January 2012 Newsletter Happy New Year

Marja Beltrami, CPA

Hope your holidays were merry and bright and you are looking forward to the New Year before us!

Nomination requests for the Society’s new fiscal year went out, and nominations came in! Thank you to all who participated in providing nominations and a BIG THANK YOU to those willing to commit your time and talents to the Society in these roles. I want to encourage those of you who do not get elected this time around to still participate in a committee of your choice and to re-run for an office next year! I also encourage EVERYONE to sign up and participate on a committee.

Like many organizations, especially other State Societies, ours struggles to find volunteers to run for offices and probably even more importantly, work on/with a committee. Not to make light of the time and dedication our officers make to the Society, but I would say that most of the work performed on behalf of the Society is done at the committee level.  This is where we truly struggle as an organization and we see the same people over and over, and in multiple committees. (To those, I solute!) This is where we struggle with member burn out. I am hoping for a time in our Society where we compete for positions because there are so many volunteers!

To assist with this, I would like to see the society focus on some benefits for those who will come out and run for office, or chair a committee. I would like to implement training to assist our volunteers to succeed and benefit from leadership skill building, other tools and support. I also hope the Society will offer the same leadership skill building tools to all members. Who couldn’t benefit from this type of training? Those in both, industry, and public accounting would benefit. CPE and knowledge doesn’t have to always be about taxes or financial reporting. Strong leaders in strategic positions are key to the Alaska Society’s continued success, as is any business’s success.  How are we going to accomplish all of this? That’s a good question. We have started with our own Annual Meeting that is scheduled to take place in Homer this year on May 31^st and June ^1st. The CPE presented will be Helping Leaders Achieve Success presented by Jennifer Wilson. She is a co-founder and partner of Convergence Coaching, LLC a national leadership and marketing consulting firm.  So look for the announcements on our annual meeting and plan to attend. I think it is going to be a great meeting!

But beyond that, we have formed a task force to look into ways to develop leadership from the inside out;  to develop and encourage our own members to lead. We are looking at the California Society and the Washington Society to see how they have been successfully developing their own leaders (or so they say!) We are looking forward to being able to make some recommendations to the AICPA’s Leadership Academy at some point in the future. We can always use some assistance on this task force. So if you are interested please contact me, let’s get you on our task force. To lead, or not to lead…..

Why I joined the AKCPA?

Rebecca Martin, Director

Initially, I selfishly joined because I thought it would help me get promoted in the regional firm I worked for at the time.  Despite my initial selfish reason, I came to love my AKCPA membership for so many reasons.

First, CPAs willingly shared information about other employment options and help me realize where I was working was a great place to learn and grow.  As I grew in my career, the AKCPA provided me outside mentorship, interesting & applicable CPE, and kept me update on issues affecting AK CPAs.  

When I was debating opening my own firm and scared out of my mind, members offered encouragement, insight into how they did it, and practical solutions for making money while my firm was slowly taking off.  

Now, the AKCPA provides me access to amazing collagues and continuing mentors, client issue resolution through the Tax Brown Bag meetings, and best practices for a small firm through MAP.

I feel I wouldn't be where am am today without the amazing support and encouragement provided by the CPAs and Linda Plimpton at the Society. Thank you all for your friendship and priceless advice!

Practitioner Liaison Meeting

Anchorage, AK

October 28, 2011
Time: 12:30 - 3:30pm

Attendees:

Internal Revenue Service

• Kristen Hoiby, NW Area Manager, Stakeholder Liaison
• Kari Gilje, Stakeholder Liaison
• Mike Cvitkovic, Stakeholder Liaison
• Brian Lasselle, LB&I Group Manager
• Carol Saunders, W&I SPEC Tax Consultant
• Coral Quimby, Taxpayer Advocate Service
• Diane Nesvick, TE/GE Indian Tribal Governments
• John Williamson, SB/SE Collection Group Manager
• Julie Payne, SB/SE Associate Area Counsel
• Kristia Douts, Local Taxpayer Advocate
• Sonia Oen, SB/SE Exam Group Manager

