Summer Strategies for Savvy Tax Professionals

In this episode, Roger and Annie discuss a variety of tax-related topics, including updates on the Beneficial Ownership Information (BOI) reporting requirements, and the Employee Retention Credit (ERC). They also cover issues with the postal service causing delays in tax payments reaching the IRS, the benefits of taxpayers and tax professionals setting up online accounts with the IRS, and recent changes to overtime pay thresholds and non-compete clauses. Additionally, they provide tips for tax professionals on what to focus on during the slower summer months, such as working on extension returns, analyzing technology and software, and planning CPE. They close by mentioning the upcoming IRS Tax Forums taking place in various cities across the US.

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• (00:00) - Introduction and Welcome
• (01:20) - Discussion on BOI (Beneficial Ownership Information)
• (02:03) - Hearing Insights and Political Dynamics
• (05:41) - Legal Challenges and Court Cases
• (10:59) - Employee Retention Credit (ERC) Updates
• (14:37) - Mail Issues and IRS Processing Delays
• (21:18) - New FTC Rules on Non-Compete Clauses
• (22:55) - Overtime Protections and Salary Thresholds
• (25:01) - Impact of Elections on Business Regulations
• (25:27) - Challenges for Small Business Owners
• (26:32) - Survey Insights from Tax Season
• (28:24) - IRS Online Services Improvements
• (30:33) - Benefits of IRS Online Accounts
• (36:31) - Summer Strategies for Tax Professionals
• (40:12) - Planning for CPE and Technology Updates
• (42:40) - Upcoming IRS Forums and Final Thoughts

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Annie Schwab

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All content from this podcast by SmallBizPros, Inc. DBA PADGETT BUSINESS SERVICES is intended for informational purposes only.

Creators & Guests

Host

Annie Schwab, CPA

Franchisee Operations Manager at Padgett Business Services

Host

Roger Harris, EA

President at Padgett Business Services

What is Federal Tax Updates?

CPAs, Enrolled Agents, and Tax Preparers can keep up-to-date with the latest federal tax information while earning NASBA approved CPE credits and IRS approved CE credits by listening to the bi-weekly Federal Tax Updates podcast. The hosts Roger Harris and Annie Schwab have over 75 years of tax experience between them, which has been featured in various media outlets including Wall Street Journal, USA Today, The Morning Business Report, Bloomberg Business News, and Accounting Today.

There may be errors in spelling, grammar, and accuracy in this machine-generated transcript.

Roger Harris: Hello everybody. Welcome to another federal tax update podcast. I am Roger Harris and joined again back from her sabbatical or whatever we called it. Annie, how are you doing?

Annie Schwab: I'm doing great, Roger. How about yourself?

Roger Harris: Not too bad. Not too bad. We're we're kind of in between the end of spring and the beginning of summer and the end of a tax season and rolling [00:00:30] into. What do we do now? And, you know, there's always something. And there is we're going to bounce around with a lot of things. And you know there's some things that are changing and changing in real time and uh, some that impact us immediately, some will impact us in the future. Some may have already impacted you. So what do you want to start, Andy? What's the what's the first thing.

Annie Schwab: Well we may as well we may as well start with boy let's start there.

Roger Harris: Beneficial owner. [00:01:00] Um, couple of things here that well first of all, let me start by saying there's really nothing brand new or any changes. So, uh, whatever you know about, boy, we're not going to get into the details of what it is and who qualifies and all that sort of stuff. We hope that, you know, those things are are listened to one of our podcasts, but there are some kind of moving targets and things that are moving and some potential changes. So we thought we'd let you know about that. Um, let me start [00:01:30] by saying some of this is kind of. My feelings after being a witness at a hearing on April the 30th, the House Small Business Committee held a hearing on how FinCEN was being implemented. And, um. I was asked to come in and kind of talk about it from our perspective of a practitioner. There was a business owner, I guess, a couple of business owners, and then I'm not sure what the last one was, kind of a researcher [00:02:00] or something because, um, he didn't really talk about it from a technical standpoint. He talked about it from Big Picture. But here's a couple of observations from that hearing that, uh, are interesting in terms of I think most of us are sitting around kind of waiting to see if anything changes because we're concerned about whether we can offer services, help our clients understand what substantial control means, understand what willful is in terms of violations. And so we're all kind of sitting around waiting. [00:02:30]

