UPDATE to Dec 21 Post: IRS E-Services Portals Unavailable until Jan 6

As an update to our previous post from December 21, the IRS has announced that the e-Services’ Transcript Delivery System, Disclosure Authorization and Electronic Account Resolution systems will be unavailable for three additional business days - returning to operation on January 6, 2013.

During this time, you will be unable to request transcripts, submit a new Form 2848, Power of Attorney and Declaration of Representative, Form 8821, Tax Information Authorization, or use Electronic Account Resolution. The IRS encourages users to hold their transactions until the system is once again operational.

IRS Centralized Authorization File System Down for Maintenance

The IRS has announced that the Centralized Authorization File system (CAF) will be unavailable due to maintenance starting 6AM EST December 26th and will be back up on January 2nd at 6:30AM EST. This outage will affect the Transcript Delivery Service and Disclosure Authorization systems. Please plan to have any requests submitted no later than midnight, December 25th or hold them until the maintenance is concluded.

IRS Update: What to Expect for Federal Refunds for the 2013 Filing Season

What to Expect for Federal Refunds for the 2013 Filing Season

It is important to set your customers’ expectations for when the IRS will be sending refunds during the upcoming 2013 Filing Season and beyond.

Due to the increase in fraud and identity theft, the IRS is increasing their fraud filters during the processing of all individual returns. This means that a larger number of returns will be reviewed therefore, processing will take longer and the refund will be sent out later for these returns.

The IRS messaging for refunds for the upcoming filing season will be that refunds will be sent to the taxpayer within 21 days from the time the return has been accepted. This message will be the same on the IRS website, “Where’s My Refund?” page, and when a taxpayer calls the IRS help desk.

The refund cycle chart has been eliminated and replaced with an IRS Information Guidelines for the Tax Preparation Community publication. Click here to read more.

You will also notice the following changes to the “Where’s My Refund?” tool for the upcoming filing season:

• The expected date of when the refund will be sent will no longer be given when the return begins to be processed.
• The refund status will be presented by way of a status bar as follows:
• Return Received - Learn more
• Refund Approved - Learn more
• Refund Sent - Learn more
• Click here to read more.

Click here to read the entire CrossLink Tax Update that includes further information on what to expect for Federal refunds for the 2013 Filing Season.

IRS Offers Tax Tips for “The Season of Giving”

December is traditionally a month for giving generously to charities, friends and family. But it’s also a time that can have a major impact on the tax return you’ll file in the New Year. Here are some “Season of Giving” tips from the IRS covering everything from charity donations to refund planning:

• Contribute to Qualified Charities. If you plan to take an itemized charitable deduction on your 2012 tax return, your donation must go to a qualified charity by Dec. 31. Ask the charity about its tax-exempt status. You can also visit IRS.gov and use the Exempt Organizations Select Check tool to check if your favorite charity is a qualified charity. Donations charged to a credit card by Dec. 31 are deductible for 2012, even if you pay the bill in 2013. A gift by check also counts for 2012 as long as you mail it in December. Gifts given to individuals, whether to friends, family or strangers, are not deductible.
• What You Can Deduct. You generally can deduct your cash contributions and the fair market value of most property you donate to a qualified charity. Special rules apply to several types of donated property, including clothing or household items, cars and boats.
• Keep Records of All Donations. You need to keep a record of any donations you deduct, regardless of the amount. You must have a written record of all cash contributions to claim a deduction. This may include a cancelled check, bank or credit card statement or payroll deduction record. You can also ask the charity for a written statement that shows the charity’s name, contribution date and amount.
• Gather Records in a Safe Place. As long as you’re gathering those records for your charitable contributions, it’s a good time to start rounding up documents you will need to file your tax return in 2013. This includes receipts, canceled checks and other documents that support income or deductions you will claim on your tax return. Be sure to store them in a safe place so you can easily access them later when you file your tax return.
• Plan Ahead for Major Purchases. If you are making major purchases during the holiday season, don’t base them solely on the expectation of receiving your tax refund before the bills arrive. Many factors can impact the timing of a tax refund. The IRS issues most refunds in less than 21 days after receiving a tax return. However, if your tax return requires additional review, it may take longer to receive your refund.

For more information about contributions, check out Publication 526, Charitable Contributions. The booklet is available on IRS.gov or order by mail at 800-TAX-FORM (800-829-3676).

(The above content is as it appeared in an official IRS Tax Tips e-mail distributed on December 6th, 2012.)

IRS Update: Reminders for Year End and the Upcoming Filing Season

As we approach the end of 2012 and the start of the 2013 Filing Season, here are some reminders and things to know:

Start of Filing Season

The 2013 Filing Season will open on Tuesday, January 22, 2013. This is the day after Martin Luther King Jr.’s Birthday.

Renewing Your PTIN

If you have not already done so, you must renew your PTIN for 2013 before you begin to prepare 2012 returns. Click here to read more.

