2014 Tax Season - IRS Changes

[Guest Taxed]

Each year, the IRS balances anticipated customer service needs against available resources to determine the right mix of technology, employees and IRS partner-provided assistance to meet these needs in the most effective and efficient way. The changes for filing season 2014 affect these areas:

• Tax Return Preparation
• Transcript delivery
• Tax Law Assistance
• Tax Refund Inquiries
• Employer Identification Number
• Practitioner Priority Service

Taxpayers should find these automated services easy to use and convenient. Many are available 24 hours and seven days a week.

Tax Return Preparation

Due to resource constraints, fewer tax returns have been prepared at IRS walk-in offices in recent years. For several years, return preparation has only been available in a limited format – only offered at some IRS offices and not every day of the week at some locations. In addition, taxpayers had to have income below the Earned Income Tax Credit thresholds to receive this assistance.

With the growth in electronic tax preparation and continued resource limitations, the IRS will be directing qualified taxpayers during the upcoming filing season to more than 13,000 volunteer partner sites across the country rather than limited services at the IRS’s 250 walk-in offices. The IRS will refer taxpayers who visit the walk-in offices for tax preparation to the nearest volunteer site for tax return preparation.

In addition, the IRS Free File program on IRS.gov offers free e-file and tax software to help taxpayers prepare their returns.

New “Get Transcript” Service

Early in 2014, a new online request option called “Get Transcript” on IRS.gov will allow individual taxpayers with an SSN to instantly view and print a copy of their tax transcripts. With Get Transcript, taxpayers will save both time and effort. When the new service is available, transcript requests will generally be referred to the online tool. Taxpayers will be able to use the tool to authenticate, view and print copies of their transcript in one session. Taxpayers will still also be able to request that a transcript be mailed to their address of record by using the existing online tool or sending in Form 4506T. A specific date when Get Transcript will be available will be announced early in 2014.

The tool will be available for five types of transcripts: tax account, tax return, record of account, wage and income, and verification of non-filing.

Tax Law Assistance

The majority of tax law questions the IRS receives each year are about basic tax law issues. This includes questions pertaining to Forms 1040A, 1040 EZ and related items on Form 1040 such as filing status, dependents, exemptions and taxable income. During each filing season (January to mid-April), the IRS will continue to answer these basic tax law questions.

A small percentage of taxpayers seek help with other, more detailed tax law questions that frequently take more time to address. Beginning with the 2014 filing season, the IRS will refer taxpayers with these more complex questions to a number of other resources available on IRS.gov, IRS tax publications and the software packages taxpayers may already be using. This step reflects the continuing adoption of tax preparation software. More than 90 percent of all taxpayers use of tax return preparation software, either on their own or through their tax professional, and the tax law help is included as part of the software.

Most tax law questions are asked during filing season. To focus IRS resources on the filing season, outside of the January – April time frame the IRS will refer all taxpayers with tax law questions to the resources listed above.

Tax Refund Inquiries

Traditionally, the most common question the IRS receives is about when people can expect to see their refund. In recent years, the IRS has issued more than 90 percent of refunds in less than 21 days. With the continued growth of the internet and mobile apps, the IRS will direct all refund inquiries during the first 21 days after a taxpayer files electronically to the “Where’s My Refund?” tool available in English and Spanish through the IRS2Go phone app, IRS.gov and the automated telephone service. IRS customer service representatives will only be able to research the status of a refund if it’s been 21 days or more since the return was filed electronically or more than six weeks since a paper return was mailed to the IRS or if the Where’s My Refund? tool directs them to contact the IRS.

Practitioner Priority Service

The Practitioner Priority Service (PPS) provides tax professionals a dedicated channel to resolve taxpayer client account issues. Over the past few years, a growing number of customers who were not tax professionals used this service. Beginning in January, the IRS will limit PPS to tax professionals and requests related to resolving client related issues. All other requests will be referred to other appropriate resources for service. This change is expected to help the IRS provide better service to more tax professionals and help free up other resources for customer service.

Employer Identification Number

The IRS’s EIN Online Assistant continues to be a success with more than four million requests processed per year electronically compared to just over 588,000 requests made for an EIN via our manual telephone option. Beginning with the 2014 filing season, the IRS will refer all EIN requests to the EIN Online Assistant and refer only those with questions about a previously assigned EIN to a live IRS representative

[Pacun]

Employer Identification Number

The IRS’s EIN Online Assistant continues to be a success with more than four million requests processed per year electronically compared to just over 588,000 requests made for an EIN via our manual telephone option. Beginning with the 2014 filing season, the IRS will refer all EIN requests to the EIN Online Assistant and refer only those with questions about a previously assigned EIN to a live IRS representative

What's this date? Is it January 1st or 31st or even Jan 13th, 2014 when corporations can start filing their 1120 returns for 2013.