Roger Harris: And what was interesting in this hearing was that, uh, both Democrats and Republicans talked a lot about changes that needed to be made. So I think there is at least the beginning of some recognition that if we don't make some changes, there might not be the compliance in the small business community that was anticipated when the law was passed. But there's an interesting dynamic to [00:03:00] that from a political standpoint. Is the bill that created boy was passed with a heavy bipartisan support. So how do you say something is wrong with a bill that we all supported? And, uh, how do we not look bad in passing it? And and there's to the to the credit of most people, uh, as I said, on both sides of the aisle, I think there is a recognition that there's a lack of awareness, uh, [00:03:30] potential noncompliance. And there's actually been a bill introduced. This, unfortunately, is not bipartisan. It's just Republicans won in the House and one in the Senate to repeal it. Uh, Congressman Davidson introduced a bill on the House, and Senator Tuberville introduced a bill similar to it on the Senate side. And repeal may be difficult because that admits that the whole law was wrong when they passed it. So I don't know that we'll [00:04:00] get that. But again, it's a recognition that something is not going right. I've got to tell you a funny and I know I'm dominating this part of the discussion.

Annie Schwab: That's okay. Go ahead.

Roger Harris: Um, we'll get Annie in here in a minute because you'll be sick of me. Uh, I had an interesting interaction. I met with a senator staff. Now you have to know that, first of all, the senator's staff member I met with was a CPA. And actually owned an LLC on a piece of rental property. They had, uh, in another state. And yet they knew [00:04:30] nothing about DIY. So their CPA and their an LLC. So that kind of shows you the concern is if someone. Oh, and their senator was on the committee that passed the bill. So there's kind of an interesting story that, um. Someone whose senator voted for the legislation through committee all the way through the passage, is a CPA and owns an LLC. Didn't even know [00:05:00] what I was talking about, but by the time we finished having our discussion, they agreed there was a lack of awareness and probably changes need to be made. So that was an interesting thing that happened last week. One of the things that has opened up the opportunity for the potential to be changes is there was in March, a lawsuit in the federal court in Alabama, where a business association and I think I have their name here, took to court to declare the Corporate [00:05:30] Transparency Act non unconstitutional. It is the National Small Business Association and SBA. And they won the case. And the court in Alabama declared the Corporate Transparency Act unconstitutional. A lot of it was privacy related. Um unfortunately as the court only extended it to be unconstitutional for members of the National Small Business Association. So that means that for [00:06:00] right now, unless you were a member of that organization when this ruling was done, and again, it was I think it was early March, I know it was March, but you couldn't join afterwards and get get out of it, but you had to be a member on the date of the court case. You're exempt, but everybody else is covered. Still.

Annie Schwab: No, they've been repealed. Right.

Roger Harris: It. Well it doesn't. Well it's unconstitutional, which effectively I guess repeals it.

Annie Schwab: Okay, okay. Yeah.

Roger Harris: If you make it unconstitutional, then you got to go in and make significant changes [00:06:30] that I think they said privacy. And what else did they say? Because the reason I'm mentioning this is, uh, today there was an article where they're still in the appeals process. And whatever you say, Nasba. No, it's not Nasba Nsba whatever that is actually put in their paperwork, you know, for the appeal. Um. And they don't believe they wanted it repealed and they wanted it to be unconstitutional. And they just declared it unconstitutional, which I don't know what the difference in that [00:07:00] is. Either way, it's not going to be. Oh, um, they it violates the Fourth Amendment for protections against unreasonable searches and seizures. That was what got the court didn't agree with that. I don't know what they're searching or season, but there you go. So that part didn't get ruled affirmatively and they want that done anyhow. So we're in this situation where we have one lawsuit that's in appeal. Don't know how long it'll take. And I think we've mentioned this on an earlier podcast. Aicpa has [00:07:30] suggested that as long as we have this court case out there, boy should be put on hold, and in fact, it should be a year after the court is actually court case is actually settled, that it becomes something that would be implemented.

Roger Harris: So we can see what the court says. It gives everybody time to make changes. So at the hearing a delay I'm apologize for rambling on here, but we'll we'll get through this in a minute. At the hearing, most of the other witnesses that were opposed to the boy [00:08:00] reporting wanted complete repeal. My message was, well, if you're not going to repeal it, you need to fix it. And here's what you should fix it with. And I think that got some attention in the sense that, you know, it's kind of hard to say we passed it because it was a great idea, but we're just going to say never mind and take it away. So hopefully we'll get some some changes on it. We're still in a wait and see mode practically in terms of insurance carriers and lawyers and what can we do [00:08:30] and what can't we do? And what is the big one of the big hang ups is what is willful behavior. Because Fincen's answer to every question about the penalty is, well, it has to be willful. We'll give us examples. No, we can't do that.

