Federal Direct Tax Blog

Crook Arrested for Using Dead Preparer’s Identity to File Tax Returns

jrogers — Fri, 18 May 2012 16:16:19 +0000

A man, Todd P. Halpern, in New Jersey was charged with one count of tax fraud and one count of identify theft. He was arrested at his home by agents of the FBI and IRS, according to U.S. Attorney Paul J. Fishman’s office.

Halpern prepared and filed 657 fraudulent federal income tax returns with the IRS in 2009 and 2010 using the Electronic Filing Identification Number of a deceased tax return preparer. Halpern prepared and filed the tax returns using stolen identities of actual taxpayers, without their knowledge. The tax returns contained fraudulent income and deduction amounts, which allowed Halpern to receive tax refunds deposited directly into his personal bank account. What a crook!

IRS agents determined that $373,938 in refunds from fraudulent tax returns were wired into Halpern’s personal bank account between July 2009 and August 2009. Halpern used these funds to make purchases at Prada, Chanel, Saks Fifth Avenue, and Bloomingdales, to acquire season tickets to the New York Giants, to purchase thousands of dollars in jewelry, gold coins, and silver certificates, to make car payments on multiple luxury vehicles, including a 2007 Cadillac Escalade and a 2008 Lexus GX-470, and to buy car parts for his classic 1957 Chevy Bel Air.

The charges of tax fraud and identity theft are each punishable by a maximum potential penalty of five years in prison and a fine of $250,000. Let’s hope he gets the max on each count.

Federal Direct Is Now A Certified CE Provider!

jrogers — Wed, 09 May 2012 13:39:40 +0000

It’s true. Along with providing the best training and support (among other things) in the industry, we are now certified to provide continuing education classes, including prep courses for the upcoming RTRP test! With this new resource, current and prospective partners can rest assured that they will pass the exams to become a Registered Tax Return Preparer, and who knows, perhaps EA prep will follow. Currently, Federal Direct’s partnership with Gleim does provide a 10% discount on all EA prep, etc.

As we progress through the summer you will see new courses appear, and you will be able to begin preparing for the RTRP test, which is already available, and, as always, we are here to answer any of your questions!

Time To Start Thinking About Your RTRP Test!!!

jrogers — Thu, 26 Apr 2012 18:53:46 +0000

Ladies and gentlemen, it is time to begin thinking about your plans regarding the impending Registered Tax Return Preparer exam. As much as many of us unintentionally procrastinate, it is advisable to go ahead and begin preparing to take the test. Do not wait until the last minute.

Here are a few facts about the current test that might help you as you plan:

1. The test is based on Tax Year 2011 tax law, so everything is current.

2. The testing fee is $116 dollars at the time of testing.

3. You must make an appointment to take the test using your PTIN account at www.irs.gov/ptin.

4. The test includes 120 multiple choice/ true or false questions.

5. The test will take approximately 2.5 depending on preparedness.

6. Passing score is 350/500. This is 70% or a C if you like grades.

7. You will get your score before you leave the testing site.

8. The test is available in English only.

***Prep Material is available now, and more material will be provided on your partner portal in the coming weeks.

Reminder: Webinar Tonight Covering Amendments

jrogers — Wed, 18 Apr 2012 15:56:32 +0000

Don’t forget about the webinar covering amendments this evening! It’s time to fix any errors that were made, claim rightful dependents who were previously claimed, etc.

*If you cannot make the webinar, it will be posted on your partner portal so you will have access to it once it is posted!

Title:	Amending Tax Returns – Form 1040X
Date:	Wednesday, April 18, 2012
Time:	5:00 PM – 6:30 PM EDT

Warning: Failure to File or Pay Penalties

jrogers — Tue, 17 Apr 2012 22:12:38 +0000

Here are eight important points about the two different penalties you may face if you file or pay late.

If you do not file by the deadline, you might face a failure-to-file penalty. If you do not pay by the due date, you could face a failure-to-pay penalty.
The failure-to-file penalty is generally more than the failure-to-pay penalty. So if you cannot pay all the taxes you owe, you should still file your tax return on time and pay as much as you can, then explore other payment options. The IRS will work with you.
The penalty for filing late is usually 5 percent of the unpaid taxes for each month or part of a month that a return is late. This penalty will not exceed 25 percent of your unpaid taxes.
If you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100 percent of the unpaid tax.
If you do not pay your taxes by the due date, you will generally have to pay a failure-to-pay penalty of ½ of 1 percent of your unpaid taxes for each month or part of a month after the due date that the taxes are not paid. This penalty can be as much as 25 percent of your unpaid taxes.
If you request an extension of time to file by the tax deadline and you paid at least 90 percent of your actual tax liability by the original due date, you will not face a failure-to-pay penalty if the remaining balance is paid by the extended due date.
If both the failure-to-file penalty and the failure-to-pay penalty apply in any month, the 5 percent failure-to-file penalty is reduced by the failure-to-pay penalty. However, if you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100 percent of the unpaid tax.
You will not have to pay a failure-to-file or failure-to-pay penalty if you can show that you failed to file or pay on time because of reasonable cause and not because of willful neglect.

(http://www.irs.gov/newsroom/article/0,,id=256616,00.html)

IRS Warning: Congressional Inaction Risks 2013 Tax ‘Disaster’

jrogers — Thu, 12 Apr 2012 20:36:33 +0000

During the most recent Bush administration, individual income tax cuts passed which are now expected to expire at the end of this year. This year is an election year which means that politicians are waiting until after the election to decide whether or not the tax cuts will be extended.

According to Accounting Today, most democrats, along with President Obama, want to extend the tax cuts to all income levels except the top two brackets for high income earners. Republicans, however, want to extend the tax cuts to all income levels.

The potential problem at hand is whether or not there will be sufficient time to make the decision regarding the tax cuts without causing mass confusion to taxpayers. Not just confusion, but delays worse than we’ve seen in the past which will affect every single taxpayer, not just those who file a certain type of form (for example, in 2010 taxpayers who itemized had to wait until mid February to file).

Not only would this create delays for the possibility of filing, this could create a backlog of returns that could postpone acceptances and refunds as well.

Webinar This Thursday Covering Extensions!

jrogers — Tue, 03 Apr 2012 14:56:29 +0000

The deadline to file your taxes is April 15th. Many people find themselves not quite ready to file, and this is when knowing how to file an extension becomes very useful, giving your client another reason to keep you as his personal tax professional. There will be a webinar this Thursday, April 5th at 6pm est, discussing Extension filings. It will be a short webinar, probably 30 min or less just covering the basics of what extensions provide, how to complete them, deadlines, etc.

Webinar Covering Dealing With Rejections Now On Your Partner Portal

jrogers — Thu, 29 Mar 2012 19:29:05 +0000

Rejections are an inevitability in the tax preparation world. Previously claimed dependents, wrong EINs, etc. Now, take a second to think about how nice it would be with out them. Ok, stop. That will never happen. So, instead of wishing for the impossible, simply go to your partner portal, log in, and go to your WEBINARS tab. There it is! The webinar to help you fix, resubmit, and get accepted those returns that are sitting. Sitting returns translate to zero dollars in your pocket until you get them accepted, which could potentially be a great deal of money.

Another One Bites The Dust. TaxMasters Files For Chapter 11 Bankruptcy.

jrogers — Mon, 26 Mar 2012 18:11:32 +0000

Yet another company claiming to assist taxpayers with tax debt resolution files for Chapter 11 bankruptcy. From false claims of help to deceptive businesses practices, another national tax resolution company shows why it may best to go with a local tax professional.

Many national tax resolution companies advertise negotiation help in resolving clients’ debt problems. Many do the work they advertise, while many, such as TaxMasters, are catching heat due to claims that they are taking the money and refusing to do the work on behalf of a client. TaxMasters has recently filed for chapter 11 bankruptcy which allows for reorganization of the business, assets, and debt. In most cases the debtor is still in control of business practices.

One big problem with these national debt resolution firms is that they always say “YES.” Yes, we can lower your debt. Yes, we will fix your tax problems. The correct response to these questions is “Maybe.” There is absolutely no guarantee that anyone can reduce or eliminate any tax debt or liabilities that a person or company has. For this reason, the word “scam” is throw around. Is it always a scam? No, but many times it is. If it sounds too good to be true, it usually is.

There are other resources available to people or business with tax debt issues. Local Enrolled Agents are a great resource. Generally speaking, they can charge lower rates than a national firm and have just as much, if not more, expertise than national companies that bank on flashy commercials.

Saint Patrick’s Day Contest Winners Announced

jrogers — Mon, 19 Mar 2012 17:43:39 +0000

The results are in! The winners of the second annual St. Patrick’s Day Tax Filing Contest are as follows:

Bank Funded Returns:

1st. Place: Farrell’s Tax & Services, LLC ($250 and a FD Laptop bag)

2nd place: Friendly Tax Service (FD Laptop bag)

Honorable Mention: RGS Tax Services, St. Louis Tax Service, Maydelin Martell Agency

E-filed Returns:

1st. Place: Eastern Shore Tax Services ($100 and a FD Laptop bag)

2nd place: Girotel # 4 (FD Laptop bag)

Honorable Mention: Rodriguez Tax Service, Alamo Business Concepts, Remesas Cibaio, Inc.

Congratulations to the winners! For those who didn’t win, there’s always next year!

*All prizes will be shipped today.

Oh, No, he didn’t, yes, yes he did…(Undercover IRS Visits)

jrogers — Mon, 19 Mar 2012 14:40:17 +0000

Expect more undercover IRS secret shoppers and undercover office visits. In light of a recent incident involving a volunteer preparer, these visits will be increasing in numbers. These visits are designed to unsure compliance with the IRS regulations, and almost everyone knows about them. The recent incident regards a volunteer tax preparer who told a taxpayer that he did not need to report cash income that he received. The undercover quality reviewer, who also happened to be a Treasury Inspector, made up some story about money being tight, the economy is bad, the area is out of money, etc. The preparer disregarded his better judgement when he gave this advice, which caused the location to be closed, along with another location where the same preparers volunteered.

Fraudulent Tax Return Could Lead To Deportation

jrogers — Sat, 17 Mar 2012 21:29:52 +0000

Two married resident aliens were convicted of willfully making, subscribing, and assisting in the preparation of a false tax return which caused the government a tax loss of over $10,000. An immigration judge ordered the couple’s deportation.

