IRS Cracks Down on Tax Preparer Miami

IRS Cracks Down on Tax Preparer Miami

The IRS is sending letters to 21,000 members of the Tax Preparer Miami community to make them aware of their preparer responsibilities and to provide them with information to ensure the accuracy and quality of their clients’ returns in the 2012 filing season. The IRS plans to visit at least 2,100 of the income Tax Preparer Miami during the filing season at their business locations.

Tax Preparer Miami and IRS has provided information regarding the letters to and visits with income tax preparer Miami in a question-and-answer format. The purpose of the letters and visits is to heighten awareness of preparer responsibility, with a focus on income tax preparer Miami who prepare a large number of returns with Schedules A, C and E.

Certain Income Tax Preparer Miami firms have been selected due to the high percentage of attributes that indicate errors in filing Schedules A, C or E during the 2011 filing season. Included with the letters are enclosures addressing areas of concern regarding those schedules. The letters and visits are an integral part of the effort by the IRS to provide oversight of income tax preparer Miami firms, as well as to inform practitioners of their responsibilities.

The Schedule A enclosure is being sent to income tax preparer Miami who have prepared returns that have a high number of attributes typically found to have significant errors on Schedule A, Itemized Deductions. The notice lists the most common issues as unreimbursed employee business expenses and business mileage claimed on Form 2106, travel, meals and entertainment expenses, and charitable contributions. Tax Preparer Miami CPA Viera advises staff to make reasonable inquiries if the information furnished by a taxpayer appears to be incorrect, inconsistent with an important fact, or incomplete.

The Schedule C, Profit or Loss from Business (Sole Proprietorship), enclosure is used to inform income tax preparer Miami who have prepared returns with attributes that indicate a high number of errors on Schedule C. The most common Schedule C issues are: reporting less than all the gross receipts, reporting expenses that are not ordinary and necessary for the business, and reporting the allowable amount of the expenses paid or incurred during the tax year. Income Tax Preparation Miami CPA Viera advises staff to ask clients sufficient questions to ensure that the expenses being claimed are correct. Taxpayers may not fully understand the law and they may believe they are entitled to claim Schedule C deductions for nonqualifying expenses.

The Schedule E, Supplemental Income and Loss, is the third enclosure used by the IRS to indicate that a income tax preparer in Miami has prepared returns that have a high incidence of attributes found to result in error on Schedule E. The most common issues are that rental income and expenses have not been correctly reported, rental depreciation has not been correctly calculated and passive activities, basis and at-risk rules have not been properly considered or calculated. Income Tax Preparation Miami CPA Viera makes the appropriate inquiries to determine the existence of facts and circumstances required as a condition for claiming a deduction or credit.

When it comes to income tax preparation in Miami residents often feel a lot of anxiety. This is for good reason as you need to carefully go line by line and make sure that you are executing your tax preparation the right way. Why not hire a pro?

Tax Preparer Miami Finding a Pro

Really, there is no reason to stress out when tax time rolls around. All you need to do is find a professional Tax Preparer Miami. You can start your search online by typing income tax preparer in Miami into the search engine of your choice and seeing what comes up. Likewise, you can look in the phone book under income tax preparation Miami and see what is available.


13 Tips to Finding the Right Tax Preparer Miami Team

13 Tips to Finding the Right Tax Preparer Miami Team

How do you find an Income Tax Preparer Miami Team that is right for you? First, income Tax Preparer Miami are not all the same.

First, not all Tax Preparer Miami are the same.

I previously wrote an article about this last year titled: “Tax Preparer Miami – Are they really all created equal”, and you may be as surprised as other readers about just how much tax return preparation can vary.
In fact, I calculated the average savings I typically find from annual tax savings, reducing professional fees and audit assessments. In total, the average savings are:
– $23,750 Annual tax savings
– $5,000 Audit defense savings
– $10,000 Reduced audit assessment savings
– $50,000 Reduced legal fees
– $3,000 Reduced tax return preparation Miami (average) fees
This is a total average potential savings of $91,750! Your tax preparer does make a difference! How much more could you do with these savings?
Second, the right tax preparer for you depends on what is important to you. Take a minute to answer this question:


How you answer this question will impact what type of Tax Preparer Miami team you need. I’ve asked these questions to clients, prospects and colleagues. I have compiled the most popular answers and what it means to you as you find the Income tax preparer Miami for your team.

