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NAEA’s membership voted on proposed bylaws revisions and elected directors and officers for terms beginning in May 2019.
The membership approved the proposed bylaws revisions. We will be posting to NAEA’s website today the new version of our bylaws. The membership also elected:
||Donald Rosenberg, EA
||Nancy Lyman, EA
||Trish Evenstad, EA; Michael Fioritto, EA, CPA; Chris Hardy, EA;
||Jake Johnstun, EA; and Twila Midwood, EA
Congratulations to newly elected (or re-elected) leaders and thanks to Jim Adelman, EA and his Nominating Committee.
After weeks of “spirited” discussions, our friends at IRS have gone live with what NAEA’s representatives on the IRS Transcript Working Group characterize as a good first step. The agency on Wednesday announced it would allow tax practitioners with a CAF number as well as an e-Services account and access to an e-Services secure mailbox (SOR, and yes we find the acronym non intuitive, too) to receive unredacted Wage and Income transcripts in their secure mailboxes. To do this, they must:
IRS officials stated they would “continue to work with the tax professional community and [are] exploring an option to send masked as well as unmasked transcripts to the security mailbox.”
- Call the Practitioner Priority Service line;
- Authenticate identity with CAF number, name, Social Security number and date of birth;
- Fax a completed authorization form (Form 2848 or Form 8821);
- Request an unmasked Wage and Income transcript; and
- Access e-Services secure mailbox to receive the unmasked Wage and Income transcript.
Additionally, the agency’s presser states the Service will delay its moratorium on faxing business and individual tax transcripts until February 4, 2019. IRS originally intended the policy to go into effect January 2, 2019. Enrolled agents should keep in mind that they will be able to continue to obtain partially redacted transcripts through the Transcript Delivery System but will have to wait in those instances, of course, until authorizations are processed through CAF.
NAEA has taken the lead within the tax practitioner community in this effort and will continue to engage with the IRS and Congress until our members’ issues are resolved. We appreciate our partners at IRS received our concerns seriously and look forward to additional announcements as the new policy continues to evolve in 2019.
The 115th Congress will most likely adjourned sine die, or for those of us who slept through high school Latin, “without a day.” Congress is extinguished and will not meet again until the day the duly elected members of the 116th Congress are sworn in and allowed to take their seats.
The new Congress will need to take up the unfinished business of the 115th Congress, which in this case will mean passing permanent appropriations for such mundane federal departments and agencies as Transportation, Housing and Urban Development, State, EPA, Interior, Homeland Security, Agriculture, Justice and … wait for it… the Department of Treasury, which obviously includes the Internal Revenue Service.
Congress must finish this old business by midnight February 8th or unfunded departments will be sending their employees home for an mid-filing season (at least for IRS) and unscheduled (and theoretically unpaid) vacation. IRS leadership assures us the agency will be ready for filing season and that the computers and employees of the agency will be able to implement the provisions of the Tax Cut and Jobs Act. In the words of Otto von Bismarck, “Providence protects idiots, drunkards and the Internal Revenue Service during filing season” or something else that means we will muddle along notwithstanding headwinds.
In Notice 2019-01, Treasury and IRS announce their intent to issue regulations addressing certain issues with respect to foreign corporations with previously taxed earnings and profits (here’s a new acronym for you, PTEP) arising from the enactment of the Tax Cuts and Jobs Act.
In Notice 2018-97, which we included in the December 14th issue, IRS provides initial guidance on the application of §.83(i). EAs will recall §.83 generally provides for the fderal income tax treatment of property transferred in connection with the performance of services. The notice addresses three issues in particular, and IRS anticipates further guidance on §.83(i) will be issued in the form of proposed regs. The employee benefits lawyers at Fenwick & West provide further information.
In Notice 2018-96, IRS announces the credit phase-out schedule for new qualified plug-in electric drive motor vehicles sold by Tesla, Inc. More details in the notice, but urban virtue signaling is about to become more, well, virtuous: for the first two calendar quarters after December 31, 2018, purchasers of Teslas may claim 50 percent of the otherwise allowable credit.
In Revenue Procedure 2019-9, IRS updates Rev. Proc. 2018-11 and updates the annual adequate disclosure revenue procedure. The guidance identifies circumstances under which the disclosure on a tax return with respect to an item or position is adequate for the purposes of the §.6662 accuracy penalty and the §.6694 return preparer penalty.