[MsTabbyKats]

Oh well....I was a frequent caller to the "complex issues" dept.....with all kinds of "international issues"

Phasing out....phasing out.....more things I'll be phasing out.

[Mr. Pencil]

five types of transcripts: tax account, tax return, record of account, wage and income, and verification of non-filing.

California has provided tax account info online for several years. Invaluable for verifying estimates and other payments. Security is pretty weak--you just need SSN and AGI--but it's not as much information as IRS transcripts. Do you think IRS will post the income transcripts (W-2/1099) before April 15?.

[Guest Taxed]

I like the idea of a Get Transcript service for the taxpayer. Now I can tell them get it yourself!

[kcjenkins]

New taxes for 2014: What you should know
Dan Caplinger, The Motley Fool

Let's take a look at some potential new taxes in 2014 that you might have to pay if Congress doesn't take action in the next few weeks.

Expiring provisions could add new taxes in 2014

The biggest challenge that taxpayers face is predicting whether lawmakers will extend expiring tax breaks. Every year, lawmakers seem to go down to the wire with key tax-extender legislation, and it's never certain whether certain popular provisions will get the go-ahead to remain in effect for the following year. If these provisions expire, they'll create new taxes in 2014 for individual and business taxpayers to pay.

For individuals, new taxes could come from a variety of sources:

For years, homeowners who've had part of their mortgage debt forgiven haven't had to treat the resulting debt reduction as taxable income. That could change for 2014, and it comes at a tough time for some homeowners. Bank of America (ticker: BAC) , JPMorgan Chase (JPM ) and other banks have continued to modify loans as part of settlements with regulators and state attorneys general, producing debt forgiveness income. Yet with the perception that the housing market has recovered, lawmakers might choose not to extend the provision.

Public-transit commuters could see a new tax if a provision equalizing the amount they're entitled to receive tax-free from their employers to subsidize their commuting expenses expires. Without an extension, the amount could drop from an expected $250 per month to $130 per month. Those who drive to work and use parking will continue to get the higher amount, raising debate about tax policy.

The loss of other deductions and credits could boost taxes, including the energy-efficiency credits for certain home-related expenses, tuition deductions for higher education, and itemized deductions for sales taxes.

Meanwhile, for businesses, the potential losses could be even bigger.

The most substantial new taxes in 2014 for businesses would come from the expiration of the 50% bonus depreciation provision, which allowed half of the cost of purchases to be deducted from current-year income rather than having to be spread out over the usable lifetime of the purchase. A provision aimed at small businesses that allows them to elect to deduct all of the cost of certain types of property has gotten more attention on political grounds. But bonus depreciation affects businesses of all size, and many credit the provision for helping General Electric (NYSE: GE ) and other big corporations greatly reduce their tax bills in recent years.

Some provisions affect specific industries. Credits for biodiesel production are slated to expire, as are benefits for railroad-track maintenance, motorsports complexes, and racehorse owners. These narrowly defined provisions are often relatively small in dollar terms, but they can have a big impact on those who are in the businesses that they affect.

What's next?

As of mid-December, lawmakers hadn't taken much action to push these provisions forward. That doesn't mean it won't happen, though, as many individuals and businesses rely on the provisions. In particular, targeted business tax breaks often make or break a certain industry's business model, and players in those industries use all their political clout to try to get them extended. Nevertheless, given the lack of attention the situation has gotten so far, it's entirely possible that expiring provisions will in fact results in new taxes for 2014 and beyond.

[Guest Taxed]

In my letter with the organizers I gave my clients a heads up and told them that it is uncertain which if any of these expiring provisions will be grandfathered in 2014. They need to prepare accordingly. I am sure I will have a lively conversation when I see them in Feb. I think ny now most Americans have come to expect Congress to do things at the last minute and retroactively. One hell of a way to run a super power country?

[Mr. Pencil]

whether lawmakers will extend expiring tax breaks....

As of mid-December, lawmakers hadn't taken much action to push these provisions forward.

"Much" action???

Even when the budget debate shut down the government, none of them mentioned the expiring tax cuts already scheduled. Both parties are promising "tax reform" in 2014, but neither side has political momentum. The chairman of the House Ways & Means Committee terms out next year, and the chairman of Senate Finance is resigning from Congress altogether. In my opinion, neither party wants to extend those cuts because, a.) they want the money, and b.) they want to blame the other guys.