ANSWER #1: Paying the least amount of tax legally
Your Income Tax Preparer Miami team needs to:
– Know the tax law very well and know how to be creative legally.
– Ask you a lot of questions about your situation in order to understand your situation and goals.
– Have a review process where at least one other person reviews your return solely for the purpose of how to reduce your taxes legally.
Q1: Can you tell me about the other (your industry) you service?
A: Your Tax Preparer Miami needs to know how the tax law applies to your situation. Having other clients in your industry or with similar investments indicates that the tax preparer is likely to be familiar with the tax laws that impact you.
Q2: Who will be working on my income tax return?
A: It’s very common (and a good business practice) for income tax preparers in Miami to have staff prepare your tax return. You want to make sure the other people working on your return have the same level of expertise.
Q3: What is your tax return review process?
A: Tax Preparer Miami who are focused on reducing your taxes will have this built into their review process. Usually it involves having another experienced tax preparer review the return solely for the purpose of finding ways to reduce your taxes.
Q4: What would you have done differently on my past tax return?

A: Show the income tax preparer Miami you are interviewing your prior year tax return. Creative income Tax Preparer Miami will be able to give you at least one idea of what you can do to reduce your taxes by looking at your tax return for just a few minutes. If it’s creativity you are after, this is a great question to ask! But don’t expect the income tax preparer Miami to give you all the details right then and there – that’s why you pay them!
Q5: How much can you save me in taxes?
A: While it’s difficult for any income Tax Preparer Miami to answer this in just a few minutes of looking at your past tax return, it is possible for them to know if they can save you taxes after spending 30 minutes with you.

Q6: What deadlines do you impose on clients?
A: This may seem like an odd question for minimizing your taxes but it has a direct impact. If your income tax preparer in Miami allows you to provide your information a week before the tax return is due, it’s very unlikely that the income tax preparer Miami will have the time to focus on your return to truly minimize your taxes. Income Tax preparers in Miami that want to reduce your taxes want your tax return information early and will communicate that to you.
Q7: What recent tax law changes should I be aware of?  A: To minimize your taxes, your tax preparer needs to know the tax law inside and out, which includes the latest changes? Your tax preparer needs to be able to answer this question without hesitation.
ANSWER #2: Minimizing tax return preparation fees your tax preparer needs to:
– Focus on the tax work and recommend someone else for the non-tax work (such as bookkeeping).
– Request tax information in a certain format.
– Require you to input your information online.


Q1: What can I do to reduce my tax return preparation fees?
A: To minimize your tax return preparation fees, your tax preparer always needs to have your fees in mind. Ask your tax preparer what you can do to reduce your fees. If you don’t get at least 2 suggestions, your tax preparer probably isn’t thinking about how to keep your fees low.
Common suggestions include:
– Have someone other than the tax preparer do your bookkeeping. I am always skeptical when a tax preparer does the bookkeeping. First, they either charge an arm and leg or if they reduce their rates to accommodate you, it means they don’t spend their time entirely on tax issues, which could indicate their tax skills aren’t up to par.
– Organize your information. Don’t bring your tax preparer a shoebox! A tax preparer that is really focused on keeping your fees down will have forms, spreadsheets and other tools available for you to use to organize your tax return information.
– Enter your information online. Many tax preparers now require clients to input their information online. Accurately entered information can help reduce fees. Caution: Information that is entered inaccurately can increase your fees!
Q2: What is your fee structure?
A: Your tax preparer needs to be able to answer this question with confidence. Any wavering could indicate that the tax preparer knows the fees are too high for you but just doesn’t want to tell you. Unfortunately in these situations, you find out too late!
ANSWER #3: Reducing audit risk your tax preparer needs to:
– Know the tax law very well and how to properly report your activity.
– Understand the IRS’s current “hot buttons” or “red flags.”
– Offer an audit defense plan.


Q1: How many audits have you been through and what triggered the audit?
A: The most important part of this question is what triggered the audit. If it was triggered by how something was reported, then that may be something the tax preparer had control over (and may be a bad sign for you).
Q2: What was the outcome of the audits you have been through?
A: A return can be randomly selected for audit or selected because of a certain activity (even though it was reported correctly). So it’s important to understand the outcome of the audits. Was additional tax assessed or were there no changes? Additional tax may indicate that something was not reported properly.
Q3: Do you offer an audit defense plan?
A: Tax preparers that are confident in their work will offer an “insurance” program that covers their professional fees to handle your audit if your return is selected for audit.
Q4: What is your tax return review process?
A: Although tax returns can be selected randomly for audit, many are selected due to how items are reported on the tax return. Tax preparers who are focused on reducing audit risk will have a review process that includes another tax preparer reviewing your return solely for accuracy of reporting.
Be selective with the tax preparer you put on your team. The average savings I find for my clients is over $90,000! Your tax preparer makes a difference!



