the WISCONSIN ACCOUNTANT
a newsletter of the Wisconsin Association of Accountants
 

August 2014

Executive Corner

 

 

WAA Annual convention will be held at the beautiful Chula Vista Resort in the WI Dells September 21 - 23, 2014.

 

After our 9am board meeting on Sunday (all our welcome), some

will be off for 18 holes of golf.  Sunday night we will have dinner at the hotel with a boat ride after and cocktails with the hospitality room open after the boat ride. We have a great line up of speakers on Monday plus Jennings on Tuesday.

 

All the information can be found On our website - www.waainc.org

And remember the WAA hospitality room will be open Sunday and Monday night - we provide the beverage - the members provide the fun! 

 

Byron L Dopkins, EA, ABA                                

WAA Executive Director

 


 Byron Dopkins

Executive Corner

 

 

I hope everyone is enjoying the summer and the hot weather that

has arrived. The year goes so quickly and another winter and tax

season will be here again.

 

Please schedule the dates for the upcoming convention and tax

seminars on your calendar so you are up to date and can provide

high quality services to your clients. The seminars, convention

and newsletter are benefits of your WAA membership. I hope you

invite other accountants you know to join the WAA and attend a

chapter meeting or upcoming seminar.

 

See you in the WI Dells in September! 

 

 

Steve Smith, EA, ABA, ATA

WAA President 

 


 

Affordable Care Act Seminar
Tax Aspects by Jennings Seminars

Ten Things to Know About the Taxpayer Advocate Service 

IRS Tax Tip 

 

1. The Taxpayer Advocate Service (TAS) is an independent organization within the IRS and is your voice at the IRS.

 

2. We help taxpayers whose problems are causing financial difficulty. This includes businesses as well as individuals.

 

3. You may be eligible for our help if you've tried to resolve your tax problem through normal IRS channels and have gotten nowhere, or you believe an IRS procedure just isn't working as it should.

 

4. The IRS has adopted a Taxpayer Bill of Rights that includes 10 fundamental rights that every taxpayer has when interacting with the IRS:

 

Taxpayer Bill of Rights

  • The Right to Be Informed.
  • The Right to Quality Service. 
  • The Right to Pay No More than the Correct Amount of Tax.
  • The Right to Challenge the IRS's Position and Be Heard. 
  • The Right to Appeal an IRS Decision in an Independent Forum. 
  • The Right to Finality. 
  • The Right to Privacy. 
  • The Right to Confidentiality.
  • The Right to Retain Representation.
  • The Right to a Fair and Just Tax System.

Our TAS Tax Toolkit at TaxpayerAdvocate.irs.gov can help you understand these rights and what they mean for you. The toolkit also has examples that show how the Taxpayer Bill of Rights can apply in specific situations.

 

5. If you qualify for our help, you'll be assigned to one advocate who will be with you at every turn. And our service is always free.

 

6. We have at least one local taxpayer advocate office in every state, the District of Columbia, and Puerto Rico.  You can call your advocate, whose number is in your local directory, in Pub. 1546, Taxpayer Advocate Service -- Your Voice at the IRS, and on our website atirs.gov/advocate. You can also call us toll-free at 
877-777-4778. 

 

7. The TAS Tax Toolkit at TaxpayerAdvocate.irs.gov has basic tax information, details about tax credits (for individuals and businesses), and much more.

 

8. TAS also handles large-scale or systemic problems that affect many taxpayers. If you know of one of these broad issues, please report it to us at www.irs.gov/sams.

 

9. You can get updates at

10. TAS is here to help you, because when you're dealing with a tax problem, the worst thing you can do is to do nothing at all.

Senators Express Concern about Accrual Accounting Proposal 

MICHAEL COHN

 

Nearly half the members of the U.S. Senate have signed a letter expressing concern about a tax reform proposal to require the use of accrual accounting and are urging the leaders of the Senate Finance Committee to preserve the option of the cash method of accounting for tax purposes.

 

The American Institute of CPAs and other accounting organizations, such as the National Conference of CPA Practitioners, have been urging Congress to preserve the cash method of accounting, particularly for small businesses, including testifying or submitting written testimony on the benefits of cash accounting at a congressional hearing last month (see House Hearing Considers Cash Accounting for Small Biz and Cash Accounting: A Simpler Method for Small Firms).

