February
2002
|
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
OFFICERS & GOVERNORS 2001 - 2002
OFFICERS
President President Elect 1st Vice-President 2nd Vice-President Executive Secretary |
DeQueen Hot Springs Newport |
BOARD OF GOVERNORS
District I District II District III District IV District V District VI |
Pocahontas Searcy West Memphis Little Rock Prescott Nashville |
FROM THE PRESIDENT’S PEN
Dear Members:
I'm sure you are all busy right now and probably don't have time for a lot of reading, other than research material. It seems that I spend more time doing research these days than I do actually preparing tax returns.
I received some good information the other day via email from none other than Taxprepper (Homer Holbrook), that you might all find interesting. It seems he ran across an item on the web that listed an RRC Toll Free Number. This is a toll free number to research your client's Rate Reduction Credit. This is an automated toll free number (800-829-4477). Prepare for the call by having the primary SS#, the filing status for 2000 and the number of exemptions claimed on the 2000 tax return. The call takes about 2 minutes. I tried it tonight just to make certain that it did work. If your client can't remember or did not keep up with how much their rebate check was, you can use this number to find out just how much they did receive. Thanks for the very useful information Homer.
In case you haven't noticed yet, it looks like IRS is playing with all of the mailing addresses for the various returns again. They have addresses for taxpayers who prepare and mail their own returns and they have another set of addresses for taxpayers who have their returns prepared by a preparer. Be sure to check your pubs.
It's barely begun and I already wish tax season were over. I hope everyone is staying caught up better than myself.
Sincerely,
James C. Hodge, President
Arkansas Society of Public Accountants
HAPPY NEW YEAR
NSA District Governor's Column
As we move into 2002, familiar cries of Happy New Year are heard everywhere - in department stores, over the media, in newspapers. It's a trite little statement, to be sure, but it offers reassurance and comfort. Simply hearing, Have a Happy New Year, brings promise and hope. Somehow, it conveys the message that life goes on, healing takes place, and human beings are constantly being rejuvenated.
Happy New Year signifies an opportunity to begin anew, that it is time to move ahead. For those of us active in our professional societies, it means a time of evaluating where we are - what happened last year, how well did it work, is it worth repeating? It is a time for planning new programs that will benefit our members and their clients. It is a time for assessing our Society's progress and determining what areas need strengthening and which ones need to be redesigned.
Many changes have taken place at the National Society of Accountants during the past year. It is exciting to be able to say that the changes brought about during 2001 were positive; indeed, they were foundational changes with will serve NSA well. Hiring a new Executive Vice President was basic to the re-building that is now taking place. EVP Ams follows the philosophy of securing the best possible people for the job at hand, training them well, establishing accountability, then letting them do their job.
Mike Chakarun was hired as Director of Federal and Legislative Affairs, a highly visible, very important post that had remained vacant far too long. Mike is a CPA that understands right-to-practice issues from both sides of the coin. He participates in conference calls of the Coalition for Affordable Accounting, provides technical support to the Peer Review Program, and has been working hard to complete a new version of the Synopsis of State Accountancy Laws ( to be released shortly). Because of his experience in Washington, he is proving his worth as our advocate on Capital Hill regarding tax-related issues.
A bright and creative young lady, Jodi Miller came to NSA as Director of Marketing and Member Services. Jodi has lots of ideas and energy to throw our way. Sandy Herring has re-joined our staff as Senior Member Services Coordinator. Sandy worked for NSA many years and we're delighted to have her back home. Jenny Hemphill recently joined us as Communications Manager and Kate Haddon assumed the role of Marketing Coordinator.
NSA's Long Range Plan is being reassessed and updated. This task is not being taken lightly and its perfection and implementation will consume most of this year and next. Serious decisions have been made and ideas explored in several areas that were thought to be our-of-bounds in the past. Member benefits particularly, are undergoing scrutiny to be sure NSA offers what its members want, and methods of delivering them expeditiously are being explored.
