Filing Season Tips for Tax Pros
Many tax professionals know this filing season has several new factors that impact all tax professionals: new tax laws, a new tax form and schedules, and new Due Diligence rules. Here’s some information to help you and your clients navigate through this filing season.
New Tax Form
The IRS’s new Form 1040 for 2018, its corresponding Schedules 1-6, and instructions are now available. Other Schedules for Form 1040 are available too.
Preparer Tax Identification Number (PTIN)
As a tax return preparer, you will need to make sure your PTIN is valid and entered on the form when filing. You must renew your PTIN every year. If it isn’t current, you can use the online application process on the IRS's Tax Professional PTIN System to renew it. But you must have a valid PTIN before filing.
New Tax Laws
We have a great resource to help you and your clients - TAS’s Tax Reform Changes website, available in both English and Spanish. It has information about what is changing and what is not for the 2018 tax year in an easy to understand format by topic, and line-by-line using the 2017 Form 1040. It also has the line and schedule references for the new 2018 Form 1040!
One important change that directly affects tax return preparation is that taxpayers can no longer deduct tax return preparation fees under miscellaneous itemized deductions on Schedule A.
IRS e-Services & e-File programs
IRS e-Services application is a suite of web-based tools that allow tax professionals, reporting agents, the mortgage industry, payers, and others to complete transactions online with the IRS. Don’t forget to apply for IRS E-file Provider Services. You can use IRS online e-file application to become an authorized e-file provider or view and update existing applications. Learn more about IRS e-file that's required for most tax return preparers.
Securing Data is Essential
Tax professionals increasingly are targeted by cybercriminals seeking to steal taxpayer data and file fraudulent tax returns. Make sure you take steps to protect client data and protect your business. Protect Your Clients; Protect Yourself.
Look to Publication 2043, IRS Refund Information Guidelines for the Tax Preparation Community, for refund timing information. Remember if a client is claiming the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC), the IRS cannot issue refunds before mid-February under the law. The IRS expects the earliest EITC/ACTC related refunds to be available in taxpayers’ bank accounts or on debit cards starting on Feb. 27, 2019, if they chose direct deposit and there are no other issues with their tax return.
Representing Taxpayers before the IRS
Publication 947, Practice Before the IRS and Power of Attorney, is a must read if you are not familiar with representing clients. It explains who can represent a taxpayer before the IRS and what forms are used to authorize you as a representative for the various activities that might be needed on a client’s account.
Circular 230, Regulations Governing the Practice of Attorneys, Certified Public Accountants, Enrolled Agents, Enrolled Actuaries, and Appraisers before the Internal Revenue Service, is a must read for anyone representing taxpayers.
New: Due Diligence requirements are expanded for 2018 and now include head of household filers as well other items on tax returns. Paid preparers must exercise due diligence by keeping records, conducting interviews and asking adequate questions to determine whether a taxpayer meets all the eligibility requirements for certain refundable credits and head of household filing status. Failure to take these steps can be costly, as penalties can apply. To keep up-to-date on Due Diligence rules and information, visit Hot Topics for Return Preparers.
Have a client that can't afford representation? See if a Low Income Taxpayer Clinic can help.
IRS Services & Taxpayer Advocate Service Assistance (TAS)
Do you or your client need to know more about a particular IRS service, process or notice? View Publication 5136, IRS Services Guide, visit the IRS Help page or you can contact the Practitioner Priority Service.
Didn’t get your client’s issue resolved by contacting the IRS? TAS is here with lots of information to help on a variety of tax topics, or you can contact us.
Reporting a Systemic Problem
Know of a problem that affects multiple taxpayers? Send it to TAS, via the Systemic Advocacy Management System (SAMS).
Other TAS and IRS Resources