Continuing Education for Registered Return Preparers

It is very important to remember that all registered tax return preparers and return preparers with provisional PTINs must complete 15 hours of continuing education by the end of 2012. Click here to read more.

Increased Emphasis on Fraud by IRS

Due to the significant increase in the filing of fraudulent returns and identity theft, the IRS will be increasing their fraud filters for the upcoming filing season. Click here to read more.

Click here to read the entire CrossLink Tax Update that includes further information on reminders for year end and the 2013 Filing Season.

IRS Update: Changes to TY 2012 IRS Forms

As we wait for Congress to decide whether or not they will extend the provisions that expired at the end of 2011, the IRS has made changes to the following forms that are not related to late legislation:

Form 8867 (Paid Preparer’s Earned Income Credit Checklist) – Click here to read more.

Form 8863 (Education Credits) – Click here to read more.

Schedule 8812 (Child Tax Credit) – Click here to read more.

Click here to read the entire CrossLink Tax Update that includes further information on the changes to Tax Year 2012 IRS Forms.

IRS Update: Small Business Health Care Tax Credit

This is a reminder that the small business health care tax credit is available to businesses with 25 or fewer employees and who offer health insurance to their employees. Eligible small employers may claim this credit when they file their 2012 Federal return using Form 8941 (Credit for Small Employer Health Insurance Premiums).

This credit has been available since 2010 and its purpose is to help eligible small businesses pay for their health insurance premiums for their employees.

Here is how the credit works:

• The credit is available to employers with 25 or fewer full-time equivalent employees whose average annual salaries are not more than $50,000.
• The credit is calculated on a sliding scale with a maximum credit of 35% of the employer’s contribution toward their employees’ health insurance premiums.
• Read more

Click here to read the entire CrossLink Tax Update that includes further information on the Small Business Health Care Tax Credit.

Status of Federal Tax Provisions Not Applicable for 2012 Tax Returns

As we informed you in May 2012, the “Extender” tax provisions expired at the end of 2011 and, as of right now, they are not applicable to 2012 Federal returns.

At the present time it is not clear when Congress will take action on the expired provisions. Since the Extender provisions are closely tied to “Bush Era Tax Cut” provisions (which expire at the end of 2012) including the automatic budget cuts (Sequestration) and the extension of the debt limit, it appears that the earliest they will be acted upon is late December 2012.

A total of 58 individual and business Federal tax provisions expired at the end of 2011. What follows is a list of the expired or changed provisions that will have the most impact to taxpayers on their 2012 Federal returns if they are not extended.

Provisions no longer applicable for Tax Year 2012 returns:

• $250 Educator Expense Deduction – Form 1040, line 23
• Tuition and Fees Deduction – Form 8917 and Form 1040, line 34
• Read more

Provisions that changed significantly for Tax Year 2012 returns:

• Alternative Minimum Tax (AMT) exemption amounts revert to what they were in Tax Year 2000
• Maximum Section 179 Deduction amount has been reduced to $139,000 for 2012
• Read more

Click here to read the entire CrossLink Tax Update that includes further information on Federal Tax Provisions not applicable for 2012 tax returns.

IRS Update: IRS EITC Preparer Compliance Update

The IRS is making changes to their ongoing EITC compliance efforts for the upcoming year. Beginning this month (October 2012), EITC return preparers that have been identified by the IRS as “at risk” for filing returns with EITC errors will receive compliance letters, educational visits, or be subject to a due diligence audit.

The IRS uses a risk-based scoring model to determine which preparers of EITC returns warrant one of the following types of actions from the IRS:

• Soft Compliance Letter - During October 2012 and November 2012 the IRS will be mailing 3,000 compliance letters to new and low-to-medium risk EITC preparers. Read More
• Knock and Talk (Educational Visit) - During December 2012, the IRS will conduct 100 educational visits to preparers whom the IRS has identified as filing highly questionable Tax Year 2011 EITC returns. Read More
• Due Diligence Audit Visit - Due diligence audits are performed on preparers whom the IRS has identified as being at the highest risk of preparing questionable EITC returns. Read More

Click here to read the entire CrossLink Tax Update that includes further information on IRS EITC Preparer Compliance.

IRS Identity Protection PIN

The IRS is expanding the number of taxpayers who will receive an Identity Protection Pin (IP PIN) for the upcoming season. All taxpayers that have had an identity theft indicator applied to their IRS tax account will receive an IP PIN that must be included on their 2012 Federal income tax return. This means that approximately 600,000 taxpayers will receive an IP PIN for the upcoming filing season.

The affected taxpayers will receive their IP PIN in a notice (Notice CP01A) from the IRS in December 2012. This notice will include their 6-digit IP PIN and information on the use of the IP PIN.

If you know that any of your customers have been the victim of identity theft you may want to inform them that they will be receiving this notice in December. They will need to keep it and bring it in with the rest of their tax information when they come to have their 2012 income tax return prepared.

