This. Is. Amazing. In a Herculean effort to drag itself into the 21st Century, the IRS has finally implemented a “secure messaging” service. This means that instead of calling to discuss matters and playing phone tag — or snail mailing and faxing files to them — we can finally send messages and files via a new secure IRS e-mail system!

Now, lest you get too excited — from what I can tell so far, there are some serious limitations:

• You must be INVITED to participate. Your IRS representative must invite you (the client) and you must register. As long as the accountant has a Power of Attorney on-file for that client, he/she (me!) may use it as well. Under “Tax Preparer Options” there is a “Request Access” button.
• It will be down for maintenance every Friday from 8-11 pm EST.
• It does not seem to be an actual portal or shared “space”, so we still have what is my biggest issue: I like to submit audit files in an organized format, whereby there is a folder that corresponds to each of the listed requests on the IRS letter — with documents in each folder that provide the various types of support being requested. (For example, a folder for “Revenue” that has copies of sales receipts, POS end-of-day scans, invoices, etc.; and a folder for “Fixed Assets” that has copies of packing slips, vendor invoices, depreciation schedules, etc.) It doesn’t look like this system will allow you to upload an entire folder structure, the way a portal or document-sharing system does. But I haven’t confirmed this yet.

Check it out for yourselves! This is real!
Welcome to Secure Messaging | Internal Revenue Service

From today’s National Association of Tax Professionals TaxPro e-newsletter, and Accounting Today‘s Tax Practice e-newsletter, some important announcements from the IRS:

NATP – Tax Relief for Victims of Hurricane Irma
Extended filing and payment deadlines

Hurricane Irma victims in parts of Florida have until January 31, 2018, to file certain individual and business tax returns and make certain tax payments, the IRS announced in IR-2017-150.

This includes an additional filing extension for taxpayers with valid extensions to October 16, and businesses with extensions to September 15. This includes the September 15, 2017, and January 16, 2018, deadlines for making quarterly estimated tax payments. The IRS noted, however, that because individual tax payments related to 2016 returns were originally due on April 18, 2017, those payments are not eligible for this relief.

A variety of business tax deadlines are also affected including the October 31deadline for quarterly payroll and excise tax returns. Businesses with extensions also have the additional time including, among others, calendar-year partnerships whose 2016 extensions run out on September 15, 2017 and calendar-year tax-exempt organizations whose 2016 extensions run out on November 15, 2017. The disaster relief page has details on other returns, payments and tax-related actions qualifying for the additional time.

The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. Thus, taxpayers need not contact the IRS to get this relief. However, if an affected taxpayer receives a late filing or late payment penalty notice from the IRS that has an original or extended filing, payment or deposit due date falling within the postponement period, the taxpayer should call the number on the notice to have the penalty abated.

In addition, the IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866.562.5227. This also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization.

Individuals and businesses who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2017 return normally filed next year), or the return for the prior year (2016). See Publication 547 for details.

From today’s National Association of Tax Professionals TaxPro e-newsletter, and Accounting Today‘s Tax Practice e-newsletter, some important announcements from the IRS:

NATP – Tax Relief for Victims of Hurricane Harvey
Extended filing and payment deadlines

Hurricane Harvey victims in parts of Texas have until January 31, 2018, to file certain individual and business tax returns and make certain tax payments, the IRS announced in IR-2017-135.

This includes an additional filing extension for taxpayers with valid extensions that run out on October 16, and businesses with extensions that run out on September 15. This includes the September 15, 2017 and January 16, 2018deadlines for making quarterly estimated tax payments. The IRS noted, however, that because individual tax payments related to 2016 returns were originally due on April 18, 2017, those payments are not eligible for this relief.

The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. Thus, taxpayers need not contact the IRS to get this relief. However, if an affected taxpayer receives a late filing or late payment penalty notice from the IRS that has an original or extended filing, payment or deposit due date falling within the postponement period, the taxpayer should call the number on the notice to have the penalty abated.

In addition, the IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866.562.5227. This also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization.

Individuals and businesses who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2017 return normally filed next year), or the return for the prior year (2016). See Publication 547 for details.

Accounting Today – IRS loosens rules for retirement plans to lend money to Hurricane Harvey victims

The Internal Revenue Service granted additional relief to victims of Hurricane Harvey on Wednesday by allowing 401(k)s and other employer-sponsored retirement plans to give loans and hardship distributions to aid them without incurring penalties.

The IRS said 401(k) plan participants, along with employees of public schools and tax-exempt organizations with 403(b) tax-sheltered annuities, as well as state and local government employees with 457(b) deferred-compensation plans, can be eligible for the streamlined loan procedures and liberalized hardship distribution rules. While IRA participants are barred from taking out loans, they’re also eligible to receive distributions under the looser procedures.

Retirement plans can provide relief to employees and some members of their families who live or work in disaster area localities affected by Hurricane Harvey and designated for individual assistance by the Federal Emergency Management Agency. Currently, parts of Texas qualify for individual assistance, but the storm is spreading Wednesday to parts of Louisiana as well, and those areas may also eventually qualify. For a complete list of eligible counties, visit https://www.fema.gov/disasters. To qualify for this relief, hardship withdrawals must be made by Jan. 31, 2018.

Under the IRS relief, a retirement plan can allow a victim of Hurricane Harvey to take a hardship distribution or borrow up to the specified statutory limits from a storm victim’s retirement plan. Someone who lives outside the disaster area can also take out a retirement plan loan or hardship distribution if they want to use the money to help a son, daughter, parent, grandparent or other dependent who lived or worked in the disaster area.

More details are available in Announcement 2017-11 on the relief to victims of Hurricane Harvey, which caused damage to parts of Texas. It permits easier access to victims’ funds held in workplace retirement plans and in IRAs, for the period beginning Aug. 23, 2017, and ending Jan. 31, 2018. Additional information about other tax relief related to Hurricane Harvey can be found on the IRS disaster relief page.

I have a dear friend who used to work as a developer for TurboTax, and I can say from many interviews with him and testing of the software that it technically works fine. There’s no major bug in it as far as I can tell (though it’s a crime that they won’t let you review your forms as you go through the interview, or before submitting them).

The big, glaring issue in my opinion is their marketing, as well as their tax prep interview language, which makes it sound like anyone can do their own taxes. This simply isn’t true.

If you have a non-complex tax situation and your life has not changed significantly from prior years, then by all means, use a DIY program. Side note: I used to like TaxAct best, when Kiplinger owned it, but now H&R Block does, and it’s filled with advertising, promo and pressure to pay more to contact them for extra bells & whistles (review, advice, audit protection, etc.).

But if you have a complex situation or things have changed since the prior year, you really should consult a professional. And when I say a “professional”, I mean make sure that an EA or a CPA is doing your taxes, not just having a high school kid prepare them and have the professional “sign off”.

There have been so many situations — including an unfortunate major audit — where I’ve reviewed client tax returns they prepared themselves using TurboTax and found glaring mistakes. They come to me to figure out what went wrong… and the obvious answer is that they shouldn’t have been doing their own taxes in the first place.

This isn’t an advertisement for my own services — I’m not even accepting new tax clients. This is a serious warning for your own good. Not everyone can do their own taxes. This court case is a great example of why — the defendant blamed the software for “luring him” into claiming deductions. So if you DO decide to do your own taxes and you mess up, keep in mind that the court won’t take “the software made me do it” as a defense.

Source: Why DIY Tax Software is Not a Good Option | AccountingWEB