Category: Professional Tax Articles

Sigma 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

 

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NEWS AND TIPS

Tax 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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IRS Makes Offshore Voluntary Disclosure Program More Open for Non-willful Tax Evasion, Advises Sigma Tax Pro

A recent announcement by the IRS is intended to bring more offshore taxpayers into compliance with U.S. tax obligations.

Professional tax preparers have often faced challenges in working with clients who have offshore investments or those who earn other income outside of the United States. The IRS’s Offshore Voluntary Disclosure Program was intended to encourage non-compliant taxpayers to come into compliance. However many taxpayers have been unwilling to do so for fear of severe penalties. The new announcement by the IRS is designed to make it easier for those are non-compliant to come to the table and it is hoped it will result in thousands of taxpayers making good on their obligations.

The highlights of the announcement are an expansion of the streamlined filing compliance procedures and important modifications to the Offshore Voluntary Disclosure Program. The important distinction in these cases is between those taxpayers whose non compliance was non-willful and those who intentionally avoided paying taxes. The Department of Justice is also working in tandem with the IRS to identify US based institutions who have willfully assisted taxpayers in their avoidance of taxes. Moreover, thousands of foreign institutions have also agreed to cooperate with the U.S. government and provide information on taxpayers who have assets overseas and are avoiding paying taxes.

The Offshore Voluntary Disclosure Program was launched by the IRS in 2012 and the IRS reports that more than 45,000 taxpayers have used the program paying about $6.5 billion in taxes, interest and penalties.It is hoped the new announcement will convince non compliant taxpayers who have previously been reluctant to come forward to do so. For non-willful taxpayers residing outside the U.S. all penalties will be waived and for those residing inside the U.S. there will be a miscellaneous offshore penalty equal to 5 percent of the foreign financial assets that gave rise to the tax compliance issue..

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. Clients can already renew their tax software licenses for next year’s tax season and ensure the lowest pricing available in the industry.

 

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NEWS AND TIPS

Sigma Tax Pro Breaks Down Key Tax Provisions of Affordable Care Act

The Affordable Care Act contains some key tax provisions that all professional tax preparers should be aware of.

The Affordable Care Act is a complex piece of legislation that many taxpayers are not well versed in. Furthermore many tax professionals do not fully understand the ramifications of the the current administration’s landmark law. The main items to be aware of are the Premium Tax Credit and the Individual Shared Responsibility payment. The IRS administers these tax provisions and it is essential that accountants, CPAs, enrolled agents and tax preparers can discuss them with their clients when next tax season arrives.

The Premium Tax Credit is applicable to any taxpayers who obtain their health insurance coverage through the Health Insurance Marketplace. Beginning in 2014 any taxpayers who get their coverage in this fashion will be eligible for this tax credit which will make purchasing health insurance more economically viable. The Open Enrollment period for the Health Insurance Marketplace has ended but some individuals may still be able to use it, such as those who have recently become unemployed and no longer have employer sponsored health insurance. In summary if a taxpayer meets any of the following criteria they may be eligible; they buy health insurance through the Marketplace; they are ineligible for coverage through an employer or government plan; they are within certain income limits; they do not file a Married Filing Separately tax return and cannot be claimed as a dependent by another person.

The Individual Shared Responsibility payment refers to the requirement that individuals must have essential minimum health insurance for themselves and each member of their family. If they do not they must have an exemption from the responsibility to have minimum essential coverage, or make a shared responsibility payment when they file their taxes. For this reason it is important their chosen tax professional can correctly advise them on this requirement as it could have a significant impact. The minimum requirement could be met by employer sponsored heath insurance, government sponsored insurance, insurance purchased direct from a company or coverage purchased through the Health Insurance Marketplace.

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. Clients can already renew their software licenses for next year’s tax season and ensure the lowest pricing available in the industry.

 

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Sigma Tax Pro Reports New IRS Penalty Relief For Small Business Retirement Plans

The Internal Revenue Service recently announced it will pilot a one year program to help small businesses who owe penalties for their retirement plans.

