IRS e-Services Now Requires Users Be Registered Using Secure Access

This is to let everyone that has an IRS e-Services account know that they must register through the Secure Access two-factor authentication process in order to access their account.  This began on December 10, 2017.

If a user had already registered using the Get Transcript, View Your Tax Account or IP PIN online tools they should use that password and their e-Services user name.

See the e-Services – Online Tools for Tax Professionals and the Important Update about Your e-Services Account pages on the IRS website for more information.

For more information on what an individual needs to do to register for the Secure Access process see the Secure Access: How to Register for Certain Online Self –Help Tools page on the IRS website.

Preparer Due Diligence Requirement Expansion Reminder

This is a reminder that the preparer due diligence requirements were expanded by the PATH Act last year to include the child tax credit and the American Opportunity education credit as well as the earned income tax credit.  This means that under IRS Code section 6695(g) the IRS has the authority to penalize a tax preparer $510 for each return (and for each credit on that return) for which the preparer fails to comply with the due diligence requirements related to these three credits.

The Four Due Diligence Requirements can be summed up as follows:

• Complete and submit the Form 8867 (Paid Preparers Due Diligence Checklist) whenever the earned income tax credit, child tax credit and/or the American Opportunity Education credit is claimed on a federal return.
  
  
• Complete all necessary worksheets or similar documents showing how each credit was calculated.
  
  
• Knowledge – Know the tax law and ask questions until you have all the information you need to determine eligibility and the correct amount for each of the credits. This means the preparer when evaluating the information provided by the taxpayer should ask additional questions if that information seems incorrect, inconsistent or incomplete. Any additional questions, and the taxpayer’s answers, should be documented and kept with the taxpayer file at the time they are asked.
  
  
• Keep a copy of all of the above, along with a record of how and when you obtained the information to determine eligibility for, and the amount of, the credits. You must also keep a copy of all the documents you reviewed and used to determine eligibility for and the amount of the credits.

It is important to note that preparers need to pay particular attention to meeting the knowledge requirement and be sure that they are asking enough questions to ensure they have enough information to be sure each of these credits is correctly claimed.  Lack of meeting the knowledge requirement is the area where a due diligence penalty is assessed is most cases when the IRS performs a due diligence audit.

For more information, see the Refundable Credit Preparer Due Diligence Law page on the EITC Central website.

For more information on other aspects of due diligence and refundable credits see the following pages on the EITC Central website:

• Due Diligence Training Module 
• Other Refundable Credits Toolkit – Links and information related to child tax credit and the American Opportunity education credit 
• Refundable Credit Frequently Asked Questions 
• Child Related Tax Benefits Comparison 
• Common EITC Questions and Answers 
• What You Need to Know About CTC and ACTC – Information on Child Tax Credit and Additional Child Tax Credit 
• What You Need to Know About AOTC and LLC – Information on the American Opportunity Education Credit and the Lifetime Learning Education Credit 
• Avoiding Common American Opportunity Education credit Errors 
• Preparer Compliance Program – How IRS determines which preparers to conduct a due diligence audit on.

IRS Security Awareness Week

The IRS, state tax agencies and the tax community are declaring this week (Nov 27 – Dec 1) as “National Tax Security Awareness Week”. 

The IRS will be releasing a series of reminders to taxpayers and tax professionals on steps they can take to better protect themselves from cybercriminals.

Each day will focus on the following topics:

• Online Security
• Recognize Phishing Scams
• Data Breaches
• W-2 Email Scam
• Small Businesses

See the Security Summit webpage on the IRS website for detailed information on the above topics and how you can better protect yourself from becoming a victim of identity thieves.

Last Day to E-File Returns in 2017

This is a reminder that the last day to file a 2016 return electronically will be Saturday, November 18.
  

The IRS is shutting down their Modernized e-file system after November 18 so the agency can perform annual maintenance and to enable the IRS to reprogram the system for the upcoming 2018 tax-filing season.

Any individual that files a 2016 return after November 18 must file it on paper. This includes any individual that qualified for an extension of time to file their 2016 federal return until January 31, 2018 because they lived in federally declared disaster area and file their 2016 federal return after November 18.

For more information see IRS News Release IR-2017-183 (dated Oct. 31, 2017) on the IRS website.

PTIN Renewal

The IRS has begun to accept renewals for existing PTIN holders or applications for new PTINs for 2018.

The US District Court did uphold the IRS’s authority to require preparers to obtain a PTIN therefore anyone who prepares or helps prepare any federal tax return for compensation must have a valid PTIN and existing PTIN holders must renew their PTIN each year.

The big difference for renewals this year is that the IRS is no longer charging a fee to renew or obtain a PTIN. The same US District Court of Columbia enjoined the IRS from charging a user fee for the issuance and renewal of PTINs on June 1, 2017.

For more information see the 2018 PTIN Renewal Period Underway for Tax Professionals news release on the IRS website.