Other changes to the IP PIN program that you need to know:

• If the taxpayer was issued an IP PIN they must include it and have it entered correctly on their 2012 Federal return or the IRS will reject their return. The inclusion of the IP PIN will allow the return to be processed normally and will not delay their refund.
• If the taxpayer loses the notice that includes their IP PIN they can call the IRS Help Desk. Once they have authenticated who they are, they will be issued with a replacement IP PIN.
• Click here to read more.

Click here to read the entire CrossLink Tax Update that includes further information on the IRS Identity Protection PIN.

Last Day to e-File Tax Year 2011 Returns

This is a reminder that the IRS will be shutting down the e-File system this Friday, October 19, 2012.In order to ensure that you receive your acknowledgement by Friday, be sure that you transmit any remaining Tax Year 2011 returns by tomorrow, October 18.

Any Tax Year 2011 returns that are not e-Filed by October 18 will be refused by Central Site and will need to be filed by paper for the remainder of 2012.

IRS Update: Latest Information on Requirements for Tax Return Preparers

IRS Competency Testing

Remember that you only have until the end of 2013 to take and pass the IRS Competency Test.

With over 330,000 tax return preparers still needing to take and pass the test it is in your best interest to take the test as soon as possible. At the present time there are plenty of open spots at a Prometric testing site. However, if you wait until this time next year you may have difficulties making an appointment for the test. Read more

PTIN Renewal

A PTIN is good for each calendar year. The time to renew your PTIN for 2013 is approaching. To ensure that your PTIN is valid for 2013 you have from October 15 – December 31, 2012 to renew your PTIN. Read more

Click here to read the entire CrossLink Tax Update that includes further information on Testing and PTIN Renewal Requirements for Tax Return Preparers, as well as information on Continuing Education and Background Checks.

Changes to IRS Form 2848 (Power of Attorney)

The most recent revision (Rev. March 2012) of Form 2848 (Power of Attorney) has some changes that you should be aware of. As a reminder, this is the form that a taxpayer uses to authorize their tax return preparer to represent them before the IRS – usually regarding tax returns for specified years.

Below are the changes to Form 2848:

• In order to represent a married couple on a joint return, both the husband and wife must now complete and submit separate Forms 2848.
• If you wish to have the IRS send copies of all notices and communications to you, the box next to each representative’s name and address must be checked.
• Click here to read more.

Click here to read the entire CrossLink Tax Update that includes further information on the changes to IRS Form 2848 (Power of Attorney).

CrossLinkTax.com Now in Spanish!

As CrossLink continues to serve a growing number of Latino-owned and Latino-serving tax preparation businesses, we recognize the importance of providing bilingual resources for you and your clientele.

We are pleased to announce the launch of a Spanish version of our website which you can access at www.CrossLinkTax.com/EnEspanol by clicking on the “En Español” link in the top right-hand corner of any page on our English website. We invite you to keep in touch with us by liking our Facebook page and, as always, encourage you to contact a CrossLink Team Member for any of your needs.

Thank You!

Your CrossLink Team

IRS Update: IRS to Give Greater Scrutiny to Compliance with IRA Rules

The IRS is about to begin a new initiative to go after taxpayers who make excess contributions to their Individual Retirement Arrangement (IRA) account or do not begin to withdraw funds from their traditional IRA account when they reach age 70.

Excess Contributions

Generally, an excess contribution is any amount made to a traditional IRA that exceeds $5,000 ($6,000 if 50 or older) per year. However, a taxpayer’s maximum IRA contribution may be less than this amount because a taxpayer cannot contribute more than their earned income. Click here to read more.

Required Withdrawals from Traditional IRA

Taxpayers with traditional IRAs must begin making withdrawals by April 1 of the year they reach 70. Failure to do so may result in a penalty of 50% on the required distribution.

According to the Treasury Inspector General for Tax Administration, there were approximately 255,000 taxpayers who failed to comply with the withdrawal requirements in 2006 and 2007 – costing the government approximately $174 million.

Click here to read the entire CrossLink Tax Update that includes further information on increased IRS scrutiny for IRA rules compliance.

IRS Update: EITC Warning Letters and Self-Employed Deductibility of Medicare Premiums

IRS Warning Letters for Tax Preparers Who Did Not Submit Form 8867 with EITC Returns

Beginning this filing season the Internal Revenue Service (IRS) requires that any tax return claiming EITC that is completed by a paid preparer must have the Form 8867 (Paid Preparer’s EIC Checklist) attached to it. The failure to comply with this requirement means that the paid preparer is not meeting their due diligence requirements and is therefore subject to a $500 penalty for each tax return that does not have Form 8867 attached to it.

