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Real Time TaxPosted Friday, January 20, 2012, at 5:43 PM
The IRS just announced the second in a series of public meetings to obtain feedback on how to implement long-term changes to the tax system in order to reduce the burden on taxpayers.
The IRS Commissioner, Doug Shulman, has a vision to move the agency from the current "look back" model to "real time" upfront matching of tax returns when they are first filed with the IRS.
This is the Real-Time Tax System. Under this system, the IRS would match data on your tax return with third-party information (W-2, 1099s, etc) as your tax return is processed by the IRS. Then they would provide the taxpayer with the opportunity to fix returns that contain data that does not match IRS records.
The wording of the IRS announcement is interesting. The IRS will allow you to fix your return to match their data. The implication here is that your return is not correct and needs adjustment. Might it be possible that the third-party reported information is incorrect?
Anyway, I do not know if this is a good thing or a bad thing. Right now, the IRS matches up third party information with your return and if it does not match they send a CP2000 notice. If you do not dispute the notice (and win the argument), the tax is assessed along with penalties and interest.
The automation of tax collection can result in the abuse of the taxpayers bill or rights (see my last post discussing Tina Olsen's report to Congress). At the same time, if the IRS will give you the opportunity to "fix" the return and not assess penalty and interest, then it is a good thing. Actually, even if they still assess the penalty and interest, you will learn of the discrepancy sooner and thus reduce the amount of penalty and interest.
Anyway, if you are interested in attending the meeting, it is January 25th at the IRS Headquarters in Washington, DC. Here is the number to call to let them know you are on the way -- 202-622-3359. Have a safe trip.
If you have specific questions about IRS tax problems, post those questions here or send an email to firstname.lastname@example.org (all communication regarding tax matters is confidential to the fullest extent of the law). To learn more about tax problems and how to resolve them, visit www.irssurvival.com (if you do not see your specific issue listed or you cannot find an answer to your specific problem, send an email or call 573-275-9055 or 855-IRS-SURVIVAL.
IRS Circular 230 Notice: To ensure compliance with requirements imposed by the IRS, we inform you that, unless specifically indicated otherwise, any tax advise in this communication (including any attachments) was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding tax-related penalties under the Internal Revenue Code, or (ii) promoting, marketing, or recommending to another party any tax-related matter addressed herein.
Taxes, Liens and Levies, Oh My!!
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Alan is a CPA and a Certified Fraud Examiner (CFE) with the firm Begley, Young, Unterreiner & White, LLC located in Cape Girardeau. He is a member of the American Institute of Certified Public Accountants, the Missouri Society of Certified Public Accountants and the Association of Certified Fraud Examiners. Alan obtained his MBA from Southeast Missouri State University, and is also a Certified QuickBooks ProAdvisor who provides support to clients on the use of QuickBooks. Alan's firm works with a variety of small businesses and not-for-profit organizations providing accounting and payroll services, compilations, reviews and audits, estate and tax planning and tax preparation. Alan can be reached at 334-2845 (office) and 275-9055 (cell) or you can email him at email@example.com.