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August, 2014
Volume 24 Issue 1
PSEA
2015-2016
Board of Directors
President
Joni Cappuccio, EA CPA
First Vice President
Barbara Richardson, MBA EA
Second Vice President
Aaron Shirk, EA
Secretary
Linda Bleil, EA
Treasurer
Mikal Abdullah, EA
Immediate Past President
Vacant
Directors
Diana C. Dugan, EA
Elizabeth Hotz, EA
Warren Hudak, EA
Natasha Johnson, EA
William Matesevac, EA
Kathryn G. McCusker EA
Alfred Whitcomb, EA PA
PA EA ALERT
Inside this Issue
President’s Letter 1
Award Winner /
WT Reimburse-
ment
2
PA Registration 3
Profile Challenge /
NE Rep Confer-
ence / Court Case
4
Board List & Mtgs 5-6
PA Tips
Annual Mtg Recap
Fed GR Update
KOP Breakfast
Meetings
7
8-9
10-16
16
ACA / Lands End
Info
Treasurer’s Re-
port
17-19
20-24
Volume 24 Issue 4 September 2015
President’s Letter
By Joni Cappuccio, EA, CPA
Greetings,
Thank you for the honor of serving as PSEA President. With your support, I’m
looking forward to a productive year with our wonderful Officers and Board of
Directors.
Our 2015 fEAst in the EAst was a great success. This year, 103 attendees en-joyed two days of outstanding CE programs, networking and camaraderie with
fellow practitioners. As always, the evaluations were very positive. Many
thanks to everyone who attended!! The Board is beginning to plan next year’s
program which will be held in State College on Monday, June 13 and Tuesday,
June 14, 2016. Please let us know if you have any suggestions for particular top-
ics or speakers.
Our annual membership meeting was held on Monday, June 8, 2015. Reports
from each of our committees are included in this newsletter. Congratulations
to Past President, Robert Nugent, EA ATA ATP ARA, who was awarded the
Joe Frezza Founders Award!! We were so very fortunate to have NAEA Presi-dent, Terry Durkin, EA provide an update on NAEA activities and install our
incoming Officers and Board of Directors. Welcome to new PSEA Board mem-
bers: Elizabeth Hotz, Natasha Johnson and Alfred Whitcomb. Lynda Mosca-
tello, EA was elected Treasurer. However, for personal reasons, she has decid-
ed to move on. Therefore, Mikal Abdullah, EA has agreed to serve as Treasur-
er; Barbara Richardson, MBA EA, First Vice President; and Aaron Shirk, EA,
Second Vice President. Mikal has successfully completed the transition to
Treasurer, and Leon Fox, EA has examined our books for the prior year. I
want to thank Lynda for her many years of service to PSEA and our members;
Mikal, Barbara and Aaron for stepping into their respectful positions; and Leon
for examining our books. I would also like to thank Samantha Stewart, EA and
Mary Ann Jesse, EA for their past leadership and service on the Board.
Have you completed your NAEA profile? NAEA is currently conducting an affil-
iate profile challenge through October 15, 2015. State affiliates with the great-
est increase in completed profiles win a prize. Your profile is complete when
your basic information, language, practice type, practice experience and list of
specialties are entered. All members are urged to update their membership
profile on the NAEA website by October 15.
Page 2
The Board is working on some new programs to support our members for this
coming year. Thanks to PR Committee Chair, Natasha Johnson, PSEA is now on
twitter. Follow us @PATaxExperts. Additional programs include a mentoring
program; bylaws revisions; website update and local networking groups through-
out the state. We welcome your input and participation in any of these initiatives
or our committees.
Hope to see you all at our third annual PA state education event, which will be
held Friday, October 30, 2015 at the Comfort Suites in Carlisle, PA. Representa-
tives from the PA Department of Revenue will present 6 hours of NAEA continu-
ing education credits on PA state tax issues, and IRS Senior Stakeholder Liaison,
Rich Furlong, will present 1 hour of IRS / Treasury Circular 230 continuing educa-
tion credits on the Affordable Care Act. Please see registration form later in the
newsletter.
Happy extensions!!
Best regards,
Joni Cappuccio
2015 Western Pennsylvania Working Together
PSEA members receive a $25 reimbursement for attending the West-
ern Working Together Conference held on September 18, 2015 in
Cranberry. In order to receive reimbursement, a copy of your CE cer-
tificate must be sent to Joni Cappuccio before October 31, 2015 via
email at [email protected] or fax at (215) 736-9455.
Joe Frezza Founders Award
Congratulations to Past President, Robert Nugent, EA ATA ATP ARA for receiving the 2015 PSEA Joe Frezza Founders Award at our Annual Meeting on Monday June 8. Bob was recently in the hos-pital. His address is 6600 Rising Sun Avenue, Philadelphia, PA 19111. Please keep him in your thoughts and prayers. We wish him a speedy recovery.
REGISTRATION Register by October 22, 2015
(Please complete 1 registration per attendee)
Name:
Address:
City, State and Zip
Telephone PTIN __________________
Email (required for confirmation)
Please return registration, with check made payable to PSEA to:
PSEA, c/o W P Matesevac Jr EA, 120 Park Drive, Delmont, PA 15626.