Practitioner Representatives

• Therese Sharp, Chair, ASCPA, Alaska Society of CPAs
• Cynthia Coulter, ASCPA
• John Rodgers, ASCPA
• Karen Ague, ASCPA
• Kevin Branson, ASCPA
• Lisa Rogers, ASCPA
• Robert Rehfeld, ASCPA
• Rodney Kleedehn, ABA, Alaska Bar Association
• Barbara Hompesch, EA, Alaska Society of Independent Accountants
• Kathie Riley, EA, ASIA
• L. LaVonne Scott, EA, ASIA
• Paula Laurion, EA, ASIA

Meeting Summary

Julie Payne, SBSE Associate Area Counsel, Seattle

Julie (participating by phone) shared several updates regarding Counsel.  Currently, they are trying to put together additional pro bono assistance for taxpayers representing themselves before the court in addition to the services already existing through Gonzaga.  If any practitioners are interested in assisting, please contact Julie for more information.  Julie also noted that Counsel has been able to build up their staffing adding new attorneys in Seattle.  Julie hopes this additional coverage will help with workloads.

Mike Cvitkovic, Stakeholder Liaison, Seattle

Publications 4666, a bookmark providing search terms on IRS.gov, and 4938, Return Preparer Office, both not currently posted on IRS.gov, were distributed.

There are a number of changes regarding Information Returns. First, the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011 repealed both the expansion of information reporting requirements to payments made to corporations and to payments for property and other gross proceeds originally created under the Affordable Care Act, and the expansion of information reporting requirements for rental property expense payments originally created under the Small Business Jobs Act.  Next, the 2011 Form 1099-B will include cost basis reporting on certain securities sales.  The IRS is revising Form 1040 Schedule D and introducing new Form 8949 to report the enhanced information on Form 1099-B.  More on cost basis reporting is available at         the Overview and FAQs on IRS.gov.  And, the new Form 1099-K, Merchant Card and Third Party Network Payments, is causing changes to reporting on Form 1040 Schedule C and business income tax returns. Additional information on Form 1099-K Merchant Card Reporting is also found in the IRS.gov FAQs.  For more information on all these items, see the Third Party Reporting Information Center on IRS.gov. Additionally, box 12 of Form W-2 may have a Code DD for reporting Health Care Coverage and may also include 2-D bar codes.  If your client has a W-2 with the bar code and you have a bar code scanner, you can upload all the information using the code.  If Form W-2 has an ITIN, the information will need to be key-punched; you cannot use the auto-fill feature in your software for these W-2s.

1,049 organizations in Alaska have automatically lost their tax-exempt status because they did not file legally required annual reports (Form 990, 990EZ, or the “postcard” 990N) for three consecutive years.  You can find the list of the organizations by state as well as Frequently Asked Questions on IRS.gov.  Organizations can apply for reinstatement of their tax-exempt status, including retroactive reinstatement. Additional information is in IR-2011-63, and full details are available in Notice 2011-43, Notice 2011-44 and Revenue Procedure 2011-36.

FATCA (Foreign Account Tax Compliance Act) introduces a new tax form for 2011, Form 8938 (shown in draft), which will be attached to the Form 1040.  FATCA requires certain U.S. taxpayers holding foreign financial assets with an aggregate value exceeding $50,000 to report certain information about those assets.

A new page on IRS.gov has helpful tips for bankruptcy trustees who receive IRS Collection notices.  If IRS is listed as a creditor, bankruptcy trustees may contact the Centralized Insolvency Operation at 800-913-9358. Hours are 7 a.m. to 10 p.m. Eastern Time.  For more helpful information, see helpful tips for bankruptcy trustees on IRS.gov.

The March 2011 revision of Form 656, Offer in Compromise, must be used when submitting an offer. After July 4, if an offer is submitted on an outdated form, the IRS will return Form 656, but not the other forms contained in the offer. This is not a rejection of the offer, but rather a request to submit the offer on the most current form.

The revised Circular 230, like many other IRS publications, is only available electronically.  The Publication 17 and the Form 1040 instructions are downloadable to a Kindle.

The next Form 2290, Heavy Highway Vehicle Use Tax return, usually due Aug. 31, will instead be due on Nov. 30, 2011.  Returns should not be filed and payments should not be made prior to Nov. 1.  For more information, see Trucking Tax Center on IRS.gov.

