December
2002
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The Arkansas Public Accountant is the monthly publication of the Arkansas Society of Public Accountants. The society is a professional organization composed of Licensed Public Accountants, Enrolled agents and persons holding out to be accountants or tax preparers with their services available to the public. This organization is dedicated to helping our members give the best possible service to their clients. We are happy to accept articles and/or advertising that would be of interest to our members and ask that you submit any thing for publication by the 25th of the month to be included in the next month’s publication.
Please send to: LaVERNE
LONG, Editor |
The Arkansas Public Accountant
CLICK HERE TO VISIT THE OFFICIAL ASPA ONLINE SHOPPING MALL!
OFFICERS & GOVERNORS 2002 - 2003
OFFICERS
President President Elect 1st Vice-President 2nd Vice-President |
Bryan Johnston |
Nashville Hot Springs Jonesboro |
BOARD OF GOVERNORS
District I District II District III District IV District V District VI |
Bradley Crain |
Pocahontas Searcy West Memphis Little Rock Prescott Nashville |
FROM THE PRESIDENT’S PEN
Dear Members:
The annual meeting of the board members of the Arkansas Society of Public Accountants, the Arkansas Society of Certified Public Accountants and the Arkansas State Board of Accountancy was held November 15, 2002. This annual meeting is important because it allows us to discuss common issues which affect all of us as practitioners. Possible legislation being considered by each of the Boards for introduction into the upcoming Arkansas legislative session was the key topic for discussion. Each board reported that there was no legislation being considered at this time.
As we approach the Tax Filing Season, I hope that you are making preparations. Have you renewed your tax preparation software? Have you renewed your Tax Service software? Have you registered for the 1040 Gear Up Seminar coming up December 18 - 19, 2002 which will be held at the DoubleTree Hotel and Robinson Center? If you haven't registered for this seminar, now is the time to register (a registration form is available on our web site at www.arspa.org). The $25 Early Bird Discount applies until December 1, 2002. The National Society of Accountants recently released an exposure draft of the Tax Accounting Standards for Small Business (TASSB) comment by NSA members and the public. The reason for the development of TASSB by NSA is due to its beliefs that there are no relevant standards for the preparation of useful financial statements for small and medium size business. Visit NSA's web site at www.nsacct.org for a complete copy of the draft. The comment period ends January 17, 2003.
The Arkansas Society of Public Accountants and the National Society of Accountants are working for you. Continue to watch this column as I describe the benefits of both ASPA and NSA.
Merry Christmas to all.
Sincerely,
Donny Woods, President
Arkansas Society of Public Accountants
STAND OUT FROM THE CROWD AND EARN THE ACCREDITED TAX PREPARER DESIGNATION BEFORE TAX SEASON
Issued by the Accreditation Council for Accountancy and Taxation (ACAT), ACAT credentials are a way for professionals to demonstrate proven knowledge and expertise within the accounting industry. In addition, it is an indicator of integrity and the individual's voluntary commitment to continuing professional development.
ACAT offers a nationally recognized Accredited Tax Preparer (ATP) designation to professionals who have a thorough knowledge behind the existing tax code & tax preparation of individuals, corporate and partnership tax returns.
The ATP credential can be earned in three ways:
- You are automatically eligible is you have taken 60 CPE hours in taxation, with 48 hours earned within the previous two years
- You are automatically eligible if you are an Enrolled Agent, CPA or Licensed Accountant (through examination).
- Or you can take two tax courses - and earn CPE - through Surgent Educational Software.
The ATP Package can be purchased online at www.surgent.com or you may call at (610) 688-4477.
All applicants must also meet the requirement of three years of work experience in tax preparation and compliance (one year is considered a tax season, i.e., January through April).
ACAT reviews all applications within 48 hours. Full refund issued if application is not approved. Those approved will receive a handcrafted certificate noting your accredited status to display in your home or office within two to three weeks - just in time for tax season!
Please contact ACAT National Office today.
Accreditation Council for Accountancy and Taxation
Toll free: 888-289-7763
Email: info@acctcredentials.org
This was sent for publication by the District VIII Governor, Wanda Samek of Texas.
ACCOUNTANTS FOR MAIN STREET NOT WALL STREET
By Bill Parrish, NSA Governor District VII
Just two and a half months ago, President Bush signed into law what is perhaps the most sweeping legislative effort to regulate the practice of auditing in the last 100 years. While the intent of the legislation is to regulate those practitioners auditing SEC registered companies and the acts of employees and officers of such companies, as with much legislation, the impact will be felt far beyond the intended audience of the law. The public does not distinguish between licensed and non-licensed accountants, some of which perform audits for large entities and some of which do not. This is not perceived to be the bill to "Regulate Audit Service Providers," it is perceived to be the bill to regulate "accountants" even though most accountants, non-licensed or licensed, do not offer audit services.