The IRS has begun sending out warning letters to preparers who have submitted Tax Year 2011 EITC tax returns without attaching Form 8867. This letter warns the preparer that they did not meet their due diligence requirements in 2012. The IRS will not assess any penalties for the 2012 Filing Season. Click here to read more.

Self-Employed Taxpayers Can Deduct Medicare Premiums

The IRS Office of Chief Council has advised IRS attorneys that self-employed taxpayers may deduct Medicare premiums when calculating the self-employed health insurance deduction on Form 1040, line 29.

This reverses the IRS stance held before 2010 when the IRS stated that self-employed taxpayers could not include any Medicare premiums in the self-employed health insurance deduction. This decision also expands what the IRS permitted in 2011, allowing self-employed taxpayers to include only Medicare Part B premiums when calculating the self-employed health insurance deduction.

Click here or to read the entire CrossLink Tax Update that includes further information on EITC Warning Letters and Self-Employed Deductibility of Medicare premiums.

IRS Update: Revised IRS Procedures for Issuing ITINs

The IRS has announced that they will no longer accept notarized copies of the 13 acceptable documents that show proof of identity and foreign status when applying for an Individual Taxpayer Identification Number (ITIN) for the remainder of 2012.

The IRS will now only issue an ITIN when the application includes the original of the following documents:

• Passport
• US driver's license
• US military identification card
• National identification card
• Click here to read more.

Each document must be current and contain an expiration date. They also must show your name, photograph, and support your claim of foreign status.

If a certified acceptance agent is used, either original documentation or copies of original documentation certified by the issuing agency must be attached to the ITIN application.

Click here to read the entire CrossLink Tax Update that includes further information on the revised IRS procedures for issuing ITINs.

IRS Update: The Foreign Account Tax Compliance Act and Your Customer

As a reminder, the new reporting requirements under the Foreign Account Tax Compliance Act (FATCA) have been in effect for the past two filing seasons. It is important to understand the FATCA rules so that you can help your customers comply with these reporting requirements.

Below is a brief list of what is considered a foreign financial asset:

• Bank accounts maintained in a foreign bank
• Any interest in a foreign entity
• Click here to read more.

Under FATCA, a taxpayer must file Form 8938 (Statement of Specified Foreign Financial Assets) with their Federal income tax for each year that they meet the following foreign financial asset reporting thresholds:

• Foreign financial assets of more than $50,000 ($100,000 for joint taxpayers) on the last day of the year; or
• More than $75,000 ($150,000 for joint taxpayers) at any time during the year.

The penalty for not filing Form 8938 when it is required is a $10,000 fine. There is also an additional penalty of $10,000 per month (maximum of $50,000) if Form 8938 is not filed within 90 days after the IRS mails the taxpayer a notice of failure to file.

Click here to read the entire CrossLink Tax Update that includes further information on the Foreign Account Tax Compliance Act and how it affects your customers.

IRS Update: Who is a Supervised Preparer?

How is a supervised preparer different from a registered tax return preparer?

A supervised preparer:

• Must obtain a PTIN
• Does not have to pass the competency test
• Does not have to meet the yearly continuing education requirements

Who is considered to be a Supervised Preparer?

Under IRS Notice 2011-6 a Supervised Preparer is an individual who is:

• Employed by an attorney or CPA firm; or
• Employed by other recognized firms that are at least 80% owned by attorneys, CPAs or enrolled agents.
• Click here to read more

Click here to read the entire CrossLink Tax Update that includes further information on how a Supervised Preparer is different from a Registered Tax Return Preparer.

IRS Update: IRS “Fresh Start” Initiative and Changes to IRS Offer-in-Compromise Program

As part of their continuing “Fresh Start” initiative, the IRS has announced that they will be offering more flexible terms to its Offer-in-Compromise (OIC) program. This will enable some of the most financially distressed taxpayers to resolve their tax problems more quickly.

The IRS has made the following changes to the OIC program to more closely reflect real-world situations:

• When calculating a taxpayer’s reasonable collection period, it will now look at future income as follows:
• Offers paid in 5 or fewer months: 1 year (down from 4 years)
• Offers paid in 6 to 24 months: 2 years (down from 5 years)
• Allowing taxpayers to pay their student loans
• Click here to read more

The IRS “Fresh Start” Initiative began in 2008 and has included the following:

• In 2008: Lien relief for taxpayers trying to refinance or sell a home
• In 2009: New flexibility for taxpayers facing payment or collection problems
• Click here to read more

Click here to read the entire CrossLink Tax Update that includes further information regarding the IRS "Fresh Start" Initiative and Changes to IRS Offer-in-Compromise Program.

A message from Charles Petz, CPA

Thank you for another great year!

I wanted to take a moment to personally thank you for selecting CrossLink as your professional tax software solution. It is customers like you that have helped us to become the fastest growing professional tax software solution in the country* and I am proud to say that, based on the results of our annual customer survey, we have done so while maintaining our industry-leading customer satisfaction scores.

