What will be different in 2015
There is no such thing as a “typical” tax season.
Between last-minute tax law changes; too few seasonal workers, or too many; and even the weather; the fates conspire to fulfill the ancient curse from China – “May you live in interesting times.”
In fact, the 2014 season just passed was interesting. It began with chaos over the planned IRS credentialing program for independent tax preparers, followed by a lawsuit by the American Society of CPAs. That lawsuit is still working its way through the judicial process, though that process would be circumvented if Congress were to fast-track a bill and push it to the President’s desk for signature.
Technical problems with the web portals and registration processes in support of the Affordable Care Act (“ACA”) likewise delayed tax submissions, with the additional requirement for tax preparers to educate and validate the health insurance of their clients. Until this information could be validated, preparers could only proceed at some risk to themselves and their clients.
These issues were not resolved, and have become more complicated as the year passed. A host of other issues have joined the queue as well, so that any practice management plan for the 2015 tax season must consider the following at a minimum:
- The prospect of a voluntary AFSP (Annual Filing Season Program). If the AICPA does not prevail in its lawsuit over credentialing, the IRS has indicated it will pursue a voluntary program that would require completion of the AFSP course (which Drake software offers through www.drakeetc.com) and getting the required number of CPE credits prior to the end of the year. Drake offers coursework for credits through ourFSP page (see www.Drakesoftware/voluntary). It’s important to note that under this voluntary program, the IRS intends to market its list of “credentialed” preparers to taxpayers, giving CPAs, EAs, and those who achieve their AFSP Record of Completion a competitive advantage.
- Tax Extenders after the elections. This collection of 50 temporary tax breaks, including auto race tracks, wind energy, school teacher expenses, Puerto Rican rum producers, multinational corporations, and more, expired at the end of 2013, but is likely to be extended until 2015. Indications are that this will be done after the elections in November, which could be disruptive for early filers.
- New forms and information for the ACA. Though the IRS has issued guidance to taxpayers and businesses during the year, more critical filing season guidance will be released as the season approaches. Two new forms (Form 8962, Premium Tax Credit, and Form 8965, Health Coverage Exemptions) are being released to address calculating individual shared responsibility payments and the premium assistance tax credit. These documents help tax preparers understand qualified health coverage, minimal essential coverage, exemptions from shared responsibility payment, and the reporting required for tax purposes -- a lot of new work for preparers, and likely higher fees for taxpayers.
- Continuing attrition among refund settlement banks. The most recent of these is Advent Bank, a relatively new refund settlement bank, which is discontinuing operations. See this page for details: https://www.adventtax.com/
- Tax Refund Theft bill. If this were to gain momentum and pass in some form, it could have an impact on 2015 (harsher penalties, filer passwords, for example) but would more likely impact the 2016 filing season and beyond.
- Other legislation in the works, which may or may not impact 2015 taxes:
- Student and Family Tax Simplification Act - https://www.govtrack.us/congress/bills/113/hr3393
- CTC Improvement Act - https://www.govtrack.us/congress/bills/113/hr4935
- America Gives More Act - https://www.govtrack.us/congress/bills/113/hr4719
Six months remain before tax preparers hit their stride for the new season, and much can happen during that time – from tax reform legislation to new programs that can more effectively curb the rising number of false returns.