PENNSYLVANIA SOCIETY OF ENROLLED AGENTS PRESENTS
Continuing Education* on Pennsylvania & Federal Issues
October 30, 2015
Comfort Suites in Carlisle, PA
Representatives from
The PA Department of Revenue,
and Richard Furlong, Senior Stakeholder Liaison, IRS
will speak on
PA Unclaimed Property procedures
Recap PIT changes and desk audit issues
Recap of PA Corporate Net Income changes
Review of PA Board of Revenue and Finance procedures
Review of E-Services for Taxpayers and Tax Pros
Affordable Care Act
The cost to all will be $65.00, which includes a continental breakfast and lunch.
Don’t miss this opportunity for networking AND great Continuing Education at a super price!
Registration and continental breakfast at 8:15; Education 9 AM - 4 PM.
Room rates are $99.00 + tax for a single or a double. When making your reservation, mention PA Society of En-
rolled Agents. The room block closes October 12, 2015. There is onsite parking behind the hotel.
* This program qualifies for 6 hours of NAEA continuing education credit, and 1 hour of IRS continu-
ing education credit for Treasury Circular 230. PA Number: PX000496L
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NAEA Profile Challenge
NAEA is currently conducting an affiliate profile challenge through October 15,
2015. State affiliates with the greatest percentage increase in completed profiles
win a prize. All members are urged to update their membership profile on the
NAEA website by October 15. After you log in on the NAEA website (naea.org),
go to my profile, update my profile, update my “Find an EA” profile. Your profile
is complete when your basic information, language, practice type, practice experi-
ence and list of specialties are entered.
New England IRS Representation Conference NAEA is a Sponsor of this Year's New England IRS Representation Conference! Earn 8 CE credits (7 tax, 1 ethics) while learning about representation from the perspectives of both private practitioners and IRS and DOJ employees. All attendees will be given access to the entire recorded event, including the breakout sessions. The event is being held November 20 at the Foxwoods Resort and Casino in Ledyard, Conn. NAEA Members may use discount code 2015NAEA to get a $50 dis-count, bringing the early bird registration to $199 if you sign up by Octo-ber 14. This price includes breakfast, lunch, snacks, and the cocktail re-ception. There is a hotel room block for the conference but space is lim-ited! To register, visit: http://irsrepconference.com . For any questions, please contact Amanda Evans at [email protected] .
Court Case Update Compliments of Frank Degen, EA USTCP
In one of my sessions in June, 2014 - Preparing a Form 1040 (with help from the Tax Court), I included a TC case Sophy 138 TC 204 where the TC found unmarried taxpayers who jointly owned homes were limited to a mortgage interest deduction of only $550,000 of debt per taxpayer (the same as MFS). In other words the mortgage interest deduction was on a per-residence basis. On Friday, 8/7, the 9th Circuit Court of Appeals reversed the TC and basi-cally said the deduction was on a per-taxpayer basis. http://cdn.ca9.uscourts.gov/datastore/opinions/2015/08/07/12-73257.pdf Even though PA is in the 3rd Circuit, the TC decision still stands outside the 9th Circuit. The 9th Circuit decision is a source of authority and an EA might want to use it with a Form 8275 if they have taxpayers in this situa-tion.
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PA Society of Enrolled Agents
Board of Directors for 2015-2016
Title Name/Address Phone/Fax Email
President Joni K. Cappuccio, CPA EA Ph: 215-736-9455 [email protected]
609 Prospect Avenue
Morrisville, PA 19067
First VP Barbara A. Richardson, MBA EA Ph: 717-532-7744
103 S Conestoga Drive Fax: 717-532-5090
Shippensburg PA 17257
Second VP Aaron B. Shirk, EA Ph: 717-273-3100 [email protected]
346 S. Ninth Street
Lebanon, PA 17042
Treasurer Mikal Abdullah, EA Ph: 215-549-3328 [email protected]
249 E. Walnut Park Drive Fax: 215-549-3029
Philadelphia, PA 19120
Secretary Linda S. Bleil, EA Ph: 412-486-1017 [email protected]
4068 Mt. Royal Blvd. #115 Fax: 412-486-1091
Allison Park, PA 15101
IMP Vacant
Director Diana C. Dugan, EA Ph: 610-367-7757 [email protected]
116 Cornrath Road Fax: 610-369-1796
Barto, PA 19504
Director William P. Matesevac, Jr., EA Ph: 724-568-5086 [email protected]
120 Park Drive
Delmont, PA 15626
Page 6
2015 / 2016 PSEA Schedule of Board Meetings
Monday, August 17, 2015, Carlisle, PA 10 am
Monday, October 19, 2015, * Conference Call 9 am
Monday, December 14, 2015, * Conference Call, 9 am
Monday, February 8, 2016, * Conference Call, 9 am
Monday, April 25, 2016, Carlisle, PA 10 am
Wednesday, June 8, 2016, * Conference Call, 6 pm, fEAst only
Sunday, June 12, 2016, State College, PA 7 pm
* Teleconference – 1-800-569-1949, Pass Code: 099782
PA Society of Enrolled Agents
Board of Directors for 2015-2016 (cont.)
