IRS Update: Return Preparer Testing and Background Check Update

The IRS has announced that the Registered Tax Return Preparer Competency Test is being launched the week of November 28, 2011.

Here is what you need to know about testing:

• Currently registered preparers have until December 31, 2013 to pass the competency test.
• Scheduling an appointment will be done through the online PTIN account you used to renew or register your PTIN at www.irs.gov/ptin.
• The testing fee is $116.
• The fee is paid online at the time of scheduling a test appointment.
• You will take the test on a computer at a Prometric test center.
• The test will cover Tax Year 2010 Form 1040 and related schedules.
• The test will take two and a half hours and will contain 120 multiple choice / true or false questions.
• When you go to take the test, you need to bring a valid, government issued photo identification.
• The test is available in English only.

Click here to continue reading the entire CrossLink Tax Update which includes detailed information on the Return Preparer Test and Background Check.

Pre-Season Readiness: Ensuring your readiness for the 2012 Tax Season

With the 2012 Tax Season fast approaching, your CrossLink Team wants to make sure you are prepared.

Click here for a checklist of tasks that should be completed in December to ensure your readiness for the upcoming tax season.

In addition to your readiness, your CrossLink Team also wants to make sure your clients are prepared for their tax appointment. Click here for a customer checklist of "What to bring to your appointment."

For other industry resources, such as the latest IRS information, training opportunities, or helpful documentation, visit http://www.crosslinktax.com/.

IRS Update: EITC Changes for the Upcoming Filing Season

Increase in Due Diligence Penalty Amount

The penalty for tax preparers who do not exercise due diligence for EITC returns has been increased by the IRS to $500 per return.

Change to Due Diligence Requirements

The following changes to Earned Income Tax Due Diligence requirements (Section 6695 of the Internal Revenue Code) will go into effect for filed returns beginning on January 1, 2012:

• Form 8867 (Paid Preparer’s Earned Income Credit Checklist) is now required to be both completed by the paid preparer and submitted with a Federal income tax return that is claiming the Earned Income Tax Credit.
• A firm will now be subject to the same penalty as their preparers if...

Click here to continue reading the entire CrossLink Tax Update which includes detailed information on the changes to due diligence requirements as well as changes to 2011 Form 8867 (Paid Preparer’s Earned Income Credit Checklist).

IRS Update: Federal Forms Changes You Should Know About

Below are changes to some of the 2011 Federal forms that you should be aware of for the 2012 Filing Season.

Schedule D and New Form 8949

Beginning with Tax Year 2011, all capital transactions will now be reported on the new Form 8949 (Sales and Other Dispositions of Other Assets).

Form 8949 has been added because of the new requirement that the basis of stock sold must be reported on Form 1099-B for stock purchased after December 31, 2010.

The following new fields have been added for reporting capital asset sales on Form 8949:

• Transaction type checkbox
• Code field (column b)
• Adjustment field (column g)

Schedule D is now only used to gather all capital gains and losses reported on the various applicable forms and to calculate the total net capital gain or loss for the year.

Click here to read the entire CrossLink Tax Update which includes detailed information on the new fields added on Form 8949 as well as the new fields added to Schedule E and Schedule SE, and the additional questions added to Schedules C, E, and F.

IRS Update: Changes You Need to Know for the Upcoming Filing Season

Below are some changes that you need to be aware of as you get ready for the upcoming filing season:

E-File Start Date

E-Filing will begin on Tuesday, January 17, 2012. As a result of this change, acknowledgements will not be delayed for tax returns that are transmitted on the first day (January 17, 2012). Acknowledgements will come back from the IRS as they would on any other day of the filing season.

Processing and Refund Cycle

The IRS has moved all taxpayer files to their new Master File (CADE2) for the upcoming filing season.

Click here to read the entire CrossLink Tax Update which includes information on the Processing and Refund Cycle.