Tax CPA Exempt From IRS Competency Test

Tax CPA Exempt From IRS Competency Test

The Internal Revenue Service today marked the third anniversary of its groundbreaking Income Tax Preparer in Miami initiative and urged those paid Tax Preparerrequired to pass a new competency test to take the test as soon as possible with the exemption of Tax CPA and Attorneys.

Three years ago the IRS took its first step toward ensuring standards for competency, continuing education and ethics would apply to all paid Income Tax CPA. Major facets of the initiative are now in place.

On June 4, 2009, IRS Commissioner Doug Shulman launched a six-month review focusing on the competency and conduct of paid Tax CPA. The review resulted from a recognition that paid Tax CPA were an important element in the integrity of the nation’s tax system.  The review included a series of public hearings with the Tax CPA community, consumer advocates, oversight groups and taxpayers.

Six months later, the Tax CPA Review laid out a series of recommendations to extend oversight to certain areas of the preparer industry to enhance tax compliance and service to Taxpayers.

Among the initiative highlights:

Mandatory registration and use of a Preparer Tax Identification Number (PTIN): Anyone who is paid to prepare, or help prepare, all or substantially all of a federal tax return now has to register with the IRS and obtain a PTIN, as do all enrolled agents. The PTIN is valid for a calendar year and must be renewed annually. Almost 850,000 tax preparers have registered since the requirement began.

Competency Test: In November 2011, a 120-question basic competency test was launched. Certain Tax CPA are required to take the test by Dec. 31, 2013, to stay in business. The IRS urges an estimated 340,000 preparers required to take the test to do so as soon as possible to give themselves more time if they have to retake the test and to avoid a potential flood of last-minute test takers. Certified Public Accountants, Enrolled Agents and attorneys are exempt from the test because they already have other testing requirements as part of their credentials. Certain non-signing preparers supervised by Tax CPA, EAs or attorneys are exempt, as are non-1040 preparers.

Continuing Education (CE): The roughly 340,000 tax preparers who have a testing requirement also have a new requirement to complete 15 hours of continuing education courses each year. The CE credits must include 10 hours in federal Tax law, three hours in federal Tax law changes and two hours in ethics. This requirement became effective January 2012 and it applies even if the preparer has not yet taken the test. There are now hundreds of outlets offering IRS-approved CE courses. More details are available at

Ethics and Tax Compliance: Ethical requirements that previously applied only to CPAs, EAs and attorneys now apply to all paid Income Tax Preparer in Miami. All paid tax preparers also will undergo a tax compliance check and are subject to the standards for practice outlined in Treasury Department Circular 230.

Registered Income Tax Preparer: Tax Preparers who pass the competency test and tax compliance check are given a new credential: Registered Tax Income Tax Preparer. To date, over 4,800 people have become Registered Income Tax Preparer.  Beginning in 2014, only Registered Income Tax Preparer, Enrolled Agents, Certified Public Accountants, and attorneys will be authorized to prepare individual Income Tax returns for compensation.

Public Database: The IRS also will create a publicly searchable database that will allow Taxpayers to see if their Tax CPA have met IRS standards or to find a Tax CPA in their zip code area. The IRS will have a public education campaign to inform taxpayers to use only Tax CPA, EAs, attorneys or Registered Income Tax Preparer in Miami if they pay to have their taxes prepared.

The database will also show any credentials held by the tax preparer, including the new RTRP credential, as well as those who are EAs, Tax CPA and attorneys.

The RTRP competency test is available at more than 260 vendor testing centers nationwide. Tax Preparers can determine if they have a test requirement by going to their online PTIN Account at Preparers also can set a test date, time and location through their online PTIN Account.


What Income Tax Preparation in Miami Looks Like Today

What Income Tax Preparation in Miami Looks Like Today

Over the last decade, Tax Preparation in Miami firms ranging in size from small local firms to large international ones have embraced tax outsourcing as a way to improve efficiency, client service, and staff retention. This article will provide an overview of those benefits as well as discuss the workflow, security, and regulatory issues surrounding the Tax Preparation in Miami business process.

Tax outsourcing improves efficiency in at least three ways. First, it increases the annual billable hours per Income Tax Preparer Miami by enabling firms to staff for off-season rather than peak-season workload. Second, tax outsourcing moves Income Tax Preparation in Miami firms toward a paperless tax workflow which streamlines and standardizes the Income Tax Preparation in Miami and review process. Third, when offshore tax outsourcing is used, firms can significantly reduce costs due to the wage differential between U.S. and offshore preparers.