It's going to be a Happy New Year at NSA. I hope your New Year is bright, prosperous, and healthy, too!
Wanda Samek
District VIII Governor
IRS ACKNOWLEDGES TEMPORARY DELAYS IN EIN PROCESSING
Issue: On January 2, taxpayers and their representatives started using a new toll-free number to request an Employer Identification Number (EIN).
The new number consolidates several numbers into one, although the IRS processes EIN requests at three IRS Centers. Customers have experienced busy signals, and responses to faxed or mailed EIN requests have taken longer than expected. Start-up issues, unexpected high demand and a backlog of requests led to the initial delays. The backlog stems from the last part of December 2001, when the system was down for end-of-the-year processing and no EINs could be issued.
Who's affected: Customers who have phones, mailed or faxed an EIN request within the last few weeks.
What the IRS id doing about the problem: The IRS regrets the delays and the agency is taking immediate steps to address the problem. The IRS is redirecting personnel to ensure that calls are answered timely. Customers should see significant improvement by this time and employees are also working to resolve the backlog as quickly as possible, but it could take as long as three weeks to get caught up.
What affected taxpayers should do: The IRS is asking customers to wait three weeks before re-faxing or calling about their requests. This will help speed IRS processing of current requests and clear the existing backlog. The IRS does not send confirmations in response to faxed or mailed EIN requests.
FYI
I HAD A CALL FROM LOREN JANES THIS MORNING ABOUT A WEB SITE THAT DEALS WITH AN OLD LAW IN THE CODE THAT HE FEELS A NUMBER OF OUR MEMBERS MAY TO UNAWARE OF. THIS LAW CONCERNS PICKING UP OLD EQUIPMENT OR OTHER ASSETS AND BEGINNING TO DEPRECIATE THEM AGAIN. THE WEB SITE IS www.fairmark.com and is titled "DEEMED SALE." TAKE A LOOK FOR YOURSELF IT YOU ARE INTERESTED IN SEEING WHAT THIS IS. I DON'T OFFER ANY OTHER INFORMATION ON THIS AS I DO NOT HAVE THE ROOM IN THIS PUBLICATION TO PRINT IT. LOREN SAYS IT CONSISTS OF ABOUT 20 PAGES. IF YOU NEED OTHER INFORMATION, PLEASE CALL HIM AT 800-382-0787.
I HAVE THE DATES CONFIRMED FOR ALL OUR EDUCATIONAL SEMINARS IN 2002 WITH THE EXCEPTION OF THE 1040 SEMINAR AND THEY ARE:
May 29 & 30, 2002 - Gear up Accounting Seminar
July 25 & 26, 2002 - Quickbooks for Accountants - Phill Gomez
September 25, 26 & 27 - Annual Convention & Gear Up Business Entities Seminar
I hope this helps you layout your CPE calendar for the year.
GREETINGS FROM NSA
Shelly Russell
NSA State Director
Some of you may have been following the American Institute of CPAs' multi-million dollar campaign to create a new global credential, whereby there would be a new "super CPA" credential available to non-CPAs. This campaign was soundly defeated by a vote of 83,980 against and 50,034 in favor, falling far short of the two-thirds approval needed to amend the AICPA bylaws.
NSA has several services to help make their members' lives easier during tax season. Don't forget about the Tax Research Assistance service, where you can get your tax questions answered without charge and within 48 hours. The number to call is 800-966-6679 ext. 1321 or E-mail at bphillips@nsacct.org. The NSA website www.nsacct.org also provide links to Federal, State and US Territories tax forms, which you could find helpful during this season. In addition, you can get significant discounts on tax guides, QuickFinder handbooks, and Nelco, just to name a few. But remember, you can only take advantage of these services if you are a member of NSA. Please contact me at Sruss51670@aol.com if you need an application to join; if you are already a member, thank you very much!