Just this morning, I read an article that gave some encouragement to me in that the results of a national poll indicated that 41% of small business owners have an overall favorable opinion their accountant while only 12% have a negative impression of their accountant. Our profession was bested by only the computer industry at 60%, banking at 50%, and internet service providers at 45%. Perhaps there may be comfort in knowing that we are ranked as the fourth most respected profession in the eyes of small business owners, but I am dismayed that we are not number one!
We hear a lot these days about rebuilding the image of our profession, about regaining the public trust, about regaining the respect of fellow business owners as a whole. This is the message coming from the remaining part of the profession now dubbed the Big 4. That is the wrong message. The true message that rings with your clients and my clients is that "WE ARE THE ACCOUNTANTS FOR MAIN STREET - NOT WALL STREET." We need to remember that we were not a part of the problem faced by the large audit firms who succumb to greed. Indeed, we need to constantly remind ourselves, and each other, that we are the accountants there on a daily basis to assist our clients, to help keep our clients out of trouble, and to help our clients chart a solid future for their small businesses. We are the accountants who see our clients in church, who serve on local boards and organizations with our clients, the accountants whose children and grandchildren go to school every day with the children and grandchildren of our clients.
Think with me for a moment about your relationship with your clients. In doing so, I trust you will reach the same conclusions that I have about our profession. OUR profession is not in trouble. The profession in trouble is the huge audit firms who became so large and unwieldy that their interests were placed ahead of the interests of their clients. How can we reinforce our values with our clients? Simply put, we can keep on doing what we have been doing. We can keep on providing rock solid advice to our clients. We can continue to interpret the laws correctly for our clients. We can remain true to our code of ethics.
When we put the needs of our client above the needs of our firms, we can call ourselves Accountants for Main Street, Not Wall Street.
NEW ALIEN POLICY
The IRS has just released an advisory from the national office outlining a new policy that will affect many resident and nonresident aliens. Income tax returns filed with a W-2 form that contains an invalid Social Security number (SSN) will be considered "not in processible form", even if the 1040 contains a valid Individual Taxpayer Identification Number (ITIN). As a result, the refund will be frozen until the mismatched numbers issue is resolved.
ITINs are issued by the IRS to resident and nonresident aliens who are ineligible for Social Security numbers. In the past, when this kind of return was filed, the IRS processed it using the valid ITIN and issued a refund to the taxpayer. Now, however, this practice will change, potentially affecting thousands of undocumented immigrants who are working illegally in the United States.
According to the advisory, the IRS concluded that a Form 1040 containing a W-2 with an incorrect SSN is a valid return, and is a valid claim for refund. However, if the IRS cannot match the SSN on the W-2 with the ITIN on the 1040, it cannot determine if the attached W-2 belongs to the taxpayer and if the taxpayer is due a refund. Consequently, the return is not processible and the refund will be frozen until the number conflict can be resolved. No interest will be due to the taxpayer for the delayed refund unless the IRS fails to issue a check within 45 days after the mismatch is resolved.
Although not specifically mentioned, because the return is not processible, the refund that is frozen would presumably include any credits on the return, such as the earned income credit.
The advisory was issued in response to a request for guidance from the Partnership, Trusts, and International section of the IRS. It parallels other Federal actions relating to stricter enforcement of immigration rules since the September 11 attacks.
IRS PLANS TO VISIT TAX PREPARERS TO DISCUSS BUSINESS E-FILE & E-PAY
The Internal Revenue Service (IRS) is committed to providing taxpayers and tax preparers with the information and tools they need to electronically file timely, accurate, and complete tax returns. The professional return preparer community is a vital partner in helping with this goal. This year, as part of that partnership, the IRS plans a series of visits to many tax professionals.
Soon, Taxpayer Education & Communication (TEC) Specialists in your areas will be contacting many in the Practitioner community by phone and mail to arrange a visit to discuss E-submissions. The visits are intended to provide awareness of current E-submission opportunities and to discuss the benefits of electronic filing, the enrollment process and recent program enhancements. Most importantly, the latest IRS E-services offered to eligible tax preparers will be covered.
These visits will not be an audit, nor will the Service employee seek to inspect records or impose penalties. Instead, the time will be used to update practitioners on the latest improvements to IRS E-services.
For more information about IRS E-file and E-pay opportunities, visit our Web site at http://www.irs.gov/ and click on "IRS E-file." To learn more about the Electronic Federal Tax Payment System (EFTPS) go to http://www.eftps.gov/.
New suspicious activity report form now available for Money Service Businesses
A new Suspicious Activity Report (SAR) form is now available for Money Service Businesses. Money Service Businesses must stop using the interim Bank SAR (Form TD F 90-22.47) and start to report suspicious activity using the new SAR-MSB form.
Who must file a SAR?