On February 21, 2012, the Supreme Court decided Kawashima v. Holder, holding that the offenses that make an alien removable include offenses that involve fraud or deceit, regardless of whether the elements of the offense require a finding of fraudulent or deceitful conduct.

The Supreme Court upheld the ruling.

Update: Rejected Corporate Returns

jrogers — Fri, 16 Mar 2012 14:37:49 +0000

Corporate returns that were rejected yesterday have 5 more days to refile and get accepted before any penalties will be levied. For both the corporation and shareholders the penalties for filing late are steep. Shareholders run the risk of receiving a $100 fine for being untimely. If the untimeliness boiled down to an intentional disregard, that fine could jump to $250 or 10% of the aggregate amount of items to be reported (the greater of the two). For corporations,the penalties are $195, per number of months late, then multiplied by the number principles in the corporation. That’s only if the corporation owes zero tax. If the corporation owes tax, add 5% of the tax to the total per month late, up to 25%.

(http://www.irs.gov/instructions/i1120s/ch01.html#d0e586)

IRS Newswire: First Registered Tax Return Preparer Certificates

jrogers — Thu, 15 Mar 2012 21:29:17 +0000

The IRS has announced that it has begun to provide test results to tax return preparers who have taken the new return preparer competency test.

The competency test to get your new designation, Registered Tax Return Preparer, is a 120 question test which has a perfect score of 500. Preparers must score a 350 or higher to receive a passing grade. Basically, they must get 70% or higher to pass.

Those who have already taken the test have been sent a letter from the IRS informing them whether they passed or failed. Preparers who pass the test must still pass a tax compliance check which is generally given a few weeks after the test score is issued. Those passing both the test and the compliance check will then be issued their Registered Tax Return Preparer certificate. Only people receiving the certificate can call themselves a Registered Tax Return Preparer.

The test can be taken at over 260 locations, and the test fee is $116.

S Corporation & C Corporation Tax Return Deadline Quickly Approaching

jrogers — Tue, 13 Mar 2012 21:54:46 +0000

April 15th comes to mind when you think about when taxes are due. This is a friendly reminder that if your business is an S-Corporation or a C-Corporation, your business tax return is due before March 15th.

S Corporations
Your S-Corp (LLC’s taxed as an S-Corp count too) is required to file IRS Form 1120S (Corporation Tax Return) before March 15th. After your Form 1120S is complete, you must distribute K-1′s to your shareholders by March 15th as well.

C Corporations
C-Corps (LLC’s taxed as a C-corp also fall into this category) are required to file IRS Form 1120 (Corporation Tax Return) along with any income tax due before March 15th.

Extension
If you need an extension to file your S-Corp and/or C-Corp tax return, you must file IRS Form 7004 by March 15th, requesting the automatic six month extension. Keep in mind the extension is not an extension for paying your taxes. Estimated tax payments are due before March 15th and can be submitted with your Automatic Six Month Extension Form 7004.

Written by Michelle Edwards, CPA
http://cpainerie.com/taxes/s-corporation-c-corporation-tax-return-deadline-quickly-approaching/

IRS Newswire: Tax Scam Abusing College Tax Credit

jrogers — Fri, 09 Mar 2012 10:12:40 +0000

The IRS has released a warning to the public in regards to tax schemes that promise higher refunds to those with low income. The IRS would like to specifically warn the elderly, church members, and working families. Under this scheme, the promoter claims to be able to obtain a tax refund or “non existent stimulus payment” based on the American Opportunity Credit, even if the person was not enrolled in an accredited post-secondary institution.

The IRS has started cracking down on several areas of noncompliance, and this is one of those areas. The Internal Revenue Service has identified and stopped an upsurge of the fraudulent claims. These claims are being actively investigated. There is potential for criminal prosecution.

The IRS would like to remind the public that all taxpayers are legally responsible for the accuracy of their tax returns, even if they used a preparer, and they must repay any refunds received in error.

Essentially, there is a certain amount of care everyone should take regarding his or her tax return. Use a tax professional that you know and trust, and take the time to ask questions if you don’t understand something on your return.

For more information please see IRS Newswire Issue Number: IR-2012-29

Don’t Burn Your House Down Just Yet….

jrogers — Thu, 08 Mar 2012 18:12:06 +0000

Donating the final use of your home may not be tax deductible as a charitable donation. It is common, in cases were people are going to demolish an existing building and rebuild, that the existing building may be donated as gift to the local fire department for the purpose of teaching,training, etc. an exercise in putting out fires. Having said that, simply donating your old house to be burned down, doesn’t cut it. Essentially the main question is who receives the larger benefit, the taxpayer or the public? Therefore, in order to receive the tax deduction, the taxpayer must show that the value of the donation exceeded the value of the demolition services provided.

More info: (Rolfs, 7th Cir)

No More Recapture Reminders for 2008 First Time Homebuyers

jrogers — Thu, 08 Mar 2012 17:02:29 +0000

The IRS will no longer send out reminders to First Time Home-buyers who purchased a home in 2008. The credit in 2008 was essentially an interest free loan from Uncle Sam. Most people pay back the loan in 15 years (15 installments of $500 through his/her tax return). Undoubtedly and obviously, the IRS will still be tracking the recapture amount on Form 5405.

Federal Direct’s Race to St. Patty’s Day Tax Filing Contest

jrogers — Tue, 06 Mar 2012 21:56:53 +0000

As we are wrapping up the peak part of tax season, we are rolling out our annual Race to St. Patrick’s Day Tax Filing Contest. This contest is here to reward you for filing during the traditionally slower part of tax season. Since March 1st up to the 17th, the leading offices in bank funded returns and e-filed returns will each receive a cash prize plus some Federal Direct (FD) merchandise!!!

The leading office is Bank-Funded returns will receive a cash prize of $250 and a FD laptop bag. The runner up will receive a laptop bag.

The leading office in E-File only returns will receive $100 and a laptop bag. The runner up will receive a laptop bag.

*This contest is open to all FD partners in good standing.Winners will be notified via email on March 21st.

IRS Alert: Audit Compliance Initiative Projects for March 2012

jrogers — Mon, 05 Mar 2012 17:01:58 +0000

The IRS regularly conducts national, regional and local compliance initiative projects (CIPs) to study perceived areas of noncompliance. The IRS uses the data from these projects to develop more comprehensive projects and allocate its audit resources in the areas showing significant noncompliance.

Projects to be conducted through March regard Schedule C filers, taxpayers taking duplicate mortgage interest deductions of $10,000 or more on Schedule C and A, and filers claiming Employee Business Expense of more than $50,000 in deductions.

For Schedule C filers, the targeted group will have travel, meal and entertainment expenses. More specifically, they will have gross receipts of over $10,000, expenses greater than Schedule C income, and/or meal and entertainment expenses less than $1,000. The IRS has determined that this taxpayer segment is deducting personal travel, meal and expenses to reduce taxable income and conceal meals and entertainment under travel expenses to avoid the 50% limitation.

Taxpayers taking duplicate mortgage interest deductions of $10,000 or more on Schedule A or C are being targeted in another CIP. This duplication results in under-reporting income tax and under-reporting self-employment tax from Schedule C. Most of these return identified were self prepared.

The IRS will be conducting office audits for another CIP. Taxpayers targeted in this Compliance Initiative Project are Form 1040 filers with employee business expense deductions of more than $50,000.

The projects scheduled to be completed by March 31st.

Full details on Part 1 of IRS Compliance Projects

Tax Season Contest Starting – St. Patty’s Day

jrogers — Thu, 01 Mar 2012 20:04:35 +0000

Federal Direct Partners: Be sure to check your email for details on the St. Patrick’s Day tax filing contest. Cash and Merchandise prizes awarded following the holiday!

1 Billion in Outstanding 2008 Tax Refunds!

jrogers — Fri, 24 Feb 2012 14:57:46 +0000

Be sure to inform your clients that they have until April 17th this year to file for 2008 tax refunds credits. The IRS estimates that there is over 1 billion dollars in unclaimed refunds still waiting for returns to be filed. Many people feel that they do not need to file tax returns due to having minimal income, however they are unaware that they would be qualified for tax credits for being in this low income group. Also, many people feel that they might be penalized for filing after the filing season has passed, but these procrastinators can rest easy; there is NO penalty for filing a return claiming a refund after the due date for that tax year.

File with Paystubs…Substitute W2s Now Accepted!

jrogers — Tue, 14 Feb 2012 20:41:16 +0000

Many offices have clients who have been struggling to get official W2s from their employers. Now that we have hit February 14th the IRS will accept these returns with a substitute W2 form attached (form 4852). This will allow you to e-file the tax return as long as you have the employers EIN, which can typically be found on your clients last pay stub. If you have any questions regarding completing and filing form 4852 please contact the support center at (866) 357-2052.

Fraudulent Tax Offices and Check Cashing Stores Targeted by IRS

jrogers — Wed, 01 Feb 2012 17:24:10 +0000

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

Detroit Tax Fraud Ring Blamed for First Week Slow Fund

jrogers — Mon, 30 Jan 2012 06:03:23 +0000

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

PTIN payment site scheduled to be operational on Monday 1/16/2012

jrogers — Sun, 15 Jan 2012 16:30:16 +0000

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

E-File Start Date Delayed to 9am Eastern 1/17/2012

jrogers — Thu, 05 Jan 2012 18:08:38 +0000

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

PTIN Application Website Down For Maintenance

jrogers — Wed, 21 Dec 2011 22:50:16 +0000

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.”

2011 IRS Publication 17 now available

jrogers — Thu, 08 Dec 2011 22:48:53 +0000

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

Tax Preparers… Get your PTIN NOW!

jrogers — Tue, 29 Nov 2011 14:35:28 +0000

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.

Thanksgiving Holiday Hours

jrogers — Mon, 21 Nov 2011 14:13:29 +0000

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.

Tax Preparer Fingerprinting Program Put on Hold

jrogers — Wed, 09 Nov 2011 15:39:19 +0000

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.

Earned Income Tax Credit – Preparer Fraud Penalty Increases

jrogers — Mon, 07 Nov 2011 16:47:12 +0000

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.

Faster Tax Refunds This Tax Season!

jrogers — Thu, 03 Nov 2011 15:07:22 +0000

The IRS will be filing all returns through the new Modernized E-File (MEF) system this coming tax season. This translates to your clients getting their refunds in as little as 5 days. This represents a reduction in refund delays by 2 days. The IRS reserves the right to delay returns with questionable Earned Income Tax Credit claims for additional review.