Director Warren Hudak, Jr., EA Ph: 866-386-3508 [email protected]
1013 Mumma Road
Lemoyne, PA 17043
Director Kathryn G. McCusker, EA Ph: 814-674-5259 [email protected]
P.O. Box 68 Fax: 888-845-6431
Carlisle, PA 17013
Director Elizabeth M. Hotz, EA Ph: 215-679-7227 [email protected]
772 Main Street Fax: 215-679-7228
Pennsburg, PA 18073
Director Alfred L. Whitcomb, EA PA Ph: 717-766-9477 [email protected]
49 W Main Street, PO Box 2438 Fax: 717-795-7966
Mechanicsburg, PA 17055
Director Natasha Johnson, EA Ph: 267-886-1776 [email protected]
4042 Ford Road Fax: 267-200-0082
Philadelphia, PA 19131
PA DEPARTMENT OF REVENUE ISSUES TOP 10 ITS FILING TIPS FOR CORPORATION TAXES Use the correct form. All corporate tax reports for tax years beginning after Jan. 1, 2000, must be filed using the non-year specific form. Properly submit amended returns. If an amended return must be filed, taxpayers must complete the non-year specific RCT-101. All sections of the re-turn, regardless of what items are being amended, must be completed. The amended report check box under Step B, Page 1 of the RCT-101 must also be checked. Use only numbers in numeric fields. Alphabetic or non-numeric characters should never be used in numeric fields. Use of “none” or “NA” in an apportion-ment field will cause the integrated tax system to calculate a 100 percent apportionment factor. Use checkboxes appropriately. Checkbox indicators on the return:
If the corporation has an extension of time to file its federal income tax return, or if the income of the entity is in-cluded on the income tax return of another business or individual with an extension of time to file the federal income tax return, “Federal Extension Granted” must be checked.
If checking “Holding Company,” do not use three-factor apportionment. If checking “Investment in LLC” or “Family Farm,” do not complete Section A. If checking “Solicitation Only,” “Single-Member LLC,” “Multi-Member LLC,” or “PA S Corporation,” do not
complete Section C, Corporate Net Income Tax, on Page 3. Provide all demographic information. “Corp Tax Account ID,” “Federal EIN,” “Business Activity Code,” “Corporate Name,” Address Lines, “City,” “State,” and “Zip” must be completed in Step C on Page 1 of the RCT-101. Indicate a change of corporate address under Step B, Page 1 of the RCT-101. Complete history of earnings correctly. History of earnings for capital stock/foreign franchise tax must be in order, starting with the oldest year on Year 1. If only one year is applicable, the first year should be entered on the Current Year line. There should be no gaps in the history of earnings period begin and period ending dates, and the most recent consecutive five years must be provided. Claim bonus depreciation properly. If taking a deduction for bonus depreciation, Section B1, Current Year Federal Depreciation of 168K Property, must be completed on Page 3. Also, Schedule C-3 (REV-799) must be filled out and included with the RCT-101. Calculate apportionment appropriately. When claiming three-factor apportionment, the denominator of each factor must equal the property, payroll, and sales reported on the federal income tax return, regardless of the activity in Pennsylvania. NOTE: The integrated tax system considers a factor of 0/0 = 1.000000 and 0/1 = 0.000000. The numerators and de-nominators must be entered on Schedule A-1 and Schedule C-1. Report foreign corporations’ lack of activity. A foreign corporation with no property, payroll, or sales anywhere must complete Schedule A-1 and/or C-1 on Page 4 of the RCT-101, using zero as the numerator and one as the denominator. Account for partnership activity. If a corporation owns underlying partnerships, the corporation’s share of the partnerships’ property, payroll, and sales factors must be included in the property, payroll, and sales of the corporation. BONUS: Apply electronic payments properly. In order to ensure proper application of tax payments, follow the detailed instructions regarding ACH debit and credit electronic funds transfer. Visit www.etides.state.pa.us, selecting “Instructions” under the “Options” category, then “Payment Methods” under the Electronic Funds Transfer (EFT) header.
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PSEA Annual Meeting As you are aware, the PSEA annual meeting of the membership was held on June 8, 2015 in State College. One issue raised by a member at the meeting was why the Board has continued to appropriate $30,000 for a defense fund. To provide background information, a few years ago, the State of New York incurred legal expenses in order to protect Enrolled Agents’ practice in New York. Therefore, the Board decided that it would be prudent to establish a reserve in the event any such issue arose in the Commonwealth of Pennsylvania. The Board addressed this issue at the last Board of Directors meeting held on August 17 in Carlisle. After discussion, the Board decided to reduce this appropriation to $15,000. It will be reflected in the next financial statements. Due to time constraints, the Membership, Website and Public Relations Committee reports were not pre-sented at the annual meeting. Therefore, they are provided below.
Membership Committee Report
June 8, 2015
PSEA currently has 33 members, of which 33 are new members. We had 358 members last year at this
time. This means that 61 old members did not renew. We do not have a handle on why members did
not renew yet, but will be following up on that. It may be due to several factors such as people retiring
because we do have an older membership, or some problems with the membership process with NAEA.
We will follow up and report in the newsletter when we have more data.
Respectfully submitted,
Kathryn G. McCusker, E.A.
Website:
The Website has not been changed yet. We have allowed for an update in our budget for the website
which will include updating the language in the background to allow for interaction in the future.
If there is anyone interested in assisting with the website update, or have any ideas regarding the website
update, please feel free to contact myself, Mikal Abdullah or Lynda Moscatello, the current website com-
mittee.
Thank you,
Diana Dugan, EA
PSEA Public Relations Committee
Report to the Membership
Annual Meeting – June 8, 2015
Presented by Samantha Stewart, EA, PR Committee Chair
During the 2014-2015 governance cycle, the PR Committee has worked on the following initiatives
LinkedIn group
PSEA is now on LinkedIn.
Members are requested to post tax items of interest.
If enough interest, a blog or forum will be created.
Lands’ End Business Outfitters
Members can purchase PSEA-branded items directly from Lands’ End Business Outfitters.
Can choose specific items and change the logo colors as needed to match.
