September 2010 AKCPA Newsletter

September 1, 2010

John Rodgers

John Rodgers, President

President's Message

This past month I traveled to Las Vegas for the IRS Tax Forum.  There were 6,000 people attending, mostly enrolled agents however some CPA’s were present.  This trip wasn’t AICPA or AKCPA related, but for another committee called the IRS Taxpayer Advocacy Panel (IRS TAP).  This is a federal advisory panel which I was appointed to in 2009 consisting of 110 volunteers from around the country.  The mission of this panel is to improve the IRS by working systemic issues and making recommendations to IRS services, products, or procedures.   Alaska, because of population, has only one representative for a three year term.  My term ends December, 2011.

The Tax Forum hot topics were:  the new tax preparer registration requirement, S Corporation audit issues, and many were trying to get in front of a real live IRS person wanting assistance with problem resolution.  Correspondence audits were a major subject of complaint as the IRS is having difficulty with matching the paperwork that preparers are sending in showing justification for the deduction not reaching the person or persons working the case.  So the case goes unanswered, tax is assessed and the clock begins ticking for your chance for Appeals or tax court.  The IRS TAP committee is working very hard on this problem.

If you are curious about the IRS TAP Committee, or have recurring issues with the IRS you think need improving, please email me at johnr@cpaalaska.com.

The AKCPA board continues to watch the lobbying activity with regards to the new tax preparer registration and how it affects CPA firms. I hope many of you sent the letter of objection to the IRS Public Liaison Office recently broadcasted by the AICPA.

It’s Friday before Labor Day, the sun is out, but the corporate tax deadline is quickly approaching.  Are you going to tend to the stack of tax files on your desk or head off somewhere for a long weekend?  Then again you may be on the auditing side and your deadlines are certainly different but just as demanding.  Whatever you choose, I hope you enjoy the weekend.

Best,

John

Alaska State Board of Public Accountancy Report

Melody Schneider, Board Liaison

August 25th and 26th the Board of Public Accountancy met in Fairbanks. The Executive Administrator position established during the legislative session is progressing through the State system and the position is expected to be posted for applications by early October. With a start date of January 2011, the job search is expected to move quickly and the Board is planning to participate in the final interview process during their November meeting in Anchorage (November 10-12). Information about the position will posted as available on the Society website.

The closed investigations are now available on the Board’s website. The timing of updates to this information and the format of the report were discussed with Quinton Warren, Chief Investigator. The Board also met with Karen Wilke and approved a consent agreement and related fine associated with non-compliance of the Alaska ethics requirement for re-licensure.

The next meeting of the Board of Public Accountancy will be held November 10th 11th and 12th in Anchorage.

ALASKA SOCIETY OF CPAs

Luncheon Meeting and CPE

You are cordially invited to attend the luncheon meeting and CPE of the Alaska Society of CPAs.

PLEASE MAKE RESERVATIONS BY September 20th.

Seating is limited.

WHEN: Wednesday, September 22, 2010

TIME:  11:30 a.m. to 1:00 p.m. (please note time change)

LOCATION: Alaska Society of CPAs

341 West Tudor Road Suite 105

Anchorage, Alaska  99503

PRICE:      $20.00

SPEAKER:   Theresa Mitchell

Theresa joined the Department of Labor Employment Security Tax Anchorage Office in 1998, and began auditing in 2005.  In her position, Theresa works with employers to assist them in properly reporting wages and other employee information on the Quarterly Contribution Reports, the Employer Option Form, and filing reports online.

Theresa is currently a Field Auditor II, and was promoted to Supervisor of Anchorage Auditors 2 years ago.

TOPIC: Alaska Employment Security Tax - What Accountants Need to Know for Clients and Their Own Business Qualifies for 1 CPE credit

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Wednesday, September 22, 2010

Please make reservations by September 20, 2010.  Please call, email or fax your reservation to—ASCPA Phone: 562-4334     Email: akcpa@ak.net Fax: 562-4025.

Don’t Leave Home without a Contingency Plan

September is National Preparedness Month. Are you ready in case of emergency?

Do you have a plan for you or your family if a crisis occurs? Imagine not being able to contact your friends or family members. How would you know if everyone was safe? Does your family have a list of basic steps and information to follow?

 

Develop a contingency plan binder.

When tragedy strikes, there is often no time to go through drawers, filing cabinets and shoe boxes looking for pertinent information. Those who bear responsibility for your affairs need the relevant material immediately. First, find a folder or binder with dividers and label each section.

Some ideas for sections in your notebook are:

  • Action List
  • Key Contacts
  • Medical Notes
  • Financial Accounts
  • Insurance
  • Business Interests
  • Asset Inventory
  • Funeral Instructions
  • Estate Planning Documents
  • Personal Items
  • Miscellaneous

Gather your important documents and place them in the appropriate file. For sake of your loved ones, begin your contingency book right away. Once you are satisfied it is complete, show it to your family and tell them where they can find it.

