Tax Attic

Jerry Coon

Jerry Coon

This is among my favorite weeks of the year. No, it’s not because we are almost one-half of the way through the tax season, although that is an important milestone for all of us at Action Tax. No, it’s not because it seems like winter is winding down. I like boats but it’s not because the annual Grand Rapids Boat Show takes place this week. No, it’s not because the President gives his State of the Union address this week even though I am interested in what our President has to say about a few items such as the usage of drones. This is a favorite week of mine because I love baseball and this week, Tuesday to be exact, the Detroit Tiger pitchers and catchers report for spring training at the Tigers minor league facility in Lakeland, Florida. The Tigers are going to have a tremendous team this year and stand a good chance to get back to the World Series this fall. I would love the game and this week even if Detroit was among the poorest teams in the game but it’s always much nicer to have a very good team to cheer for. Over the years, long-time Tiger fans have seen the good, the bad, and the ugly and in many of those years, 42 to be exact, Ernie Harwell was the announcer. Ernie had the habit of starting out the first broadcast of the first spring training game by reading a couple of verses from the Bible. He read from the Song of Songs, Chapter 2, vs. 11 and 12. Ernie passed away in May, 2010 so I will do the honors for him: “For lo, the winter is past, the rain is over and gone; the flowers appear on the earth; the time of the singing of birds is come; and the voice of the turtle (doves) is heard in our land.” Ernie’s version of the Bible and what he traditionally read refers to just the “turtle” being heard but I think turtles and me have one thing in common. When it comes to singing, we are better seen than heard. A little research brought me to the New International Version of the Bible and it refers to just “doves”. Since Ernie isn’t here to argue the point, I will put them together, i.e. “turtle doves”. I think he would be okay with that. Sing on turtle doves. Make Ernie proud. Go Tigers. Make all Tiger fans proud.

When this tax season started, the Internal Revenue Service was put in a tough spot by Congress when Congress passed a major tax law on January 1, 2013 that materially affected many of the returns being filed for the 2012 tax year. The IRS responded by basically delaying the start of the tax season when they announced that no electronic returns or paper filed returns would be accepted prior to January 30. In previous years, the first returns were accepted for processing around January 16. In addition, only basic returns were going to be accepted on January 30. Non-basic, but still very common returns with depreciation, residential energy credit, and tuition credit were not going to be accepted until later in February or early March. In addition, the IRS was giving itself 21 days after a return was successfully accepted to process a refund. In prior years, most people received their refunds, especially direct deposit refunds, within seven to ten days. I’m happy to report the IRS has revised its projected processing dates for returns. They announced at the end of last week that on Sunday, February 10, they will begin accepting returns claiming depreciation. On Thursday, February 14, they will begin accepting returns claiming the tuition credit. In addition, so far they have not taken 21 days to process refunds. It appears that they are issuing at least some refunds within ten to fourteen days. The IRS has been put under tremendous pressure by Congress and I would say they are responding quite admirably.

Two weeks ago I wrote that on Friday, January 15, the IRS lost a Washington DC court case pertaining to the IRS’ ability to regulate a new class of tax preparers called Registered Tax Return Preparers (RTRPs). The IRS created the RTRP class and then wrote the rules regulating the class. Three preparers affected by the RTRP rules brought suit against the IRS because their businesses were negatively affected by the rules. The preparers won and an injunction was issued against the IRS stopping them from enforcing the RTRP rules. In addition, the IRS was told to stop enforcing the Preparer Tax Identification Number (PTIN) system in which all preparers are required to obtain a PTIN and undergo a background check. The IRS subsequently asked for partial relief from the injunction concerning the PTIN. On Friday, February 1, the judge agreed with the IRS that the PTIN system is valid. The RTRP system is on hold but the PTIN system lives on. Evidently, the IRS has not decided whether they will appeal the part of the verdict that invalidated the RTRP system. Stay tuned for further developments. This is Jerry Coon signing off.

 

Jerry Coon is an Enrolled Agent

and Registered Tax Return Preparer.

He owns Action Tax Service on

Northland Dr in Rockford.

Contact Jerry through his website:

www.actontaxservice.com.

 

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