TIS THE SEASON TO REST AND PREPARE! SUSAN S VIEW OF THE NATP 2011 NATIONAL CONVENTION

Transcription

1 TIS THE SEASON TO REST AND PREPARE! PRESIDENTS MESSAGE - LYNN'S LINE Hi to all NH-NATP members, Tax Preparer Registration (PTINs) and the IRS Competency Exam (available Nov 28th, 2011) are the most important changes that affect our profession. With this is an annual requirement of 15 CPE credits starting in EAs, CPAs & Attorneys are required to obtain more CPEs each year. Our goal as a chapter is to provide support and education options. The board is meeting the end of November to plan the 2012 Education Seminars. The middle of November the Annual Return Preparer letters were issued. IRS mailed 21,000 plus letters to return preparers as part of its Tax Return Preparer Compliance Program. (One of our members showed me the one he had received). The letters are issued to "tax return preparers who prepared returns with a high percentage of attributes that typically indicate errors" on 2011 filing season Schedules A, C or E. The letter does not necessarily mean that the returns you prepared were erroneous; it means that your returns were caught up in a screen created by the IRS. You can go to the IRS website for Tax Professionals and the first article is about these letters. Choose this item and the explanation and sample letters are there. Happy Holidays to you all and have a healthy and profitable 2012 Tax Season. I hope to see you all at our Spring and Fall Seminars in Lynn B Annicchiarico EA President NH-NATP lricoea@comcast.net SUSAN S VIEW OF THE NATP 2011 NATIONAL CONVENTION The convention was held in St Louis this past August. For anyone that has never attended a convention, I highly recommend you to do so. The education that is offered is phenomenal; the instructors are very effective in explaining tax issues; but most of all, the amount of knowledge that participates bring to the convention is extremely impressive. The comradery that you share with other professionals is well worth the time and money spent. We plan to add some of the speakers to our list of potential speakers for our NH Seminars. NH NATP sponsored a table at the Chapter Showcase and we raised over $ towards the Women s Shelter charity. We had two drawings, each for a pint of Maple Syrup. Another aspect of the convention, for those of you that may be interested in joining the Board of Directors, is the opportunity to participate in workshops that help improve your leadership skills. So mark your calendars now for next year s NATP National Convention Baltimore July 9-12, 2012 See you there!?! Susan

2 2012 BOARD OF DIRECTORS: President: Lynn Annicchiarico, EA; Term 2012 Vice President: Susan Merrill-Paul, EA; Term 2014 Treasurer: Chris Sawyer, EA; Term 2014 Secretary: Terri L. Wisell, EA; Term 2013 Board Members: Winfield Bassage, EA; Term 2012 Shirley Perry, EA; Term 2013 Harold Maxham; Term 2012 Carol Romeril, EA; Term 2014 Sol Asmar, EA; Term 2012 Alexander Weekes, EA; Term 2012 Patricia Tremblay, EA; Term 2013 Edward Zelazo, Jr., EA; Term 2012 OVERVIEW OF FALL SEMINAR HELD OCTOBER 27th NH UPDATES include major changes to business tax forms the new forms are not currently available but keep watching the DOR website IRS UPDATES PTINS, preparer registration, e-file mandates PRIMARY SPEAKER -- Granite State Financial of 402 Amherst Street, Suite 205, Nashua, NH 03063, was very proud to sponsor the afternoon speakers at our recent meeting of NATP in Concord, NH. Thank you for the rave reviews that we received from the attendees. For those who were unable to attend, let me summarize their presentations. Mark McManus spoke about the tax issues involved in annuity products, which are becoming a larger part of the retirement income planning landscape. He said that, during accumulation (your journey up the mountain), ROI stands for Return on Investment. However, during distribution (your journey down the mountain), ROI stands for Reliability of Income. Most retirees are afraid that they will run out of money before they run out of breath. Mark showed how the lifetime benefit riders on variable annuities (GMIB = Guaranteed Minimum Income Benefit, GWB = Guaranteed Withdrawal Benefit) can provide a pension income for those who no longer have pension incomes from their employer. He also discussed how, with the Enhanced Death Benefit (EDB) rider, you can have a life insurance component in your IRA or even better, in your Roth IRA, where traditional life insurance is not available. Herb Daroff, J.D., CFP(R) spoke about the tax issues of trusts and estates. He told us that trusts can be revocable or irrevocable, tax-exempt or taxable. He described how not all irrevocable trusts are created equally (can be used for elder care planning or estate planning, or both). If the trust is taxable and properly designed, income taxes can be paid

