VOLUME 09 – FALL 2014

Sigma 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

Treasury 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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