 

The AICPA said an August 6 letter to Senate Finance Committee chairman Ron Wyden, D-Ore., and ranking member Orrin Hatch, R-Utah, was signed by 46 senators from 32 states.

 

"As the Finance Committee develops its comprehensive tax reform package, we ask that you consider the negative impact that this proposal would have on the professional services sector as well as farming and ranching businesses," the senators wrote. "We believe that such a change has not been fully vetted and many of the concerns raised by these businesses have not been addressed."

 

The AICPA noted that it is a leading opponent of tax reform proposals to mandate the use of accrual accounting for businesses and individuals who exceed $10 million in annual gross receipts. The AICPA has partnered with state CPA societies and CPA firms to voice the profession's concerns about the accrual accounting requirement.

 

The letter noted that currently the cash method is generally available to C corporations with less than $5 million in average annual gross receipts, along with individuals, partnerships, S corporations, professional services corporations, and most farming and ranching businesses, regardless of their revenue, unless they have inventory. The Cost Recovery and Accounting Discussion Draft that was released late last year by the former chairman of the Senate Finance Committee, Max Baucus, D-Mont., would require all of these businesses and individuals who exceed $10 million in annual gross receipts to use the accrual method of accounting.

 

The senators' letter pointed to the impact of having to convert to the accrual basis for previously exempt businesses, including CPA, medical, dental, architectural, engineering and law firms. "[T]he acceleration of the business' tax liability combined with the inability to match revenues with expenses would force businesses to borrow money to meet their tax liability. The basic tenet of taxation is 'ability to pay.' Forcing businesses to recognize income before they receive payment violates this basic tenet."

 

The letter explained that the proposal "would cause numerous adverse unintended consequences and as a result is opposed by many members of both parties. Therefore, we strongly encourage you to maintain the current ability of pass-through entities, personal services corporations, and farming and ranching businesses to use the cash basis for tax purposes irrespective of annual gross receipts."

 

The letter argued against the notion that the reform would level the playing field. "While some may believe that subjecting all taxpayers with more than $10 million in annual gross receipts to the same threshold is simpler, we disagree," said the letter. "Requiring more businesses to use the accrual method of accounting would create unnecessary complexity in the tax law and substantially increase compliance costs."

 

The AICPA commended Senators Sherrod Brown, D-Ohio, Pat Roberts, R-Kan., Angus King, I-Maine, and Ron Johnson, R-Wis., for leading the effort to continue the cash method of accounting. 

Are They Still Your Clients? 

The IRS May Think So 

JIM BUTTONOW; AUGUST 12, 2014

  

For the third time in three years, the Internal Revenue Service has changed Form 2848, Power of Attorney and Declaration of Representative, which Circular 230 licensed tax professionals use to represent their clients before the IRS. Several major updates to the form anticipate Affordable Care Act compliance and reflect the retirement of e-Services online tools for tax professionals. However, one important change was not found on the form at all - but, rather, in the instructions.

 

Click here to sign up for Tax Pro Today's eNewsletter to get the latest news and behind the scenes commentary you won't find anywhere else.

 

The IRS changed Form 2848 instructions to point out to practitioners how to get a list of their active authorizations on file with the agency. Authorizations automatically stay on file with the IRS for seven years. But when your client's engagement is complete, it's a best practice to withdraw your authorizations to limit your professional responsibility to the client and the IRS.

 

When your client's Form 2848 remains on file with the IRS, the IRS will come to you, as your client's authorized representative, to speak on behalf of your client - even if you're not engaged to do so. This can present client challenges and disrupt IRS compliance efforts. The IRS expects tax professionals with a power of attorney authorization to be in a knowledgeable position to represent their clients, or withdraw the authorization.

 

As the Form 2848 instructions now explain, practitioners can request a list of active authorizations by submitting a Freedom of Information Act request to the IRS Centralized Authorization File unit, which keeps track of practitioners' filed tax authorizations. This FOIA request is called a CAF77 request.

 

Submitting a CAF77 request

 

The IRS requires a specific format for this request and provides a sample CAF77 request letter as a template. The IRS also requires proof of identity with the letter; attach a copy of your driver's license or a notarized statement swearing to your identity. 