TAX INFORMATION FROM THE IRS
PROVIDED BY TAXPAYER EDUCATION AND COMMUNICATION SB/SE
NASHVILLE, TN
On January 2, 2002, the IRS consolidated the assignment of EINs to just three sites (Brookhaven, Cincinnati and Philadelphia). They also added six new prefixes (20,21,30,32.26,27) in addition to the 14 new ones added last year. With the consolidation, these three sites will issue the majority of new numbers.
In addition, the IRS has eliminated the state and prefix association. Customers could potentially receive a new EIN with any of these prefixes.
Employer Identification Number (EIN)
Prefix and Service Center Alignment Table
Service Center EIN Prefix Codes
- Brookhaven - 01, 02, 03, 04, 05, 06, 11, 13, 14, 16, 20, 21, 22, 23, 25, 31, 34, 51, 52, 54, 55, 56, 57, 58, 59, 65
- Cincinnati - 30, 32, 35, 36, 37, 38, 61
- Philadelphia - 26, 27, 33, 39, 41, 42, 43, 45, 46, 47, 48, 62, 63, 64, 66, 68, 71, 72, 73, 74, 75, 76, 77, 81, 82, 83, 84, 85, 86, 87, 88, 91, 92, 93, 94, 95, 98, 99
IRS IMPLEMENTS NEW TAX RELIEF FOR VICTIMS OF TERRORISTS ATTACKS
Washington - The Internal Revenue Service has developed special procedures to expedite refund claims related to the Victims of Terrorism Tax Relief Act, which President Bush signed today.
Under this law, the federal income tax liability of those killed in the terrorist attacks of September 11, or as a result of the anthrax incidents last fall, is generally erased for both 2001 and 2000. The new law also provides for tax abatements for 1994 and 1995 for the victims of the April 1995 Oklahoma City bombing.
"We do not want those who lost loved ones in these attacks to be burdened by tax issues," said IRS Commissioner Charles O. Rossotti. "When they're ready to address such financial matters, we're here to help them."
The law provides that the minimum amount of relief for these victims will be $10,000. If the abated taxes for the two years are less than that, the government will refund the difference to the surviving spouse or to the victim's estate.
Surviving spouses or executors of the September 11 or anthrax victims may file amended tax returns for 2000 at any time until April 15, 2004, and may claim the tax relief for 2001 when they file the decedent's return. Survivors or executors of those killed in Oklahoma City may file amended returns for 1994 and 1995 until January 23, 2003.
Survivors or executors of these "Killed in Terrorist Action" (KITA) victims should put "KITA - Oklahoma City," KITA - 911", or "KITA - Anthrax" as appropriate, at the top of any amended or original tax returns claiming this relief and send them to the Internal Revenue Service, P O Box 4053, Woburn, MA 018888. If using a private delivery service, they should send them to IRS, 310 Lowell Street, Stop 661, Andover, MA 01810.
The IRS is now finalizing a new Publication 3920, "Tax Relief for Victims of Terrorist Attacks, " which will include details on preparing refund claims. The IRS expects to make Publication 3920 available in February on its Website at www.irs.gov . Pub 3920 will also ve available by calling toll free 1-800-829-3676. Taxpayers with questions about KITA relief may call toll free 1-800-829-1040.
IRS CAUTIONS TAXPAYERS ABOUT NEW LINE ON TAX FORMS
NASHVILLE - The Internal Revenue Service says many early filers have made an error related to a new line on the Federal Tax Form. This line is for the Rate Reduction Credit, which taxpayers use if they did not receive last summer's Advance Payment in the maximum amount for their filing status.
"This credit is the only new line on the basic tax forms. Taxpayers should read its instructions carefully so they get the proper benefits," said IRS spokesman Dan Boone. " Errors can delay processing and we want everyone due a refund to get it as quickly as possible."
Some taxpayers are putting their Advance Payment amount on the credit line, when they should be leaving the line blank. If you have already received the maximum amount for your filing status, just skip the Rate Reduction Credit line on your tax form. The maximum amounts are:
- $300 for a single person or a married filing separately;
- $500 for head of household;
- $600 for married filing jointly or a qualifying widow(er).
