Category: Practice Management

Tax Resolution Hot Sheet™ #4: Appeals – Digital Signatures, Digital Case Files

In this issue:

  • Reissuance of digital signature guidance for Appeals
  • Extension of electronic case file pilot for Examination Appeals
  • Make just one more cold call

Extension of Digital Signature Guidance
Today, we have a pair of Appeals-related guidance extensions to discuss. First up is memo AP-08-0521-0015. In response to the pandemic last year, Appeals basically had no other choice than to create a procedural deviation to allow for digital signatures on many documents. More specifically, this change related to digital images of signatures, which are usually verboten.

In other words, Appeals was able to temporarily accept signatures that were drawn on computer — e.g., there was never a wet ink signature to start with. It’s also important to note that these are NOT true “digital signatures”, which have some sort of authentication protocol attached to them. This is literally just drawing a signature with your mouse, or taking a photo of a signature with your phone and cropping it, and then copy/pasting it into the IRS form, with no security provisions.

In other departments, such as the CAF Unit, we’ve already seen relatively quick (by government standards) creation of true digital signature options. It’s my hope that the Service will expand those technologies to all departments sooner rather than later, making life easier for everybody.

Also in this procedural deviation is the ability for Appeals personnel to receive taxpayer documents via email and to send taxpayers documents via SecureZip. We can only hope that this is going well, and that in the future we can do the same with Collections and Examination. Then we’d really be living the dream, eh?

These temporary provisions were set to expire, but have been extended through Dec. 31, 2021.

Electronic Case Files in Field Examination Appeals
IRS field units still use paper files for the vast majority of the work they do. When a taxpayer is getting put through the ringer on either the Collection or Exam side, there’s a massive amount of paper created. Running an audit from an iPad? Pfft, maybe by 2050, if we’re lucky. 🙂

But, at least there are some steps in the right direction. Within SB/SE, there has been a pilot program running for a little while (pre-COVID) that allows for digital case files for certain types of field examination. These are mostly individual income tax examinations that are being run under this program. Payroll tax, excise tax, gift … Continue reading

May 17th Doesn’t Matter

Some people really don’t like having their pre-conceived notions challenged.

For example, consider this response to the email I sent yesterday:
—-
Boy are you wrong!!! Congress passed the Legislation after tax season already started – beyond our control.
IRS needed to interpret the changes made in the final Legislation – beyond our control.
Tax software needed to be updated for those changes – beyond our control.
State Legislators needed to decide if they were going to follow federal changes – beyond our control.
—-

…plus six more lines, including one extolling my “insensitivity and arrogance”.

All because I had the audacity to declare that yesterday was the end of filing season.

In total, I received over 30 replies to yesterdays email. That’s a lot of replies for what was probably the shortest email I’ve ever sent.

Just so everyone knows, I am completely aware that IRS extended the filing and payment deadline to May 17th — I’m not an idiot living under a rock (although that’s heavily debated).

But as I’ve written a few times in these emails over the past month plus, just because the IRS extended the deadline, doesn’t mean you have to.

My advice to all tax pros has been to “act as if” April 15th was still the deadline, and do as you would in any other year. That means wrapping up existing returns in progress between April 1 and 15. As of April 1, cutting off any clients that have not brought you docs yet — everybody not in-progress goes on extension to October. The same best practices that you would use in any other year.

Why?

The most important reason is so that this doesn’t throw off your business operations for the rest of the year. In other words, don’t let external forces dictate your business decisions. Tax professionals that simply embrace the May 17th extended deadline will, inevitably, continue to operate in “filing season mode”. That means delaying 1040 tax resolution season marketing. That means skipping late April and early May business development opportunities, such as new ad campaigns, the early return of some trade shows, potential speaking opportunities, and the like.

By failing to enforce a standard April 15th deadline upon your clients, you are stepping over dollars to pick up dimes. If you also offer accounting services, and you stay 100% in “tax season mode”, think of all the potential accounting clients that … Continue reading

Revisiting agent fees for SBA EIDL and PPP loans

While I twiddle my thumbs waiting for the IRS to update the Collection Financial Standards so I can report on it, and while you wrap up tax season over the next 11 days (because you should be blatantly ignoring the May 17 nonsense), let’s not forget about the PPP and EIDL loan worlds.

As you may have heard, the application period for PPP loans has been extended through May 31, with processing extended to June 30. So, plenty of time for your clients to get in both their first and second draw applications if they haven’t already done so.

EIDL application deadlines are always specific to each disaster declaration. For the ‘rona ‘saster, the application deadline is currently December 31, 2021. If your area has been impacted by recent winter storms, hurricanes, fires, floods, tornadoes, civil unrest, earthquakes, drought… Yikes, what a downer… Here, just search the SBA disaster declaration list yourself. There are literally 999 active disaster declarations across the country. Each local disaster declaration will have it’s own application period for EIDL and other relief that your clients might be eligible for.

Ya’ know what, after that depressing paragraph, I hereby interrupt this email to insert some random cuteness…

Image

OK, much better!

As I was saying… There is still plenty of opportunity for you to be the hero and help your clients that need it to obtain these loan funds. But, there’s a catch to being an accountant and helping with SBA loan applications. I wrote about this extensively a year ago, but it’s worth revisiting now as the PPP winds down.

Last year about this time, I was annoyed to learn that some accounting “guru” out there was not only instructing tax and accounting professionals to charge an up front fee for completing the PPP loan application for their clients, but to also charge a back-end contingency fee based on the approved loan amount. This “guru” was setting people up for a visit from an SBA Special Agent (yes, the SBA has law enforcement personnel).

Here is the super-short version of what you need to know about fees in relation to SBA loans:

  1. It is a violation of SBA regulations for you to charge any fee in connection with an SBA 7(a) loan application. PPP loans are 7(a) loans.
  2. It is a violation of SBA regulations for anybody to charge a contingency fee in connection with any
… Continue reading