Roger Harris: You know, define it well, no. And they'll tell you to go read a legal definition. And I don't think many of us are lawyers. Let me wrap up this rambling part of the podcast by saying this. For those of you that are waiting, I would advise you to continue to wait. There does seem to be [00:09:00] a genuine recognition that the thing as being currently implemented is not working. Out of some close to 30 million businesses that would have to file the form. The last number we heard was a million. So we're a long way from anywhere near what we're going to need. It's probably not going to get a bill passed before the end of the year, because nothing's going to pass in Washington now. And we'll talk some more about that heading into the election. The [00:09:30] hope is that there'll be pressure on the administration to go to Treasury and say, hey, hold this up. Give us a little more time. So it's beginning to get it may be like we all remember, you know, 1099 K when it first got presented, there wasn't a lot of complains. And then all of a sudden at the end, a firestorm of complaints showed up. And it did get.

Annie Schwab: Delayed two years, I think.

Roger Harris: So we're kind of hoping that's what happens here, is that there's enough discussion and complaining and [00:10:00] unease about it that, uh, sooner than later we'll get a delay and we can go try to fix some of these things. But the politicians are, well, except for the one I talked to are aware of the problem. And, uh, hopefully we'll we'll get some needed changes. I don't think we can get repeal. I don't think anything is going to pass, uh, repealing it because it's too political. But we'll see. So that's the latest on, boy, we'll Annie, if we're going to talk about [00:10:30] boy, we have to talk about the earned income. I mean not earned income credit. Employee retention credit. What's you sure do what's been happening there? And I'll shut up and let you talk now.

Annie Schwab: No. No worries. Yes. The employee retention credit still a hot topic. The moratorium is still in place, so the IRS is barely opening envelopes. I will say checking for mail. They are continuing to search out for those mills. The IRC mills. Um, [00:11:00] they're they're not making um, I guess they're not giving us a heads up as to whether that moratorium will be lifted or not. Um, there have been plenty of people still waiting for their money. We get questions, you know, how do I see the status of my IRC claim? Or, you know, how long is it going to be before I get my money? And so we are, you know, we know that that is out there. Uh, our concern, I guess maybe the service's concern is that the longer this lingers [00:11:30] on, there's a potential for the statute of limitations to run up and not be able to get some of the the bad actors or the IRC mills. So again, chatter is still there. Nothing major, in fact, like, you know, something new, no big changes. Uh, there's still lots of warnings out there for scammers. I think the scammers are still, you know, out and about, um, again, it's something that we're in that wait and see mode again, you know, [00:12:00] just wait for more guidance. So unless you're hearing something different, Roger, it's kind of status quo on IRC.

Roger Harris: The only as you were talking, I realized I did hear, I don't know if this is earth shattering, but I hadn't had a chance to share it with you yet. Remember, there was a bill that was passed, uh, out of the house, went to the yep, that was going to reinstate the R&D credit and going to increase the child tax credit. And one of the pieces in there was to pay for it was to retroactively end the IRC as of January [00:12:30] 31st.

Annie Schwab: Of this year.

Roger Harris: Of this year. So, yes, 3 or 4 months ago, um, there's some talk, particularly on the Democratic side, that they want to bring that bill back up. Okay. Uh, because it got bipartisan support in the House. They're getting a lot of pressure from Republicans on the R&D credit from Democrats on the child tax credit. Right. And they're convinced if they could bring it up, it would pass. So I asked them, I said, surely the God, you're not going to pass a bill in June and make [00:13:00] something retroactive till January 31st, because you've got a lot of legitimate claims that could have. Yeah, of course, from there till now. And you expect them to say, oh, of course not. But they said, well, it's a pay for, which means.

Annie Schwab: Oh.

Roger Harris: You know, we need the money to, to do this other stuff. So I mean. Is it possible? But I guess.

Annie Schwab: It's. Yes. Anything could happen. Yeah.

