Green Mountain Payroll Conference

Green Mountain Payroll Conference

Joseph McCarthy CPA IRS Senior Stakeholder Liaison

203.415.1015 cell860.756.4431 office

joseph.s.mccarthy@irs.gov

Joseph McCarthy CPA IRS Senior Stakeholder Liaison

203.415.1015 cell860.756.4431 office

joseph.s.mccarthy@irs.gov

Small Business/Self-Employed Division

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Issue Management Resolution System (IMRS)

What is IMRS?

• Provides a mechanism for raising concerns about – IRS policies, practices and

procedures– Systemic problems

• Facilitates issue identification, resolution and feedback

Submitting an Issue

• Gather all information

• Contact local stakeholder liaison staff – search “stakeholder liaison” at IRS.gov

Reporting Cost of Employer Sponsored Health Coverage

Health Coverage for Older Children

Exclusion from gross income for reimbursements for medical care under an employer-provided accident or health plan

• Employee’s child under 27

• Effective as of 3/30/10

• Child does not have to be a dependent

IRC 105(b)

Small Business Health Care Tax Credit

• Maximum credit is 35% of premiums paid by the employer

• Two part phase out of credit– Fewer than 25 full-time equivalent

employees– Average wages less than $50,000 per

employee • Excluded employees don’t qualify

IRC 45R

,

IRS Forms No Longer

Being Mailed

From 941

The Form 941, Employer’s Quarterly Federal Tax Return will no longer be mailed.

Social security and Medicare tax for 2011.

• For 2011, the employee tax rate for social security is 4.2%.

• Reduced Social Security withholding will have no effect on the employee’s future Social Security benefits.

IRS Notice 1036

New Rules for Federal Tax Return Preparers

Who needs a PTIN?

Any individual who is compensated for preparing, or assisting in the preparation of, all or substantially all of a U.S. federal tax return or claim for refund

New Online Sign-Up Systemwww.IRS.gov/taxpros

Competency Testing

• Many preparers will be required to pass a competency test by Dec. 31, 2013

• Testing will begin approximately mid-2011

• Exempt from testing:

– Attorneys, CPAs, and enrolled agents

– Certain supervised preparers

– Those who prepare no Form 1040 series returns

Competency Testing

• The initial test(s) will be for individuals who prepare Form 1040 series returns

• After competency testing has begun, new non-exempt preparers will be required to pass a competency test prior to obtaining a PTIN

• After passing the test, the individual is officially an “Registered Tax Return Preparer”

Continuing Education

• Registered Tax Return Preparers will have a new requirement to complete 15 continuing education hours per year:– three hours of federal tax law updates– two hours of ethics– ten hours of federal tax law

• The CE requirement has not begun. The earliest it will begin is Fall 2011

Background Checks

Fingerprint checks will potentially be implemented in mid-2011 for individuals who are not attorneys, CPAs, or enrolled agents

Additional Ongoing Efforts• Extension of Circular 230 ethical standards

to all paid tax return preparers

• Development of a comprehensive return preparer enforcement strategy

• Development of a public awareness campaign to educate taxpayers, preparers, and employees on the new requirements and standards

• Creation of a public database