Access the PSEA store at: http://business.landsend.com/store/psea/
New Board Member On-Boarding Packets
Vital information for new BOD members
ShredFest
Paper shredding event at multiple locations across PA
Logistics
Shredding would be done by Shred-It,
6 locations across the state
Saturday morning
Potential window is late-August to mid-October, 2015
Would needs LOTS of volunteers
6 parking lots
Media and other advertising
On-site volunteers day of event
Page 9
FYI Keeping you informed
Before I get into my spill about this or that a lot has happened since our fEAst in the East Conference in
State College, PA this past June. The governing members of the PSEA organization in keeping in the best
interest and vision of the organization instituted a number of changes in its governing structure. I have
with all its rights and responsibilities become PSEA’s new Treasurer. So in the best interest of proper
recognition we the PSEA governing body and all its membership like to personally thank Lynda Moscatello,
EA for her many years of service as the organization’s Treasurer. Personally stating with respect to my
short tenure I only wish that I was paying a little more attention during that instruction phase, thank you
Lynda.
Being the new guy on the block in no way precludes a lack of understanding of my duties that is to be a
good custodian of PSEA’s financial resources providing the necessary financial information to support deci-
sion-making. I am looking forward to the coming fiscal year and as always I welcome your patience and
continuous support.
For Your Information (FYI) is a collection of informative communications its sole purpose is to keep you
the practitioner informed. The great thing about being part of the Government Relationship Committee it
allows upfront discussions with senior liaison members from various departments of the Internal Revenue
Service facilitating needed exchange of ideas and concerns that are important to the PSEA community.
Seeing and understanding the big picture of the Service one just needs to ask “What is its Purpose.” Simply
stating in keeping with its stated mission, goals, and objectives the Internal Revenue Service is doing a lot
more with a lot less these days as it applies the tax laws in a way that is fair to all helping the tax communi-ty to understand and meet their tax responsibility. Like any big organization the IRS is asking questions
that require putting a value to their decision making efforts. To understand this concept of putting a value
to the efforts of decision making I thought back to my college days. Struggling to finish my finance degree I
had to read an assortment amount of Form 10-K annual reports particularly the manager discussion sec-
tion looking for that correlation between applied decisions and EPS (Earnings per Share). The IRS is and
most likely with always be a political football whereby opposing political parties with threats of abolishment
to the limiting of needed funding for primary operations may on the surface dampen the vision and mission
goals of the IRS.
I like to think that the Internal Revenue Service in meeting their vision and mission statements has the En-
rolled Agent community in mind. Only EAs, attorneys and CPAs can represent without limitation before
the IRS but EAs specialize in the field of taxation. The Enrolled Agent the eyes and ears and sometime the
biggest critic of IRS policies and procedures is an important tool in helping the taxing community meet
their many tax obligations plus helping to bring measurable value to IRS decision makers.
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On June 19, 2015 the Internal Revenue Service released proposed regulations implementing a new federal law authorizing states to offer specially-designed tax-favored ABLE accounts to people with disabilities who became disabled before age 26. The Achieving a Better Life Ex-perience (ABLE) account provision was signed into law in December 2014. Recognizing the special financial burdens faced by families raising children with disabilities, ABLE accounts are designed to enable people with disabilities and their families to save for and pay for disa-bility-related expenses. The IRS welcomes comments. Comments must be received by Sept. 21, 2015, and may be submitted electronically, by mail, or hand delivered to the IRS. A public hearing is scheduled for Oct. 14, 2015, at the IRS Auditorium, 1111 Constitution Ave. NW, in Washington. See the proposed regulations for details on submitting comments or participating in the public hearing. More information can be found at Tax Benefit for Disability: IRC Sec-tion 529A. Form 8300: Educating businesses located in US Territories and Possessions of their Form 8300 filing responsibilities: A couple of months back, LB&I discovered that businesses located in US territories and possessions were confused as to their Form 8300 filing responsibilities. To address this issue, a Chief Counsel Advice Memo on the subject was released, followed by an In-formation Release (IR-2015-81) and changes were made to IRS.gov highlighting the filing re-quirements of businesses located in US territories and possessions. The Form 8300 drop-in article was revised to include information directed at the territories and possessions. The New Form 8300 Reference Guide has been posted to IRS.gov (available in both html and pdf formats): The guide provides a wealth of information on the filing requirements of Form 8300, in addition to practical examples and knowledge reinforcement questions. The Form 8300 Reference Guide has taken the place of the old Form 8300 workbook and general FAQs. To make it easy for practi-tioners to print the document, the guide was posted to IRS.gov in pdf format as well as HTML. Our experience with the FBAR Reference Guide has been that many practitioners use this guide for in-house training, we’re hopeful the Form 8300 Reference Guide will be used in a similar way. The IRS has developed the following educational products for your use in learning more about why, when and where to file Form 8300: IRS Form 8300 Reference Guide is available on IRS.gov. Its purpose is to educate and assist U.S. persons who have the obligation to file Form 8300; and for tax professionals who prepare and file Form 8300 on behalf of their clients. Publi-cation 1544, Reporting Cash Payments of Over $10,000 (Received in a Trade or Business), ex-plains key issues and terms related to Form 8300. Publication 1544 and can be downloaded in English or Spanish.
May 2015 Practitioner Liaison Meeting Philadelphia, Pennsylvania
9:00 A.M – 12:30 P.M.