 

Many small businesses have been saddled with penalties for not filing reporting documents pertaining to their retirement plans. The Internal Revenue Service announced this week that it will begin a pilot program to help small businesses in this position. During this pilot one-year period small businesses will be able to file current and prior year forms to avoid penalties. The details of the program can be found on the IRS website at Revenue Procedure 2014-32.

The penalties that small businesses can face in this situation can be up to $15,000 per return. Moreover, many businesses were unaware that this filing requirement even existed. The Internal Revenue Service hopes that the new program will allow good intentioned businesses to come into compliance with the filing requirements. Pension plan administrators must file an annual Form 5500, however this program is only available to certain small businesses such as owner-spouse arrangements.

In an attempt to simplify the process for business owners and retirement plan administrators, multiple plan returns will be allowable in a single submission. Furthermore, if returns are delinquent for more than one year, relief may still be granted and there will be no filing fee during the first year pilot phase.

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. Clients can already renew their software licenses for next year’s tax season and ensure the lowest pricing available in the industry.

http://www.miamiherald.com/2014/05/30/4147104/tax-preparers-claim-final-victory.html

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NEWS AND TIPS

Tax Preparers Claim Final Victory Over IRS in Licensing Plan, Announces Sigma Tax Pro

The conclusion to a case that has taken over two years was finally reached as the IRS declined to file a petition to the Supreme Court.

The case that began in 2012 when three tax preparers decided to take on the IRS reached its conclusion this month when the IRS did not exercise its option to seek a review of the case by the Supreme Court. Now that the deadline has passed, the issue can finally be put to rest and tax preparers around the country can breathe a sigh of relief. The IRS will not be able to require independent tax preparers to go through a licensing program which many within the industry perceived to be onerous.

The background to the case is interesting; the IRS proposed that it had the authority to regulate tax preparers under the “Horse Act” of 1884. This statute was created to regulate compensation claims for dead horses brought by civil war veterans but was used as a means to put forward licensing requirements for tax preparers in the 21st century. The three tax preparers who took on the IRS —Sabina Loving of Chicago, Ill., Elmer Kilian of Eagle, Wis., and John Gambino of Hoboken, N.J., argued that the IRS could not use this 19th century legislation without the approval of Congress.

The proposed licensing would have affected hundreds of thousands of tax preparers across the United States and it was argued that it would have benefited special interests over independent tax preparation offices. Ultimately, the IRS did not obtain congressional approval and declined their opportunity to take the case to the Supreme Court.

Sigma Tax Pro provides a full range of essential services for independent tax 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. Clients can already renew their tax software licenses for next year’s tax season and ensure the lowest pricing available in the industry.

http://article.wn.com/view/2014/05/27/Sigma_Tax_Pro_Reports_New_IRS_Penalty_Relief_for_Small_Busin_m/

 

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Sigma Tax Pro Advises Taxpayers and Tax Pros To Be Aware of Phony IRS Calls

Many American taxpayers have recently been subjected to a pervasive scam by fraudsters pretending to be IRS agents.

The Internal Revenue Service (October 31, 2013) warned taxpayers late last year of what is purported to be the largest IRS phone scam in history. Criminals have been calling taxpayers and demanding immediate payments for taxes owed. The fraudsters claim to be IRS agents and tell the victims they owe thousands of dollars to the IRS. They demand immediate payment which must be in the form of prepaid debit cards or wire transfers. Thousands of victims have already lost over $1 million through this elaborate ruse which often preys on recent immigrants to the United States.

The Washington Post (April 16th, 2014) recently covered the issue and posted a recorded conversation of one of the scam phone calls. They also report that the reason for immigrants being targeted in the scam relates to the threat of deportation that the criminals use to force the victim into paying whatever they demand. However, they also report that the scam has now spread to any taxpayer that can be conned into believing that they are indeed IRS agents. Furthermore the scam involves the use of VOIP (Voice Over Internet Protocol) technology so it appears the call is coming directly from the IRS. The call will show up on the victim’s caller ID as 1-800-829-1040 which is the main IRS phone number.

