At the annual National Association of Tax Professionals conference last week, I was privileged to be in the second row for IRS Commissioner Chuck Rettig‘s address to tax professionals. I came away truly believing that he cares about issues like diversity, inclusion and civility, and that we should treat each other like human beings. See the full speech here: NATP – IRS Commissioner Address to Tax Professionals.
Great heads-up today from our wonderful alderman, Scott Waugespack:
Tax Prep Chicago is the City’s free income tax assistance program. Through the end of the 2019 tax season, Tax Prep Chicago provided free tax assistance to nearly 18,000 for low-income Chicagoans, putting more than $25 million back into communities across the city.
However, residents need assistance on taxes and financial services year-round. That is why Tax Prep Chicago’s partner, Ladder Up, offers free tax help and financial advice throughout the summer at the Harold Washington Library.
Families earning up to $55,000 and individuals earning up to $30,000 are eligible to take advantage of the free assistance. Services include:
Find out more here.
Source: Tax Assistance – Ladder Up
I’m personally heartbroken that Nina Olson, the National Taxpayer Advocate for the past 18 years, is retiring at the end of July. She and her staff have done an incredible job advocating on behalf of taxpayers, and doing everything they can to help cut government red tape and shift the focus of Congress and the IRS, bringing attention to the real-world situations their laws, policies and procedures can cause.
In her recently-released 37th and final report to Congress, she reiterated key IRS challenges in the areas of:
– Taxpayer Service
– Appropriate Use of Self-Service Applications
– Treatment of Financially Vulnerable Taxpayers
She also shared a 2019 Filing Season Review and outlined TAS Priority Issues for FY 2020, including the creation and online availability of a roadmap of tax controversies, and limitations on the ability of Amish taxpayers to receive full child tax credit benefits.
Nina left us with these parting words: “even as the system works for most taxpayers most of the time, it doesn’t work for millions of others. Taxpayer service is woefully inadequate. . . IRS audit notices are often unclear, leading some taxpayers to ‘agree’ to assessments by default – even when they don’t owe the tax. And the IRS doesn’t screen for ability to pay before it takes collection actions, thereby causing or worsening financial hardships for financially vulnerable taxpayers. Advocating for taxpayers affected by problems like these, both individually and collectively, has been and will continue to be the work of TAS.”
The Taxpayer Advocate Service (TAS) is an independent organization within the IRS that helps taxpayers and protects taxpayer rights. Your local advocate’s number is in your local directory and at https://taxpayeradvocate.irs.gov/contact-us. You can also call TAS toll-free at 877-777-4778. TAS can help if you need assistance in resolving an IRS problem, if your problem is causing financial difficulty, or if you believe an IRS system or procedure isn’t working as it should. The service is free. For more information about TAS and your rights under the Taxpayer Bill of Rights, go to https://taxpayeradvocate.irs.gov. You can get updates on tax topics at facebook.com/YourVoiceAtIRS, Twitter.com/YourVoiceatIRS, and YouTube.com/TASNTA.
I’ll be giving a presentation this Wednesday, June 26th at 5:30 pm at Ampersand Cowork in Logan Square (Chicago) for their series Drink & Think: Entrepreneurship @ Ampersand! The topic is, “Thinking About Starting a Small Business – Side Business – Freelance Gig? Here’s What You Need To Know First.”
Come out and enjoy some drinks & snacks on their gorgeous rooftop deck and learn what you need to know before starting a small business. Tickets are only $5 — get them here:
https://www.eventbrite.com/e/drink-think-entrepreneurship-tickets-63579032598
You’ll learn:
– Why NOT to run a small business… and why bother if it’s that hard?
– When to start it (and what that even means)
– What will you need? Bank accounts, EINs, Business Plans and more
– Technology tips – bookkeeping, payroll, data entry, paperwork
– What’s deductible?
– Choice of entity
– Employees or independent contractors?
– And plenty more fascinating and essential tips.
See you there!
From the SBA (June 16, 2019) — In case you missed the 2019 National Small Business Week Virtual Conference, you are still in luck. The seven webinars are available to watch on demand. The topics include SBA funding programs, driving growth with customer obsession, online marketing and ads, mastering your cash flow, government contracting and disaster preparedness.
Source: 2019 National Small Business Week Virtual Conference | SCORE
After second-quarter taxes are over and I’m caught up on extended tax returns, I plan to reach out to clients who got surprised with a 2018 tax bill and do a “Paycheck Checkup” with them, to make sure the same thing doesn’t happen for 2019. I’ve had a couple clients already meet to go over their tax returns to figure out “what happened?” The results have most commonly stemmed from the limitation on state/local/property tax deductions to the elimination of the unreimbursed employee expense deduction. However, in some cases it was simply that the new TCJA tax law is too complex to use a regular W-4 to calculate withholding.
So, if you haven’t done a Paycheck Checkup, consider now a good time for it, before it gets too deep into the calendar year to make up the difference via paycheck withholdings.
Source: Done with taxes this year? Use 2018 return to get 2019 withholding right | Internal Revenue Service
I totally identify with this recent article from Accounting Today‘s weekly e-newsletter. And from chats with colleagues, and now this article, it sounds like I wasn’t alone.
Some clients have always needed more time to get in returns, but this tax season saw an avalanche of extension requests. Just hours before this year’s deadline the IRS warned that 50 million taxpayers had yet to file their returns.
Read the full article here: Tax preparers report ‘record-setting’ number of extensions | Accounting Today
From today’s IRS e-News for Tax Professionals:
The IRS today issued a draft of the 2020 Form W-4, Employee’s Withholding Allowance Certificate (PDF), that will make accurate withholding easier for employees starting next year. “The new draft Form W-4 reflects important feedback from the payroll community and others in the tax community,” said IRS Commissioner Chuck Rettig. “The primary goals of the new design are to provide simplicity, accuracy and privacy for employees while minimizing burden for employers and payroll processors.”
The IRS expects to release a near-final draft of the 2020 Form W-4 in mid-to-late July to give employers and payroll processors the tools they need to update systems before the final version of the form is released in November. To make additional improvements to this initial draft for 2020, the IRS is now accepting comments for 30 days. To facilitate review of this form, IRS is also releasing FAQs about the new design.
Source: IRS, Treasury unveil proposed W-4 design for 2020 | Internal Revenue Service
Join us next week in Chicago at the 5th Annual Conference Of The Cooperative Professionals Guild! The theme is “New Horizons and Best Practices for Cooperative Professionals”. $250 registration fee includes breakfast, lunch and snacks each day. Agenda and details in the link below.
A recent Forbes article by Ashlea Ebeling summarizes some of the key take-away points regarding audit rates from this year’s IRS Data Book.
Some excerpts/ highlights:
For the highest income taxpayers—returns showing adjusted gross income of $10 million or more–the audit rate dropped from 14.52% in 2017 to just 6.66% in the latest report.
By comparison, for households with AGI under $200,000, the audit rate dropped slightly, stayed the same, or climbed (from 0.48% to 0.54% for $50,000 to $75,000 AGI households).
It’s not a surprise that audits are dropping overall. The IRS’ budget is smaller these days and its staff of enforcement workers is lean. Technology upgrades and enforcement wherewithal are among the agency’s most pressing funding needs.
In her recent annual report to Congress, National Taxpayer Advocate Nina Olson listed audits (correspondence exams, field exams and office exams) among the nation’s most serious tax problems.
Still, the Government Accountability Office says the tax gap—the difference between tax amounts that taxpayers should have paid and what they actually paid voluntarily and on time—as 82% of owed taxes, leaving an annual gap of $458 billion.