Surviving the crisis — what’s next?

Here are some tips on regaining financial balance in the days following a disaster from Disaster Recovery: a Guide to Financial Issues, published as a public service by the American Institute of Certified Public Accountants, American Red Cross and National Endowment for Financial Education:

  • Try to avoid making major financial decisions.
  • If your home is damaged and uninhabitable, contact the Red Cross, your county office of emergency management or other local disaster relief organizations to guide you to shelters and temporary housing.
  • If you need cash, contact the Red Cross, and if you are in a major disaster area, call the Federal Emergency Management Agency (FEMA). They may be able to guide you to sources of emergency cash assistance. You may receive emergency cash assistance from federal, state or local government following the declaration of a disaster. The money generally is not taxable.
  • If you don’t think you’ll be able to pay all your bills, contact your creditors and ask for more time. If your residence is temporarily uninhabitable or totally destroyed, notify service companies – like the utility and phone company – so they can stop billing immediately. Try to pay as many of your bills on time as possible to protect your credit rating.
  • You may want to consider the assistance of a professional financial advisor. Ask friends or other professional advisors, such as your lawyer, for references.

Disaster Recovery: a Guide to Financial Issues offers additional advice on such topics as managing an injury or disability, financial decisions after a death, stabilizing your finances, lawsuits and other settlements, and managing a property loss.

If you are having trouble deciding which financial information — or how much of it — you should include in your disaster file, a CPA can help. He or she can assist you in deciding which financial documents are necessary for your contingency plan.

Outstanding Internal and External Exposure Drafts –

Now Listed on the Extranet

Here is the link to the documents listing outstanding internal and external accounting related exposure drafts.

Here is the link:   https://extranet.aicpa.org

Once inside the Extranet, click on State Society Resources and then General State Society Information to find the folder.

FASB

Issue date -- 6/29/10

Proposed ASU, Fair Value Measurements and Disclosures (Topic 820): Amendments for

Common Fair Value Measurements and Disclosure Requirements in U.S. GAAP and IFRSs

Comment deadline -- 9/7/10

Issue date -- 6/24/10

Proposed ASU, Revenue Recognition (Topic 605): Revenue from Contracts with Customers

Comment deadline -- 10/22/10

ARSC (AICPA)

Issue date -- 7/8/10

Proposed Statement on Standards for Accounting and Review Services, The Applicability of Statements on

Standards for Accounting and Review Services

Comment deadline -- 10/8/10

ASB (AICPA)

Issue date -- 7/19/10

Proposed Statement on Auditing Standards, Letters for Underwriters and Certain Other Requesting Parties

(Redrafted)

Comment deadline -- 9/30/10

Issue date -- 7/8/10

Proposed Statement on Auditing Standards, Revised Applicability of Statement on Auditing Standards

No. 116, Interim Financial Information

Comment deadline -- 10/8/10

Issue date -- 7/8/10

Proposed Statement on Auditing Standards, Interim Financial Information (Redrafted)

Comment deadline -- 10/8/10

IFAC

Issue date -- 7/15/10

ISA 315 (Revised), Identifying and Assessing the Risks of Material Misstatement through Understanding the

Entity and Its Environment and

ISA 610 (Revised), Using the Work of Internal Auditors

Comment deadline -- 11/15/10

Surgent McCoy September 2010 through January 2011

WEBINAR SCHEDULE

September:

1 - Fraud Issues in a Challenging Business Environment

10 – Tax Aspects of the New Health Care Reform Act of 2010

13 - How to Form a Nonprofit and Obtain IRS Approval

16 – Fair Value Measurement: Practical Concerns Faced by Non-Issuers

17 - Multistate Tax: New Issues in Apportionment of Income - The Sales Factor

23 - Individual Tax Planning Ideas That Save Client Money

24 – Tax Aspects of the New Health Care Reform Act of 2010

28 – Multistate Tax: The Hot New Issues in Determining Nexus

29 - A&A Update 2010, Part 1: Convergence -- How FASB and IASB Are Changing Financial Reporting in the Next 18 Months

30 – Schedule C Taxpayers: New IRS Audit Targets – What You Need to Know

October:

7 – Board Governance Issues: Consulting for the Nonprofit Organization

12 - Creating a Joint Venture - For Profit/Nonprofit

13 - A&A Update 2010, Part 2: Compilation and Review Update -- How SSARS 19 Will Affect Your Compilation and Review Engagements

19 – Avoiding Common Audit Sampling Mistakes

20 - A&A Update 2010, Part 3: Principles-Based Accounting and Private Company Reporting Under U.S. GAAP and IFRS -- Where Are We Headed?