Tax outsourcing improves client service in at least two ways. First, with most tax outsourcing vendors providing a one to three day turn-around time, firms can get tax returns back to their clients days if not weeks earlier. Second, by eliminating mundane data entry and file organization tasks outsourcing enables tax Tax Preparation in Miami to focus on higher level, value-added client services.

Finally, Income Tax Preparation in Miami firms say that tax outsourcing improves their ability to attract and retain qualified staff by “taking the edge” off tax season. Long busy season hours drive many people out of the profession. Tax outsourcing enables firms to get the work done while providing staff some semblance of a normal life during tax season.

Tax outsourcing is enabled by paperless workflow technology that connects a CPA firm with its tax outsourcing service provider. When taxpayer source documents are received, the CPA firms scans and uploads them to the tax outsourcer’s website along with a copy of the proforma tax software file. The tax outsourcer then preparers the tax return along with an organized, indexed, and annotated set of digital workpapers that make review more efficient.

If corrections are needed, CPA firm in Miami can either have the outsourcer make them or do it themselves if the work required is small.

Along with quality, the top concern of most CPA firms that outsource is maintaining the security and privacy of taxpayer information. CPA firm in Miami must adequately vet their service providers to ensure data security is maintained. To do this, CPA firms should consider the security of the location where the work is performed (the service center), the security of the hardware where the data resides (the data center), the security of the software used to provide the service, and the security of the data while in transit.

SurePrep’s onshore and offshore service centers, for example, are designed to prevent its Income Tax Preparation in Miami from removing taxpayer data from the facility. To start with, no hardware in the service center contains taxpayer data. SurePrep Income Tax Preparer Miami work from virtual machines located in world class data centers. So theft of hardware from the service center would not cause a breach of taxpayer data security. Furthermore, SurePrep preparers do not have the ability to send taxpayer data out of the service center via email or the internet.

Because SurePrep maintains a paperless environment there’s no ability to print or write taxpayer data on paper that could be removed from the premises. SurePrep preparers are prohibited from using cell phones at their workstations so that data cannot be removed verbally, by texting, or digital photography. And closed circuit cameras record all work areas to ensure compliance with these security procedures.

Most people that visit their tax outsourcer’s service center comment that the security is beyond that of any CPA firm. In addition to preventing the unauthorized removal of data from the service center, the servers where the data resides need to be physically secure from theft or intrusion. To achieve this, tax outsourcers should maintain servers at data centers with SAS70 Type 2 and SSAE-16 certifications.

Even if the servers are physically secure, firms need to have confidence that outsourcers’ servers cannot be hacked into over the internet. To provide this level of assurance, SurePrep hires a company to try to hack into its systems every year. Vulnerabilities found are remediated after which the security consultant provides its unqualified opinion as to the security of the software. Finally, data must be safe while in motion. This can be achieved by ensuring all data transfers between the CPA firm in Miami and outsourcing provider are done over an encrypted connection.

Tax outsourcing services can be performed onshore or offshore. Using offshore resources reduces costs but requires the CPA firm to obtain a signed and dated Section 7216 consent letter from the taxpayer before tax return information is disclosed to an offshore tax preparer.

Section 7216 consent letters must include the name of the taxpayer, the name of the tax return preparer, the name of the recipient, the intended purpose of the disclosure, and the specific tax return information to be disclosed. The letter may specify the duration of the consent (e.g., 10 years) eliminating the need to get it signed every year. Every firm we know that has requested 7216 consents from their clients has received them without issue enabling them to enjoy cost advantages over most other firms.

Summer is a great time to test tax outsourcing and see if the process can benefit your firm. In addition to the above considerations, firms will want to ensure the tax outsourcer has the experience necessary to prepare high quality returns, and has technology that can add value beyond the tax outsourcing service. SurePrep, for example, streamlines the onscreen preparation and review of tax returns with its SPbinder paperless tax binder.

SPbinder is a workpaper system that integrates PDF, Excel, Word and e-mail documents into a single electronic tax binder. SPbinder provides a common set of tools that allow workpapers of every format to be cross-referenced, tickmarked, annotated, and signed off. SPbinder tracks open items, review notes, and automatically determines missing documents. And SPbinder enables each worksheet or page in a file to be organized separately, providing the same organizational flexibility as with paper (something that can’t be done with any other document management or workpaper system). Each tax outsourcer provides its own flavor of value-added technology. It is up to firms to decide which will provide the most benefit.