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Green Mountain Payroll Conference
Green Mountain Payroll Conference
Joseph McCarthy CPA IRS Senior Stakeholder Liaison
203.415.1015 cell860.756.4431 office
Joseph McCarthy CPA IRS Senior Stakeholder Liaison
203.415.1015 cell860.756.4431 office
Small Business/Self-Employed Division
E-News For Payroll Professionals
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Latest information on payroll topics
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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
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
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
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
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