IRS Changes Start of E-Filing Season

jrogers — Thu, 03 Nov 2011 14:50:15 +0000

For the coming 2011 tax season, the IRS has changed the date they will start accepting e-filed returns to January 17th, 2012. This is a Tuesday and return filed should be acknowledged by the IRS within 24 hours, as opposed to previous seasons where the first days’ acknowledgements would be delayed for 48 – 72 hours.

Upcoming Webinar – Navigating your Partner Portal & Marketing Center

jrogers — Wed, 02 Nov 2011 13:48:21 +0000

The next training webinar for Federal Direct partners is scheduled for Tuesday November 8th at 6:30pm Eastern. This webinar will cover accessing your online resources for tax preparation tools, software & tax training, and will go through using the custom marketing creator for creating and implementing your office’s own unique marketing programs. Registration invitations have been sent out by all account managers. This webinar is scheduled for approximately 1 hour, and will have an open question and answer session at the end. If you have not received your invitation please be sure to contact your account rep at (866) 357-2052.

Schedule C Clients and How Then Can Beat An Audit

jrogers — Mon, 24 Oct 2011 13:00:08 +0000

IRS statistics show that approximately 4% of all returns including schedule C income eventually get audited. Half of these returns are audited due to a random selection and the other half are chosen based upon a scoring assessment based upon IRS standardization charts for different acceptable business expenses. The IRS released that the most common two items that are reviewed in schedule C audits are line 9 (vehicle expenses) and line 24 (travel, meals, and entertainment). The logic behind these fields being chosen over others is the record keeping requirements for these expenses. Without proper documentation, these deductions are easily disallowed.

To Prove Vehicle Expenses:

Must Have a Mileage Log
If using actual expenses, you must have receipts for any expense over $75

To Prove Meals and Entertainment Expenses:

receipts for expenses at or greater than $75
notes for each day you were traveling for business purposes and what those purposes were
for entertainment expenses you must indicate: Who you were entertaining, for what reason, type and place of the entertainment, and of course keep the receipts for anything over $75.

Be aware, the IRS requires timely reporting of these requirements. All of these record requirements are required to be documented within 1 week of actually happening.

2011 PTIN Applications & Renewals Now Available

jrogers — Fri, 21 Oct 2011 13:06:33 +0000

PTIN renewal for the coming tax season is now available. The 2011 system was made operational October 20^th. All paid tax return preparers must obtain or renew Preparer Tax Identification Number (PTIN). If you have a PTIN that was issued in 2010, the renewal fee is $63.00. If you are applying for the first time, the initial application fee is $64.25.

New this year: PTIN applicants will see questions on the online PTIN system asking if they are a “supervised preparer” or “non-1040 preparer”. Supervised preparers will need to enter the PTIN of their supervisor. This must be a CPA, Attorney or Enrolled Agent, and they must be signing all of the returns the “supervised preparer” has a hand in completing.

Visit the IRS PTIN website or contact your account representative for assistance in obtaining a PTIN for the coming tax season or renewing an existing PTIN.

NY Tax Preparer Registration Requirements

jrogers — Thu, 20 Oct 2011 16:09:18 +0000

As well as registering with the IRS on a federal level NY state tax return preparers must also register with the New York Department of Finance and Taxation. You must register if you are a tax preparer who prepares at least 1 New York state tax return, or if you will be offering bank product return options to your clients this tax season. Registration costs $100 and must be done annually. Enrolled Agents, CPAs, and Attorneys are exempt from this state registration requirement. For more info and to register as a NY State preparer visit their website at: http://www.tax.ny.gov/tp/reg/tpreg.htm

Extended Deadline for E-Filing 2010 Tax Returns… Oct. 31st, 2011

jrogers — Fri, 14 Oct 2011 16:06:36 +0000

Oct 15^th is the date published on the IRS’ official e-file chart, but they have changed it to 8am Eastern, Monday October 31st. There is no additional time past this date to electronically resubmit returns that have been rejected, they will have to be paper filed.

What does this mean for my office? - Any 2010 returns that you want to have e-filed you need to get into us prior to 8am Eastern on October 31st. We suggest you get these to us prior to this absolute deadline, but October 31st at 8am Eastern is the comprehensive cut off time!

Now that the IRS is converting over to the “Modernized E-Filing” (MEF) system they will be accepting returns electronically year-round, so this should be the last e-file deadline that you have to be concerned about. We will keep you posted as more information on the MEF system becomes available.

IRS incorrectly bills 80,000 taxpayers repayment of First Time Homebuyer Credits

jrogers — Thu, 13 Oct 2011 17:20:12 +0000

The IRS incorrectly distributed approximately 80,000 notices to taxpayers stating that they needed to begin repayment of their first time homebuyer’s credit. Many of these mistakenly sent out statements were sent to taxpayers who purchased their homes in 2009, who do not need to repay the credit at all. Also the IRS attempted to identify taxpayers for collection who sold their residences prior to the required 3 year holding period, and were provided inaccurate information from a private third party data provider which caused another large group of taxpayers incorrectly receiving repayment statements. If any of your clients received these letters be aware; the only taxpayers who are responsible for repayment of the first time homebuyer’s credit are those claiming the credit on home purchased in 2008 and those who sold or disposed of their home prior to the expiration of the 3 year holding period.

Federal Direct Moves to our New Offices

jrogers — Tue, 11 Oct 2011 21:07:25 +0000

We are very happy to announce that we have officially made the transition to our new office suites located at 5410 Emerson Way Indianapolis, IN 46226. You can still reach us via phone at the same numbers as before, but any mail correspondence should be sent to the above address.

New Earned Income Credit Filing Requirements for the 2011 Tax Year

jrogers — Thu, 06 Oct 2011 03:17:04 +0000

The IRS announced that they will be continuing their “Knock and Talk” EIC preparer education program, along with sending compliance letters, initiating preparer due dilligence audits, and requiring additional information be attached to all returns claiming EITC. Prepareres will not notice much differece in the preparation process as now the tax preparation software will submit the EITC checklist (form 8867) along with the rest of the e-filed tax forms.

This October the IRS will be sending letters and paying visits to tax offices that have been identified as high risk. The IRS uses a scoring system to classify EITC return preparers and to determine their actions against these preparers. High risk preparers can expect one of the following 3 IRS actions on their tax offices:

Educational/Soft Compliance Letter
Starting this month, the IRS will begin mailing 3,000 educational/compliance letters to new, low, and medium-risk preparers. The intent of this letter is to:
- Educate the preparer on what the requirements are in the areas where the IRS has seen the most errors on EITC returns.
- Educate the preparer on what their due diligence requirements are and the consequences of not complying with these requirements.
- Notify the preparer that the IRS will continue to review all EITC returns that they prepare.

Knock and Talk Visit
Beginning in December, the IRS will conduct approximately 100 educational visits to preparers who have been identified as filing highly questionable EITC claims.

The objective of these visits is to ensure that the preparer understands the type of errors that the IRS has identified on their returns and to improve the accuracy of their future EITC claims.

No penalties or interest are assessed because of these visits; however, the IRS will be closely monitoring returns filed by these preparers during the upcoming filing season. If the IRS does not see an improvement, a due diligence audit will be performed.

Due Diligence Audits
The IRS will again be conducting approximately 1,000 due diligence audits over the next year. The first of these audits will begin this month (October 2011).

The IRS conducts a due diligence audit on a preparer whom they consider to be filing a large number of highly questionable 2010 EITC claims.

Tomorrow’s Webinar: Amending Returns and working with form 1040X

jrogers — Wed, 28 Sep 2011 04:31:20 +0000

Tomorrow evening’s webinar will be covering how to properly complete an amended return for your clients, to fix other preparers mistakes, where to mail the completed forms, how long you have to request refunds through the amendment process, and what documentation needs to be attached to form 1040X. This webinar is primarily focusing on Federal Direct Gold and Platinum Partners, but is open to all partners. If you would like to attend and have not yet registered click here: Webinar Registration

The webinar will be available in your Partner Portal for future reference or if you are unable to attend the webinar live.

Webinar Scheduled for:

Wednesday, 9/29/11

6pm Eastern

Final PTIN registration details released

jrogers — Fri, 23 Sep 2011 16:14:44 +0000

Provisional PTINs:

available through 4/18/2012. This means that you WILL be able to get a PTIN prior to completing the preparers examination up to this date. If you already have a PTIN, you will need to renew that PTIN for a fee of $64.25 after October 15th, 2011 for the coming tax season. You will be able to preparer 2011 tax returns starting this January with a provisional PTIN.

Official PTIN and Registered Tax Return Preparer:

This status is relating to PTINs issued after 4/18/2012, or renewal of provisional PTIN after 10/15/2012 for 2013 tax season. PTIN application or renewal fee is $64.25. Fingerprinting and a background check will be required; the fee is not determined yet for this but is estimated to be between $60 and $90. Enrolled Agents, CPAs, and Attorneys do not have to be fingerprinted. Applicants for an Official PTIN will have to take and pass the Registered Tax preparer examination. The fee for this examination has not yet been determined but is estimated at $100 to $120. There will also be a 15 hour Continuing Education requirement consisting of ( 2 hours of ethics, 3 hours of tax law changes, 10 hours of Federal tax topics. Preparers will be required to renew their PTINs annually between 10/15 and 12/31 for the following tax seasons. These renewals will be at a rate of $64.25.

Get Your PTIN NOW!

jrogers — Wed, 14 Sep 2011 14:10:03 +0000

For anyone who has not heard the deadline for avoiding having to take the RTRP Examination until December 2013 is October 1st. Federal Direct can assist you get your PTIN now, but if you delay, you will experience multiple additional charges and an examination before you can preparer taxes this year! If you do not get your PTIN by October 1st you are looking at the following:

Fingerprinting and Background Check (fee yet to be determined)
Preparer Competency Examination ($100-$125)
15 hours of Continuing Education (aprox. $300)

If you have not gotten your PTIN (preparers tax identification number) yet, call Federal Direct at (866) 357-2052.

Registered Tax Return Preparer – Testing Requirement Pushed to Dec. 31st 2013

jrogers — Tue, 06 Sep 2011 18:37:42 +0000

The IRS issued notice that Tax Preparers who have already been issued a PTIN (preparers tax identification number) will have up until December 31st, 2013, to complete their testing requirement. The test will be administered at over 260 Prometric locations across the US, and will be partially “open-book”. The testing facilities will provide copies of IRS Publication 17 and the 1040 handbook for test takers assistance. The IRS has not released an official date when 2011 PTINs will become available, but they have reiterated that “early October” is their goal. This means, that if you do not have a PTIN as of yet… GET IT NOW!!!