The Bank Secrecy Act requires certain money service businesses (MSB) to report suspicious activity. The MSBs required to report suspicious activities are:
- Money transmitters
- Money order - issuers, sellers and redeemers
- Travelers check -issuers, sellers and redeemers
- U.S. Postal Service
Any other MSB may voluntarily file a report of suspicious activity.
When to file a SAR
A SAR must be filed when a transaction or pattern of transactions conducted by, at or through the MSB is both suspicious and $2,000 or more.
MSBs must file the form within 30 days after becoming aware of a suspicious transaction.
A copy of the filed form and supporting documentation must be retained for five years from the date of filing.
Filing a Suspicious Activity Report
Form TD F 90-22.56, the new Suspicious Activity Report by Money Services Business (SAR-MSB), is available for immediate use. MSBs must stop using the interim Bank SAR (Form TD F 90-22.47) and start to report suspicious activity by filing the new SAR-MSB form.
The new SAR-MSB form is available as:
- The form only
- Continuation sheet
- Instructions
To obtain these items, visit one of the following web sites:
- MSB web site - www.msb.gov
SAR-MSB - TD F 90.56 (form only)
SAR-MSB Continuation Sheet (TD F 90-22.56A)
SAR-MSB Instructions (TD F 90-22.56B)
- FinCEN web site - www.treas.gov/fincen
- IRS web site - www.irs.gov
OR call the IRS Forms Distribution Center 1-800-829-3676. If you have any questions, please call 1-800-800-2877.
Suspicious
A transaction must be reported if the MSB knows, suspects or has reason to suspect that the transaction or a pattern of transactions:
- Involves funds derived from illegal activity or is intended or conducted in order to hide or disguise funds or assets derived from illegal activity: or is
- Designed to evade the requirements of the Bank Secrecy Act, whether through structuring or other means; or,
- Serves no business or apparent lawful purpose, and the reporting business knows of no reasonable explanation for the transaction after examining all available facts.
Disclosure Prohibited
MSBs and their employees are prohibited from disclosing to a person involved in the transaction that a suspicious activity report has been filed. Further, each MSB or MSB employee is protected form civil liability for any SAR filed.
Penalties
Civil and criminal penalties may be imposed for willful violation of the SAR filing requirement.
IRS proposes user fee for certain offer-in-compromise requests
The Internal Revenue Service issued proposed regulations, which, if adopted, would require a $150 user fee for many Offers-In-Compromise (OIC). A taxpayer would normally be required to pay the user fee at the time the OIC request is submitted.
Low-income taxpayers - those whose incomes fall below the poverty line - would be exempt from the fee. For this purpose, the proposed regulations would authorize the IRS to use the poverty guidelines published by the Department of Health and Human Services, or some other measure.
In addition, OICs based on doubt as to liability only (where doubt exists that the tax assessed is correct) would also be exempt from the user fee. The fee would be refunded in certain other situations, described in the proposed regulations.
An OIC is an agreement between a taxpayer and the IRS that resolves the taxpayer's tax liability. Under certain circumstances, the IRS has the authority to settle, or compromise, federal tax liabilities by accepting less than full payment.
The Office of Management and Budget encourages federal agencies to implement user fees to recover the cost of providing special services to come recipients that others do not use. Accordingly, the proposed fee is designed to recover part of the cost of processing OIC requests and evaluating the taxpayer's ability to pay. This user fee proposal was developed with input from tax professionals, Low Income Taxpayer Clinics and the IRS Taxpayer Advocate.
Written or electronic comments on the proposed regulations must be received by February 4, 2003, at 10 a.m. at the IRS. 1111 Constitution Avenue., N.W., Room 4718. Persons who wish to present oral comments at the hearing must submit comments and an outline of topics to be discussed by January 23, 2003. Submissions should be addressed to: CC:ITA:RU (Reg-10377-02). Room 5226, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044.
The proposed regulations will be available soon on the IRS Web site at www.irs.gov/regs.
HERE ARE SOME NEW NUMBERS TO REACH THE IRS
1-800-829-4933 NEW This is the Business & Specialty Tax Line. May be used by Businesses, Corporations, Partnerships and Trusts who need information and/or help related to their Business Returns or Business (BMF) accounts. Services cover Employer Identification Numbers (EINs), 94x returns, 1041. 1065, 1120S, Excise Returns, Estate and Gift Returns, as well as issues related to Federal tax deposits.
1-800-829-1954 NEW Refund Hotline. Individual and Joint Filers who need to check the status of their current year refund. Automated Refund Self-Service Interactive Applications are offered on this line. NOTE: The "Where's my refund?" automated self-service feature is also available 24/7 at <http://www.irs.gov/> to obtain refund status information.
GEAR UP 1040 SEMINAR WILL BE THE 18TH AND 19TH OF DECEMBER, 2002.
CLICK HERE TO REGISTER WITH OUR ONLINE FORM.
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