Roger Harris: And we could be sitting here with clients who we did legitimate claims for, uh, in [00:13:30] this month. May, as we sit here recording it. Yeah. And it would be deemed not valid because it was after the expiration date. I don't know, it seems far fetched, but. Hey. But, uh. Yeah, I forgot to tell you about that. There again, it's all politics. They think. The Democrats think by bringing that bill up, it's a popular with Republicans in the House. Um, it's popular with business people to get that R&D credit back to, away from the five year, uh, amortization. So. Right. [00:14:00] I thought it was dead, but evidently.

Annie Schwab: Apparently it's bad.

Roger Harris: Nothing's dead. Nothing that'll get me dead.

Annie Schwab: What was going on with the mail?

Roger Harris: Yeah, and I don't know if this is a regional problem. Uh, I know it's a big problem here in the South. Where where I am, um, the post office, to say the least, is having a bad year.

Annie Schwab: Uh, okay.

Roger Harris: They are. There are people who mailed. I'll tell you two stories to example of what the problem is. And I'll tell you what the IRS said. [00:14:30] Once example is a person mailed their payment and let's get around the fact that they should have paid electronically. But they mailed a check on April the 2nd for their balance due on their tax return. They mailed a check on April the 9th for their first installment payment of their, uh, estimated tax for the next year, May the 17th or 18th. The first check that showed up was for the estimated tax.

Annie Schwab: Uh oh.

Roger Harris: And [00:15:00] so the IRS applied that to the tax return.

Annie Schwab: Oh, no.

Roger Harris: And then a few days later, the check for the tax return tax showed up. So the IRS sent that one back. They didn't send that one back. They deposited it and sent the IRS check back. So because the delay in the mail, I have another situation of someone who mailed their taxes on March the 31st. We're recording this on May the 20th. It still hasn't shown up, [00:15:30] and there is a lot of that going on where checks are just out there and never, never land balance dues are sitting on tax returns, and we don't know if those checks are going to show up when they're going to show up.

Annie Schwab: They're sitting in the pile of IRCc claims. No, I don't I mean, that's you.

Roger Harris: Can't blame this on the IRS. This is the Post Office's fault. So I raise that issue at one of the meetings with the person in the processing center. Um, the [00:16:00] situation of where the first check coming in, that was estimated tax. And he said that should have never happened. I said, well, it did. So, you know, it did happen. He said, they they still look at all. Postmarks. Now, I believe that if you're at the last couple of weeks of April, if you're into June, or you're really looking at postmarks when they come in.

Annie Schwab: So I don't know.

Roger Harris: What are they going to do when those checks, if those checks finally show up? And the worst thing is he mentioned that [00:16:30] soon the notices for balance due returns are going to start going out.

Annie Schwab: That's right. It's it's usually the very beginning of June when that happens.

Roger Harris: Right. So now you're going to have people getting notices for balance dues on tax returns when they were mailed in March or early April. And what do you do. And. I don't have an answer because I've never. I've done this for a long time and I've never seen this happen in the postal.

Annie Schwab: Not that long. Not that long of a delay. [00:17:00] No. Um.

Roger Harris: Because, you know, and the IRS says they they're aware of it now, and there's been some hearings in the House and the Senate about it. And but you got to think about it from the IRS. How do they know if you really did mail the check or you're just lying and saying, I haven't paid it yet, but I don't want to pay penalties and interest because the post office lost my check. You know, it's like the dog ate my homework kind of thing. How do you so well.

Annie Schwab: Maybe the messages. You should be making your payments online to avoid all of this.

Roger Harris: Yeah, and we'll talk about online [00:17:30] accounts later. But I think that's the message I gave to the IRS is it's not your problem that you didn't create it, but it's going to be your problem to deal with.

Annie Schwab: Well, and the tax practitioners and the taxpayers too, they're going to have to, you know, deal with it too. The notices, the the writing of the letter, the proof of this or proof of that.

Roger Harris: And then, most importantly to your point, this is a really good way to encourage people to no longer mail checks, right? Because this doesn't happen when you pay electronically. [00:18:00] But if you're. You know, old fashion and, like writing those checks, I don't know, I mean, I'm experiencing things now, like when you pay bills, if you have to write a check, they're not getting them, you know, think about something. Yeah. When do you have to mail a birthday card? Now to get there on the birthday.

Annie Schwab: I don't know. That's a good. Now I send e-cards. I don't even mail birthday cards or thank you letters or any of that anymore.