Office Closed for Labor Day Holiday

jrogers — Thu, 01 Sep 2011 19:52:53 +0000

Federal Direct’s Corporate office will be closed this Monday 9/5/2011 in observance of the Labor Day holiday. We will reopen Tuesday 9/6/2011 at 9:00am EST.

Deadline for e-filing 2010 Tax Returns – Extended

jrogers — Wed, 24 Aug 2011 18:36:01 +0000

The official deadline for electronically filing 2010 individual tax returns has been extended from October 15th to October 17th. This date coincides with the due date for your clients that filed an extension request earlier in the year. The reason for the extension was due to the 15th falling on a weekend. If you are unable to get your clients return e-filed before this date, do not fear, you can still file them via paper filing methods. Bank products will allow for your fees to be pulled from clients refunds all the way through the October 17th deadline. If you have any questions relating to the end of the 2010 e-filing season, do not hesitate to give us a call at (866) 357-2052.

FREE ITIN (Individual Tax Identification Number) Info Webinar

jrogers — Wed, 17 Aug 2011 12:11:58 +0000

If you are looking to grow your tax business, you should not overlook ITIN application and filing services. The undocumented Immigrant marketing in the United States is a constantly growing source for new clients, and their need for ITIN processing is grows right along with them. This webinar will cover what an ITIN is, and what it is not; How your office can benefit from offering these services, who is eligible, and what are the requirements for filing them. If you have interest in attending the webinar is this Thursday, 8/18/2011, at 6:30pm Eastern. Enter your information on our contact page and in the comment box indicate that you would like an invitation to the ITIN Webinar. Space is limited, so please register ASAP.

Nearly 2 Million Fewer Tax Returns Filed in 2009 vs. 2008

jrogers — Tue, 16 Aug 2011 14:15:54 +0000

The IRS released statistics showing total filing figures for the country along with individual state statistics also. One of the most notable statistics reported was that there was nearly 2 million (1,730,061) fewer tax returns filed for the 2009 tax year versus the 2008 tax year. Many sources relate this to the economic downturn in 2008, and as more people lost their jobs, were unemployed or underemployed during this period. Many of them did not reach the minimum income level requiring them to file a tax return for 2009. The most recent minimum income thresholds that require a returns to be filed are:

IRS Tax Table of Who Must File

Newest Tax Filing Statistics Released

jrogers — Wed, 10 Aug 2011 13:04:16 +0000

It takes approximately 1 year for the IRS to tabulate and release statistical information related to tax filings. They have just finished compiling tax and demographic information for the 2009 tax year, filed starting January of 2010. This year should be of significant relevance as it is the first set figures relating to the recession starting in 2008. Average income for taxpayers in 2009 fell 6.1% from the 2008 tax year, to $54,283. Another compelling figure was that the number of returns filed for 2009 dropped by almost 2 million, relating to people that perhaps were unemployed or underemployed during this period.

Tax Credit for Hiring a Veteran Proposed

jrogers — Mon, 08 Aug 2011 21:40:59 +0000

President Obama just recently proposed a new tax credit for hiring veterans that have recently returned from combat overseas. The credit ceilings would range from $4,800 to $9,600, depending on the longevity of the position these veterans are employed for and the length that they have been unemployed and if they have any disabilities. This credit is still far from being signed into law, but the proposal has been well received by both parties and the Department of Labor.

Average Tax Prep Fees Remained Unchanged for Tax Year 2010

jrogers — Fri, 05 Aug 2011 14:02:15 +0000

Average fees for a 1040 individual tax return prepared during 2011 were $233, according to a survey of over 8,000 accountants and tax preparers across the country done by The National Society of Accountants. This figure actually reflected a slight increase, 1.7%, over fees charged for preparing 2009 tax returns.

Tax Implications of Federal Government passing Debt Ceiling Increase

jrogers — Wed, 03 Aug 2011 15:24:13 +0000

The bill to increase the US debt ceiling passed both the House and Senate Monday evening. The bill raises the debt ceiling in several increments throughout the next year and gets us past the 2012 election. A “super committee” comprised of both Republicans and Democrats will convene to approve another 1.5 trillion in borrowing for the future, and to determine the spending cuts and tax modifications to cover this increase. The new law that created this “super committee” and new stair step approach to raising the debt ceiling is officially known as the Budget Control Act of 2011. Although this law currently does not spell out the tax code changes that will be enacted, but the law requires this new bipartisan committee to draft new debt reduction legislation by the end of 2011. The words “Sweeping Tax Reform” have been mentioned, so this indicates more fundamental changes rather than simple loophole closings. Couple this with expiring Bush tax cuts December 31, 2012, and there is good reasoning to think that we will be seeing major tax changes, if not next year, then in 2013.

Over 50% of all households paid NO federal tax for 2009

jrogers — Wed, 27 Jul 2011 20:40:11 +0000

Over 50% of all US households paid NO federal tax for the tax period of 2009. Even more impressive than that is that almost 30% of all households got a check back for MORE than all of their income taxes they paid in. This is due to the refundable credits such as Earned Income Tax Credit and The First Time Home Buyer Tax Credit. Some explain these dramatic figures are due to the recession hitting in 2009 and increasing the amount of low income individuals filing tax return for that period, but the figure is still staggering!

100,000 Tax Preparers to be target by the IRS for PTIN violations in 2010 season

jrogers — Sat, 16 Jul 2011 14:34:17 +0000

The IRS has began sending letters to about 100,000 tax return preparers who either used outdated PTINs or used social security numbers instead of a PTIN when filing returns this past tax season. The letters explain the new oversight program, inform preparers of how to register for a new PTIN, or renew an old PTIN, and where to get assistance.

Also in a measure to try to identify preparers that are leaving their information off of the returns they preparer entirely, the IRS is contacting taxpayers and asking if anyone assisted them in preparing their returns. The IRS is contacting these taxpayers via mail in attempt to identify these fraudulent preparers and to bring them to task.

Tax Clients Liens & Levies – IRS offers “Fresh-Start Open House” Tomorrow

jrogers — Fri, 15 Jul 2011 13:33:41 +0000

The Internal Revenue Service will open the doors to dozens of its Taxpayer Assistance Centers across the country this coming Saturday, July 16, 2011, to answer taxpayer questions and provide help with tax filing issues.

This special event is particularly intended for people who want to make a “fresh start” by taking steps to have liens withdrawn. It also provides an opportunity to those who cannot visit an IRS walk-in office during regular weekday hours to speak with IRS personnel about their tax issues.

A total of 74 Taxpayer Assistance Centers will be open in 34 states, Washington, D.C. and Puerto Rico from 9 a.m. to 2 p.m. local time. To find more information on open centers visit the IRS’ Saturday Services Page.

Continuing Education for Tax Preparers

jrogers — Thu, 14 Jul 2011 14:33:37 +0000

Tax Preparers will have to complete 15 hours of continuing education starting in 2012. These 15 hours will be broken down into 10 hours of federal tax law topics, 3 hours of tax law updates, and 2 hours on ethics. Courses will be provided by numerous IRS approved organizations, and Federal Direct will provide these courses to partners at a discounted rate. Enrolled Agents, CPAs, and Attorneys are exempt from the 15 hour rule, although they still have to maintain their professional continuing education requirements to keep their professional certifications current and in good standing.

Tax Preparer Tips – MN State refund distribution delay

jrogers — Tue, 12 Jul 2011 19:56:33 +0000

Note to all offices preparing MN state tax returns – Minnesota has placed their state government offices and agencies on a skeleton schedule while they attempt to pass an acceptable budget. This state processing shutdown will have an effect on any clients that are currently waiting for a MN state tax refund, as they are not processing any refunds at this time. They have not indicated when their refund system will be re-instituted, but let this stand as an indicator to advise your clients accordingly.

Tax Preparer Tips – Manual Entry of SSNs now required on all W2s

jrogers — Fri, 08 Jul 2011 13:47:20 +0000

New for the 2011 tax season all W2s will require a manual entry of clients social security number. Software companies will no longer be allowed to prepopulate SSN onto W2s. The reasoning behind this is related cleints having ITINs (Individual Tax Identification Number) instead of Social Security Numbers. In past years software programs would simply populate the tax clients ITINs onto the W2s, but that was obviously not correct, due to ITINs not being valid for working in the United States. You will still be able to file tax returns for clients with ITINs, however you will simply have to identify the SSN that is listed on the W2s that they bring to you.

Tax Representation for All Clients!

jrogers — Tue, 05 Jul 2011 14:52:31 +0000

Federal Direct will offer full representation on all returns for the 2011 tax season. Offer your client base more service this year with full return representation by IRS Enrolled Agents. Did your client’s refund get offset by some prior debt? We can identify what that is and why. Did your client get denied EIC? We can fight for them! Our partners have asked and we are delivering… Full return representation for all clients. Call your account representative for more information.

When Does My Tax Preparer PTIN Expire?

jrogers — Thu, 30 Jun 2011 14:02:14 +0000

Tax Preparers were required to get a Preparer Tax Identification Number last tax season. Those PTINs were initially scheduled to expire one year, to the day, from when they were issued. That time frame has been changed by the IRS, now all PTINs will expire on 12/31 of the following year. This translates to anyone who received a PTIN for the 2010 tax year (Jan 1, 2011 – Dec 31, 2011); those PTINs will be active through 12/31/2011. Everyone will need to re-register their PTIN again before preparing any 2011 returns this coming January, and the IRS has stated that the online reregistration process will become available mid October, 2011. For any questions on PTIN registration and reregistration please contact your Federal Direct account representative.

Tax Debt forces SuperBowl Veteran to put championship ring up for auction

jrogers — Wed, 29 Jun 2011 21:01:46 +0000

Fuzzy Thurston, a former lineman of the Green Bay Packers will be auctioning off his 1967 SuperBowl Championship ring to help with his 1.7 Million tax debt. The tax debt originates from Thurston’s post NFL business venture where he opened a chain of restaurants called The Left Guard. The original debt was issued in 1984 for $190,806 but is now totaled with

Senators Press IRS to Adapt Tax Code for Same-Sex Couples

jrogers — Tue, 28 Jun 2011 13:00:30 +0000

8 democratic Senators have pressed the IRS for appeals to the tax code relating to the handling of same-sex couples. Many states now allow for same-sex couples to file joint State returns, however these same couples must file separate federal tax returns. A heavy portion of the problems these couples face are related to dealing with local and state community property laws. For the full story see: Same-Sex Couples Tax Filing Problems

Business Mileage Deductions Changes for 2nd Half of 2011

jrogers — Fri, 24 Jun 2011 15:23:38 +0000

The IRS has just released its’ adjusted mileage rates for the second half of tax year 2011. These rates will be in effect for all clients returns this coming January. Be aware, taxpayers always have the option of calculating and using actual expenses for their vehicle, but typically the mileage rates offer taxpayers the most benefit.