 

Fax or mail the request to the FOIA office:

 

Internal Revenue Service

HQ FOIA

Stop 211

2980 Brandywine Road

Chamblee, GA 30341

Fax: (877) 807-9215

 

You can request that the IRS provide the listing of your authorizations on a CD (in a Windows Notepad text file) or in a paper document.

 

The listing will show all clients with active authorizations under a single CAF number. If you have multiple CAF numbers, you should request CAF77 listings for each CAF number. The listing will include all Forms 2848 and Forms 8821, Tax Information Authorization, in effect. It will not include the third-party designee from any filed returns.

 

It usually takes two to four weeks to receive your CAF77 listing. Once you receive the listing, review it for authorizations you'd like to withdraw.

 

Submitting an authorization withdrawal request

 

You can withdraw authorizations individually using the existing instructions on Form 2848. To withdraw multiple authorizations, it's easier to use a CAF77 listing. Here's how:

 

1. On your CAF77 listing, identify and mark out the clients for whom you want to keep authorizations on file. The remaining authorizations will be withdrawn.

 

2. Include a cover letter explaining that you want to withdraw authorizations for all clients listed, excluding the client information that is marked out. You, as the client's representative, must sign and date the letter.

 

3. Send the cover letter and marked-up CAF77 listing to the assigned CAF unit for the state in which you practice. When the CAF unit receives your request, it should withdraw the authorizations you indicated.

 

After the CAF unit processes your request, the clients for whom you withdrew authorizations may receive Letter 2675C, Power of Attorney Termination Response. But the IRS is inconsistent in following this procedure. Likewise, you may or may not receive correspondence about whether the CAF unit processed your request. In addition, because this process is still manual, sometimes the IRS doesn't process withdrawal requests at all, leaving authorizations erroneously in effect.

 

There's no immediate, direct way to confirm that the IRS withdrew your authorizations. That is why it's a best practice to regularly submit CAF77 requests to view your authorizations on file.

 

Many tax professionals have suggested that the IRS facilitate this process by allowing practitioners to view a complete listing of their authorizations and withdraw them in an online account. The IRS has expressed interest in this solution, but has not provided a timeline for development of this functionality.

 

As reflected in the IRS changes to Form 2848, withdrawing authorizations is an important practice. It provides needed closure to engagements and defines your professional responsibility to the client and the IRS.

 

Jim Buttonow, CPA, CITP, directs tax practice and procedure services and software for H&R Block, including assisting The Tax Institute at H&R Block with tax practice and procedure. He is also 2014-2015 chairperson of the IRS Electronic Tax Administration Advisory Committee. 

Six Tips for People Who Owe Taxes 

IRS Tax Tips

  

While most people get a refund from the IRS when they file their taxes, some do not. If you owe federal taxes, the IRS has several ways for you to pay. Here are six tips for people who owe taxes:

 

1. Pay your tax bill.  If you get a bill from the IRS, you'll save money by paying it as soon as you can. If you can't pay it in full, you should pay as much as you can. That will reduce the interest and penalties charged for late payment. You should think about using a credit card or getting a loan to pay the amount you owe. 

 

2. Use IRS Direct Pay.  The best way to pay your taxes is with the IRS Direct Pay tool. It's the safe, easy and free way to pay from your checking or savings account. The tool walks you through five simple steps to pay your tax in one online session. Just click on the 'Pay Your Tax Bill' icon on the IRS home page.

 

3. Get a short-term extension to pay.  You may qualify for extra time to pay your taxes if you can pay in full in 120 days or less. You can apply online at IRS.gov. If you received a bill from the IRS you can also call the phone number listed on it. If you don't have a bill, call 800-829-1040 for help. There is usually no set-up fee for a short-term extension.

 

4. Apply for a monthly payment plan.  If you owe $50,000 or less and need more time to pay, you can apply for an Online Payment Agreement on IRS.gov. A direct debit payment plan is your best option. This plan is the lower-cost, hassle-free way to pay. The set-up fee is less than other plans. There are no reminders, no missed payments and no checks to write and mail. You can also use Form 9465, Installment Agreement Request, to apply. For more about payment plan options visit IRS.gov.

 

5. Consider an Offer in Compromise.  An Offer in Compromise lets you settle your tax debt for less than the full amount that you owe. An OIC may be an option if you can't pay your tax in full. It may also apply if full payment will cause a financial hardship. You can use the OIC Pre-Qualifier tool to see if you qualify. It will also tell you what a reasonable offer might be.