The FUTA surcharge of .2% expired on June 30.  Revisions have been made on line 7 of the draft Form 940.

FBAR (Foreign Bank and Financial Accounts) reporting is done through the TD F 90-22.1, which is due on June 30.  Help with questions on FBAR and Title 31 is available Monday - Friday, 8 a.m. to 4:30 p.m. Eastern Time, at 866-270-0733 (toll-free inside the U.S.) or 313-234-6146 (not toll-free, for callers outside the U.S.). Questions may also be submitted via FBARquestions@irs.gov.

Innocent spouse relief has been enhanced by eliminating the two-year time limit that once applied to equitable relief requests.  Details are in Notice 2011-70.  A series of Q and As has been posted to IRS.gov.

Kristia Douts, Local Taxpayer Advocate, Anchorage

There has been a change in TAS criteria.  TAS is temporarily limiting its acceptance of cases when the taxpayer’s problem involves an IRS delay in processing certain tax documents. If the taxpayer is not currently facing an imminent threat of enforcement action or otherwise experiencing situations that meet the definition of an economic burden, TAS will refer the taxpayer to the appropriate IRS function specializing in return processing issues, rather than accepting the problem as a TAS case.

Effective October 1, 2011, TAS will generally no longer accept cases that only involve processing delays for the following issues:

Original Returns;

Unpostable/Reject Returns;

Amended Returns; and

Injured Spouse Claims.

Kristen Hoiby, Stakeholder Liaison, Seattle

The Return Preparer Program continues.  PTIN renewals have begun.  Information is available on IRS.gov as well as in the PTIN system to reflect the renewal process. The PTIN FAQs continue to be regularly updated and reflect the most recent information about renewals.  Renewal reminders are now being sent in a staggered mailing to the existing PTIN holders.  Additionally, the competency testing should begin some time in November.  The web site includes a candidate information bulletin that is written by the vendor Prometric which provides an explanation of the test itself and well as what to expect.  Additional information regarding the continuing education requirements as well as information for sponsors should be released soon.  Look for it on IRS.gov under the Return Preparer page.                 For 2012 the e-File mandate requires certain paid preparers (or firms) filing 11 or more individual or trust returns in 2012 required to e-file.  More information can be found at e-File mandate.

Mike Cvitkovic, Stakeholder Liaison

There were many changes to the Estate tax in 2010.  As a result large estates of people who died in 2010 will have until early 2012 to file various required returns and pay any estate taxes due.  This relief is designed to give large estates, normally those over $5 million, more time to comply with key tax law changes enacted late last year. Revised versions of the estate tax forms are now available on IRS.gov, and the carryover basis form will be released this fall. IR-2011-91 specifies the relief offered.  Detailed information can be found on IRS.gov in an article entitled Frequently Asked Questions on New Tax Rules for Executors.

IRS has issued guidance regarding employer-provided cell phones. This guidance relates to the removal of cell phones from the definition of listed property.  When provided for non-compensatory business reasons, cell phones will be treated as an excludible fringe benefit.  Notice 2011-72 provides the specifics.

A change to the standard mileage rate for business took place on July 1. The rate went from 51 cents per mile to 55.5 cents.

The Social Security Wage base for 2012 was announced.  It is $110,100.

Kari Gilje, Stakeholder Liaison

The Voluntary Classification Settlement Program (VCSP) is a voluntary program described in Announcement 2011-64 (PDF) that provides an opportunity for taxpayers to reclassify their workers as employees for employment tax purposes for future tax periods with partial relief from federal employment taxes. To participate in this new voluntary program, the taxpayer must meet certain eligibility requirements, apply to participate in VCSP by filing Form 8952, Application for Voluntary Classification Settlement Program, and enter into a closing agreement with the IRS. More information is available on IRS.gov.

Roundtable & Comments

John Rodgers asked about the future of the Anchorage office if additional IRS employees retire.  Would Appeals be slowed down further?

Cynthia Coulter asked about CP2000 for qualified educational distributions.

