Welcome to the Dog Days of Summer

Welcome to the Dog Days of Summer

Who let this dog out? After a two month hiatus to concentrate on our fall Tax School materials, your erstwhile blogger has returned! *pause for the deafening applause to subside*

I would like to begin this submission by thanking all of our guest bloggers who provided great insight, ideas, and were even willing to share some personal information about themselves. We indeed have a great team! Right now, likely the last thing you’re concerned with is another upcoming tax filing season (especially after the two never ending ones), so I thought I would give you some food for thought to consider during this time of the year.

New IRS Tax Pro Accounts

I believe most of you would agree that our ability as tax professionals to retrieve information from the IRS through traditional means (letters and telephone calls for example), is difficult and, in my opinion, is disappearing.

What’s a practitioner to do? Well, the IRS has a solution for you. Recently, they announced the creation of Tax Pro Accounts.

The IRS Tax Pro Account is an online portal for tax practitioners. The portal will allow for virtual creation of powers of attorney (POA) and allow access to individual taxpayer information once a taxpayer has created their own IRS online account and grants authorization to their tax professional. The taxpayer must digitally sign for approval of the request.

Advantages of integrating between a taxpayer’s IRS Online Account and the Tax Pro Account include:

• Taxpayers may use the IRS Online Account to authorize their tax preparer to represent them by submitting a POA and view their tax accounts with a Tax Information Authorization (TIA).
• Tax professionals may use their Tax Pro Account to initiate POAs and TIAs digitally.
• The completed digital authorization will immediately be recorded and appear in the Centralized Authorization File (CAF) database without manual processing by the IRS.

Authorizations for POA and TIA may be requested for tax years 2000 through the current year, plus three future years. For 2021, authorizations may be requested for 2000-2024.

Additional features are planned to be added in the future, including managing authorization records proactively, viewing or canceling pending requests, and viewing or printing submission confirmations.

The IRS has released the following resources:

• Publication 5533, Why You Should Create an IRS Online Account
• Publication 5533-A, How to Submit Authorizations Using Tax Pro Account and Online Account
• Publication 5533-B, Benefits of Tax Pro Account and Digital Authorizations

With access to client information continuing to move toward digital delivery methods, practitioners should encourage taxpayers to establish online access to their information and suggest taxpayers create meaningful passwords to prevent cyber theft. As explained previously, online action is required on the part of the taxpayer to grant permission to the tax professional for access to their records.
Taxpayers may visit the IRS website and click on View Your Account Information, then the client should click on ‘Create or view your account’ for more information or to establish their online IRS account portal.

Having both you and your client establish these accounts will help to make addressing issues from previous seasons, as well as gathering information for future filings, easier. For example, in earlier blogs we gave you information on a taxpayer’s ability to modify their information for the advance on the 2021 child tax credit (ACTC) or, in fact, to opt out if they so desire. The ability to make these changes will exist until late November and, while the IRS has told us they will be sending letters in January to taxpayers regarding their ACTC (Letter 6419), you can certainly imagine how many potential problems could emerge when reconciling the ACTC on 2021 returns.

Don’t stare at the clouds too long…

You have just a month or so before the items listed below need to get back on your radar. But before you read on, don’t forget to register for Fall Tax School. We will once again be virtual so you can learn while relaxing.

Important dates coming up:

September 15:

• Third quarter estimated tax payments
• Calendar year S Corps and Partnerships on extension from March 15

September 30:

• Trust and calendar year estate income tax returns (Form 1041) on extension

And of course we all know October 15 will be just around the corner!

How about one more thing to get you running around in circles?

Here’s a draft release of the 2021 Form 1040.

Although not in video format, for all of us here at Tax School, this is Tom O’Saben back again at the mothership….we’ll say goodbye for just a while.

By Tom O’Saben, EA