VOLUME 02 – WINTER 2014

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Sigma Tax Pro reports IRS attempt to regulate professional tax preparers struck down by Supreme Court

A recent attempt by the IRS to introduce a certification exam, annual fees, and 15 hours of continuing education courses each year has been unsuccessful.

Professional tax preparers can breathe a sigh of relief as a federal appeals court struck down the recent attempt by the IRS to increase regulation on the industry. The IRS had proposed sweeping changes in the requirements to become a registered tax preparer; this would have included an initial certification exam, new annual fees and and an annual requirement to complete 15 hours of continuing education. Unsurprisingly the move was met with significant opposition from tax preparer associations and the federal appeals court decision was met with enthusiasm by hundreds of thousands of tax pros nationwide.

CPAs, enrolled agents and attorneys handling IRS audits have long been subject to onerous requirements from the IRS, however the recent attempt to expand this regulation to anyone preparing tax returns for money has been unpopular. Many tax professionals are small local businesses and the proposed regulations would have made it impossible for many of them to continue to operate. The IRS holds that its objective is to ensure that taxpayers get quality service from tax professionals and the regulations would not have been unreasonable.

John Koskinen, IRS commissioner believes that a further appeal is not forthcoming but they are exploring other options. This may include voluntary credentials for tax preparers as well as legislative remedies. Koskinen also recognized the chances of the new regulations being passed by the Supreme Court were slim from the beginning. He did however reject claims that the increased regulation would have unfairly benefited large tax preparation chains such as H&R Block and Jackson Hewitt.

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. The Audit Assistance program is offered to new and existing clients and can provide them with peace of mind in the event their clients are audited by the IRS.

 

 


 

NEWS AND TIPS

proupdate-v1-w2014_03Sigma Tax Pro explains what tax preparers need to know about IRS guidelines on medical and dental expenses

Recent changes to IRS guidelines on medical and dental expenses can have serious implications for tax preparers and their clients
Many taxpayers are unaware of the complex nature of claiming medical and dental expenses on their tax return. The 2014 tax season has seen the advent of many new regulations and it essential that all professional tax preparers are aware of the new guidelines and their implications for their clients. The commonly held assumption by taxpayers that all medical and dental expenses are deductible is certainly not accurate but even seasoned tax professionals may not be aware of some of the recent changes.

The first and perhaps most important change is that medical and dental expenses must exceed 10 percent of AGI before they can be claimed as a deduction. However this is an exception which states that taxpayers over 65 years of age may continue to use the previous threshold of 7.5 percent. Furthermore these expenses can only be claimed if itemized and cannot be claimed if the taxpayer has already claimed the standard deduction. The IRS also mandates that claimed expenses must have been paid in 2013 and must have been paid for the taxpayer, their spouse or their dependents. Only certain expenses are eligible and for guidance IRS Publication 502 should be consulted. Finally while travel expenses incurred while traveling to receive medical care are eligible double deductions are not.

Finally, perhaps the most obvious regulation relates to claiming medical and dental expenses paid from tax free accounts, this is referred to as double benefit. Such accounts include Health Savings Accounts or Flexible Spending Arrangements, any expenses paid from these accounts are not eligible for deductions. In summary it is essential that tax professionals make their clients aware of the new guidelines to ensure they receive the maximum refund with minimum stress.

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. The Audit Assistance program is offered to new and existing clients and can provide them with peace of mind in the event their clients are audited by the IRS.

 


SUPPORT

proupdate-v1-w2014_04Here to help you

Get Full 24/7 Support throughout Tax Season

Sigma Tax Pro fully understands the intense workload that tax professionals are under during tax season. We are committed to supporting our clients through even the most stressful days. Our customer service agents are available to take your calls 24 hours a day, 7 days a week. Whatever your tax preparation software needs are, Sigma Tax Pro has the solution.