In the past year we expanded our operations in Rome, GA – and we are not done growing! To continue to meet your needs, this summer we will be doubling our office space in Bellevue, WA. Additionally, we continue to look at ways to improve our solutions and integrate additional technologies to enable your success. Along those lines, I am happy to report that a 64-bit driver for Motorola Symbol scanners will be available on your archive disk in early June.

As many of you will remember from last year, I strongly believe that well rested employees are essential to meeting your needs and ensuring our continued success. In support of this, I wanted to let you know in advance that our employees will be out of office for the period between May 28th and June 1st. During these four business days the entire PEI Team will be recharging their batteries so that when we return to the office on Monday, June 4th we do so with the energy, creativity, and passion you have come to expect from CrossLink. During this period, CrossLink Technical Support will be checking emails and voicemails to ensure urgent matters are supported.

Should you have any questions regarding this break, please do not hesitate to contact your CrossLink Account Team for additional information. Thank you very much for your business!

Charles Petz, CPA
Chief Financial Officer
Petz Enterprises, Inc.

* Based on "Freedom of Information Act data from Third Party Data Store extract listing currently authorized Electronic Return Originators".

IRS Update: Federal Tax Provisions Not Applicable for 2012 Tax Returns

As we move towards the 2013 Filing Season you will need to keep an eye out on what Congress does with regard to the “Extender” tax provisions that expired at the end of 2011.

Here are two lists of the provisions that will have the most impact on individual Tax Year 2012 Federal returns.

Provisions that are no longer applicable for Tax Year 2012 Federal returns:

• $250 Educator Expense Deduction – Form 1040, line 23
• Tuition and Fees Deduction – Form 8917
• Itemized Deduction for Sales Tax
• All personal nonrefundable tax credits allowed when calculating Alternative Minimum Tax
• Click here to read more

Provisions that changed significantly for Tax Year 2012 returns:

• Alternative Minimum Tax (AMT) exemption amounts revert to what they were for Tax Year 2000: Tax Year 2012 AMT exemption amount is:
• Single/Head of Household: $33,750
• Married Filing Joint: $45,000
• Married Filing Separate: $22,500
• Maximum Section 179 Deduction amount has been reduced to $139,000 for Tax Year 2012
• Click here to read more

Click here to read the entire CrossLink Tax Update that includes further information regarding Federal tax provisions that are not applicable or have been changed for Tax Year 2012 Federal tax returns.

Introducing the New CrossLink Blog!

We would like to welcome our customers and prospective customers to the new CrossLink Blog. As part of our commitment to building our relationship with you and taking your success personally, we believe that delivering meaningful information and interaction via social media is critical. The blog format will allow us to deliver industry news, support updates, commentary from CrossLink management, and other relevant information to help you be as successful as possible.

Remember to bookmark this page and check it periodically or subscribe using the RSS feed buttons on the right. This blog supports Google, Yahoo, Outlook and any Atom-compatible RSS feed reader applications. If you use Outlook, choose the Atom feed from the drop-down buttons, then select Microsoft Outlook from the drop-down list on the new page you arrive at and finally click Subscribe Now to complete the setup. You will then start receiving blog posts under a new folder within your Outlook client. Just make sure to come back to the blog itself to comment and interact with other users!

To comment, just click on the X comments link below any blog post and sign in with your Google (Gmail) or AOL Instant Messenger (AIM) account. If you don’t have an account, these are free to create by visiting accounts.google.com/SignUp or http://www.aim.com/. You can even subscribe specifically to comments using either the same RSS buttons on the right side of the blog or by clicking Subscribe by email below the comments box to receive replies to posts you commented on in your email box.

Thank you and happy reading.

P.S. Please be sure to “Like” us on Facebook at www.facebook.com/CrossLinkTax for even more valuable information.

IRS Update: Circular 230 and Registered Federal Tax Return Preparers

Remember registered Federal tax return preparers must follow the due diligence and ethical conduct requirements in IRS Circular 230 (Regulations Governing Practice before the Internal Revenue Service) when preparing tax returns. Enforcement of these regulations is performed by the IRS Office of Professional Responsibility (OPR).

As a registered Federal tax return preparer you will need to become familiar with all of Circular 230, however the following sections are especially important:

• Definition of practice before the IRS and what this means to registered Federal tax return preparers who are not CPAs, EAs or Attorneys:
• Section 10.2 – Definition of practice before IRS, Practitioner, and Tax Return Preparer.
• Section 10.3 (f) – What practice means for registered tax return preparers.
• Section 10.22 (Diligence as to accuracy) emphasizes that you must exercise due diligence when preparing all Federal tax returns.
• Section 10.27 (Fees) covers rules surrounding contingent fees and how a practitioner may not charge these types of fees for any services rendered in connection with any matter before the IRS which includes preparing a tax return.
• Section 10.30 (Solicitation) explains the rules covering advertising, solicitations and how and what fee information may be published.
• Click here to read more.