Attendees: IRS Representatives and Name & Title of Major Organizational Repre-
sentatives
Narina Bchtikian, Senior Stakeholder Liaison, IRS
Margaret Romaniello, Stakeholder Liaison Manager, Mid-Atlantic Area.
William Mealy, Senior Stakeholder Liaison, IRS
Richard Furlong, Senior Stakeholder Liaison, IRS
Yvette Jackson, Acting Local Taxpayer Advocate, Philadelphia
Mahendra Patel, Taxpayer Advocacy Panel (TAP)
Dennis M. Brown, Examination Territory Manager, Central Area
Jeffrey V. Austin, Disclosure Manager, Philadelphia - Telephone.
Reuben Robinson, Finance, Research & Strategy, Research Manager Philadelphia - Telephone.
Jim Smith, Collection Manager, Central Area Campus Liaison, Philadelphia Telephone.
Ina Weiner, Supervisory Trial Attorney. Area Counsel.
Richard C. Marriette, Manager, LB&I.
Michael G. Malatesta, Appeals Team Manager.
Frank Quinn, IRS, Government Liaison - Telephone.
Phylis Horn-Epstein Pennsylvania Bar Association
Jean Rigney, Pennsylvania AFWA Philadelphia Chapter.
Mikal Abdullah, PSEA. Francis J. Cellini, PSTAP.
Damian Gaspari, PICPA.
Justina Tushak, PA – NATP - Telephone
Meeting Summary Opening Remarks, Roll Call and Administrative Details – Narina Bchtikian. Narina introduced herself and requested that those in attendance announce themselves and the organizations that they are representing. She also informed those in attendance that the Agenda was changed to accommo-date some of the guest speaker’s schedules. Jim Smith – Collection Manager, Central Area Campus Liaison. Jim stated that he had two important messages for the attendees regarding upcoming Field Collection activity. With his time limited Jim was able to cover the first two items listed in the Power Point inserted below, Con-tinued Focus on Employment Taxes. 1 – FTD Alert Program – He explained that this is a National Initiative, a pro- active emphasis on businesses who are not making timely Federal Tax Deposits. This is a program that has existed for decades. The alerts are issued in the third month of the payroll quarter. This National Initiative is the result of recommendations that were made in a recent GAO Review. Revenue Officers will be making contact with certain establishments to assist in correcting the current problems and then addressing past liabilities through an installment agreement. 2 – Trust Fund Recovery Penalty (TFRP) – Jim also mentioned another important initiative regarding the
Trust Fund Recovery Penalty. The results of a recent TIGTA/GAO review found that Collection “should pur-
sue TFRP earlier in case processing”. Revenue Officers would begin to gather information at first contact to
identify which corporate officers would be considered responsible for the TFRP to advance the case process.
Page 12
Reuben Robinson – Research Manager, Finance, Research & Strategy. Reuben mentioned that Research is working on multiple projects. One of which is the development of measures for Outreach and Education. Such as possible outreach regarding Simplified Home Office Deduction, SHOD. He also discussed several other recent projects such as Workload Selection Filters and E-File of 94X. Reuben also mentioned that Finance, Research & Strategy has a new Director, Adina Leach. Michael G. Malatesta - Team Manager, Appeals Area 4.
Mike mentioned the new AJAC procedures that went into effect in September 2014. Appeals are trying to
follow the procedures but it is difficult with recent personnel attrition. They are down to nine people from a
previous total of forty-six. Mike also mentioned the Appeals Lean Six Sigma (LSS) team. They have analyzed
the communication process for non-docketed cases and recommended ways to expedite the process. Next
year they are expecting to recommend new procedures for docketed cases.
Margaret Romaniello - Mid-Atlantic SL Manager.
Narina introduced Mid-Atlantic Area SL Field Manager Maggie Romaniello. Maggie provided the attendees
with her background information. The majority of her prior IRS experience has been with Collection. Maggie
started with the Stakeholder Liaison predecessor, TEC in 2001. She has had frequent acting assignments and
details which have led to her current position as the Mid-Atlantic Area manager. Maggie discussed the fact
that we in SL continue to try to pursue conducting more virtual events and some of the struggles that we
have with technology. The new Director of Operations Support, Bobby Hunt, has charged us with measuring
the impacts that our events have on partners and on overall compliance. If anyone has any ideas on how we
can measure these impacts please let Maggie or an Eastern PA Stakeholder Liaison know? in particular if you
are involved in your organization’s outreach programs.
Taxpayer Advocacy Panel - Mahendra Patel
Narina next introduced Mahendra Patel a member of the Taxpayer Advocacy Panel from Pennsylvania. Mr.
Patel explained that his background is not in taxes but in Structural Engineering. He previously worked for
PennDot and some of the projects that he worked on were the Blue Route and the Vine Street Expressway.
When he retired in 2007 he wanted to return something back to this country so he volunteered for the Tax-
payer Advocacy Panel. He is currently in the second year of a three year appointment. He was assigned to the
Forms and Publications sub-committee. He recently worked on the new Publication 974. Some of the other
projects that Mr. Patel has also worked are the Form 4797 and Publication 590 B, IRA to Roth. He also men-
tioned that TAP meetings are open for the public to attend.
Business Updates
Area Counsel – Ina Weiner
Narina next introduced Ina Weiner from Area Counsel. Ina started by explaining that there wasn’t a lot of
new information since the last meeting. Like everyone at the IRS counsel staff is “doing more with less”. They
have lost 7 staff attorneys while tax court inventory continues to rise. They are electronically reviewing OIC
Cases from Brookhaven. They are also moving Tax Court Calendars. Counsel also has plenty of regular col-
lection cases.