Purpose	Rates 1/1 – 6/30/11	Rates 7/1 – 12/31/11
Business	$0.51	$0.555
Medical/Moving	$0.19	$0.235
Charitable	$0.14	$0.14

Child Care Credit without an EIN or SSN

jrogers — Wed, 22 Jun 2011 20:19:08 +0000

Yes, It can be done; and Yes, it can be e-filed. The IRS has stated that it will now be accepting e-filed returns without the presence of an EIN or SSN for the care provider. You should make sure that your clients have exercised due diligence in attempting to obtain the EIN or SSN before filing a return without one, but this is a common problem for clients that have care providers that are not conscientious about providing tax statements. For more information please contact your account rep or the support center at (866) 357-2052.

IRS Tax Preparer Forum in Atlanta, GA

jrogers — Mon, 20 Jun 2011 13:56:55 +0000

Planning on attending the Atlanta, GA IRS tax forum? Be sure to let your Account rep know. We would love the opportunity to meet with you face to face and chat about the past season and discuss strategies for the coming year. The Altanta, GA IRS forum is scheduled for June 28th -30th, and is being held at The Marriot Confrence Center located at 265 PeachTree Center Ave. Atlanta, GA 30303. For complete details or to register to attend the forum click here: IRS Tax Forum

Get your PTIN early this year

jrogers — Thu, 16 Jun 2011 21:21:01 +0000

The IRS is moving forward with implementing their testing requirement for tax preparers and they have stated that this will be in place for this coming 2011 tax season, starting January 2012. One way to postpone having to take the preparer competency examination is to have your PTIN issued prior to the IRS implementing the Preparer Testing. To register for your PTIN now, click on this link and follow the on screen instructions

IRS wants your input on Preparer Exams

jrogers — Fri, 10 Jun 2011 15:58:46 +0000

The IRS has selected Prometric to administer the forthcoming tax preparer examinations, but they would like to hear from you, the actual preparers, regarding the structure, length, specific areas and topics that should be covered, reporting, etc. Prometric is the company that has been administering exams for Enrolled Agents and CPAs for years, but with the expected volume that will accompany this new preparer requirement, they are open for suggestions and comments as to streamline the process. Comments can be emailed to Notice.Comments@irscounsel.treas.gov.

Jackson Hewitt to file Bankruptcy

jrogers — Sat, 04 Jun 2011 01:58:34 +0000

Jackson Hewitt officially filed petition for bankruptcy on May 23rd in the Delaware District court. Jackson completed the the 2010 tax season with over 700 franchisees operating 4,800 locations. The Bankruptcy has been classified as a “packaged bankruptcy” for restructuring debt, but this official filing is certainly a negative blow to the second largest tax office franchiser in the US.

Ronnie Deutch Firm Closes . Assets Siezed

jrogers — Wed, 18 May 2011 15:39:50 +0000

Ronnie Deutch, the face and name behind the tax preparation franchise Ronnie Deutch Tax Centers, has had her assets seized by a CA judge, closed her firm, and has been forced to turn over her BAR license to practice law. Deutch has been charged with making false promises to her clients seeking tax assistance and representation in front of the IRS. Deutch has been charged with tampering with evidence and diverting clients funds. See the full story by clicking here: Ronnie Deutch Tax Prep Franchise in Big Trouble

E-file Tax Returns through Oct. 15th 2011

jrogers — Mon, 25 Apr 2011 15:47:02 +0000

Many tax preparers are unaware that the IRS accepts e-filed returns through October 15th. This can be both for taxpayers who owe and those who are requesting a refund. If you have any questions about e-filing after April 18th please feel free to contact our year round tax and technical support team at (866) 357-2052.

Tax Prep tips for clients filing extensions

jrogers — Wed, 13 Apr 2011 12:07:48 +0000

Many people are under the misconception that filing an extension will allow for a delay in having to pay tax liability. This is not the case! An extension simply allows a 6 month stay in having to submit a completed tax return. An estimated tax payment must be submitted along with the extension filing for the late filing penalty to be waived. The form for filing an extension is IRS form 4868, and can be submitted electronically.

Last Minute Filers – Tax Preparers be ready!

jrogers — Tue, 12 Apr 2011 18:34:37 +0000

While most tax offices have already experienced a considerable slow down from the peak weeks of late January and early February, do not become complacent and overlook the revenue potential that can come from the last minute crowd! While most of these last minute filers will not choose bank products, they certainly are worthy clients for your practice. These returns typically include more difficult forms and schedules, so be sure to schedule your time appropriately and be sure not to short change yourself when calculating fees. Be sure not to overlook the assistance your Federal Direct partnership provides. Our tax support can prove exceptionally useful on these tricky returns.

New Process for e-filing returns with ITINs and SSN mismatches

jrogers — Tue, 29 Mar 2011 19:57:52 +0000

In past tax seasons, returns filed with an ITIN (Individual Taxpayer Identification Number) reporting wages paid had to have the ITIN listed on the wage statement to be eligible for electronic filing. Due to programming changes the IRS’ e-file system, That is no longer required.

The taxpayer’s correct ITIN should be used as the identifying number at the top of Form 1040. You ensure this is correctly done by entering the ITIN when starting a tax return in your program, and when entering W2 information indicate the SSN that is actually shown on the wage statement from the employer.

Please contact our tax office support center with any questions on these types of returns.

Congratulations to St. Patty’s Day Tax Filing Contest Winners!

jrogers — Fri, 25 Mar 2011 14:50:17 +0000

Bank Product Return Filing Winners:

Gonzalez Tax Service
Muller Tax Service

E-File Only Return Winners:

Rodriguez Tax Services
Neal Workman & Associates

Honorable Mention Offices:

Walkers Tax Service
Joan’s Residential Services
Martell Insurance Co.
Girotel #4
Alamo Business Concepts

Be on the look out for Federal Direct’s next filing contest “Race to the Finish”. This contest will begin April 1st and go through April 18th. Don’t overlook the late season filers and extension filers, as the on-time filing of returns owing a balance due is soon approaching. Also, be aware that you can electronically file returns and request bank products for your clients all the way through October 15th.

Race to St. Patricks Day Tax Filing Contest!

jrogers — Thu, 03 Mar 2011 18:43:49 +0000

Be sure to participate in the mid season Race to St. Patricks Day filing contest. Cash prizes are awarded to the first and second place offices for return volume relating to both bank products and e-file only returns! For more details see our full promo sheet: Race to St. Patrick’s Day Tax Filing Contest.

Itemized Returns Now Being Accepted

jrogers — Tue, 15 Feb 2011 03:41:40 +0000

The IRS is now accepting returns with Itemized deductions, First Time Home Buyer Credits, Educator Expenses, etc, that were previously being delayed. Be sure to make sure that the returns you have been waiting to submit are being sent in for processing. If you have any questions, be sure to contact the support center at (866) 357-2052. The IRS estimates a longer than usual lag in processing these returns as they are actually limiting the numbers of returns they will process on a daily basis. Acceptances and rejected return acknowledgments are expected to be received back within a 48 hour period. For more information see the full IRS press release by clicking here: http://www.irs.gov/newsroom/article/0,,id=236037,00.html

Jackson Hewitt and Liberty… NO MORE RALS!

jrogers — Fri, 11 Feb 2011 17:00:14 +0000

Notice of charges for a Cease and Desist and order of hearings were issued to Republic Bank on February 9th. Republic Bank is the bank used by Jackson Hewitt and Liberty Tax Services to provide their refund anticipation loan products for this tax season. This order by the FDIC indicated the intent of governing bodies to terminate the 1-2 day refund loan products from the tax preparation industry. For full info on the order and the FDIC’s stance please see Republic Bank and Trust’s 8K by clicking here.

Kansas IRS Service Center Closed due to weather!

jrogers — Wed, 02 Feb 2011 17:10:11 +0000

The Kansas State offices have been closed since Monday afternoon because of the weather. Our last efile batch retrieval from IRS was Monday morning. We should be back to work Thursday and resume the legacy e-file processing.

Bad Weather Hitting Indianapolis!!

jrogers — Tue, 01 Feb 2011 02:48:12 +0000

We are currently experiencing a winter storm which is dropping 3+ inches of ice on our roads and then the snow is scheduled to start after that! We have pushed the start of business back to 10AM Eastern for our support center and will keep everyone posted on shortened hours of operation as the storm continues to hit. If you are unable to get assistance on the support line (866) 357-2052, please send an email to support@federaldirecttax.com and a representative will get back with you as soon as possible.

H&R Block Free File…Not So Free!

jrogers — Wed, 19 Jan 2011 00:24:34 +0000

H&R Block’s “Free Ez” advertising campaign has got a lot of taxpayers and tax preparers wondering, what is the Catch? Bloomberg has summed up what the marketing gimmick is all about in an article. Not many customers can actually file on form 1040EZ and they are also charging for the state returns that must also be filed. Check out the article for more details.

Tech Support Line (866) 357-2052

jrogers — Fri, 14 Jan 2011 18:38:28 +0000

Tech Support (866) 357-2052

Faxes should be sent to (317) 252-0360.

Neon Sign Winner Announced

jrogers — Tue, 11 Jan 2011 18:12:21 +0000

Congratulations to T-Tax of Detroit, MI on winning our Tax Office Neon Sign contest. Thanks to all offices that participated. Honerable mentions go out to L&S Tax Services and Superior Housing.