The IRS has warned taxpayers of several ways to tell if a phone call they receive could be a scam. The first sign is if you have not received notification in the mail prior to the phone call. The IRS will always communicate any past due taxes via mail first. Also if the caller becomes threatening or tries to intimidate you this is also a sign that it is a scam. Perhaps the simplest advice to follow is always to call the IRS first at 1-800-829-1040 to check if you do indeed owe taxes. If this is the case then payments arrangements can be made via the legitimate IRS call centers.

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. Clients can already renew their software licenses for next year’s tax season and ensure the lowest pricing available in the industry.

 

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NEWS AND TIPS

Sign Up Now For 2014 IRS Nationwide Tax Forums Recommends Sigma Tax Pro

The Internal Revenue Service recently announced the location and dates for its 2014 Nationwide Tax Forums.

 

The IRS Nationwide Tax Forums are popular with tax pros, enrolled agents, CFPs and CPAs across the United States. The three day forums will be held at five locations during the months of July and August. The first forum will be held in Chicago from July 1st to the 3rd and the pre-registration deadline is June 17th. The second will be in San Diego from July 15th to the 17th and the registration deadline is July 1st. New Orleans will host the third forum from July 22nd to the 24th with the deadline on July 8th. Washington D.C.’s forum will be from August 19th to the 21st and the deadline is August 5th. Finally Orlando, Florida will see the fifth and final forum on August 26th to 28th with an August 12th deadline.

The pre-registration deadlines can offer attendees considerable savings on the cost of enrollment; the on-site price will be $355 but those who take advantage of pre-registering will pay only $225. These three day events provide essential up-to-date information on federal and state tax issues. They also feature presentations by experts from the IRS and its partners as well as training seminars and workshops. There will over 40 separate seminars and workshops to take advantage of at each forum. Moreover, enrolled agents and CPAs can earn up to 18 Continuing Professional Education Credits in each location. CFPs may also be able to use the courses for continuing education credits pending approval.

Many national associations also participate in the forums including the American Institute of Certified Public Accountants (AICPA), the National Association of Tax Professionals (NATP) and the National Society of Tax Professionals (NSTP). Members of these associations qualify for further discounts and will pay only $215 before the pre-registration deadline. Attendees at the 2013 forums reported a 94% satisfaction rate and the 2014 forums mark their 24th year.

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. Clients can already renew their software licenses for next year’s tax season and ensure the lowest pricing available in the industry.

 

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IRS Has $760 Million in Refunds Available for Taxpayers Who Did Not File in 2010 Advises Sigma Tax Pro

The IRS recently announced it has $760 million for taxpayers who did not file a tax return in 2010, but returns must be filed by April 15, 2014.
A recent announcement by the IRS should be of interest to tax professionals across the United States. IRS commissioner John Koskinen advises any taxpayer who has not filed their return for 2010 to do so before April 15th of this year. He notes that it is often students and part time workers who have not filed their returns. Sigma Tax Pro advises tax professionals to check with their clients to ensure they filed a return for 2010 and if not to file before the upcoming deadline.

The law provides taxpayers with a three year window in which to claim refunds, the 2010 tax return deadline was originally April 15th, 2011 for this reason the window will close this year on April 15th marking exactly three years. Often taxpayers who earned relatively small amounts of money do not realize they may be eligible for a refund. However the IRS estimates that half of the outstanding refunds are more than $571 and there are close to one million refunds still waiting to be claimed. Furthermore there is no penalty for claiming a late refund, many taxpayers may be under the impression that they will incur penalties for filing late.

Tax pros should advise their clients that their 2010 refund checks can be withheld if they have not filed returns for 2011 and 2012. Moreover if the taxpayer has unpaid child support, outstanding student loans or other federal debt the refund can also be withheld. For low income taxpayers the potential loss is even greater as they will be unable to claim any Earned Income Tax Credit (EITC) which can be as much as $5,666.

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. Clients can already renew their software licenses for next year’s tax season and ensure the lowest pricing available in the industry.