Roger Harris: So it's going to be a mess. And if it hasn't already started [00:18:30] in your practice, if you're listening to this, don't be surprised if you don't have people walking in with balance due notices and they say, I mailed my check, then ask them to go look and see if it's cleared. And sadly, it may not have. Yeah, and it may never. I mean, I'm hoping that eventually they'll show up, but one interesting story that the IRS guy said, yeah, we're beginning to hear that problem. And after I started hearing it, it kind of made sense. And this was in Utah. So I know it's not just Georgia, he said. I got a call from postmaster [00:19:00] or whatever, postmaster general, whatever they are in local and said, just want to let you know we've got I don't know if it's trucks, boxes, pallets, oh, five of whatever's with mail for you sitting here. And he said, well, why don't you send it to me?

Annie Schwab: Well, yeah.

Roger Harris: So they just got all this IRS.

Annie Schwab: Well, Utah, Utah is a.

Roger Harris: Big and the post office knew it. But instead of just sending it to them, they had to call him and say, hey, we got this sitting over here. Well, I mean, I don't know. So yeah, that's going to be an issue I think we're going to [00:19:30] hear about, uh, if it hasn't already kicked in, don't be surprised if in your practice you have issues with late checks, hopefully the IRS will look at the postmarks. They'll see it was postmarked before April 15th.

Annie Schwab: Fingers crossed.

Roger Harris: Do it quick because those notices are getting ready to go out.

Annie Schwab: Yeah. And those are auto generated. So there's no holding that back. They're just going to.

Roger Harris: Know if you mailed a check or not.

Annie Schwab: Exactly.

Roger Harris: All right. What do you want to talk about now? Um, things.

Annie Schwab: Well, we did have some new stuff [00:20:00] pop up. Um, you know, starting September 4th. Uh, so at the end of the summer here, the Federal Trade Commission has finalized rules prohibited prohibiting non-compete clauses. So that's something new. Um, the goal there, I think, is probably to, you know, prevent, um, sorry, to increase the ability of, uh, innovation or higher workers salaries, um, maybe business formation. They have a whole [00:20:30] list of reasons. And they did studies and percentages and billions of dollars going here and there. And apparently Non-competes are really holding back, uh, workers and pay raises and different kinds of things. So we'll have to see September 4th. You got a little bit, but certainly if you hear about it or clients asking you. Um, it was something that it was just a few weeks ago, too. Um, so then you.

Roger Harris: Have a bigger impact on some states and others. Some states have been pretty restrictive on non-compete.

Annie Schwab: Oh, that's true.

Roger Harris: Up [00:21:00] to now, but yeah, but yeah, I mean, the whole reasoning behind it and this was regulatory, it didn't require Congress to do anything. No. It's just they want to, you know, not punish workers. Now, I think you can still hold what I call non-solicitation, uh, contracts, meaning you can't go solicit my clients, but you can go open a competing business.

Annie Schwab: Something like that.

Roger Harris: Yeah, but it's it's potentially got a huge impact, I think.

Annie Schwab: So, I mean, I, I remember looking at those, you know, when I [00:21:30] would join a company and, you know, understanding the concept behind it, but not the nitty gritty. So um, we'll see. We'll see what happens.

Roger Harris: Watch that. Watch your clients.

Annie Schwab: Yeah, yeah. And then another thing was also on the expansion of the overtime protections. So they're basically overtime rules. So time and a half basically they're increase the the salary limitations. So the thresholds and they're actually going to let's see. They increase one time in July. So it'll go to like 44,000in [00:22:00] July. And then again in January. It'll bump up again to like 58,000. And then it'll start this automatic increase every three years to kind of keep the, the thresholds up. Um, and so that's something that's I mean that's another big thing. Now I don't know how the states are going to deal with that because some overtime, you know, their states have overtime protections as well. Right. Um, so we'll have to see how that plays out. But and a lot of.

Roger Harris: States have a higher minimum wage [00:22:30] now. So the federal minimum wage is kind of irrelevant because you got to pay more of that in the state. But yeah, this you know, it used to be a thing in small business that everybody tried to get around paying overtime by putting everybody on salary and depending on whether it's Republican or Democrat, they attack that in different ways. Democrats want to do it by setting salary thresholds. Republicans used to do it based on your supervision. And how many people did your duties right? Things like that. But yeah, be careful if you have small business clients who say, I don't have to pay [00:23:00] overtime because I pay salaries.

