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Reminder to Tax Preparers

The IRS is aiming for a greater degree of accuracy in tax returns.  As such it has issued more than 10,000 letters to tax preparers who have submitted tax returns that the IRS has identified contain common errors.  The purpose of these letters was to remind the tax preparers of their obligation to ensure accuracy in the tax returns they prepare for their clients.

As a form of follow-up action, the IRS also plans to visit 2,500 of those who received the letters to discuss their responsibilities further and to verify their compliance with existing requirements.  At the same time, the IRS wants to remind all tax preparers about getting registered and obtaining their Preparers Tax Identification Number (PTIN).  Tax preparers who already have an existing PTIN must still register but will be allowed to retain their numbers.  Generally, all tax preparers who prepare all or a substantial part of the tax return of another person must be registered with a PTIN.

All tax preparers can register online at the IRS website, www.irs.gov under the Tax Professionals page.

In filling up the required field for the PTIN number, an SSN can be used if:

? The return is filed through the MeF system, in which case the IRS will issue an alert R0000-134 to the tax preparer about the missing PTIN but will not reject the return

? The return is filed through Legacy e-file and if the preparer inserts their firm?s EIN.  The IRS will not reject the return.

? The return is a paper return.

While the IRS will not reject returns that lack the PTIN of the preparer, the agency encourages software companies to include diagnostics into their software that picks up the missing PTIN or shows an appropriate message if the preparer inserts an SSN instead.

Tax Credits and Refunds for Christmas

You might very well receive an unexpected Christmas gift courtesy of the IRS.  The IRS is trying to give away some $165 million in undelivered tax refunds that belong to 111,893 taxpayers who have moved without a forwarding address.

If you are due a refund, you can check on the status of it and change your address at https://sa2.www4.irs.gov/irfof/lang/en/irfofgetstatus.jsp.

If you are self-employed, there is good news for you, too.  For 2010, when you calculate your self-employment taxes, you will be allowed to deduct your qualifying self-employed health insurance.  This gives you an instant 14.5% tax credit on health insurance premiums.

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