Click here to read the entire CrossLink Tax Update that includes further information regarding Circular 230 and how it affects Registered Federal Tax Return Preparers.

IRS Update: Registered Tax Return Preparer Testing

It is time for all provisional registered tax return preparers to begin thinking about taking the competency test. Even though preparers have until the end of 2013 to take and pass the test, you should think about taking the test beforehand to avoid the rush.

Below are some key facts to help you navigate the requirements for taking the competency test:

• The test is now based on Tax Year 2011 tax law. Click here for a list of the recommended IRS publications and form instructions that will help you prepare for the test.
• The testing fee is $116 and is paid at the time you schedule a test appointment.
• To take the test you must schedule an appointment using your IRS Online PTIN account you used to renew or register your PTIN at www.irs.gov/ptin. Once you have logged into your account select View Next Steps and Outstanding Requirements from the Main Menu (it is the third option under Functions on the left hand side of the Main Menu screen).
• The test consists of 120 multiple choice / true or false questions and will take up to 2.5 hours.
• A passing score on the test is 350 or above. The potential scores range from 50 to 500.
• You will receive your test results before you leave the testing site.
• The test is available in English only.

Click here to read the entire CrossLink Tax Update that includes further information regarding the Registered Tax Return Preparer Testing.

IRS Update: State e-File Due Dates and April 17 Federal Reminder

This is a reminder that the Federal filing deadline for individual returns is this Tuesday, April 17, 2012.

Taxpayers receive an extra day to file this year because of a District of Columbia holiday that takes place on Monday, April 16, 2012.

Most states that have a mid-April due date have also extended the filing deadline to Tuesday, April 17, 2012. To check the due date for your state click here.

April 17, 2012 is also the deadline for the following:

• To file an automatic six month extension (Form 4868)
• First individual estimated tax payment for 2012
• Making a contribution to an IRA for Tax Year 2011
• Filing Federal partnership tax returns (Form 1065)
• Filing estate or trust income tax returns (Form 1041)

Also, any returns rejected on April 17, 2012 will be considered timely filed if it is retransmitted and accepted by April 22, 2012.

Click here to read more CrossLink Tax Updates.

IRS Update: Continuing Education Reminder for Registered Return Preparers

Below is a reminder about the Continuing Education (CE) requirements for registered return preparers.

All registered return preparers who are not a CPA, attorney, or Enrolled Agent must complete 15 hours of continuing education each year.

The continuing education requirements begin this year (2012) and must be met by December 31, 2012. The CE requirements must also be met even if you have not completed the testing requirement.

The 15 hours of continuing education must include:

• 2 hours of ethics
• 3 hours of Federal tax law update
• 10 hours of other Federal tax law

Also, the continuing education requirements do not apply to certain supervised preparers and preparers who do not prepare individual 1040 returns.

Click here to read the entire CrossLink Tax Update which includes more of the latest information on Continuing Education AND Record Keeping requirements for Registered Return Preparers.

IRS Update: Update on Testing for Registered Tax Return Preparers

As a reminder, all provisional registered tax return preparers need to take and pass a competency test by the end of 2013.

Here is the latest information on testing:

• Beginning April 16, 2012, the test will be based on 2011 tax law.
• Beginning April 16, 2012, the test results will be available to the preparer before they leave the testing site.
• The passing score for the exam is 350. The maximum score is 500.
• Preparers who complete the test before April 2012 will receive their results as follows:
• Before March 2012 – Results mailed in early March
• During March 2012 – Results will be mailed in 7 – 10 business days
• The test may not be taken between April 1 and April 15, 2012. The IRS will use this time to update the test content so that it reflects 2011 tax law.

Click here to read the entire CrossLink Tax Update which includes more of the latest information on testing for Registered Tax Return Preparers.

IRS Update: Response to Identity Theft

Even before identity theft rose to the top of the IRS’s annual “Dirty Dozen” list of tax scams for the 2012 Filing Season, the IRS has been focusing on preventing, detecting, and resolving identity theft cases as quickly as possible. Identity theft is one of the most complex issues the IRS handles due to the growing demands for getting refunds out quickly as well as the screening process that identifies false returns before the refund is issued.

Some of the ways the IRS is working to prevent identity theft are:

• Instituting new fraud filters this year to help detect returns filed by identity theft perpetrators.
• Implementing the Identity Protection PIN program for which the IRS will issue a 6-digit “Identity Protection PIN” to a taxpayer who has been a victim of identity theft. This helps the IRS ensure that the processing of the taxpayer’s return is not delayed.

One way a taxpayer may get their first indication that they have been a victim of identity theft is when they receive a notice from the IRS indicating that:

• More than one tax return was filed using the taxpayer’s name and SSN.
• They received wages from an employer they did not work for.
• They have a balance due refund offset or have had a collection taken against them for a year that they did not file.