Annie Schwab: Right. That's true. And and I believe that this is probably going to get more attention as we get closer to the end of the year. Um, just for changes, those kinds of things. So we might do a whole kind of, maybe fair Labor Standards Act revision coming up on a future podcast. You know, where we talk about worker's compensation, minimum wage, um, tips, how to do tip credits. Uh, and then there's always [00:23:30] like the difference between employees and independent contractors. So probably could do a little bit of focus on on this area. I don't know, I feel like I'm seeing a lot on the, you know, non-competes and overtime and I don't know. What do you think, Roger. Yeah, I think.

Roger Harris: No, I think that's a good thing. I mean, you know, it's interesting. It's things like this where elections matter. Oh yeah. Republicans tend to be more business friendly and don't look at these things. Or if they do, they look for ways to make it more friendly to [00:24:00] the owner. Democrats, when they're controlling the regulatory system, worry more about the employees than the owners. And you see these things bouncing around from administration to administration. So, uh, yeah, I think we should probably talk about this on a podcast, because if you have small business clients, you got to deal with overtime, you got to deal with workman's compensation. You got to deal with all these sorts of things.

Annie Schwab: Futa Suda.

Roger Harris: Yeah. No. What's the rules today? And then [00:24:30] understand, you know, if you get a change in administration, because once the administration changes, all the heads of agencies change, all the people inside those agencies who make the rules tend to have the same beliefs as the administration. That's why they got appointed. And you see changes like this, like the overtime was a was a major one.

Annie Schwab: So yeah.

Roger Harris: Yeah, it's a good thing for a future podcast because it's not going to it's not going to go away, uh, at least through [00:25:00] this administration, if the Democrats stay power, stay in power, it'll it'll stay. And it could even get more strict.

Annie Schwab: Well, that's the same stuff with all the Trump, uh, provisions too, you know. Yeah. We'll see what happens to those by the end of the.

Roger Harris: Year that fights already started. Yeah. And what we you know, one of the things we want to talk about is I think our firms at Paget are very similar to the average firms that are out there. The ways they're the same. We survey our folks around tax season [00:25:30] to what did what did we learn from our people. And we can kind of see if the people listening have the same similar or something different.

Annie Schwab: Okay. Yeah. So we did we we asked a lot of questions about, you know, compared to the prior year. Um, we asked them about their workload and capacity, kind of very similar results over the last two years. You know, client demands are hard to meet. Workload and capacity hiring is still a struggle. Irs legislation, what we've been talking about [00:26:00] BOE and IRC for, you know, months and months and months now. So we can definitely see that there's, you know, legislation does make it a little bit more difficult to do tax planning and the such. But there was some good news from our from our folks. Uh, we had the majority of our office owners increased prices for tax preparation, and some of it was bundled like accounting and and payroll included, but over 6% for the majority, and some were even over 12%. [00:26:30] So it's nice to see that, you know, there's obviously demand out there there there are accepting new clients. Um, you know, very few even lost clients due to that price increase. So I think the demand is out there. I think, um, taxpayers think of their preparers as advisors. Um, I think, you know, bundle pricing is also becoming a little bit more popular.

Annie Schwab: Like I said, you know, tax accounting, payroll advisory, um, bundle pricing or subscription [00:27:00] pricing seems to be on the increase. So that was that was some interesting kind of dynamics. So you may have experienced similar stuff there. I will say the biggest improvement that our folks said was that the IRS online services greatly improved. Uh, there was a big drop. I don't remember the percentage in time on hold with the IRS. There was a lot more activity on the website. A lot of, you know, how many people went to the website [00:27:30] to look at for information. Um, and so I think there's a positive side there to I guess, compared to the last couple of years, especially during Covid, um, where the IRS was just so slow to process lots of issues, um, lack of trained people on the phone, uh, technology was has made really big strides in technology. Um, and like you said, the online accounts, the the taxpayer online accounts. And then there's the pro the tax [00:28:00] pro for the professionals. Um, so I don't know, I was I was happily impressed by some of the I thought it was the strides clearly.

Roger Harris: The best tax season post-Covid.

Annie Schwab: Oh yes.

Roger Harris: I mean without a doubt I guess.

Annie Schwab: It couldn't get worse, but okay.

