The first week of the tax season has seen some interesting actions taken by the IRS.  They have actively taken aim at both high fraud tax offices and check cashing facilities that seem to consistently be in the middle of of these problematic returns.  In prior years, the IRS has taken more of a reactionary stance to fighting fraud, but this year they have proactively targeted tax offices, preparers, and financial service centers that accommodate these fraudulent filings.  This proactive effort by the IRS has resulted in a delay in many early filed returns.  The IRS has stated that now that the first few weeks fo the season is behind them, they will be processing returns according to the published refund cycle going forward.  A great article covering this in more detail can be accessed here: IRS Targets Fraudulent Tax Filers

The IRS released insight that tax returns filed between the 17th and 24th are experiencing delays in funding, but returns filed after that 24th should be back inline with the standard funding cycle.  IRS fraud detection systems are at the root of the delays. Over $800,000 in fraudulent tax filings were said to have been targeted in the preseason authenticity filter, and one such Detroit tax office was the target of advanced investigation and criminal charges.  Click here for the full story.  http://www.freep.com/article/20120128/COL07/201280394/Susan-Tompor-Tax-return-schemes-ID-thieves-delay-early-filers-IRS-refunds?odyssey=mod|newswell|text|FRONTPAGE|s

The IRS’ PTIN website for renewing and obtaining Preparer Tax Identification Numbers has been a challenge this year, to say the least.  Ever since mid December, the PTIN site has been briken and under maintenance more than it has been up.  New PTIN applicants have not been able to complete the process and pay for their PTIN ever since the site came back up from it’s week and a half maintenance period from late December through January 9th.  From our correspondence with the IRS the payment site is “supposed” to be fixed and functioning properly Monday, 1/16/2012.  We assume the traffic to the application and payment sight will be overwhelming due to the start of the season coming on Tuesday 1/17/2012, and the fact that e-filed returns will be rejected by the IRS if they do not contain a PTIN.  Our advice is to try the website as early as possible on Monday, in hope of beating the rush.  The PTIN website is accessible at: http://www.irs.gov/taxpros/article/0,,id=210909,00.html?portlet=101

The IRS has delayed the start of the e-file season to 9am Eastern 1/17/2011

Due to previously scheduled maintenance on IRS systems, the PTIN system will be unavailable for NEW applications from 5:00 PM ET on Friday, December 23 until approximately 9:00 AM ET on Monday, January 9. Preparers are still able to renew existing PTINs during this window. We sincerely apologize for the inconvenience.”

The IRS has released the final revisions to the 2011 tax year publication 17.  This publication is probably the most comprehensive set of information covering individual tax return filing, and is also one of the forms that will be available to you while taking the upcoming RTRP examination.  You can access a downloadable form of Publication 17 at: http://www.irs.gov/pub/irs-pdf/p17.pdf

The IRS has their preparers test in place and is now scheduling for preparers to take the examination.  To avoid having to take the examination prior to Dec 31st, 2013 preparers must act soon.  2011 PTINs expire on December 31st, 2011, and are now scheduled to expire on the close of each calender year going forward.   The IRS has stated that they will be issuing “Provisional” PTINs throughout April 18th 2012, and if you get one of these “Provisional PTINs”, you will not have to take the test prior to 12/31/2013.  There is conflicting reports that the Provisional PTINs being issued will be terminated this December 31st 2011.  We suggest to be safe that you Get Your PTIN Now!  We will keep you posted as we hear more information from the IRS Return Preparers Office, but again our advice is to GET YOUR PTIN NOW!  Do not wait until the last minute; the IRS web servers are know to have capacity issued and are commonly over burdened with traffic close to deadlines.

Please visit the IRS’ website by clicking here: IRS PTIN to get or renew your PTIN.  Federal Direct Partners may call our tech support center if you need assistance with getting your PTIN application or renewal processed.

Federal Direct will be closed this Thursday – Saturday, 11/24 – 11/26 in observance of the Thanksgiving Holiday.  We will reopen on Monday 11/28 at 9am Eastern.

Along with the slew of changes and new regulations that have come down from the IRS and the Registered Return Preparers Office over the past 2 years was a provision mandating that all registered tax return preparers be fingerprinted.  IRS Commissioner, Doug Shulman, stated yesterday that the fingerprinting requirement associated with registering all tax return preparers has been shelved for the time being while the IRS further evaluates the feasibility of this program.

IRS released new information today highlighting increases in EITC preparer fraud penalties.  The standard monetary penalty has increased from $100 to $500 per compliance issue on returns filed after 12/31/2011.  For more information on avoiding preparer compliance penalties visit the IRS’ EITC Website for more information.  This recent update was just released today, 11/7/2011, and is still being updated on their site, so you might have to give it a day or two for all info to get updated.