In an Chief Counsel Memorandum (AM 2018-005), IRS responds to a request for guidance related to eligibility for allocation of the § 179(D)(4) deduction for energy efficient building property. As always, the lawyers remind us the advice may not be used or cited as precedent.
Speaking of memoranda, the Appeals Division issued to its employees a memorandum providing interim guidance for in-person conference procedures on appeals campus cases.
Judge Lauber presides over this week’s U.S. Tax Court case, Bontrager v. Commissioner (151 T.C. No. 12). Petitioner, who has already pleaded guilty in 2012 to violation of § 7201, is asking the Tax Court to review an IRS notice of federal tax lien (NFTL) filing.
The heart of the matter, and the principal question raised, is whether § 6201(a)(4) authorized IRS to assess restitution that a person has been ordered to pay, upon conviction of violating § 7201, when his wrongdoing consisted of aiding and abetting the evasion of payment of a third party’s tax liability.
Petitioner’s father in 1994 was convicted of conspiracy to commit wire fraud, ordered to pay mid-six figure restitution, and sentenced to several years in Club Fed. Upon his release, he contacted petitioner (his son), with whom he had had little contact in the past 20 years. Bontrager pere offered to help with son’s fledgling real estate business. Judge Lauber notes, drily, “Unwisely perhaps, petitioner accepted his father’s offer.”
The most interesting section of the case (which we know, noting Lauber’s statement above, does not end well for petitioner) is in E@lert’s opinion Judge Lauber’s discussion of the validity of the validity of the tax assessment. Ultimately, the discussion is an exercise in linguistics: the meaning of “failure to pay any tax imposed under this title” (which is actually more interesting than one might at first conclude.
| || GOVERNMENT RELATIONS NEWS|
Since last we spoke, you may have missed the extraterrestrial news: new NASA photos of Mars; Voyager 2 slipping the bonds of the solar system (bonus points: NAEA launched Voyager 2 prior to Voyager 1—who knew?); and how to track Santa with NORAD’s new revamped website.
In other holiday news, the cottage that inspired The Holiday is on the market (yes, Nancy Meyers was a genius), the debate rages on whether Die Hard is a Christmas movie (the answer, obviously, is yes); and the Boss’ timeless take on Santa Claus is Coming to Town.
Otherwise, aside from this nod to the late Penny Marshall, we offer a sleighful of tax-related items, pulled especially for America’s tax experts:
ICYMI, IRS’ website includes a nifty page focused on tax reform provisions that affect businesses. Among the items covered are like-kind exchanges (a comparison of changes to like-kind exchanges under TCJA); NOLs (IRS just issued “guidance”—E@lert offers the air quotes because we cannot determine what about the statement is actual guidance as we define the term); and wrongful IRS levy. Oh, and E@lert’s favorite new acronym: GILTI.
USA Today on five Social Security changes coming in 2019.
IRS provided a fact sheet outlining common errors that may delay CAF processing of Forms 2848 and 8821. We would editorialize, but we will let IRS’ bland assertion “the average processing time for a third-party authorization request is less than 5 days” stand on its own. Oh, and NAEA continues to advocate for IRS to eliminate its requirement for an original pen and ink signature, the lack thereof is the first of the common causes for IRS rejection.
At Procedurally Taxing, Keith Fogg unpacks a bankruptcy case in which the bankruptcy trustee is pitted against IRS when the trustee attempts to use a Chapter 7 provision to take property secured by a federal tax lien in order to pay his fees and other administrative costs.
Kelly Phillips Erb, in Forbes, provides this week’s “Pop Stars in Tax Trouble” installment: Spanish authorities charge pop singer Shakira with tax evasion.
In IR-18-255, IRS advises taxpayers who may be underwithheld for TY18 to make estimated fourth quarter tax payments by Tuesday, January 15, 2019.
This week’s blog roll includes The Tax Foundation (a one-year anniversary TCJA review)
Heaven help us, but IRS recently released the new TY18 Form 1040 (the so-called postcard) and six (yes, six) accompanying schedules (see also Russ Fox, EA’s recent blog post, “Hug Your Tax Professional”).
"There is no passion to be found in playing small —
in settling for a life that is less than the one you are capable of living."
— Nelson Mandela (1918-2013), South African activist and former president
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NAEA E@lert | Volume 1: Issue 7
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