Page 13
ACA Updates – Richard Furlong.
Rich provided a brief ACA after filing season update for attendees. The filing season went very well with no
serious problems regarding ACA. It was the first year for reconciling the Advance Premium Tax Credit.
There were some letters sent out requesting copies of the 1095-A. The check box on line 61 of the Form
1040 was pretty much the honor system since we didn’t have any information to check it against. Next year
it will be different. There will be a flood of new information returns, such as 1095-B and 1095-C. Currently
we are waiting for the Supreme Court Decision which could affect the ACA Federal Marketplace. This
should happen before the end of June.
Disclosure – Jeff Austin
Narina introduced Disclosure Manager Jeff Austin who participated via telephone. Jeffrey Austin with over-
view of the Disclosure Office and the states his office covers and work they perform – FOIA, Court Or-
der, Subpoenas and IRC 6103 cases from our state taxing agency partners and other federal agencies.
Providing Proper Authorization – Discussed that request to disclosure must be accompanied by the proper
authorization signed by the taxpayer giving IRS permission or authority to release their return or return
information. The Forms 2848 and 8821 are used to provide representatives with the taxpayer’s authoriza-
tion. Request for clients case file information – Advised that a formal FOIA request is not required to ob-
tain information from their client’s case files maintained by IRS. They can request this information directly
from the RA, RO, tax examiner, appeals officer or any IRS personal they have been working the case.
Request for Transcripts through the Freedom of Information Act – Advised all that effective March 30,
2015, Disclosure HQ made a decision that we would no longer process request for transcripts under the
Freedom of Information Act. The IRS has routine agency procedures available to obtain needed transcripts
using the Form 4506-T, by visiting a local Taxpayer Assistance Center or by calling the Practitioner Priority
Service Hotline at 866-860-4259. In order to get transcripts from any of these sources, the representative
will need to have authorization from the taxpayer – forms 2848 or 8821. The taxpayer can grant verbal au-
thorization on the Practitioner Priority Service Hotline. In order to get Non Master File transcripts, they
will need to write in to addresses provided – with the taxpayers authorization attached to receive this in-
formation. The addresses for obtaining both Individual and business NMF Transcripts will be provided in the
meeting minute notes.
Government Liaison – Frank Quinn
Narina next introduced Frank Quinn, the Government Liaison for Pennsylvania. Frank also stated that there
is not a lot going on other than ACA and Identity Theft issues. He receives these inquiries from Congres-
sional Offices. He recently received an issue on “crowd funding”. He requested guidance from Counsel
since this is an emerging issue.
Examination – Dennis Brown, Territory Manager, Central Area.
Narina next introduced Central Area Territory Manager Dennis Brown. Using information from the at-
tached PowerPoint, Dennis discussed the following topics:
1 – Abusive Promoters and Transactions.
2 – Flow through Entities. 3 – Offshore Tax Evasion.
4 – National Research Program.
5 – High Income/High Wealth.
6 – Preparer visits and examinations.
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7 – Identity Theft.
8 – Fast Track Settlement Program.
Large Business & International – Richard Marriette, Examination Manager.
Rich introduced himself to the attendees. He also explained that L, B & I cases have assets valued at
over 10 Million dollars. Much like everywhere else at the IRS they are also dealing with dwindling
resources, dynamically allocating resources where needed. There is no field focus guide for this year.
Possibility of an L, B & I reorganization sometime in the near future. The IDR Directive last year was
strategic in nature. It was needed to establish uniformity in the IDR program. The IDR is a critical tool
in an audit. With the IDR Directive there is accountability on both sides and it is a step forward in
instituting consistency. It compels candid dialogue at the beginning of the audit. Both sides are
now stakeholders in the same process. It has been 14 months since the implementation of the
IDR Directive and it appears to be going well.
Taxpayer Advocate Service – Yvette Jackson
Narina introduced Yvette Jackson the Acting Taxpayer Advocate for Philadelphia. Lois Lombardo is
currently on a detail and is planning to retire in December 2015. Inventory is still an ongoing problem.
Last year TAS had 29,300 I D Theft cases. This year they already have 36,000 Year to Date. The largest
part of the TAS inventory are IVO cases (questionable wage/withholding items), Fraud Cases and Self
Employed claiming maximum EITC. TAS is no longer accepting amended returns and injured spouse
cases unless there is a hardship involved. In that case they would have to provide documentation.
Yvette distributed Publication 4571, Taxpayer Advocate Service Case Acceptance Criteria to the
attendees.
Frank Cellini
The receipt of late or corrected 1099’s or K-1’s compress the Tax Season even more.
Damian Gaspari
Still a problem with paper filed 7004 extensions not being processed and the payments posting first.
There is more work to complete an extension electronically and some software charges per
extension filed. This was a previous IMRS issue.
Jean Rigney Jean has a problem with an address change. Per § 1.897-2 United States real property holding corporations
specifies the address to which you must mail the "Not a US Real Property Interest" Certification Under
1.1445-2(c) notice. We mailed notices there twice and they came back both times marked “unable to for-
ward”. Then we spoke with someone in the Chief Counsel’s office who told us we were not the first ones
to have the problem, that apparently the box had been closed. They told us to mail the notice to: Internal
Revenue Service Center, P.O. Box 409101, Ogden, UT 84409. However, since the mailing address is specifi-
cally listed in the regulations, we are quite concerned that our notification will not be valid. Should we mail
all such notifications to the closed box to get the “return to sender” documentation and then mail them to
Ogden? The box needs to be reopened or the regulation needs to be revised. Jean submitted the address
Page 15
problem mentioned to TAS as Yvette recommended. I received a call today and they stated they have
investigated and found that there were 7 addresses in the regs that were no longer viable. She is putting
them all together to open a project to get a Rev. Proc. issued to correct them. She said if it gets ap-
proved at the next level the project manager would be calling me. If it does not get approved she would
call and will keep you informed.