Peak Season Support Hours

jrogers — Tue, 11 Jan 2011 02:16:11 +0000

This Friday 1/14/11 is the start of the tax season and also the start of Federal Direct’s peak season support schedule. Our support center will be open Monday – Friday from 9am to 9pm and Saturday from 10am – 6pm. You can reach us at (317) 543-5562 or via email at support@federaldirecttax.com

Delayed filing start for Taxpayers who itemize

jrogers — Thu, 30 Dec 2010 14:27:38 +0000

Taxpayers who itemize on their federal tax returns will have to wait until at least mid-February to file. The delay is necessary because the IRS needs time to program its systems to accommodate tax breaks included in a compromise tax bill President Obama signed. To view the full story from the IRS click: http://www.usatoday.com/money/perfi/taxes/2010-12-23-tax-delay_N.htm

HR Block RAL program officially terminated

jrogers — Sat, 25 Dec 2010 16:34:12 +0000

H&R Block and HSBC have made it official that they will not be funding any RALs this tax season. The Office of the Comptroller of the Currency denied HSBCs appeals for RAL provision forcing H&R Block to accept the forgone conclusion of a tax season with no RAL products. Click here for full story: marketwire_HR Block RAL issues

WIN A FREE NEON TAX OFFICE SIGN

jrogers — Tue, 21 Dec 2010 16:35:51 +0000

We will be giving away a free “Fast Tax Refunds” neon sign. Simply send us pictures of your tax office inside and out and we will pick the best setup and we will get the sign shipped out. Most of our interaction with our offices is done over the phone and this lets us put a face with a name and get an idea of what your office setups are looking like. Send office pictures to neon@federaldirecttax.com. The winning office will be announced on January Winner will be announced on Monday January 7th.

Removal of the Debt Indicator – contact your legislator

jrogers — Tue, 14 Dec 2010 17:48:35 +0000

Let your legislator know how you feel about them removing the Debt Indicator! Click Here for methods of making your voice heard regarding congress’ action to remove the IRS debt indicator, which has changed the landscape of the RAL and tax preparation industry.

NY State Tax Preparer Registration is Open for 2011

jrogers — Sat, 11 Dec 2010 18:11:50 +0000

NY tax return preparers are required to register with the state annually. The link for this registration is below. Please be sure to register for this state certificate before the start of the tax season. Once registered you will receive a New York Tax Preparer Registration Identification Number (NYTPRIN). This number must be entered all NY State tax returns you prepare. Preparing return in NY state without this number can expose yourself to penalties and fines.

The New York Tax Preparer Registration Identification Number (NYTPRIN) is in NO WAY tied to your federal Preparers Tax Identification Number (PTIN). You are required to carry both numbers for the coming tax season.

http://www.tax.state.ny.us/tp/tpreg.htm

Tax Cash in 1 Hour Webinar Repeat

jrogers — Wed, 08 Dec 2010 02:44:56 +0000

We will be hosting a follow up webinar for any office that is interested in offering Instant Loans to their clients. This Webinar will be a repeat of last Friday’s webinar covering this topic. All partner offices will have a webinar invite emailed to them today. Be sure to register for the webinar by clicking on the registration button in the email.

2011 Standard Mileage Rates Announced

jrogers — Fri, 03 Dec 2010 21:06:14 +0000

The Internal Revenue Service today issued the 2011 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. Be aware, these figures are for the coming year, not for taxes being filed next month! Rates for 2010 were $.50/mile for business purposes.

Beginning on Jan. 1, 2011, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

51 cents per mile for business miles driven
19 cents per mile driven for medical or moving purposes
14 cents per mile driven in service of charitable organizations

The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs as determined by the same study. Independent contractor Runzheimer International conducted the study.

Friday Bank Product Web Confrence

jrogers — Thu, 02 Dec 2010 14:45:33 +0000

Anyone who has not yet reserved their spot in the Friday web conference, be sure to send an email to support@federaldirecttax.com, and we will send you out a registration email. The conference is tomorrow, Friday Dec 3rd, at 6:30pm Eastern and will be covering customer refund options including review of the availability of a preseason holiday loan and a competitive analysis of what other offices in your area will be offering.

Tax Cash in 1 Hr Loan Program Overview

jrogers — Wed, 01 Dec 2010 15:40:36 +0000

We will be hosting a web conference for Federal Direct offices to go over operational details of the Tax Cash in 1 Hour Loan program. If you have already partnered with Federal Direct, you will be receiving an email with details on attending this web conference. Space is limited, and if necessary, we will schedule another duplicate web conference over the weekend.

The conference will covering:

-The availability of using this tool as a preseason (holiday) loan,
-How to effectively market this loan product
-How to educate your clients on the loan details and requirements,
-How your refund product options stack up against the competition.

Tax Refunds on Prepaid Debit Cards

jrogers — Tue, 30 Nov 2010 03:02:17 +0000

Don’t forget to inform your clients of the ability to receive their refunds deposited onto a prepaid MasterCard this tax season. There added office information is needed to offer this refund option. Be sure to go over the details with an account representatives if your office wants to take advantage of this refund option.

Marketing Programs Donations Matching

jrogers — Wed, 24 Nov 2010 14:47:24 +0000

Marketing, Marketing, Marketing…. That is what makes or breaks 99% of all tax office start-ups! What is your office’s marketing plan for this tax season. If you do not have one yet, be sure to log in and check out the Custom Marketing Center where you can adopt one of the predefined marketing programs, print your own customized coupons, posters, fliers, or ads. Federal Direct will match your charitable donations if your office chooses to use the Church, Employer, or another donation based program. Contact your account representative for more info.

Liberty & Jackson Hewitt Limited to $1,500 refund checks

jrogers — Tue, 23 Nov 2010 22:07:58 +0000

Liberty Tax’s bank has released their lending program for the year and they will be limited to checks of $1,500 and the remainder printed in 7-14 days. The 50% of Jackson Hewitt offices that have any type of 1-2 day refund options will also be subject to this same limit.

Tax Cash in 1 Hour RAL replacement

jrogers — Mon, 22 Nov 2010 22:46:53 +0000

All Federal Direct partners will be receiving an overview description of the Tax Cash in 1 Hour Program today via email. Be sure to check your mail and feel free to contact us with any questions or to review marketing strategies for your tax office this season.

IRS unsure on preparer testing content

jrogers — Fri, 19 Nov 2010 15:14:05 +0000

Be aware, the IRS stated today that it has not made any determination on what materials will be considered for the 2011 tax preparer testing requirements. Many tax training programs are currently being released trying to capitalize on preparers anxiety relating to this new requirement, you should be very wary of purchasing materials this year. Federal Direct suggests waiting until later in 2011 when the IRS has actually released what they will be testing on before purchasing practice software or materials. Also, There is NO TESTING REQUIREMENT FOR PREPARING 2010 TAX RETURNS! The requirement will at the earliest be implemented next year.

Bank Applications processing

jrogers — Thu, 18 Nov 2010 18:51:31 +0000

Once your office has an EFIN (electronic filers identification number), we will be submitting your office for bank processing. This process will allow you to have your fees withheld from your clients tax refund. There is the possibility that you might get a call from the bank to verify contact info and office location. Please be available to answer these questions as these banking providers facilitate you getting paid! Please feel free to give us a call if you have any questions.

EITC – How to avoid fraud in your tax office

jrogers — Tue, 16 Nov 2010 17:25:33 +0000

The Earned Income Tax Credit (EITC) is by far the largest refundable credit available to individuals filing tax returns. This fact inevitably brings the scammers out of the woodwork trying to cash in on what they see as easy money. The fact of the matter is that you, the tax preparer, need to be sure to operate using due diligence. You need to make sure that you are not consciously assisting a taxpayer commit fraud. For assistance with handling some of the most common issues associated with processing clients claiming EITC on their tax returns see: IRS EITC Common Errors

Tax Office EFIN Applications

jrogers — Mon, 15 Nov 2010 19:48:54 +0000

New Federal Direct Partners should make sure that your EFIN applications have been processed. These applications take aproximately 6 weeks for processing with the IRS and without an EFIN you cannot e-file return or offer bank products. If you are not a CPA, EA, or Attorney, you will need to also complete a fingerprint card for the purpose of a background check. This background check is to confirm your suitability for working within the IRS’ e-file system. If your EFIN application has not yet been completed, please contact our office ASAP, to get this process underway.

Same Day Cash for your tax clients!

jrogers — Sat, 13 Nov 2010 19:29:34 +0000

Federal Direct has secured a RAL replacement product for the coming tax season. With the removal of the debt indicator, banks availability of a RAL product has been up in the air ever since August. Federal Direct is very happy to be able to announce that we have a product for our partners to offer same day refund loans to their clients. Be sure to contact your account representative to go over program details and additional registration requirements.

IRS releasing emails regarding PTIN applications

jrogers — Fri, 12 Nov 2010 13:01:58 +0000

The IRS is releasing email messages informing PTIN applicants that you may have an open PTIN application with the service that needs to be completed. This message relates to many people who were forced to apply through multiple email addresses in order to get their temporary password for online PTIN application. If you have been through the online PTIN application process and you received a PTIN, your process is complete and you do NOT need to re-register.

DO NOT upgrade to Internet Explorer 9

jrogers — Thu, 11 Nov 2010 17:18:55 +0000

Internet Explorer 9 is causing issues for partners accessing tools on the partner portal, and using online tax preparation tools. If you receive a pop-up message asking you to to upgrade, DO NOT choose to upgrade. If you have already upgraded, please contact our IT department and they will assist you in converting back to previous Explorer versions.

Should I get an EIN for my tax business?

jrogers — Wed, 10 Nov 2010 18:04:06 +0000

Many tax businesses operate perfectly fine without getting an EIN (Employer Identification Number), and if you are the only one working in your business you really do not need one. If you think that you will be hiring employees this season, you should get one. This will allow for you to not have to include your Social Security Number on the Paystubs and W2s that you distribute to your employees. Getting an EIN does not take much information, and this service is included in any Federal Direct Partnership. Simply contact an account representative and request an EIN for your business if you would like to get one set up.

New Tax Office Neon Signs Now Available

jrogers — Sat, 06 Nov 2010 16:09:59 +0000

Federal Direct has negotiated new pricing on Tax Office Neon Signs for partners looking to spruce up their storefronts for the coming 2010 tax year. Check out the available signs by clicking here: Tax Office Neon Signs

EITC Compliance Letters Being Sent out from IRS

jrogers — Thu, 04 Nov 2010 13:16:56 +0000

Offices preparing returns that have had the Earned Income Tax Credit denied will be receiving compliance letters stressing the importance of operating with Due Dilligance in the future. Earned Income Tax Credit is one of the most fradulently used tools in individual tax preparation. As a preparer you should be aware of the EITC due diligence requiremetns as well as related tax laws and regulations. Preparer penalties for failing to meet the due diligence requirements for preparing EITC tax returns range from monetary disciplinary notification, monetary penalties, criminal investigation, and Suspension or expulsion of the preparers firm from participating in IRS e-file. For information on common errors on EITC returns visit the IRS’ website at: http://www.eitc.irs.gov/rptoolkit/toolsandtips/mostcommonerrors/

2009 Check Printing is Officially Off

jrogers — Wed, 03 Nov 2010 14:28:46 +0000

Just a heads up for offices that have any outstanding bank product returns to be funded. Any remaining 2009 returns which were field using bank products that are funded from this point forward will have checks printed at the bank and mailed to the client at the address listed on their return. Preparation fees will continue to be distributed, but checks will be printed at the bank. You may shred remaining 2009 check stock in preparation for receiving new 2010 checks.

