer files the return, whether the taxpayer files the return on paper or electronically, and if there is a balance due on the return.
Issues with processing the tax return could prevent an IRS assistor from generating a tax return transcript through the Transcript Delivery System (TDS). Some taxpayer accounts affected by identity theft also prevent an IRS assistor from generating a tax return transcript through TDS. For these situations, IRS assistors will provide a Tax Return Database (TRDBV) transcript through the Database account file instead of through TDS.
TRDBV transcripts look different from the tax return transcript generated through TDS. Some TRDBV transcripts will not contain the name, address and filing status of the taxpayer as recorded on Form 1040/A/EZ. However, the TRDBV transcript will contain the social security number of the primary taxpayer at the top of the transcript page and all of the information recorded by IRS from the tax return submitted by the taxpayer. Providing taxpayers with a TRDBV transcript ensures they receive the correct tax return information.