Roger Harris: Well yeah. Yeah, the IRS was was and I think justifiably proud of a lot of the things that they did better this year. Uh, I think they, they deserve some of that credit. Uh, interestingly their, their direct [00:28:30] file program. Oh, yeah. Uh. They got a lot of activity, more than they anticipated. Now, who knows how far. They're still analyzing the data to see who used it. And you know, but one thing, it could be a good discussion point as we move into online accounts. And I don't think I realize this, to use direct file, you have to have an online account because you access it through your online account. Right? So everybody that wanted to file their tax return directly with [00:29:00] the IRS had to set up an online account. So and.

Annie Schwab: To do that you have to have the id.me ID.

Roger Harris: Me, which is the only hard part about the whole process really is going through that. So talk a little bit about because as you just mentioned, there's the individual account. There's the Tax Pro account. We're beginning to see business accounts. Um, why would a taxpayer want an online account with the IRS.

Annie Schwab: Oh well, just to get access to your records so you can [00:29:30] create an account and then you can go in there and you can see, um, data from your most recently filed tax returns. And several years back, I don't remember how many years back you can get transcripts, you can get copies, you know, you can also make payments, set up bank information in there for, um, you know, automatic payments. Um, you can create payment plans. So if you're having trouble with a balance due, um, you can sort of keep track of what's going on, what interests, what what [00:30:00] the dates are. So it's it's helpful for you as an individual taxpayer to go in there to get it. And in all honesty, if your tax preparer needs, you know, asks you, well, you know, you're a new client to me. Can I see last year's tax return and you don't have it. You can go get it for your for your tax repair. So some of the information in there is going to be useful to a tax professional as well. But like you said there's the tax pro accounts. Now for that you have to have a calf number which most tax professionals do. But [00:30:30] you can go in there and view individual and business information. You can drop in the power of attorneys. You can do pose, uh, kind of access. So right now I think you can only access sole prop information. Yeah.

Roger Harris: It's still limited.

Annie Schwab: Yeah. They're limited there. And I know they they want to somehow figure out a way so that entities partnerships and escorts corpse can get in there and kind of see the status to something about the identity of the shareholders. And the partnerships [00:31:00] partners are kind of holding it up.

Roger Harris: But you can authenticate.

Annie Schwab: Yeah.

Roger Harris: In a business, it's more complicated from the IRS. I think that's overblown in a small business. But anyhow, that's the reason.

Annie Schwab: Well, if you got 200 partners or something, it could be kind of that's different. But I mean, you can see the enhancements and you know, the security and not have to worry. You know, I remember faxing power of attorneys, um, and then waiting and waiting for them to receive it, you know, so I do think it's going to be helpful both [00:31:30] to, you know, the individual taxpayers as well as, you know, tax practitioners who need access to, to records, um, or check the status of something would be really nice if you could check the status of IRC, but I'm just throwing that out there. That would be a great enhancement. Um, I don't know that that'll come though.

Roger Harris: Yeah, the online accounts for the individuals. I think we should, if you're not really working in your firm to help people get those, because the hard part is the id.me setup.

Annie Schwab: You need your license, a photo ID. [00:32:00] Yeah. And then answer some questions. Oh, yeah, that's right. Cell phone in your name.

Roger Harris: And so it's a little it's look, we know how to get around these things. But for someone to log in their account and we've all dealt with this in other situations. You log in and it's going to send a code to a cell phone. And you got to have that code. So you can't just arbitrarily log in to one of your clients, uh, individual accounts without them being aware [00:32:30] that a code is coming and you need their.

Annie Schwab: Permission to get in.

Roger Harris: You got to get that. But but like you said, the information that's in there, you know, setting up payments, it's a way you can tell these people, oh yeah, stop mailing checks, go into your online account and pay it through the online account. Right. Transcripts. Past years, you know, all the stuff that that sometimes we struggle with, it's there and it's just going to get better.

Annie Schwab: Right. And I think more history will be there. So, you know, as they enhance this, you know, you'll you won't be saving [00:33:00] paper copies of stuff. Um, you know, hopefully everything's saved online. But I do think that they'll have enhancements, um, the ability to just access what you need, when you need it will be great. And if they can get the business side of it up, I think that's going to be even better.

Roger Harris: Well, and it's like any online account, if this is the beginning, this is just going to continue to go from here. Mhm. So don't don't fight this much longer. You might as well go ahead and and and work in this online [00:33:30] arena with the IRS because and I'm assuming the. States are doing similar things. I mean, it's not going to look exactly the same.

Annie Schwab: But but same idea.

