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IRS Holds First Hearing on Real-Time Tax System - Emil Estafanous, CPA : Emil Estafanous, CPA

IRS Holds First Hearing on Real-Time Tax System

The IRS reason a open conference on Dec 8 to accumulate feedback on how to exercise a complement in that a IRS would compare information on taxation earnings with information from third-party information earnings during a estimate of a return. Under a due “real-time taxation system,” if a IRS found discrepancies between a taxation lapse and information in IRS records, a taxpayer would be given an event to repair a problem before a lapse is accepted.

Under a stream system, that IRS Commissioner Doug Shulman described as a “look back” complement in a debate to a tumble assembly of a Council for Electronic Revenue Communication Advancement final October, a IRS conducts correspondence activities months after a taxation lapse has been filed and processed. Shulman said, “This after-the-fact correspondence proceed can emanate problems and frustrations for both taxpayers and a IRS.” He remarkable that a IRS has adult to 3 years to review individuals’ returns, and that by a time issues are resolved, a taxpayer “may no longer have a income that was refunded to them” and might also owe penalties and interest.

At a Dec 8 hearing, a IRS listened from member of a taxation veteran community, New York State, sovereign slip agencies, and low-income taxpayer clinics. Patricia Thompson, chair of a AICPA’s Tax Executive Committee, presented a AICPA’s feedback on a proposal.

Thompson pronounced that a AICPA supports a altogether design of a real-time taxation system, and she cited intensity benefits, such as shortening temperament burglary and curbing noncompliance. She endorsed that a complement be phased in and that a initial theatre concentration on a simplest returns: Forms 1040A and 1040EZ. She also forked out that even some of a simplest information earnings could means mismatching issues. For example, Form 1099-INT might uncover a mismatch where a married integrate with a corner bank comment files apart taxation returns.

Thompson also remarkable that year-end taxation legislation could means hurdles for a IRS when perplexing to discharge a real-time system.

In addition, she voiced regard that a devise will charge rejecting filed earnings where there are discrepancies. The IRS does not now reject earnings when there are discrepancies between a taxation lapse and information earnings filed with a IRS. Thompson argued that “rejection of a taxpayer’s taxation lapse should not be a mandated result” when a IRS and a taxpayer can't solve disagreements about incompatible information.

Thompson also urged a IRS to yield some-more information about how a complement will be designed so that stakeholders can consider how it will impact taxation practitioners and taxpayers.

Finally, she lifted a emanate of how a real-time taxation complement would impact a annual filing process, due dates for returns, and those taxpayers who now record early in taxation deteriorate in sequence to get their refunds sooner.

The IRS skeleton to reason another conference early in 2012.

About Emil Estafanous, CPA
Certified Public Accountant (CPA) Tax Professional committed in representing taxpayers and resolving their tax problems.

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