 

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NEWS AND TIPS

Sigma Tax Pro Breaks Down IRS Education Tax Credits

Tax professionals are often challenged by the complex nature of education tax credits such as the American Opportunity Credit and the Lifetime Learning Credit.
Many professional tax preparers have run into challenges in recent years when their clients have claimed education tax credits. The IRS reported in 2011 that 72 per cent of education tax credits were claimed incorrectly. In many cases this was due to the student not having actually attended college at all. However these incorrect claims are often attributable to honest mistakes by the tax professional who does not understand which clients are eligible for which credit and which are not eligible at all.

The American Opportunity Credit is worth up to $2,500 per eligible student and is only available for the first four years at an eligible college or vocational school. This means it cannot be claimed for graduate programs but it can it can be subtracted from your taxes and also give you a refund of up to $1,000 if it’s more than your taxes.It must be for students who are earning a degree or other recognized credential and are going to school at least half-time for at least one academic period that started during the tax year. Finally it can be claimed for the cost of tuition, books and required fees and supplies.

The Lifetime Learning Credit is limited to $2,000 per tax return, per year, no matter how many students qualify.However unlike the American Opportunity Credit it is for all years of higher education and includes classes for learning or improving job skills.Another distinction between the two is that the Lifetime Learning Credit is limited to the amount of your taxes.The Lifetime Learning Credit is also applicable to the cost of tuition and required fees, plus books, supplies and equipment, but you must buy them from the school. The two credits are quite similar but tax pros must know how to distinguish the two in order to provide excellent service to their clients. For more information please consult Publication 970 on the IRS website.

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. Clients can already renew their software licenses for next year’s tax season and ensure the lowest pricing available in the industry.

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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.

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.

 

 

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NEWS AND TIPS

Sigma 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.

 

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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.

Announcing the official beginning of the 2014 Tax Season

The wait is over for taxpayers and tax professionals alike as tax seasons begins today. Americans waiting for their tax refunds can breathe a sigh of relief.

The delay in the beginning of the 2014 tax season caused by the US government shutdown in 2013 was not as bad as initially anticipated. There was some speculation that the tax season would not begin until early in February but the IRS confirmed in December that the official date would be January 31st. This is only one day later than 2013 tax season which began on January 30th.

Although the official date this year is January 31st many tax professionals have been diligently preparing their clients taxes in anticipation of this date. Professional tax software allows them to fully prepare their clients’ returns ahead of time and then submit them electronically when tax season begins. The IRS has also advised taxpayers that there is no advantage to submitting paper returns and recommends filing electronically.

The deadline for filing taxes is set by statute and will remain April 15th, however taxpayers do have the option to file an extension for up to six months. The IRS has also stepped up its efforts to fight identity theft this tax season and has provided extensive resources to help taxpayers on their website. It is important that all individuals take the threat of identity theft seriously whether they have been victims or not.

Sigma Tax Proprovides 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. 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.

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NEWS AND TIPS

Taxpayers still prefer to hire a tax professional than file their own taxes

New data from the IRS shows that around 60% of tax returns are filed by a tax professional. Consumers are still unsure of navigating complex IRS guidelines on their own.

While many tax professionals are concerned about software that allows individuals to file their own taxes, data from the IRS shows the majority of Americans prefer to hire a professional. This even applies to more tech savvy high wage earners as they often have to file more complex tax returns. Moreover as IRS guidelines change each year many taxpayers are concerned there may be new deductions they are missing.

The IRS has taken steps to make it easier for individuals to file their own tax returns with Free File. This allows taxpayers to file their taxes for free if they make less than $58,000 per year. However it is still the minority of Americans who take advantage of this service. This may be in large part due to tax credits that are available for low income families, taxpayers want to be sure they are getting the maximum refund available to them.

It is also the fear of IRS audits that drives many people towards tax professionals when it comes time to file their tax returns. Taxpayers are aware of the onerous requirements of an IRS audit and would rather get professional advice than risk making a mistake that might trigger an audit. This combination of factors means that for the foreseeable future the majority of Americans will continue to rely on professionals rather than using their home computer when tax time comes around.

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  andcan provide them with peace of mind in the event their clients are audited by the IRS.