21 - Related Party Transactions: Key Tax Issues, and What to Watch Out For

26 - Reducing Your Business Owner Clients’ Exposure to Social Security and Self-Employment Taxes

November:

3 - Individual Tax Update

4 - Business Tax Update

5 – Multistate Tax Update

12 - Tax Planning Ideas and Strategies for Businesses and Their Owners

16 - How to Establish Residency in Low Tax States: Income, Estate, Probate and Property

17 - Hot Audit Issues: Substantiation for Cars, Meals, Entertainment, and Gifts

22 - Individual Tax Update

23 - Business Tax Update

December:

2 – The Inherent Uncertainty of Financial Reporting: How Standards Attempt to Manage Risk

8 - A&A Update 2010, Part 4: Fair Value Accounting, Comprehensive Income, and Accounting for Debt and Equity -- Where Is FASB Taking Us?

14 - Individual Tax Update

15 - Business Tax Update

16 - Year-End Payroll Tax Adjustments and 1099 Issues for Businesses

January 2011:

11 - How to Contest IRS Penalty and Interest Determinations

13 - Nonprofit Tax Update

14 - Individual and Business Compliance and Tax Form Issues Tax Practitioners Need to Know

Alaska practitioner update

IRS Announces New Return Preparer Application System and User Fee

IRS Also Releases Proposed Regulations to Amend Circular 230 Rules

    IR-2010-91, Aug. 19, 2010
    WASHINGTON — The Internal Revenue Service today announced that a new online application system for compensated tax return preparers is expected to go live in mid-September. The IRS has proposed to require all individuals who receive compensation for preparing all or substantially all of a federal tax return or claim for refund after Dec. 31, 2010, to have a Preparer Tax Identification Number (PTIN).

Under the proposed regulations, compensated tax return preparers will need to obtain, or reapply for, a PTIN and pay a user fee using this new comprehensive system, which is part of a series of steps planned to increase oversight of federal tax return preparation. Tax return preparers will be creating PTIN accounts with the IRS when they use the new system.

“This is an important first step because it lays the groundwork in our efforts to ensure the quality and integrity of professional tax return preparation, which most taxpayers rely on in one form or another,” said IRS Commissioner Doug Shulman.

Compensated tax return preparers would pay a $64.25 user fee the first year for a PTIN based on two underlying costs. The IRS proposes to collect $50 per user to pay for outreach, technology, and compliance efforts associated with the new program. And the third-party vendor will receive $14.25 per user to operate the online system and provide customer support.

    Under the proposed regulations, compensated tax return preparers will be required to renew their PTINs annually and pay the associated user fee. The amount of the fee may change in future years as the actual program costs are periodically reevaluated.

    Under the proposed regulations, the requirement to sign up on the new system will apply to all compensated tax return preparers of federal tax returns regardless of whether they currently possess a PTIN.  Tax return preparers who already have a PTIN generally will be reassigned the same number.  Any individual who plans to prepare all or substantially all of a tax return for compensation must obtain a PTIN even if the individual is not subject to the testing and continuing education requirements that will be required under Circular 230, according to the IRS’ proposed regulation.  Access to the online application system will be through the Tax Professionals page of IRS.gov.

The IRS previously announced its portion of the total annual fee in proposed regulations (REG-139343-08) and interested parties have until Aug. 23, 2010, to submit comments on the regulations.  A hearing on the proposed regulations is scheduled for Aug. 24, 2010.  The launch of the new online application system and proposed user fees are dependent on the publication of final regulations on user fees and final regulations of the requirement to obtain a PTIN.

    Proposed Regulations Released Related to Circular 230
    The IRS also today released proposed regulations that would amend Treasury Circular 230, the rules governing practice before the IRS. The proposed regulations generally would extend current regulations that apply to attorneys, certified public accountants and other specified tax professionals to all tax return preparers, including currently unenrolled tax return preparers.

    The proposed regulations (REG-138637-07) would clarify the definition of practice, establish a new registered tax return preparer designation and the eligibility requirements for becoming a registered tax return preparer, reproposed standards with respect to the preparation of tax returns, revise rules regarding continuing education providers, and amend multiple other sections of Circular 230.

    Tax professionals and other interested parties have until Oct. 7, 2010, to submit comments regarding the proposed regulations.

    Existing PTIN Application Process to Suspend Operations
    In preparation for the launch of the comprehensive new PTIN system, the IRS will cease issuing PTINs effective Aug. 22 using Form W-7P, Application for Preparer Tax Identification Number, and through e-services – Online Tools for Tax Professionals. If you apply for a PTIN before Aug. 22, 2010, you will have to reapply once the new online PTIN application system begins.

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