Current Enrolled Agent renewal period suspended

jrogers — Tue, 02 Nov 2010 18:13:52 +0000

EAs with SSNs ending in 4,5, or 6 were scheduled to complete their 3 year renewal of their EA status between Nov 1 and Jan 31 2011. The renewals are on hold due to the IRS not finalizing how much to charge for the renewals. The fee is supposed to be dropping from the original $125 price due to the new additional requirement for EAs to pay the $64.25 fee for registering their PTINs (preparer tax identification numbers).

New Tax Office Neon Sign Options Coming Soon…

jrogers — Sat, 30 Oct 2010 15:39:26 +0000

Federal Direct is proud to announce a new partnership with JantecNeon company for providing tax preparation related neon signs to our partners at a discounted price for the coming tax season. We should have the new signs posted to our marketing area by the end of next week and we will also be sending out a notification email indicating available signs and pricing!

IRS to Postpone Continuing Education Requirement

jrogers — Fri, 29 Oct 2010 13:46:37 +0000

Rest easy this year registered return preparers! IRS commissioner Douglas Shulman spoke today before the AICPA and announced that the continuing education requirement for tax return preparers would be pushed back until 2012. This means that preparers will have a full 12 months to earn the required 15 hours of CE credits.

American Opportunity Credit Expires this year!

jrogers — Thu, 28 Oct 2010 13:28:59 +0000

When reviewing your clients’ prior year tax returns be sure to check to see if they claimed any college expenses, and if they did, they should have used the American Opportunity Credit. This credit has a refundable aspect to it, similar to the Earned Income Credit, and is available for the first 4 years of college as opposed to the hope credit which only applies to the first 2 years. The cap for the credit is $2,500. Covered items include tuition, books, computers, and course materials. This credit is part of the American Recovery and Reinvestment Act of 2009 and is only available for 2009 tax returns! There is talk of expanding the coverage of this credit to include the 2010 tax year, but that has not happened as of yet. For more info on the American Opportunity Credit visit the IRS’ page by clicking here: http://www.irs.gov/newsroom/article/0,,id=226993,00.html

Military Family State Tax Filing Relief

jrogers — Wed, 27 Oct 2010 15:35:26 +0000

Tax Preparers filing returns for military personnel should familiarize themselves with the Service members Civil Relief Act and The Military Spouses Civil Relief Act. This law basically closed the loophole that was causing military personnel to be taxed by different states if they were forced to move for military duty. This law allows both the service person and their spouse to be taxed only for their state of origin, not the state that they have move to, dictated by the military. For more information see: http://usmilitary.about.com/library/milinfo/scra/bl511.htm

Back Tax Issues…

jrogers — Tue, 26 Oct 2010 13:30:22 +0000

One of the requirements for the new PTIN registration process is to be in tax compliance for both business and personal tax filings. This means that you must have filed your tax returns and if you owe, you must have contacted the IRS and entered into a payment arrangement program. In short, if you want to be a tax preparer be sure to be in tax compliance!

PTIN Reminder Letters Going Out from IRS

jrogers — Mon, 25 Oct 2010 18:07:32 +0000

The IRS begins notifying former tax return preparers that they must renew their PTINs if they are still intending on being paid preparers this coming tax season. Use of the PTIN will be required on all federal returns prepared by paid tax return preparers starting Jan. 1. This requirement is for all return preparers, even CPAs, EAs, and Attorneys. To apply for your PTIN visit the IRS website by clicking here: IRS PTIN APPLICATION.

Your First Priority – EFIN application!

jrogers — Thu, 21 Oct 2010 21:36:30 +0000

If you do not yet have an EFIN for your tax office, this should be the number one priority for getting your office set up for the coming tax season. An EFIN is your tax office’s equivalent of an IRS license. This number allows you to electronically file tax returns for profit. Without an EFIN your office does not have a tracking number and is not able to apply for bank products. The approval process associated with getting an EFIN assigned takes approximately 6 weeks. If you have not started the EFIN process, please contact Federal Direct for assistance.

H&R Block RAL Shake-UP

jrogers — Wed, 20 Oct 2010 12:49:18 +0000

H&R Block is suing their exclusive RAL banking partner HSBC for failure to properly preparer to offer Refund Anticipation Loans this season. Bad news travels fast as H&R saw its stock price drop nearly 11% following the news.

Online PTIN Application Site is Getting Better!

jrogers — Sat, 16 Oct 2010 06:07:23 +0000

The IRS has now had several weeks to work out many of the bugs in their new online Preparer Tax Identification Number (PTIN) application system. We are still receiving complaints that the initial password is not reaching applicants email boxes, but many of the other complaints have seemed to have been resolved. You can access the PTIN application website by here: IRS PTIN. All preparers will need to register for a PTIN or reregister their existing PTIN.

2 Days Left for e-filing 2009 Tax Returns

jrogers — Thu, 14 Oct 2010 13:29:53 +0000

Time to start motivating clients to sign those 8879s so you can get their returns electronically filed. the e-file deadline of 10/15/2010 is only 2 days away!

IRS Contacting Fraudulent EIC Return Preparers

jrogers — Thu, 14 Oct 2010 13:06:07 +0000

Preparers identified as being “at risk” for filing 2010 returns with EITC errors, will get letters, visits and due diligence audits. The contacts are focused primarily on education and are aimed at improving compliance with regulations. IRS will monitor returns and continue to ramp up enforcement if improvement isn’t evident.

5 days left to e-file 2009 returns

jrogers — Mon, 11 Oct 2010 22:26:50 +0000

The e-filing season will be wrapping up this Friday, 10/15. All 2009 return completed after that will have to be paper filed. There is a couple of additional days to send returns through that were rejected, but for all practical purposes, get those returns completed and send in ASAP!

Tax Franchises vs Tax Partnerships

jrogers — Mon, 11 Oct 2010 07:45:26 +0000

We have posted an article going over the differences between Tax Frachises and Tax Partnerships on our Blog pages. If you are considering getting into the tax business, this is one you should definitely check out! See the whole story at: Tax Franchise vs. Tax Partnership

Recent IRS phishing scam

jrogers — Fri, 08 Oct 2010 14:45:52 +0000

The IRS recently became aware of a fraudulent scheme targeting EFTPS users, the scheme uses an e-mail that claims your tax payment was rejected and directs you to a website for additional information. The website contains malware that will attempt to infect your computer. For more info related to this scam see the IRS’ full story at: http://www.irs.gov/privacy/article/0,,id=226755,00.html

PTIN application system down over weekend

jrogers — Wed, 06 Oct 2010 14:19:48 +0000

The IRS Online PTIN application system will be unavailable over the weekend from 8am Saturday October 9th to approximately 8am Monday October 11th. Lets hope that they get get the much needed maintenance their system needs taken care of during this period!

Back Year’s Tax Return Info

jrogers — Tue, 05 Oct 2010 15:01:09 +0000

The IRS has set up a new call in line for taxpayers to access copies of their prior years tax return info. This is big news for students that need this info quickly to apply for federal student aid and also for new home buyers that need to confirm their earnings to be approved for a mortgage. You can request a copy of prior years tax transcripts by calling (800) 908-9946.

PTIN Online application problems

jrogers — Mon, 04 Oct 2010 20:00:29 +0000

The IRS online PTIN application has some serious bugs that they are attempting to fix quickly, but it is currently very difficult to get a PTIN issued. One of the most common complaints that we are getting is: if you are listed as a “Spouse” on a married filing joint tax return, you will not be able to complete the application currently! We suggest waiting for another week or two and letting the bugs work themselves out so that you are not stuck in limbo like many applicants we have talked to!

Know your Target Market

jrogers — Mon, 04 Oct 2010 13:55:56 +0000

Federal Direct offers partners complete access to demographic data for their target market areas. Partners should be sure to check out their partner portal for the new Target Market Report tool. Find out how many return your competitors filed, how many returns were filed as a whole, how many paid preparers are in your area, etc…

Adoption Credit Increases for 2010

jrogers — Sun, 03 Oct 2010 15:02:33 +0000

The IRS has released their newly expanded Adoption Credit information for the coming tax season. The available credit has been increased t0 $13,170 per child from the previous amount of $12,150. The credit has also been made “refundable”, so similar to the Earned Income Credit, it will be available whether or not a taxpayer has tax liability.Form 8839 should be completed for all taxpayers wanting to qualify for this credit. Click here to view a draft version of the 2010 form 8839.

Reinstate the Debt Indicator!

jrogers — Sat, 02 Oct 2010 07:27:56 +0000

The IRS has stated that they will be removing the debt indicator (DI) this tax season. The DI is what the rapid refund providing banks use to assist in making an educated decision on approvals and denials for their loans. Most applicants for rapid refunds do not have immaculate credit, so having this information available allowed the banks to approve loans to taxpayers that would otherwise not qualify. We urge you to complete this form requesting your local representatives reconsider the removal of the debt indicator. The form can be accessed at DI reinstatement form. This form was actually completed by H&R Block, but it is a quick easy way to make your voice heard. This will be the only time you will ever hear us promoting H&R, but it is a good tool, and is for the benefit of our whole industry! Please complete the form; this topic affects all of our tax offices!

Tax Filing Extension deadline closing in

jrogers — Fri, 01 Oct 2010 16:27:43 +0000

The tax filing deadline of October 15th is just around the corner. Be sure to contact your clients that are on extension and get them completed. You can electronically file your clients return through the 15th of this month. If you have clients that need returns filed after October 15th, the returns must be paper filed. Contact Federal Direct for mailing information for paper returns, as destination addresses vary depending on filing location.

