Tax Law Changes For 2011

Document Sample
Tax Law Changes For 2011 Powered By Docstoc
					Starting in 2011, anyone who prepares substantial elements of tax returns or refund
requests is required to register with theInternal Revenue Service and attend continuing
professional education (CPE) courses. Continuing education is required for all tax
return preparers. IRS Enrolled Agents (EAs) have already had this requirement. EAs
pass online CPE every year. Since not all tax preparers are EAs, taxpayers will need
toverify enrolled agent status if they require someone to represent them before the
IRS. Only EAs, CPAs, and attorneys can represent taxpayers with the IRS. EAs can
be located who belong to the National Association of Enrolled Agents and meetNAEA
CE requirements as part of their membership.
  Continuing education courses consist of three hours of federal tax law updates, two
hours of ethics, and ten hours of general tax law. Tax preparers will findfree online
CPE coursesfrom the same sources EAs have used. This includesfree ethics CPE.
  The testing and continuing education requirements focus upon compliance measures
intended to assure accurate tax reporting. These regulations set standards for
reasonable inquiry into taxpayer information and the rendering of tax advice. To avoid
understatements of income, tax practitioners are required to conduct due diligence on
tax information furnished by a client that appears incorrect, inconsistent or incomplete.
Tax professionals may not simply rely upon the argument that a client has
misrepresented income as a sufficient defense.
  A new tax credit is provided in 2011 for small businesses that provide health
insurance to employees. The IRS also announced how eligible tax-exempt
organizations can claim the credit. Tax-exempt organizations are still subject to
payroll taxes but not income tax on their charitable purposes.
  A new IRS form will be used with 2011 tax returns to obtain the credit. Small
businesses will include the amount of the credit as a part of general business credits
on income tax returns. Tax-exempt organizations will utilize Form 990-T, which is
used to report and pay tax on unrelated business income, even if they do not owe
  In 2010, the credit has been available to small employers that contribute at least half
the cost of single coverage towards health insurance for their employees. Until 2013,
the maximum credit is 35 percent of premiums paid by eligible small business
employers and 25 percent of premiums paid by eligible employers that are tax-exempt
  Fast Forward Academy is a leading publisher of enrolled agent CPE. Visit us online

Shared By: