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Sigma Tax Pro and IRS Issue Warning to Tax Pros to Monitor Their PTINs

Sigma Tax Pro implores tax pros to beware of suspicious activity regarding their Preparer Tax Identification Numbers.

In a recent effort by the IRS, they have teamed up with major tax prep chains as well as software developers in a “Security Summit” with the goal of combatting cyber-security threats. The IRS stated, via IRS.gov on August 9th, that online-criminals are targeting tax professionals in an attempt to steal client data, passwords for IRS eServices, electronic filing identification numbers, in addition to PTIN information. The IRS is planning to educate tax pros about the need for online security, as well as set new security standards industry wide. The IRS is relying, in part, on the ever increasing due diligence of individual preparers to monitor their own information.

Ian Gardner, of Sigma Tax Pro stated: “We hear about these types to thing every year, but hopefully this year we can come together as a tax prep community to be proactive instead of reactive, and effectively take on this problem.”

The main action that tax pros can take is to monitor the amount of returns filed using their PTIN, which will be reported on the IRS website. Tax pros will simply log in to their PTIN account and, within a few clicks, be able to see their records. This system will only report PTIN holders filing 50 or more tax returns from the Form 1040 series. According to the IRS, this information will be updated weekly, and should be monitored during tax season, as well as after.

If misuse is suspected, tax professionals are urged to complete Form 14157 and file a complaint with the IRS directly.

Sigma Tax Pro provides a full range of essential services for tax pros. This includes industry leading software solutions as well as technical support, tax preparation support and client retention strategies. Sigma Tax Pro specializes in helping tax preparation firms expand their businesses, open new offices and increase their client base.

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VOLUME 15 – SPRING 2016

sigma-1Sigma Tax Pro Reminds Tax Pros About EIC Notifications From IRS

Sigma Tax Pro encourages tax pros to proactively reach out to clients who may have received an EIC letter or notice from the IRS.

Delray Beach, Florida March 9th, 2016

As tax season is winding down, Sigma Tax Pro wants to remind tax pros to proactively reach out to their clients who applied for the Earned Income Credit this year, but have not yet received their refund. There is a chance that the taxpayer received a letter from the IRS that will delay the refund, and by reaching out to those clients and letting them know to be on the look-out for that letter, tax pros can reduce the delay as much as possible. Taking this action will not only help your client receive their refund, but if you elected to use a Refund Transfer product, it will ensure you receive your preparation fees in a timely manner as well.

Ian Gardner, of Sigma Tax Pro, encourages tax pros to think of the situation from the perspective of the taxpayer: “Many clients receive these letters from the IRS, and they either panic, or ignore them completely. As a tax pro, you can let them know the necessary steps to get their refund, as well as remind them you are available to help.” A client may receive a letter or notice from the IRS for a number of reasons: if they qualify for EITC but have not claimed it on their return; if they need to verify their EITC claim; or if the client’s previous EITC claim was reduced or disallowed and they need to file Form 8862 to claim EITC.

Taxpayers and tax pros alike are reminded to be wary of anyone posing as an IRS agent, and should always report any suspicious activity. More information regarding fraud, identity theft, and phishing can be found on the IRS website.

Sigma Tax Pro provides a full range of essential services for tax pros. This includes industry leading software solutions as well as technical support, tax preparation support and client retention strategies. Sigma Tax Pro specializes in helping tax preparation firms expand their businesses, open new offices and increase their client base.

 


 

sigma-2Sigma Tax Pro Reminds Tax Pros Of Nearly $1 Billion In Unclaimed Refunds

Sigma Tax Pro urges tax pros to be diligent in reviewing their clients previous year returns to verify if they are among the more than one million taxpayers who did not file a 2012 tax return.

Delray Beach, Florida March 10, 2016

Under the current law, taxpayers are allowed a three-year window to claim their refund. For those who did not participate in the 2012 filing season, this is their last chance to claim the money to which they are rightfully entitled. Taxpayers are reminded that, in order to claim their prior year refund, all subsequent years must also be filed. If taxpayers are having issues obtaining prior year forms they can use the IRS tool “Get My Transcript by Mail.” The deadline to file for 2012 is April 18th, 2016, or April 19th for those in Maine and Massachusetts.

Ian Gardner, of Sigma Tax Pro, reminds tax pros that, “…Taxpayers may be missing out on more than just their refund amounts. Many individuals also qualify for EITC, which provides aid to families below certain income thresholds.” The IRS has published total potential refund amounts for each state, with the highest potential refund amounts coming from Texas, California, Florida, and New York. Tax pros in these areas are encouraged to be more diligent in ensuring their clients file, and do so within the allotted window. To contrast, Vermont, North and South Dakota, and Wyoming had the lowest potential amounts.

Sigma Tax Pro provides a full range of essential services for tax pros. This includes industry leading software solutions as well as technical support, tax preparation support and client retention strategies. Sigma Tax Pro specializes in helping tax preparation firms expand their businesses, open new offices and increase their client base.

 


 

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VOLUME 14 – FALL 2015

vol-14-01Taxpayers Who Used ‘Get Transcript’ Feature on IRS Website Should Be on the Lookout for IRS Letter, Advises Sigma Tax Pro

The IRS is sending out over 200,000 letters to taxpayers who were affected by ‘Get Transcript’ data breach

Delray Beach, Florida, August 21st 2015

After the initial reports of the issue with the IRS’s ‘Get Transcript’ application that surfaced in May, an internal review has now revealed the full extent of the fraudulent attempts to access taxpayers’ information. Jody Dovich of Sigma Tax Pro states “many tax professionals were already aware of the issue and informed their clients when the news first broke.” However, the IRS will now be sending letters out to all taxpayers who may have had their information stolen by criminals. The IRS maintains that the criminals did not gain access to internal IRS databases however. /p>

The IRS will also be offering a number of additional services to those affected by the issue. These services include free credit protection as well as Identity Protection PINs. The IRS also believes that stolen data may have been taken with a view to filing fraudulent returns next year. For this reason, anyone affected should take all precautions to protect themselves using credit monitoring and the PIN system.

Sigma Tax Pro provides a full range of essential services for tax pros. This includes industry leading software solutions as well as technical support, tax preparation support and client retention strategies. Sigma Tax Pro specializes in helping tax preparation firms expand their businesses, open new offices and increase their client base. Sigma is also launching a new identify theft product called IDShield which will be released in September of this year.

Contact: Jody Dovich
Sigma Tax Pro
+1 561-450-6422
Email:http://www.prweb.com/EmailContact.aspx?prid=11351557

 


 

vol-14-02Sigma Tax Pro Reminds Parents and Students to Check on All Education Related Tax Benefits Available

Taxpayers should check to see if they will qualify for either of two college tax credits or other education-related tax benefits for 2015.

Delray Beach, Florida, August 21st 2015

As America says goodbye to summer and heads back to school, students and parents should check to see if they can take advantage of any education-related tax benefits. The two main benefits are the American Opportunity Tax Credit and the Lifetime Learning Credit which are available to taxpayers who pay qualifying expenses for an eligible student. The IRS considers eligible students as the taxpayer, spouse and their dependents. The American Opportunity Tax Credit can provide a credit for eligible students, however the Lifetime Learning Credit provides a maximum credit per tax return.

Jody Dovich of Sigma Tax Pro highlights the importance of being aware of these often overlooked benefits: “When it comes time to file taxes, everyone is looking to squeeze every last dollar out of their refund and this is a great way to do just that.” Nonetheless, it is vital that tax pros are aware of the specific details on these tax credits. They only apply to eligible students who are enrolled in eligible colleges, universities or vocational schools, including both nonprofit and for-profit institutions. Another caveat is that the credits are subject to income limits and this could affect the amount claimed on their tax return.

Sigma Tax Pro provides a full range of essential services for tax pros. This includes industry leading software solutions as well as technical support, tax preparation support and client retention strategies. Sigma Tax Pro specializes in helping tax preparation firms expand their businesses, open new offices and increase their client base. Sigma also offers its audit assistance product to protect tax pros and taxpayers in the event of an IRS audit.

Contact: Jody Dovich Sigma Tax Pro +1 561-450-6422

 


 

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VOLUME 13 – SPRING 2015

mar-2015-01Use ‘Where’s My Refund’ To Track Your Refund, Advises Sigma Tax Pro

At this time of year many taxpayers are anxiously awaiting their refunds; the ‘Where’s My Refund’ site provides a quick and easy answer.

Delray Beach, Florida, March 28th, 2015

Any seasoned tax pro will be expecting the most common question during tax season which is “where’s my refund?” The IRS reminds taxpayers to visit their site at http://www.irs.gov/refunds to get the most up-to-date status on their refund. The IRS offers taxpayers a number of useful tips through their Tax Time Guide, which is designed to help taxpayers through the busy tax season period. The IRS has also developed an application called IRS2Go 5.0 which can be downloaded onto smartphones; the ‘Where’s My Refund?’ feature is accessible through the app.

Taxpayers should expect their information to be available within 24 hours of e-filing their tax return or four weeks after mailing a return. The system updates once per 24-hour period so there is no need to continually check throughout the day. If the information has not updated, the taxpayer should check back the following day. The ‘Where’s My Refund?’ feature has received over 179 million hits this year alone so it’s definitely a hit with taxpayers. Individuals should have their Social Security number, filing status and exact refund amount when checking the status of their return or refund.

Sigma Tax Pro provides a full range of essential services for tax pros. This includes industry leading software solutions as well as technical support, tax preparation support and client retention strategies. Sigma Tax Pro specializes in helping tax preparation firms expand their businesses, open new offices and increase their client base. Sigma also offers its audit assistance product to protect tax pros and taxpayers in the event of an IRS audit.

Contact: Jody Dovich Sigma Tax Pro +1 561-450-6422

 


NEWS AND TIPS

mar-2015-02Sigma Tax Pro Advises Taxpayers To Look Out For Identity Verification Letters

The IRS may require taxpayers to verify their identity before processing their return and issuing a refund.

Delray Beach, Florida, March 28th, 2015

Tax professionals should advise their clients that they may receive a letter from the IRS requesting them to verify their identity. There is a website that taxpayers can visit to complete the process, idverify.irs.gov. The IRS does not send the letter because of any wrongdoing on the taxpayer’s behalf but only when they have indications that identify theft may be taking place. The communication they will receive from the IRS will be Letter 5071C. When they access the verification site, they will have to answer a series of questions that only the taxpayers themselves could answer. They will then be asked to confirm that they submitted the return. If they did not, the IRS can then take action to protect the taxpayer.

The letter will be mailed via the U.S. Postal Service; the IRS will not communicate this information through emails or phone calls. If taxpayers receive phone calls regarding the letter from someone claiming to be the IRS, they can be assured it is not a legitimate call. The letter will contain a toll-free number that can be called if the individual does not wish to use the idverify.irs.gov site to complete the process. However, there may be long hold times on the toll-free line during peak hours, so the website will always be the fastest and easiest option.

Sigma Tax Pro provides a full range of essential services for tax pros. This includes industry leading software solutions as well as technical support, tax preparation support and client retention strategies. Sigma Tax Pro specializes in helping tax preparation firms expand their businesses, open new offices and increase their client base. Sigma also offers its audit assistance product to protect tax pros and taxpayers in the event of an IRS audit.

 


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VOLUME 12 – WINTER 2015

vol12-12015 Tax Filing Season Volume Greater than Previous Year, Reports Sigma Tax Pro

The early start to the 2015 tax season has seen an increase in electronically filed returns and direct deposit requests.

In contrast to last year’s delayed tax season beginning at the end of January, this years January 20th start has seen an increase in e-files and refunds over 2014 numbers. The IRS has received more than 14 million tax returns as of January 31st, and more than 13 million of those returns were filed electronically. This is a testament to the success and efficiency of the e-filing process. IRS Commissioner John Koskinen affirms their commitment to this process: “We encourage taxpayers to e-file their returns since it is the quickest, safest and most accurate way to file and the fastest way to get a refund.”

Tax professionals should also be aware of the increase in the use of the IRS’ direct deposit option for taxpayer refunds. To date the IRS has issued 7.6 million refunds worth $26.8 billion with the average refund worth $3,539 during the 2015 tax season. 7.3 million of these refunds worth $26.2 billion have been directly deposited to taxpayer accounts. It is clear that e-filing tax returns and receiving refunds via direct deposit is the way of the future for taxpayers and tax pros alike.

Sigma Tax Pro provides a full range of essential services for tax pros. This includes industry leading software solutions as well as technical support, tax preparation support and client retention strategies. Sigma Tax Pro specializes in helping tax preparation firms expand their businesses, open new offices and increase their client base. Sigma also offers its audit assistance product to protect tax pros and taxpayers in the event of an IRS audit.

Contact: Jody Dovich Sigma Tax Pro +1 561-450-6422

 


NEWS AND TIPS

dec-2014-proupdate-02Sigma Tax Pro Warns Tax Pros to Beware of IRS Phishing Scams

Despite the IRS’s efforts to thwart phishing scams, many tax preparers have received bogus emails soliciting information this tax season.

Many tax professionals are already aware of the threat posed by phishing scams but the IRS recently issued another warning about bogus emails asking to verify information. The email appears to be from the IRS e-services asking tax preparers to verify their information. The email is in fact from scammers trying to obtain usernames and passwords so they can access taxpayers information. The IRS makes it very clear on their website that they do not initiate contact via email and that any unsolicited emails should be reported to [email protected].

The phishing emails may request that tax preparers verify a variety of items including IRS e-services portal information and Electronic Filing Identification Numbers, or EFINs. IRS Commissioner John Koskinen stated the following in regards to the issue: “I urge taxpayers to be wary of clicking on strange emails and websites; they may be scams to steal your personal information.” The end of goal of such phishing scams is typically the identity theft related crimes that have plagued taxpayers and tax pros in recent times.

Sigma Tax Pro provides a full range of essential services for tax pros. This includes industry leading software solutions as well as technical support, tax preparation support and client retention strategies. Sigma Tax Pro specializes in helping tax preparation firms expand their businesses, open new offices and increase their client base. Sigma also offers its audit assistance product to protect tax pros and taxpayers in the event of an IRS audit.

 


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VOLUME 11 – WINTER 2014

dec-2014-proupdate-01House Votes For Bare-Minimum Tax Break Extension

House Votes For Bare-Minimum Tax Break Extension Reports Sigma Tax Pro The House of Representatives voted to keep lapsed tax breaks for 2014 but no agreement has been reached for 2015.

The so-called bare minimum package was finally agreed upon by the House of Representatives. This will avoid delaying tax refunds and disadvantaging taxpayers in the coming tax season. The House voted 378-46 to approve the measure, which provides $42 billion in relief to taxpayers. The Senate will not amend the bill so there will be a simple up or down vote to decide. This also comes as a welcome relief to tax professionals across America who have been waiting to hear the outcome of this decision.

However, as Jody Dovich at Sigma Tax Pro explains, this still leaves uncertainty in the future for taxpayers and tax pros alike. “Many of our clients are relieved that they now know what the 2014 tax season will look like, but they still want a long-term solution to the problem,” states Jody Dovich. President Obama has said he is also open to the short-term bare minimum option but has not confirmed whether or not he will sign the bill if the Senate votes in favor.

Sigma Tax Pro provides a full range of essential services for tax pros. This includes industry leading software solutions as well as technical support, tax preparation support and client retention strategies. Sigma Tax Pro specializes in helping tax preparation firms expand their businesses, open new offices and increase their client base. Sigma is also reminding all tax pros to check that their EFIN and PTIN numbers are up to date for the coming tax season.

Contact: Jody Dovich Sigma Tax Pro +1 561-450-6422

 


NEWS AND TIPS

dec-2014-proupdate-02Sigma Tax Pro Reports That IRS Needs To Take Action To Resolve Frozen Credit Accounts

The Treasury Inspector General for Tax Administration (TIGTA) states that the IRS needs to resolve frozen credit accounts and update systems in line with current procedures.

The so-called frozen credit accounts are accounts that are in a pending status contingent on some future event. These are typically monies that are owed to taxpayers but cannot be released for various reasons. The Treasury Inspector General for Tax Administration (TIGTA) proposes that the IRS is not only responsible for collecting taxes but should also provide excellent customer service and ensure any delays are minimized. This also prevents the payment of unnecessary interest to taxpayers because credit accounts were delayed.

The TIGTA uncovered individual and business tax modules with credits due. There were 156 individual modules with $46.4 million and 128 business modules with $1.6 billion in credits that could have been resolved sooner. The TIGTA offered the IRS 10 recommendations on how to improve their existing processes regarding frozen credit accounts. Jody Dovich at Sigma Tax Pro confirms that many tax professionals report frustrations from clients when they experience long delays in receiving refunds that are owed.

Sigma Tax Pro provides a full range of essential services for tax pros. This includes industry leading software solutions as well as technical support, tax preparation support and client retention strategies. Sigma Tax Pro specializes in helping tax preparation firms expand their businesses, open new offices and increase their client base. Sigma is also reminding all tax pros to check that their EFIN and PTIN numbers are up to date for the coming tax season.

 


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VOLUME 010 – FALL 2014

nov-2014-1Sigma Tax Pro Discusses Increase In Tax Benefits Due To Inflation Adjustments

The annual inflation adjustments have been released by the Internal Revenue Service for the 2015 tax year

It is important for all tax pros to be aware of the annual inflation adjustments the IRS makes to ensure they are getting their clients the maximum refund allowable. Revenue procedure 2014-61 provides the details about these adjustments and is available on the IRS website. The income level at the tax rate of 39.6 percent for the highest earning individuals has increased from $406,750, and $457,600 for married filing jointly, to $413,200 and $464,850 respectively. The standard deduction has increased to $6,300 for singles and married filing separately and $12,600 for married filing jointly. In addition, the standard deduction for head of household has increased from $9,100 to $9,250.

The Earned Income Credit maximum will be $6,242 for those filing jointly who have 3 or more qualifying children, an increase from the 2014 amount of $6,143. More details on the maximum credit amounts for categories such as income thresholds and phase-outs can be found in the revenue procedure at the link provided above. Some items have remained the same, however, such as the exclusion for gifts amount which remains at $14,000. Sigma Tax Pro urges all tax pros to review the revenue procedure carefully to ensure they are up to date with all changes.

Sigma Tax Pro provides a full range of essential services for tax pros. This includes industry leading software solutions as well as technical support, tax preparation support and client retention strategies. Sigma Tax Pro specializes in helping tax preparation firms expand their businesses, open new offices and increase their client base. Sigma is also reminding all tax pros to check their EFIN and PTIN numbers are up to date for the coming tax season.

Contact: Jody Dovich Sigma Tax Pro +1 561-450-6422

 


NEWS AND TIPS

nov-2014-2Sigma Tax Pro Announces PTIN Renewal Period Underway

Sigma Tax Pro Announces PTIN Renewal Period Underway For Tax Professionals The Internal Revenue Service reminds tax pros that PTINs must be renewed for the 2015 tax season

The Internal Revenue Service has issued a reminder to more than 690,000 federal tax return preparers nationwide that they must renew their Preparer Tax Identification Numbers (PTINs). All current PTINs expire on December 31st, 2014 and anyone planning to prepare tax returns in 2015 must have a valid PTIN number from the IRS. The PTIN number has to be entered on all tax returns prepared, and failure to have a valid PTIN may result in penalties.

Jody Dovich at Sigma Tax Pro urges all tax pros to complete their PTIN renewal process as early as possible, “It’s easy to get distracted during the holiday season and leave it until too late.” Any preparer who already has a 2014 PTIN can complete the renewal process quickly and easily online at www.irs.gov/ptin. For first-time applicants, the PTIN application fee is only $64.25 and this process can also be completed on the IRS website. However, for those wishing to complete a paper application, the process can take 4 to 6 weeks.

Sigma Tax Pro provides a full range of essential services for tax return preparers. This includes industry-leading software solutions as well as technical support, tax preparation support and client retention strategies. Sigma Tax Pro specializes in helping tax preparation firms expand their businesses, open new offices and increase their client base. Tax preparers can also become resellers of Sigma’s 10400-CL software and increase their revenue during tax season.

Sigma Tax Pro provides a full range of essential services for tax pros. This includes industry leading software solutions as well as technical support, tax preparation support and client retention strategies. Sigma Tax Pro specializes in helping tax preparation firms expand their businesses, open new offices and increase their client base. Sigma is also reminding all tax pros to check their EFIN and PTIN numbers are up to date for the coming tax season.

 


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VOLUME 09 – FALL 2014

oct-2014-02Sigma Tax Pro Advises Tax Pros To Be Aware Of Potential Changes to W-2 Deadlines

A new report by the GAO recommends the IRS move the W-2 filing deadline up to reduce refund fraud

The issue of refund fraud is always a topic of great importance to tax pros and is never far from the headlines. The GAO is pushing the IRS to move the deadline for filing W-2s up to January 31st and also to increase electronic filing of W-2s in an effort to stop fraudulent refunds from being filed. The logic behind this is that if the IRS had earlier access to W-2s they would be able to verify income amounts reported on tax returns. Currently employer wage data is not available until months after refunds are issued making it impossible to verify reported income amounts.

In the aforementioned report the GAO recommends Congress provide the Treasury with authority to lower the annual threshold for e-filing W-2s and evaluate the impact of moving the W-2 deadline forward. The GAO states that Congress “neither agreed nor disagreed with GAO’s recommendations, and it stated it is determining how these potential corrective actions align with available resources and IRS priorities.” The GAO’s stated goal is to reduce the amount of refund fraud which they explain is largely unquantifiable at the current time.

Sigma Tax Pro provides a full range of essential services for tax pros. This includes industry-leading software solutions as well as technical support, tax preparation support and client retention strategies. Sigma Tax Pro specializes in helping tax preparation firms expand their businesses, open new offices and increase their client base. Tax preparers can also become resellers of Sigma’s 10400-CL software and increase their revenue during tax season.

Contact: Jody Dovich Sigma Tax Pro +1 561-450-6422

 


NEWS AND TIPS

oct-2014-01Treasury Inspector General’s Focus On Problematic Preparers Supported By Sigma Tax Pro

The Treasury Inspector General for Tax Administration proposes Return Preparer Coordinators could help identify problematic preparers

The Treasury Inspector General for Tax Administration’s (TIGTA) report examines the return preparer coordinators of the IRS’s Return Preparer Office. This office is focused on reviewing the activities of of paid preparers who consistently file inaccurate or false returns. The Treasury Inspector General reported favorably that “Return Preparer Coordinators effectively managed most of the paid preparer activities under their control and provided good audit leads for further enforcement actions.” Nonetheless the report also suggests that more can be done and more timely responses to allegations of inappropriate conduct would be helpful. The TIGTA also confirms that most tax preparers are trustworthy but that increased vigilance is needed on those that do not abide by the rules.

The TIGTA’s report also provides interesting data on the use of paid tax return preparers; in 2013 81.5 million individual tax returns were prepared by paid tax return preparers which equals almost 60 percent of all individual returns filed. The types of misconduct most commonly found are defined as intentional manipulation of tax return information to generate excessive refunds for taxpayers, modifying tax returns after the taxpayers have signed them to steal the refunds, or using taxpayer identities to create fictitious tax returns to generate fraudulent refunds.

Sigma Tax Pro provides a full range of essential services for tax return preparers. This includes industry-leading software solutions as well as technical support, tax preparation support and client retention strategies. Sigma Tax Pro specializes in helping tax preparation firms expand their businesses, open new offices and increase their client base. Tax preparers can also become resellers of Sigma’s 10400-CL software and increase their revenue during tax season.

 


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VOLUME 08 – FALL 2014

sept-s2014_1Sigma Tax Pro Comments On Cuts To IRS Budget

Recent cuts to the IRS budget by Congress affect hold times experienced by professional tax preparers

As many tax pros are already aware the IRS budget was cut by 7% in 2014. IRS Commissioner John Koskinen feels that these cuts are unfair and may be driven by the IRS’ targeting of conservative groups last year. Koskinen argues that the IRS budget is only $11 billion per year but if compliance with the tax code drops 1% this costs the government $30 billion per year in lost revenues. The commissioner sees the IRS as a money-making entity and that cutting its budget will cause more harm than good in the long run.

Jody Dovich from Sigma Tax Pro explains how this will affect tax professionals: “Hold times are already long when preparers are calling the IRS for assistance. These budget cuts will only increase the hold times and make tax season even more frustrating for tax preparers and their clients.” John Koskinen affirmed this idea in a recent address to the National Society of Accountants and urged tax professionals to call their congressmen and vent their frustrations. Koskinen also highlights that the IRS budget is being cut even as they are being asked to take on the additional work of handling the tax provisions of the current administration’s signature legislation, the Affordable Care Act.

Sigma Tax Pro provides a full range of essential services for tax pros. This includes industry-leading software solutions as well as technical support, tax preparation support and client retention strategies. Sigma Tax Pro specializes in helping tax preparation firms expand their businesses, open new offices and increase their client base. Tax preparers can also become resellers of Sigma’s 10400-CL software and increase their revenue during tax season.

Contact: Jody Dovich Sigma Tax Pro +1 561-450-6422

 


NEWS AND TIPS

sept-s2014_2Tax Pros aid In IRS Recovery Of $576 Million In Tax Refunds

Sigma Tax Pro applauds the recovery of refunds by the IRS assisted by financial institutions and tax professionals.

The Treasury Inspector General for Tax Administration recently reported last year’s recovery amount, which is more than double previous years’ recoveries. This success was attributed to the IRS’s External Leads Program. The program generates leads about potentially incorrect tax refunds from banks, brokerage firms, law enforcement and the tax preparation industry. The refunds in question can be Treasury checks, direct deposits or prepaid debit cards which are the standard refund options that tax pros will offer to their clients. While the leads program has undoubtedly been a success, the Treasury Inspector General also sees room for improvement through faster follow-up on leads.

The recent success of the program can be attributed to the exponential increase in partner financial institutions that the IRS has enjoyed since 2010. Jody Dovich from Sigma Tax Pro comments on this increase: “When the program first started in 2010, they only had 10 institutions signed up. Now in 2014, they have over 250 institutions on board. That’s a massive increase.” The program has also increased its revenue from $233 million to last year’s record of $576 million. If the IRS is able to achieve their goal of verifying and responding to leads quicker, then next year’s revenue should only grow, as well as the number of institutions participating in the program.

Sigma Tax Pro provides a full range of essential services for tax professionals. This includes industry-leading software solutions as well as technical support, tax preparation support and client retention strategies. Sigma Tax Pro specializes in helping tax preparation firms expand their businesses, open new offices and increase their client base. Tax preparers can also become resellers of Sigma’s 10400-CL software and increase their revenue during tax season.

 


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VOLUME 07 – SUMMER 2014

aug-2014-01Reform to Child Tax Credits Approved by House, Confirms Sigma Tax Pro

New legislation approved by the House will tighten up Child Tax Credits to reduce misuse and fraud

The Child Tax Credit Improvement Act, known as H.R. 4936, would adjust the amount of the refundable tax credit, currently set at $1,000, for inflation. Sam Johnson, R-Texas, put forward the bill with a view to reduce commonplace fraud associated with the Child Tax Credits and also protect taxpayers. The act would require anyone claiming the credit to provide their social security numbers to be able to benefit from the tax credit. This requirement is already mandatory for the Earned Income Tax Credit and was used as a fraud prevention measure in the 1996 Welfare Reform law. It is also hoped that adjusting the credit for inflation will provide an extra benefit for couples who file joint returns and also eliminate the marriage penalty in the current version of the Child Tax Credit.

A report by the Treasury Inspector General for Tax Administration highlights the potential for fraud that exists with Child Tax Credit. The report pointed out that the number of individuals filing for the Additional Child Tax Credit without a social security number increased exponentially from 62,000 filers in 2000 to 2.3 million filers in 2010. While the need to reduce fraud is clear, the bill may also make life more difficult for some families as the expanded refundable portion of the Child Tax Credit, which expires in 2017, is not addressed in the bill. This typically affects the lowest income families and would potentially increase the number of families living below the poverty line.

 


 

NEWS AND TIPS

aug-2014-02Sigma Tax Pro Confirms Student and Family Tax Simplification Act Is Passed by House

The house recently passed legislation that will consolidate the four different tax incentives for higher education into one single tax credit.

Professional tax preparers have often struggled with the complex nature of higher education tax incentives. The existing four tax incentives consist of the Hope Credit, the American Opportunity Tax Credit, the Lifetime Learning Credit, and the tuition deduction. The new Student and Family Tax Simplification Act would create an expanded American Opportunity Tax Credit. The simplified version would provide for a 100 percent tax credit for the first $2,000 of eligible higher education expenses and a 25 percent tax credit for the next $2,000 of such expenses (for a maximum credit of $2,500). An important piece of the new tax credit is that the first $1,500 would be refundable so taxpayers can receive the credit even if they have not paid any taxes.

Taxpayers would be able use the credit for tuition, other fees as well as books and other necessary educational materials. The idea behind the credit is that it would help lower income families to cope with the rising cost of higher education. It can be used for up to four years of higher education at approved universities and community colleges, as well as trade schools. The American Association of Community Colleges, the Association of Community College Trustees, the National Association of College Stores, and the United States Student Association support the legislation. But such support is not unanimous within the higher education sector. The College and University Professional Association for Human Resources, the Council for Christian Colleges and Universities, the Council of Graduate Schools, the Hispanic Association of Colleges and Universities, the National Association of Independent Colleges and Universities, and many others have voiced opposition to the bill.

 


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