___________________________________________
About the Author: Mikal Abdullah, EA, is the principal consultant and owner of MAB Consulting Services LLC in Philadel-phia, PA. He specializes in investigative compliance issues, tax resolutions, PA Inheritance Tax, and LIHTC August 16, 2015
Reminder
King of Prussia Breakfast Meeting By Diana Dugan, EA
Every month, except during tax season, a small group of EA’s and tax professionals get together for a 9 AM
Breakfast and to discuss questions and problems that come up in our practices.
Michael’s Restaurant & Delicatessen
130 Town Center Road
Valley Forge Center, Route 202
King of Prussia, PA
Michael’s is on Town Center Rd in the Valley Forge Center which is one mile north of the King of Prussia
Shopping Center on Rt. 202
May 6, 2015
June 3, 2015
July 1, 2015
August 5, 2015
September 2, 2015
October 7, 2015
November 4, 2015
December 2, 2015
January 6, 2016
Page 16
Expectations!
Patient Protection
Affordable Care Act
by Mikal Abdullah
With Eager anticipation many patiently believing stated events follow a path of certainty only revealing that
best laid plans can fade like a vapor. This is the case of the Patient Protection and Affordable Care Act
(ACA) with all its great expectations left many tax practitioner and their clients a measureable amount of
anxiety. So if you are confused you are right on track to put it bluntly you are paying attention.
In 2014 because of the sheer volume of individuals needing to apply for healthcare we observed massive
computer malfunctions, the Marketplace phone banks unprepared for the volume, and taxpayer’s com-
plaints of Marketplace Representatives not communicating effectively. In honesty I had many concerns
about the mandated requirements such as my tax software and its integration of new Federal Forms 95A
(Health Insurance Marketplace Statement), 8962 (the Premium Tax Credit), and 8965. What I found chal-
lenging was Federal Form 8965 (Health Coverage Exemptions) its primary purpose to indicated a Market-
place coverage exemption or to claim an coverage exemption on your tax return. Form 8965 also figured
the taxpayer’s shared responsibility payment it taxpayer or other household members had neither health
care coverage nor a covered exemption.
What were the important questions that I needed to ask my clients fully understanding the two types of
exemptions one that only comes from the Marketplace and the other during the completion of the Taxpay-
er’s tax return. Section II of Form 8965 with its attachment of the Marketplace Affordability Worksheet
required a little more logistical maneuvering. First you needed to know minus all exclusion what was
household income, this also included the income of all dependents that were required to file a tax return.
Second you had to know the Taxpayer’s filing threshold which was calculated based on age, a certain
amount of income, and the taxpayer’s filing status. Third and most challenging especially for those taxpay-
er’s absent an Exemption Certificate Number require the use of the Bronze and Silver Plan Lookup tools
which finds that perfect number or amount that is affordable.
I am sure that you discovered as I did that the Affordable Care Act (ACA) just added another layer to no-
table excuses of why I didn’t file my tax returns, pay the taxes due, or have all the required documents.
The ACA (Affordable Care Act) like tax filing requirements are about chooses, wrong word, it is about pri-
orities.
Priorities that may mean the difference of family decision makers deciding on the need of mandated
health insurance or other goods or services. Regardless of political views we as Enrolled Agents actions
are dictated by the Internal Revenue Code and our understanding of the agency’s implementing and en-
forcing provision with respect to the new healthcare law. What does this mean as we move forward in
the new 2015 tax year?
Page 17
The new tax year should be the same as all previous tax years to ensure that your clients make the right tax
decisions. Enrolled Agents are America’s tax experts but that title comes with stringent educational require-
ments.
Understanding the key provisions of the Affordable Care ACT (ACA) and to properly serve your client will
require many hours of research this is especially true for tax year 2015. Requiring companies with more than
50 Full-Time Equivalent (FTE) Employees will be required to offer health care coverage or be subject to a tax
penalty under 26 U.S. Code § 4980H - Shared responsibility for employers regarding health coverage. Calcu-
lating the penalty requires certain questions to be answer, such as are you an “applicable large employer, what
qualifies as “minimum essential coverage, what is the penalty if I do not offer minimum essential coverage,
and what is the penalty if I do offer minimum essential coverage but it is not “affordable” for some of my em-
ployees. In simple terms if you have less than 50 employees, you are not an applicable large employer. If you
have 50 or more employees you are most likely an applicable large employer which consists of all full time
plus full-time equivalent of all part-time employees. Calculating full time employees (FTE) is based on an
average 30 hour service week plus total part-time hours divided by 120. For purposes of the health insurance
tax penalty, minimum essential coverage is that minimum of health insurance coverage an employer must
make available to avoid paying a penalty. The applicable employer not offering minimum essential coverage
will only pay a penalty if one employee enrolls in a health insurance exchange qualifying for premium subsi-
dies and / or other tax credits. The annual per employee penalty is $2000.00 per employee. If the coverage is
not “affordable” for one or more employees the employer could be subject to an annual per employee penalty
of $3000.00 per employee.