Other taxpayers, who should claim a credit amount, are leaving the line blank. These people received less than their filing status maximum amount as an Advance Payment and their 2001 income - generally higher than it was in 2000 - entitles them to claim the credit on their return.
The credit and the Advance Payments are how the new law gives one of its main benefits for 2001 - a 10 percent tax rate. Instead of having people wait until they file their 2001 tax returns to get a larger refund, the law provided for Advance Payments to be made last year, based on the returns for 2000. If the 2001 income and filing status would give a larger benefit than the Advance Payment, the taxpayer may claim the difference as a Rate Reduction Credit on the 2001 return.
Dependents were not eligible for Advance Payments or the Rate Reduction Credit, but may get the benefit of the lower tax rate by completing the "Tax Computation Worksheet for Certain Dependents" in the tax instructions.
Taxpayers who made an error related to this credit on their returns should wait to see if the IRS catches it during processing. If the IRS does not contact them by the time they receive their refund, they may file an amended return to correct the error.
TAX TIPS
More businesses may use cash accounting on 2001 tax returns. The IRS says small businesses with gross receipts of up to $10 million now may use cash accounting instead of accrual accounting, even if they have some inventories. Under prior rules, the limit was $1 million. The IRS says 500,000 businesses may benefit from simplified accounting under the new rules. Typical firms to benefit will be service businesses that sell related supplies - such as a plumbing business that sells plumbing supplies. Excluded from the new rules are manufacturers, wholesalers and retailers, and corporations with gross receipts of more than $5 million. Details: IRS Notice 2001-76, in Internal Revenue Bulletin 2001-52.
IRS interest rates fall, too. In the first quarter of 2002, interest rates will drop by one percentage point to 6% on both personal underpayment and overpayments....to 5% on corporate overpayments......and to 8% on large corporate under payments ( more than $10,000). IRS Revenue Ruling 2001-63.
ADDITIONAL INFORMATION
GETTING AN EIN FOR YOUR CLIENTS
Just received information: We get numbers through the Philadelphia Service Center and here are the phone and fax numbers to use.
- Toll-free phone 866-816-2065
- Fax number 215-516-3990
EIN can be obtained by a practitioner for a client without a signature or POA. Please note the new box on form SS-4 that allows a third party to receive information. This form was issued as of December 2001. Of course that means all your forms on hand are now obsolete. You will need to use the fax form service to obtain new ones if you don't already have them.
IRS introduces new practitioner priority service. This is a toll-free nationwide service that replaces the old Practitioner Hotline. It will be available 7:30 am to 5:30 pm, local time (except for Hawaii and Alaska, which will be Pacific time) weekdays. It will operate from five "campus" sites: Brookhaven, Cincinnati, Memphis, Ogden and Philadelphia.
The practitioners' geographic location will determine where the call is routed, each site will handle both individual and business inquiries. The same team will route any issues outside the scope of their authority to other IRS functions.
This service began on January 2, 2002 and will be made available in three separate phases; it should be fully operational by May 15, 2002. To find the timetable for service in your area, go to the IRS website, click on Tax Professional Corner, find Practitioner Priority Service and look for the links in the opening page. The new number is 1-866-860-4259.
A NEW FEATURE AT THE ASPA WEBSITE!
Just the other day, I went there to check on something and there was a guest book registration. The only one that had signed the book at that time was Brian Thompson. I signed it and now there are two of us.
I hope all of you sign in, leave a message and let us know what you think about it.
I immediately emailed our person that updates the site for us and asked how this came about and he said he had done it and asked me what I thought about it. Of course, I told him I thought it was great!!
If you have suggestions for improving our site, let me or one of your officers know.
Hope to see you at the Gear Up Compilation & Review Seminar May 29 and 30, 2002. We have not had this seminar in two years and I am sure that we all need this information .
happy
valentine's
day
to all of you
and to all those
you love.
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