Lisa Rogers asked about the normal timeframe for receipt of a closing letter from Exam.  Sonia noted that is usually sent in about 6 weeks, and even though it is signed by her, it is shipped from Tennessee.

John Williamson, Collection spoke about the reduction in Collection staffing in Alaska over his career.  At one point, there were 117 Revenue Officers in Alaska; today the number is 8.  Alaska is the top priority if hiring authority is received.  Collection Due Process cases are now being sent to Chicago instead Seattle and Portland due to caseload considerations.

Sonia Oen, Exam spoke next. There are 9 SBSE Exam agents in Alaska and 7 L B & I agents—with one of each in Fairbanks and 1 in Soldotna.  Alaska is a priority for TCO hiring, however we are currently under a hiring freeze and using circuit-riding TCOs.  Hopefully, we will be able to hire in December and January.

Sonia also talked about the preparer visits for the upcoming filing season.  This year, 21,000 letters will be sent nationwide.  These letters are sent to individuals with high percentages of Schedules A, C, or E giving the practitioners reminders about common errors on the forms.   Last year had 2,000 personal visits nationwide, of these only 4 were in Alaska.  We will also do the EITC Due Diligence and ERO visits (usually 3 to 4 in Alaska).  The National Research Program for Form 1040 continues each year; Sonia just received 9 Alaska cases.  In April the 1120 NRP cycle will begin.  Alaska also has offshore voluntary disclosure audits; the Alaska cases being covered out of Seattle.

Sonia also spoke about the Fast Track Settlement Program which is used more in L B & I.  She reminded the practitioners that this is a good option for some taxpayers.

Diane Nesvick, Indian Tribal Governments

Diane noted that they had just finished an Advanced Payroll Topics class in September with 35 participants and will offer a Basic Payroll class in the spring. ITG also uses the previously mentioned Fast Track Settlement Program and found it effective with a quick turn around time—60 days.  Appeals from San Francisco participated.

Carol Saunders, SPEC

Carol spoke about the volunteer program and is looking for volunteers from the practitioner community.  If you or anyone you know is interested in the program, please contact Carol at 907-271-6200.

Next Scheduled Meeting

The next meeting was discussed in terms of meeting format and whether a virtual meeting would be workable, should Stakeholder Liaison not have the funds to travel to Alaska.  No meeting date was determined at this time, but will presumably be in early May, after the close of filing season.

Outstanding Internal and External Exposure Drafts –

FASB

Issue date -- 11/14/11 Proposed Accounting Standards Update (Revised), Revenue Recognition

(Topic 605): Revenue from Contracts with Customers

Comment deadline -- 3/13/12

Issue date -- 11/8/11 Proposed Accounting Standards Update, Comprehensive Income

(Topic 220): Deferral of the Effective Date for Amendments to the Presentation of Reclassifications

of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05

Comment deadline -- 11/23/11

Issue date -- 11/3/11 Proposed Accounting Standards Update, Consolidation (Topic 810): Principal versus

Agent Analysis

Comment deadline -- 1/17/12

Issue date -- 10/21/11 Proposed Accounting Standards Update, Real Estate Investment Property Entities

(Topic 973)

Comment deadline -- 1/5/12

Issue date -- 10/21/11 Proposed Accounting Standards Update, Financial Services—Investment Companies (Topic 946): Amendments to the Scope, Measurement and Disclosure Requirements

Comment deadline -- 1/5/12

ASB (AICPA)

Issue date -- 11/15/11 Proposed Statement on Auditing Standards, The Auditor’s Consideration of an Entity’s

Ability to Continue as a Going Concern

Comment deadline -- 1/31/12

OTHER (AICPA)

Issue date -- 8/15/11 Proposed Revisions to the Statement on Standards for Continuing Professional Education (CPE) Programs

Comment deadline -- 12/1/11

IFAC

Issue date -- 10/24/11 Proposed Changes to the Code of Ethics for Professional Accountants Related to Provisions Addressing a Breach of a Requirement of the Code

Comment deadline -- 1/22/12

Issue date -- 10/19/11 Recommended Practice Guideline, Reporting on the Long-Term Sustainability of a Public Sector Entity’s Finances

Comment deadline -- 2/29/12