Click here to read the entire CrossLink Tax Update which includes more information on the IRS response to identity theft.

IRS Update: New Version of IRS Smartphone App and IRS Tax Help in Spanish

The IRS has recently made available the new expanded version of their smartphone application (IRS2GO 2.0).

It is available for use with Apple and Android smartphones and includes the following new features:

• IRS YouTube videos
• IRS News, which gives you the latest news from the IRS on new programs, legislative updates and relevant tools
• The ability to request your tax return or account transcript from the IRS using your smartphone

Learn more about the new IRS2GO 2.0 app.

IRS Tax Help in Spanish

The IRS offers a wide range of tax information in Spanish on their website, such as:

• IRS Spanish Newsroom
• Spanish version of “Where’s My Refund?”
• IRS forms and publications in Spanish
• Links to IRS YouTube videos in Spanish

Click here to read the entire CrossLink Tax Update which includes more information on the new IRS2GO 2.0 app and IRS tax help in Spanish.

IRS Update: Reporting Stock Sales on Form 8949

Below is a reminder of what additional information you may need to enter on new Form 8949 for stock sales and what to do with the Form 1099-Ks that your self-employed taxpayers may receive:

Reporting Stock Sales on New Form 8949

Remember that beginning with 2011 returns, all capital transactions that were reported directly on Schedule D in the past will now be reported on new Form 8949 (Sales and Other Dispositions of Other Assets).

As you enter sales on Form 8949 you will notice the following new fields that may require an entry:

• Transaction type checkbox (Box ABC)
• Code field (column b)
• Adjustment to gain/loss field (column g)

Learn more about reporting stock sales on Form 8949.

Form 1099-K and Schedule C, E, and F

Remember that the IRS has deferred the requirement that income reported on new Form 1099-K must be reported on a separate line of Schedule C, E, and F.

The requirement that the Form 1099-K be issued by merchant card providers and e-commerce providers (such as PayPal) is not affected, so taxpayers that receive income from credit cards, debit cards, or third party e-commerce providers will still have a Form 1099-K mailed to them. Learn more

Click here to read the entire CrossLink Tax Update which includes more information on reporting stock sales and how to report income received from credit/debit cards.

IRS Update: Reminders for Schedule E Rentals

Below are reminders regarding a change on Schedule E as well as how the 2008 First Time Homebuyer Credit was allocated between the taxpayer and spouse and how that affects the use of the IRS Lookup Tool.

Schedule E – New Line 2 for Rental Property

In the past, Schedule E only asked a question regarding possible personal use for each rental activity reported on Schedule E.

Beginning with the 2011 Schedule E, the IRS now requires that the total number of days that each activity was used as rental (Fair Rental Days) and for personal use (if any) be entered for each rental property included on Schedule E. Learn more

IRS Lookup Tool for Repayment of 2008 First Time Homebuyer Credit

When looking up account information for married couples, remember that the IRS has split the credit between the taxpayer and spouse for a credit claimed in 2008 on a joint return. The taxpayer is apportioned one-half the credit and the spouse is allocated one-half the credit.

Therefore, the IRS has created a separate account for the taxpayer and spouse on the IRS system. Learn more

Click here to read the entire CrossLink Tax Update which includes more information on Schedule E Rentals and the IRS First Time Homebuyer Credit Repayment Lookup Tool.

Pre-Season Readiness: February Tasks to Complete

With the 2012 Tax Season in progress, your CrossLink Team wants to make sure you remain prepared.

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

To view this document and other resources in Spanish, visit the CrossLink Customer Resources page.

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

IRS Update: 2012 IRS Fact Sheets

The IRS Fact Sheets page on the IRS website provides information that you should be aware of and view periodically throughout the filing season. This information covers topics that the IRS is emphasizing for the given tax season.

Currently, the IRS Fact Sheets cover the following topics:

• A guide for taxpayers that have been a victim of identity theft.
• How a taxpayer can protect themself from becoming a victim of identity theft.
• When a taxpayer can expect their refund to be released by the IRS and factors that could affect the release of the refund by the IRS.

Click here to read the entire CrossLink Tax Update which includes more information on topics currently covered on the IRS Fact Sheets page as well as a link to the Fact Sheets page.

Message from Santa Barbara Tax Products Group (TPG)

Message from Santa Barbara Tax Products Group (TPG):

REFUND TRANSFER (RT) CHECKS
With the revised funding cycles the IRS has published this year, you can expect check print records to be sent to you more frequently throughout the week. Regardless of when we receive IRS notification of deposits on any given day of the week (more frequently on Tuesdays or Wednesdays this year) and in order to follow bank compliance procedures, we will be releasing check print records each day starting at 3:00 pm PST since we do not receive the actual funds from the IRS until the following day. Please be prepared to print your checks that evening or the following morning for the season.