Tax Office Neon Signs Available

jrogers — Thu, 30 Sep 2010 13:56:14 +0000

Federal Direct is pleased to extend the availability of our neon sign contract to our partners. Zeon produces 2 signs using the Federal Direct color scheme and style. One is simply the Federal Direct Oval logo as seen in the upper left corner of our website, the other is the same oval shape, but inside the log replacing the words “Federal Direct Tax Services” is Fast Tax Refunds. If you are interested in one or both of these signs for your tax office this year, please contact your account rep for more details.

Fast Tax Refunds Neon Sign

Tax Preparer Registration – What are your thoughts??

jrogers — Wed, 29 Sep 2010 06:49:35 +0000

We are finally getting successful PTIN applications pushed through. The biggest issues we are getting reported from users of the new online application tool are problems getting your temporary password emailed to you. We have found that company emails (aka john@acmetaxservice.com) and hotmail email accounts are not working smoothly with the IRS’ system. We did not have any problems when submitting a yahoo email address. Anyone else have any success or failure stories relating to applying for their PTIN. If you have not yet applied for your PTIN visit the IRS site: PTIN application

Online PTIN Application is Up, but has some bugs

jrogers — Tue, 28 Sep 2010 15:04:10 +0000

The IRS website is active for applying for Preparer Tax Identification Numbers. The website is: http://www.irs.gov/taxpros/article/0,,id=210909,00.html. As of today 9/28/10, we still have not been able to successfully get a PTIN application put through. The IRS says that they are experiencing issues with the online tool, but are working to iron out the bugs as we speak. All tax preparers must register, even if you already have a PTIN from a previous tax season. The IRS has a help line setup for questions and problems with the online application tool. The helpline number is: 877-613-PTIN (7846)

Online PTIN applciations

jrogers — Mon, 27 Sep 2010 17:16:22 +0000

Online PTIN applications are still not available through the IRS’ website. We will keep you posted as we hear new details.

Residential Energy Credit explained in Both English & Spanish

jrogers — Sat, 25 Sep 2010 17:01:36 +0000

The IRS has published a detailed breakdown explaining the residential energy credits available for taxpayers this year. These are great info sheets to have available in your tax offices lobbies and waiting areas this season. See these links for English and Spanish versions:

Residential Energy Credit Info – ENGLISH

Residential Energy Credit Info – SPANISH

New PTIN application forms released by IRS

jrogers — Fri, 24 Sep 2010 19:33:56 +0000

The paper application form for applying for a Preparer Tax Identification number has been released by the IRS. The new form, W-12, will be replacing the previous form W7-P. This new form is available on the IRS’ website at: IRS form W-12.

It is overwhelmingly advised to apply for your PTIN or to renew your PTIN online, and the online application site is scheduled to be up and operational early next week. This will drastically speed up the approval process for your PTIN.

Form 8945, PTIN Supplemental Application for U.S. Citizens without a Social Security Number due to Religious beliefs and form 8946, PTIN application for foreign individuals without a social security numbers are both now available on the IRS websites as well.

How will people know you are an e-file provider

jrogers — Thu, 23 Sep 2010 16:44:38 +0000

Once you register with the IRS to provide electronic filing services your business will be listed publicly as a Authorized e-file provider. The IRS has a tool that provides a look-up search for taxpayers seeking out e-file providers at: http://www.irs.gov/efile/page/0,,id=10162,00.html. Once you are registered and are accepted you are in!

Marketing to Friends and Family

jrogers — Wed, 22 Sep 2010 13:07:06 +0000

Many tax preparers that start their own tax preparation business focus on getting their friends and family as some of their very first customers. Marketing to people you know puts more pressure on you to deliver a good valued product. This is a great way of building a customer base. There are several things to be aware of when enticing this group as clients. Your marketing tactics should be softer. You don’t want to force your services down their throat, but you also don’t want to be shy about asking them for their business. Another key marketing tool when enlisting friends and family as clients is to ask them for their referrals. If you provide a good service at a good value, you should certainly not hesitate to ask for the referrals and I believe you will be pleasantly surprised at the increase in your business that can come from this practice. For more on affordable and effective advise on marketing your tax services to friends and family see the full article: Keys to Home Tax Preparation Business Success – Affordable & Effective Marketing

Jackson Hubbert Office Owner Jailed 15 Years for Fraud

jrogers — Wed, 22 Sep 2010 02:45:14 +0000

Interesting story about a Dallas tax business owner who named his business Jackson “Hubbert” and landed himself a significant jail sentence and a $500K fine for inventing tax credits for clients. check it out at: Jackson “Hubbert” story.

Home Based Tax Business – Take it to the Next Level!

jrogers — Tue, 21 Sep 2010 06:00:12 +0000

Many preparers get their start working out of their home or from their laptop. We have worked with many people using this business model and have assisted them in getting past the 100 return mark. Marketing to get new customers is key, and getting a comfortable, convenient and most of all AFFORDABLE location for your tax business is paramount to growth. Check out the full article for more details on specific steps to take to Get Your Home Based Tax Prep Business to the Next Level!

Multiple offices = Multiple EFINs

jrogers — Mon, 20 Sep 2010 15:47:30 +0000

Many tax office owners are expanding their practices this year by opening another physical office. This is a great way to increase business by increasing availability to your market. You should be aware that the IRS does require that you obtain an Electronic Filer Identification Number (EFIN) for each physical office you operate. If you have more questions on expanding your practice or on applying for additional EFINs please contact Federal Direct for more assistance.

1 Month until extension and e-filing deadline

jrogers — Fri, 17 Sep 2010 19:39:04 +0000

Be sure to touch base with any clients that are on extension, as that October 15th deadline for submitting their returns is close approaching. Also, if you have any clients that still have not filed their 2009 tax return 10/15/10 is the deadline for submitting 2009 returns to the IRS electronically.

Should I get an EIN for my new tax prep business?

jrogers — Thu, 16 Sep 2010 06:07:04 +0000

Employer Identification Numbers (EINs) are generally used if you hire employees and wish to keep your social security number off of their W2 or 1099 wage statements. You can also use an EIN to open an business bank account. Just because you get an EIN does not mean that you have incorporated your business and now how to file a corporate tax return. Sole proprietorships can apply and receive an EIN just as corporations can. If you would like to apply for an EIN for your tax business, contact Federal Direct and we will assist you in obtaining an EIN.

No word on IRS e-services PTIN application status

jrogers — Wed, 15 Sep 2010 06:35:54 +0000

The IRS has stated that the online Preparer Tax Identification Number (PTIN ) application tool will be up and functioning by “mid” September. As of this morning, it is still not up, but we will keep you posted as to when you can jump in and either apply for a PTIN or renew your existing one. Remember that there is a $64.25 cost per preparer for this process.

Home Buyer Credit deadline approaching

jrogers — Tue, 14 Sep 2010 04:01:18 +0000

Be sure to inform your clients that the September 30th deadline for closing on a new home is soon approaching. The original deadline of June 30th, was extended due to the complaint from taxpayers that closing proceedings were taking longer than normal due to the more recent commonality of non-traditional purchases such as foreclosed homes and short sales. This deadline only relates to the closing on the home. There is no rush in filing the claim for credit, as it can even be included on your clients coming years 2010 filing.

NEW HSA qualified spending identified for 2011

jrogers — Sat, 11 Sep 2010 13:16:00 +0000

The IRS has released their changes relating to Flex Spending Accounts for the 2011 tax season. These regulations and changes relate to such tax avoidance accounts as Health Savings Accounts (HSA) and Archer Medical Savings Accounts (MSA). Purchases of over the counter drugs NOT requiring a prescription will no longer be included as qualifying purchases. Nonprescription Insulin, medical devices, contact lenses, eye glasses, and Co-pays for doctor visits DO still qualify. See IRS publication 969 for complete program details.

Save big $$ on temporary preparer payroll this tax season

jrogers — Thu, 09 Sep 2010 13:00:09 +0000

The Disconnected Youth Tax Credit is now available to tax preparation offices for the coming tax season. This credit is ideal for hiring seasonal tax office help. This credit has a value of up to $2,400 per employee that you hire. Employees must be between 16 and 24 years of age, and not have been in school for the preceding months leading up to your hiring, and must not have been substantially employed for the 6 month period leading up to your hiring. For complete program details and how it can be used to benefit your tax office payroll expenses this season, please see the full article at: http://www.federaldirecttax.com/blog/save-on-tax-preparer-employee-payroll/

Requirements When Correcting Rejected Returns

jrogers — Wed, 08 Sep 2010 02:40:19 +0000

According to IRS publication 1345, a tax preparer can fix or correct a rejected return if the changes are not more than $50 to “Total income” or “AGI” or more than $14 to “Total tax,”“Federal income tax withheld,”“Refund,” or “Amount you owe.”

Taxpayers, however, must be given paper copies of the new electronic return data. If new signatures are required, the taxpayer must be given copies (either paper or electronic).

Change in Rapid Refund Procedures

jrogers — Tue, 07 Sep 2010 21:46:09 +0000

Many of you may have heard that the IRS has discontinued providing the rapid refund banks with the “debt indicator”. This means that new customer RAL approval rates will most likely decline, due to more credit scrutiny. Also, many industry insiders are voicing their concern that this will trigger a price increase in the products across the board. For more in depth info see: tax-offices-rapid-refund-changes

Online vs Desktop Tax Software

jrogers — Wed, 01 Sep 2010 06:01:49 +0000

Your tax office will be faced with the decision of whether to go with online preparation software or a hard installed desktop version. To make an educated decision, here are a few of the aspects to consider about each.

Online tax software offers freedom to file returns from anywhere with in internet connection, and allows your tax prep business the ability to support preparers servicing clients in different physical locations. You can also view your office information from any PC. If you do not have access to a high speed internet connection or your service is temporarily down, Your are out of business.

Desktop Software allows you can prepare returns without having internet access. You are able to back up your own system. You are in complete control of your tax program and records. More years of development are behind desktop software and tend to lend to a more reliable and bug free product. For more details see: Tax Prep Business Software Decisions.

New Preparer Regulation Fees Finalized

jrogers — Wed, 01 Sep 2010 05:34:36 +0000

The IRS has finalized the price that each and every tax preparer will have to pay for the coming tax season. $64.25 must be paid for the initial registration that everyone must do for the coming 2011 tax season. Annually after the initial registration there is a $14.24 fee. All offices that have multiple employees, this means you must register each one. PTIN Registration Services is slated to go back online mid September. No specific Date has been indicated by IRS e-services as of yet. See How the new preparer regulations effect you for more info.