IRS Announces New Voluntary Program for Professional Tax Return Preparers

The IRS announced on June 26, 2014 that they will soon be issuing guidance on a new voluntary program for unenrolled professional tax return preparers. Under this new program, tax return preparers would be able to obtain a record of completion from the IRS for completing a required number of hours of continuing education. All tax return preparers who elect to participate in this program and receive a record of completion will be included in a database on IRS.gov that will be available by January 2015 to help taxpayers determine return tax preparer qualifications.

In order for an unenrolled tax return preparer to obtain an IRS record of completion, they must complete the following number of hours of continuing education:

• For the upcoming 2015 filing season only:
• Complete 11 hours of continuing education (CE) from an IRS approved CE provider as follows:
• 6 hours – Federal tax filing season refresher course (which includes a comprehensive test at completion)
• 3 hours – Other federal tax law topics
• 2 hours – Ethics

This requirement will need to be met by December 31, 2014.

• Each year after 2015:
• Complete 18 hours of continuing education (CE) from an IRS approved CE provider as follows:
• 6 hours – Federal tax filing season refresher course (which includes a comprehensive test at completion)
• 10 hours – Other federal tax law topics
• 2 hours – Ethics

Once the continuing education requirement is met, a professional tax preparer will also be required to consent to the duties and restrictions related to practice before the IRS that are detailed in Circular 230, Section 10.51.

A list of all IRS approved CE providers (https://ssl.kinsail.com/partners/irs/publicListing.asp) is available on IRS.gov and now includes a new column indicating which providers plan to offer the qualifying courses.

For further details, see the New IRS Filing Season Program Unveiled for Tax Return Preparers (http://www.irs.gov/uac/Newsroom/New-IRS-Filing-Season-Program-Unveiled-for-Tax-Return-Preparers) news release on the IRS website.

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.