ACH DISBURSEMENTS
All tax preparer fees and taxpayer disbursements designated to go by ACH direct deposit have an effective date of the next business day, so please keep that in mind when you are expecting a deposit for you or your client. Most banks will post the deposits the same day they receive them, but some post it the following business day.

IRS FUNDING DELAYS FOR RTs
Most accounts are paid as expected according to the IRS refund cycle. Each year however there are accounts that were expected but not paid either fully or partially each week. Please inform your affected clients to be patient with the IRS. As we normally get funding weekly, have them check back the following week as that usually will be the earliest we will see another deposit. (NOTE: For refunds processed through the IRS CADE (Modernized) system, you may see check print records come through sooner than the following week, however, our customer service reps will continue to tell clients to check back next week.)

For assistance with these clients, we have posted a notice call "IRS Refund Delays" under the ‘Downloadable Forms’ link when you log in to our website. This can help you explain to your customer what may have happened.

CHECK PRINTING RECONCILIATION
In order to print checks, you need to place a verification code from your check stock called “Check Layout Version” (it is 4 characters, and it is located on the bottom right of the check stub). This verifies you are printing on current year stock. After you finish printing your checks, try to make sure you connect again with your transmitter to send your check print records back to us as soon as you can do it. This helps reconcile our system to recognize what the check numbers are for check verification purposes. It is important to do this as quickly as possible after printing checks. Also, please remember to inform your clients who have primary and secondary taxpayer names on the check that if they both cannot cash the check at the same time, the primary taxpayer must be the one to cash their check when they go to a check cashing establishment.

COMPLIANCE UPDATE
You should have or will receive a separate email directly from TPG titled “Important Compliance Update for 2012”. Please read through that and the attachments when you receive it as it may impact you directly this tax season. Thank you for your cooperation and understanding. Team TPG

IRS Quick Alerts for Tax Professionals: Refund Status

The below information was sent out via today's IRS Quick Alert:

"The IRS has opened its filing season successfully this month, and refunds have started going out to many taxpayers. As with the start of any tax season, there are system validations that occur requiring some fine-tuning of our systems. As part of this, some taxpayers will receive refunds approximately one week later than initial projections they may have received, but these are still in line with historical refund delivery times.

The IRS reminds taxpayers that refund time frames provided by “Where’s My Refund” and tax providers are projected time frames and are subject to revision. Many different factors can affect the timing of the refund after the IRS receives the return for processing. The IRS apologizes for any inconvenience caused by the revised refund dates.

When the IRS announced the opening of the 2012 filing season, it advised taxpayers who electronically file and select direct deposit that they could see their refunds in as few as 10 days and 90 percent of refunds are provided within 21 days. Some taxpayers are getting refunds much faster, but at this time taxpayers should expect refunds to be issued as indicated in the original IRS guidelines.

The one-week delay for some refunds relates to fine-tuning IRS systems to adjust for new safeguards put in place this tax season to provide stronger protection against refund fraud. The IRS is providing additional screening for fraud this year before issuing refunds, but the vast majority of taxpayers can still continue to expect to receive their refunds in a timely fashion."

IRS Update: Helpful IRS Tools for the 2012 Tax Season

Below are a couple of IRS look-up tools that should be useful to you and your taxpayers during the 2012 Filing Season:

Where's My Refund?

Remember that the information for a taxpayer’s refund status and when it will be direct deposited or mailed will not be available until 72 hours after the return has been accepted.

Also, this tool will indicate why a refund has been reduced (the taxpayer owed money to the IRS, a state, child support, etc.). Learn More

First Time Homebuyer Credit Account Look-Up

This tool is for taxpayers who need to repay the (up to) $7,500 credit received in 2008. This tool replaces the reminder letter that the IRS sent last year.

Affected taxpayers will need their SSN, Date of Birth, Street Address, and Zip code from the latest return they have filed in order to log in. Learn More

Click here to read the entire CrossLink Tax Update which includes more information on helpful tools for the 2012 Filing Season.

IRS Update: Reminders for the Upcoming Filing Season

As you prepare your tax office for the start of the 2012 Tax Season, there are some things that you need to know:

• The start of the filing season is Tuesday, January 17, 2012. To read more about the start date see the IRS 2012 Kick Off News Release.
• Acknowledgements will not be delayed at the beginning of the season.
• If preparers have not already done so, they must renew their PTIN before they begin preparing Tax Year 2011 returns.
• If preparers still need to renew their PTIN, they need to go to www.irs.gov/ptin.
• Form 8867 (Paid Preparer Earned Income Credit Checklist) will be transmitted with all returns that are claiming EITC this year.

Click here to read the entire CrossLink Tax Update which includes more reminders for the upcoming filing season.

Pre-Season Readiness: Ready for the 2012 Tax Season

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

Click here for a checklist of tasks that should be completed in January 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."

To view these documents and other resources in Spanish, visit the CrossLink Customer Resources page.

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