IRS Announces 2021 PTIN Renewal Requirements & Fees

The IRS has announced that the 2021 PTIN renewal window is now open. All current PTINs will expire on December 31, 2020.

All tax professionals, regardless of licensure, must renew their PTIN if they prepare any return or claim for refund in 2021. The total renewal fee is $35.95, of which $21 goes to the IRS and $14.95 goes to the federal contractor administering the PTIN registration program. Once paid, nobody can receive a refund on these fees.

All Enrolled Agents must also renew their PTINs, regardless of whether or not they prepare tax returns, and without regard to your normal EA renewal year. In other words, all EAs, including those only offering taxpayer representation services, must hold a valid PTIN at all times. This requirement does not apply to CPAs and attorneys engaged in taxpayer representation if they are not also preparing tax returns for a fee.

To renew your PTIN for 2021, or to apply for your first PTIN if you are a new tax practitioner, simply visit the IRS PTIN system here: https://rpr.irs.gov/datamart/mainMenuUSIRS.do

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2021 Will Almost Surely See a Spike in TFRP Cases

One of my favorite things about taxpayer representation is that it is a recession-proof business.

In fact, on the IRS Collections representation side of things, it’s a business that booms during a recession. Despite the ’07-’08 recession throwing me into bankruptcy, I was incredibly fortunate to then stumble into an industry that was poised to take off like a rocket.

In much the same way as back in 2008, small businesses today are suffering. Hundreds of thousands of small business owners are being forced to make painful decisions, right now, about what to do with their limited capital. Since they often fail to understand the long-term consequences, they frequently opt to stop paying their payroll taxes during times like this, to instead pay suppliers and employees. That’s just the reality of the situation for them to continue operating right now.

But, of course, today’s missed Federal Tax Deposit (FTD) is tomorrow’s Trust Fund Recovery Penalty (TFRP) assessment.

Most of the new 941 tax debt cases being created right now won’t really start being worked by SB/SE Collections until mid to late 2021. That’s just another reality of the current situation. By then, those tax debtors will have accumulated 4 to 6 quarters of 941 liability.

Are you going to be ready and able to represent such tax debtors next year?

To help you get started in this arena, on Dec. 10 at 10am PST I’ll be presenting the next installment in our Sweeping Overview series of CPE classes, covering the TFRP. This class will be a 1-hour, big picture overview of a variety of TFRP representation concepts. To create this class, I’m literally extracting specific slides from the PowerPoint decks that make up the much deeper 8-hour TFRP arc contained within our CTR™ curriculum. So, just like the rest of our Sweeping Overview courses, this class is exactly that: A sweeping overview of basic, high level concepts. These classes are really intended for those tax professionals that have zero prior exposure to the topic, but they’re also a good “knowledge check” class for experienced taxpayer representatives.

Course objectives for this class are:

  • Recognize the role of the Trust Fund Recovery Penalty in the IRS Collection process.
  • Describe the IRS trust fund investigation process.
  • Identify the most common defenses against TFRP personal assessment.
  • List the steps in the TFRP appeals process.

Registration for this class is only $10, and seating is limited to the … Continue reading

IRS announces Taxpayer Relief Initiative to help those financially impacted by COVID-19

The IRS is following up on their People First Initiative from summer 2020 with some new administrative program changes to make life a little easier for taxpayers that owe back taxes and are not in a position to immediately repay those tax debts. While these are not new programs, the IRS is attempting to make it easier for taxpayers to take advantage of the existing programs, by increasing access to relief.

Under this new initiative:

  • Taxpayers now have 180 days to pay tax debts on a short-term payment plan, up from 120 days.
  • For taxpayers already paying on a previously accepted Offer in Compromise, the IRS is now offering some flexibility on the payment terms of that accepted offer.
  • Individuals with an existing payment plan on a tax debt will automatically have new tax debt balances tacked on to their existing payment plan.
  • As per March 2020 changes to the Internal Revenue Manual, certain individuals with income tax debts less than $250,000 no longer need to submit financial documentation in order to obtain a payment plan. This option is only available via call center staff, not cases that are assigned to field agents.
  • For individuals that only owe 2019 tax debt, and owe less than $250,000, the IRS may agree to not file a Notice of Federal Tax Lien (NFTL) against the taxpayer.
  • IRS is now allowing some individuals with existing Direct Debit Installment Agreements to use the IRS website tool (Online Payment Agreement) to modify their payment plan to lower their monthly payments.

If you owe back taxes to the IRS, you may qualify for these simplified options to take care of your tax problem.… Continue reading