A good start is to review www.irs.gov/Afforadable-Care-Act.
The employer mandate states that “applicable large employers” will be required to offer “minimum essential cover-
age” that is “affordable” to their employees. “Applicable large employers” who fail to offer “minimum essential cover-
age” that is “affordable” will be required to pay a “penalty” on their tax return.
Page 18
There are other Health Care Programs coming on line in 2015
● Independent Payment Advisory Board
(IPAB) for Medicare that submits proposals
to Congress for fast-track approval to
reduce costs & improve quality takes effect.
● State eligibility to receive a 23% increase in the CHIP federal match rate (FMAP) takes
effect.
● State option, subject to HHS approval, to
shift children eligible for CHIP to a health
plan sold in the state insurance exchange
takes effect.
Insurance Reforms in 2015
New provision that ties physician payments to the quality of care they provide takes effect.
President Obama on March 23, 2010, signed the Patient Protection and Affordable Care Act (PPACA). The
new law with its comprehensive health insurance reforms would cover a period from 2010 to 2020. It has had,
and will continue to have a major impact on the health care industry for employers, individuals, families, the
insurance industry, healthcare providers, and ax practitioners alike. Remember our duties to ensure that our
clients make the right tax decisions.
PSEA Logo Items Available It is now possible to order PSEA branded items through Land’s End Outfitters. Members are able to or-
der shirts, jackets, sweaters, tote bags and a range of promotional items with the PSEA logo embroidered
on them.
Access the PSEA store at http://business.landsend.com/store/psea/. Shop for the item of your choice then click Apply Logo beside the Add to Cart button. Choose the PSEA logo and watch for the preview to
appear.
Does the typical cobalt and burgundy logo clash with your chosen item color? The colors can be custom-
ized to meet your personal preferences. Once the colors and logo location are chosen, simply click Ap-
ply Logo to add more items to your order.
Send [email protected] pictures of you wearing, carrying or using your new PSEA-logoed
items and we may feature them in a future newsletter or PR campaign.
Page 19
Treasurer’s Report
Page 20
Pennsylvania Society of Enrolled Agents
Profit and Loss Statement
July 1, 2015 through August 16, 2015
Ordinary Income/Expense
Income
Dues Income
Interest Income
Total Income
Expense
Bank Service Charge
Board Meeting
TeleConference
Total Board Meeting
Board Members
Name Badges
Total Board Members
FEAst
Printing
Total FEAst
Working Together
Total Expense
Net Ordinary Income
Net Income
3,968.00
1.84
3,969.84
39.00
98.29
98.29
72.45
72.45
354.89
354.89
250.00
814.63
3,155.21
3,155.21
Treasurer’s Report
Page 21
Pennsylvania Society of Enrolled Agents
Balance Sheet
As of August 16, 2015
ASSETS
Current Assets
Checking/Savings
PNC Checking
PNC Money Market
Defense Fund
Emergency Fund
PNC Money Market - Other
Total PNC Money Market
Total Checking/Savings
Total Current Assets
TOTAL ASSETS
LIABILITIES & EQUITY
Equity
Retained Earnings
Net Income
Total Equity
TOTAL LIABILITIES & EQUITY
20,028.64
30,000.00
13,000.00
285.76
43,285.76
63,314.40
63,314.40
63,314.40
60,159.19
3,155.21
63,314.40
63,314.40
Treasurer’s Report
Page 22
Pennsylvania Society of Enrolled Agents
Profit and Loss Statement
July 1, 2014 through June 30, 2015
Ordinary Income/Expense
Income
Dues Income
FOE
Attendee Registration
Members
Non Mems
Total Attendee Registration
Guest Registration
Total FOE
Initiation Fees
Interest Income
Other Registrations
Total Income
Expense
Annual Meeting
Board Meeting
Meals
TeleConference
Travel
Total Board Meeting
Education
Licensing
Total Education
17,000.00
15,790.00
3,600.00
19,390.00
180.00
19,570.00
576.00
29.74
1,885.00
39,060.74
2,313.98
338.93
1,593.56
4,466.10
6,398.59
419.00
419.00
Page 23
Treasurer’s Report
FEAst
Attendee Fees
Instructor
Fees
Meals
Travel
Total Instructor
Postage
Printing
Promotional
Total FEAst
Membership
NAEA Meetings
Travel
NAEA Meetings - Other
Total NAEA Meetings
Office Supplies
PA Education
Postage
Public Relations
Sunshine Fund
Website
Working Together
Total Expense
Net Ordinary Income
Net Income
8,076.66
2,000.00
84.00
949.94
3,033.94
6.16
3,092.59
613.55
14,822.90
16.81
802.80
85.00
887.80
84.45
1,849.76
117.55
95.00
100.00
358.40
325.00
27,789.24
11,271.50
11,271.50
Page 24
Pennsylvania Society of Enrolled Agents
Balance Sheet
As of June 30, 2015
Treasurer’s Report
ASSETS
Current Assets
Checking/Savings
PNC Checking
PNC Money Market
Defense Fund
Emergency Fund
PNC Money Market - Other
Total PNC Money Market
Total Checking/Savings
Total Current Assets
TOTAL ASSETS
LIABILITIES & EQUITY
Equity
Retained Earnings
Net Income
Total Equity
TOTAL LIABILITIES & EQUITY
16,875.27
30,000.00
13,000.00
283.92
43,283.92
60,159.19
60,159.19
60,159.19
48,887.69
11,271.50
60,159.19
60,159.19