 

6. Change your withholding or estimated tax.  You may be able to avoid owing the IRS in the future by having more taxes withheld from your pay. Do this by filing a new Form W-4, Employee's Withholding Allowance Certificate, with your employer. The IRS Withholding Calculator on IRS.gov can help you fill out a new W-4. If you have income that's not subject to withholding you may need to make estimated tax payments. See Form 1040-ES, Estimated Tax for Individuals for more on this topic.

 

To find out more see Publication 594, The IRS Collection Process. You can get this booklet on IRS.gov. You may also call 800-TAX-FORM to get it by mail.


Additional IRS Resources:

IRS YouTube Videos:

IRS Podcasts:

Welcome to our New Members!
  

Lynn Kehl

Oshkosh

 

Neal Horman

Onalaska

 

Martina Tkacenko

West Allis

 

Samantha Christoph

Madison

 

 

If any of these new members should not be

granted membership to the WAA please submit your objections to the Executive Director.

2014

Seminars

   

WAA Annual Convention

Sept 22-23, 2014 8:30am to 4:30pm

Chula Vista

Wisconsin Dells, WI 


Bob Jennings 

Business Tax Updates

Oct 6-7, 2014 8am to 4pm

Kalahari Resort

Wisconsin Dells, WI 

  

Jennings Affordable Care Act

 Oct 17, 2014  8am-4pm

Country Springs

 Waukesha, WI  

 

Gear Up 1040

Nov 3, 2014 8am-5pm 

Nov 4, 2014 8am-4pm

Brookfield Suites Hotel

Brookfield, WI

  

Bob Jennings 1040 Update

Dec 1, 2014 8am-5pm

Dec 2, 2014 8am-4pm 

Kalahari Resort

Wisconsin Dells, WI

  

Gear Up 1040 

Dec 8, 2014 8am-5pm 

Dec 9, 2014 8am-4pm 

Hudson House Inn

Hudson, WI

 
Visit our website at  
to register or view the seminar schedule. 
 
(608) 328-8341

OFFICERS

 

President:

Steve Smith, EA, ABA, ATA 

34 North 4th Street 

Black River Falls, WI  54615

(715) 284-4419 

[email protected]

 

Vice Presidents:

Paul Kersten, CPA

610 W Green Bay Street 

Shawano, WI  54166 

(715) 524-2302 

[email protected] 

  

Mark Burbey, CPA 

900 South 10th Street 

Manitowoc, WI  54220 

(920) 682-6661 

[email protected] 

 

Secretary:

Chuck Kirsch, EA

155 S Jefferson Street

Lancaster, WI 53813

(608) 723-2502

[email protected]

 

Treasurer:

Darcie Weissmiller, EA, ABA

PO Box 307

Medford, WI 54451

(715) 748-4110

dar[email protected]

 

 NSA State Director:

Tom Adler, CPA 

1110 Fourier Drive Ste 110 

Madison, WI  53717 

(608) 664-1944 

[email protected]

 

Past President:

Jolynn McIntosh, CPA 

1124 17th Avenue 

Monroe, WI  53566 

(608) 328-8341 

[email protected] 

 

Directors:

Robert Burgardt 

414  Hartford Square 

Hartford, WI  53207 

(414) 520-0863 

[email protected] 

 

Mark Nelson, Jr, EA 

2581 S. Kinnickinnic Avenue

Milwaukee, WI 53207

(414) 481-6812

[email protected]

 

Joe Suttner, CPA

PO Box 187

Chilton, WI 53014

(920) 849-9346

[email protected]

 

Margaret Schell, CPA

6609 Montclair Lane

Madison, WI 53711

(608) 442-7525

[email protected]

WAA Benefits

 

Seminars and Educational Forums

 

Accreditation

 

Local Chapter Involvement

 

Government Agency Liaison

 

Monitor Legislation

 

Insurance Programs

 

Accountants Protection Plan

 
WAA Objectives
 

To raise professional standards and improve the practice of accountancy.

 

To strive for excellence in the profession.

 

To encourage accountants in a continuing program of

professional development.

 

To foster increased recognition for the professional in the public, private and educational sectors of our state.

 

To initiate legislative action and provide government liaison between the accounting profession and

government leaders.

 

To provide meetings and fellowship for accountants.

 

To promote the highest standard of ethical conduct among its member.