3 by the trust (but that trusts get into the 35% bracket at only $11,350 of income); by the grantor of the trust, who may be in a higher tax bracket than the beneficiaries, but the tax payments do NOT count as additional gifts; or by the beneficiaries, who may be in lower tax brackets, so that they could pay for after tax expenses, such as tuition, with their after tax dollars (e.g., it takes $50,000 to net $30,000 in a 40% bracket, but only $40,000 to net $30,000 in a 25% bracket) and, the trustee can income and/or principal to or for the benefit of some, all, or none of the beneficiaries. Herb discussed how tax exempt trusts (such as retirement plan trusts and charitable trusts) can be used during both accumulation and distribution phases of your planning. He talked about having sufficient life insurance to fund a Roth Conversion at Death for some or all of your retirement plan assets, so that a surviving spouse would have a Stretch-Roth; instead of a Stretch IRA. He discussed how other trusts can be used to leverage the available gifting exemptions (such as GRAT = Grantor Retained Annuity Trusts, IDGT = Intentionally Defective Grantor Trusts, QPRT = Qualified Personal Residence Trusts, etc.). Using a case study, he showed how to minimize or even eliminate estate taxes, even if the federal government lowers its exemption amount, or state legislatures adjust their rules. CAN YOU HELP? While we would love to do it all for you, we (the Board of Directors) just can t do so either due to time constraints or because our bylaws so state. So we are looking for help from our members with certain committees. The more who can help, the less each person will have to do. If you can give us a hand with any of the following committees, we would greatly appreciate it. Bylaws We are required to review our bylaws yearly. What will be involved? This committee will do their work via between April 20 and May 10. We will review the Bylaws to give our recommendations for changes to the Board of Directors at their May meeting. If you are interested in helping, please contact Terri Wisell at Terri.Wisell@hrblock.com Education This is the committee that plans our educational seminars twice a year, arranging speakers, location, and registrations. This is a VITAL committee and we need help doing this. At this time the committee only has two members and is in desperate need for help in the following areas: recommendations for presenters and assembling documents just before seminars. If you would be willing to give us some of your help, please contact Carol Romeril (carol@roberiltax.com) or Shirley Perry (sperry@mdccpas.com) Professional Standards This committee educates our members about ethical conduct and forwards complaints about unethical conduct of members to National. Most of this can be handled via . Interested in helping? Contact Lynn Annicchiarico at lricoea@comcast.net Government & Regional Relations - This committee is primarily for keeping members updated on state issues that affect our members and can be handled via . Can you give us a hand in this area? If so, please contact Sol Asmar at sasmar@comcast.net Audit This committee needs to do a yearly audit of the chapter s financial records. This should only take a couple hours a year in November. If you are interested in helping, please contact Pat Tremblay at ptremblay@bookstotaxes.com

4 Membership and Public Relations This committee works on ideas on Promoting membership in NATP and promoting our members to the general public. If you have ideas to help, please contact Sol Asmar at Nominations This committee oversees the election process of the Board of Directors, searching for and recommending individual members to join the Board of Directors. Most of this is work is done from July-Sept with the election occurring at our Annual Meeting in October. The majority of this work can be handled via . If you are interested in helping, please contact Pat Tremblay at Newsletter Beginning in 2012, this committee, working primarily via , will gather information from various committees and member to produce a spring and fall newsletter. If you can help in this area, please contact Susan Paul at spaulea@gsinet.net ARE YOU INTERESTED IN BECOMING AN INSTRUCTOR? The IRS changed the rules again that all instructors need to be Certified. We are planning to hold an NATP instructor certification training during the summer next year and would like to know if anyone is interested. It is open to any NATP member in NH and surrounding states. If interested please contact Lynn at lricoea@comcast.net Maximum 15 attendees reserve your spot now! DATES TO REMEMBER NH NATP Spring Seminar Concord Holiday Inn Wednesday, May 23 rd NH NATP Fall Seminar Concord Holiday Inn Thursday, November 1 st IRS ISSUES TO WATCH: Gifts -- IRS is working on a major compliance initiative to sniff out gift tax cheats. It estimates that between 60-90% of taxpayers who transfer real estate for little or no consideration to family members fail to file Form 709 to report the gift. For starters, IRS is checking transfer records from 15 states: CT, FL, HI, Neb, NH, NJ, NY, NC, OH, PA, TN, TX, VA, WA and WI. So far, over 500 people have been audited or are under examination, and many more are in the pipeline. IRS is serious about this. When the CA Board of Equalization would not freely disclose the date, the Service went to court to try to make it comply. Even if gift tax isn't due on the transfer, a return still has to be filed with the IRS, if the amount of the gift exceeds the gift tax

5 annual exclusion - currently $13,000. Expect even more states to provide information as the program expands. Payroll Taxes -- The IRS continues to feast on S firms that pay very low salaries to owners. In many cases, S firm owners take low salaries so they can receive the bulk of the corporation profits as dividends, which are not subject to payroll taxes. IRS and the courts balk at this practice. In a recent case, a CPA took a $24,000 salary in a year when his share of the S firm's profits was around $200,000. A district court agreed with the IRS that his pay was unreasonably low and ruled that the dividends are properly reclassified as salary and are hit with payroll taxes (Watson,D.C., Iowa) Enforcement -- A new IRS campaign to collect unpaid FICA tax on tips is in the works. IRS is sending out bills to employers for their share of FICA tax on unreported tips, using data collected from Form 4137, which employees use to report tip income that they didn't disclose to their employers. IRS will send letters to these firms telling them how much they owe and instructing them to include that amount with their next scheduled payroll tax deposit. Those that do so will be exempt from any interest or penalty on the back taxes. IRS was able to find these firms by changing the Form 4137 to require reporting of the employer's tax ID number. EITC Due Diligence Letters -- These letters were sent to preparers that the IRS suspects do not completely know the EITC laws. The penalty has increased from $100 to $500 per failure to comply. The IRS has a training module available on its website. Since the new Form 8867 verifying questions were asked must be prepared and sent with the return we suggest all members view this module. WHAT DOES THE NATP WEBSITE GIVE YOU? Access to Chapter ANNUAL Minutes. WHAT IS A BENEFIT OF BEING AN NATP MEMBER? NATP Members do not forget your FREE Tax Question. This is one of the best benefits that you receive along with the Member to Member section on their website. Follow NATP on FaceBook and Twitter. WE WISH YOU A SAFE AND HAPPY HOLIDAY SEASON!