Roger Harris: Same. Yeah. So, you know, we might as well buy into it. It's going to be better. I remember again, I keep showing my age here, going back to when practitioners fought electronic filing for reasons. Now you kind of laugh at, but I don't think any of us would want to go back to to paper filing returns. Mhm. No, we're going to be in the same place with these accounts in the near future. [00:34:00] So um, let's just go see, let's go get them set up. Let's work with our clients. Yeah. It's not that hard but it does take a little time. And you've got to have a cell phone. And your name is what they tell me. I've never tried one without one in my name. So, um, let's, let's, let's buy into this because again, I think in the end of the day, it's going to make our life a lot easier.

Annie Schwab: Oh me too.

Roger Harris: Yeah. Because we've all had taxpayers that come in and say, I don't know, I need to file from three [00:34:30] years ago and I can't find any of my data. At least you can go in there and see what the IRS has.

Annie Schwab: Yeah. W-2, you know, 1099 brokerage statements, all that stuff will be in there. So that'll be nice.

Roger Harris: I used to know, I'll say I used to know. I mean, there's a lot of them that do it this way. They they require new clients to bring transcripts in to, to sign up. They want to make sure that the returns, which is not a bad idea, particularly if you can get them through online account.

Annie Schwab: Right. Free. Easy to set up. Yeah. Access. Yeah. Well [00:35:00] we'll see. We'll see what happens then. Maybe we'll get some more improvements over the summer.

Roger Harris: Oh I think we will. There's a lot of resources being thrown into improving these online accounts. So I think we're we're at the tip of the iceberg of what they'll be. And, and hopefully we won't be lagging too far behind. Yeah. And we mentioned when I started this that we're ending spring heading into summer. Um.

Annie Schwab: Summer here in Texas never ends.

Roger Harris: Don't I don't want to hear that. You know, tax season goes on 12 months. But what are some [00:35:30] things that we can do, you know, during the summer when hopefully things are a little bit slower?

Annie Schwab: Well of course anything on extension you know don't wait until September October. You know, get get the information from the clients or get it filed. Um, that way you can get paid. But there's also, you know, things to consider. If you had clients who were under making underpayments, they have penalties for underpayments, you know, get get with their and get their withholdings either changed or get their estimates calculated, um, so [00:36:00] that we can, you know, so that they're not in the same boat as they were this year. We always, always, always encourage, um, spent some time talking to your S Corp and partnership clients and make sure they're doing reasonable salary as a shareholder, um, or taking guaranteed payments as a partner. Sometimes we, you know, we discover this stuff at the end of the year and it's kind of hard to fix, you know, in December or even the next year. So, um, I do we encourage our offices [00:36:30] to kind of look and make sure that they're handling payroll properly for the owners. Um, and then there's always, I don't know about you, but we've already had some clients who have gone out of business already, and it's May. And so now they're like, when do I file my final return? And the forms for this year aren't even out. And, you know, how do you handle something that either, um, you know, has closed or maybe a change in ownership or something during the year? Um, so, you know, that's another good conversation to have [00:37:00] with clients that, you know, maybe are, are selling or or starting for that matter, initial, you know, initial filings or final filings or short year returns, those kinds of things.

Roger Harris: Yeah. And one thing we all know is going to happen here soon. If it hadn't already started, our software companies are going to try to bug us to renew. Oh, yeah. They know, first of all, this is probably the most money we'll have in our checking account all year, right after tax season. And secondly, um, they want to get you before the competition. Uh, [00:37:30] um, so it's a good time to, to to analyze your technology in your firm for sure. The software. But everything, the tax software, everything that interacts with it. Uh, but your clients, like, don't, like, you know, uh, because if you're going to make any changes to your tech stack, better to do it in the summer than try to do it, certainly than during a tax season. But give yourself a learning curve. Give yourself plenty of time to work out the bugs and the kinks and the changes there. But you know, [00:38:00] you should you should analyze your technology. Uh. Really? You should do it every year. Yeah, I know. Amanda, in our firm, that's one of her prime. Prime responsibilities is to analyze all the stuff that changes so fast, to make sure that our offices have the best information they can to make their choices of what technology works best for them, given their style of practice and ferm and things like that. And everybody should do that. And tax software [00:38:30] is one of the key elements to it, because most of you do a large volume in the tax world, and the biggest tool you got is your software.

Annie Schwab: And sometimes it's not cheap. No.

Roger Harris: And it can and it's not always the cheapest is the best or the most expensive is the best right.

Annie Schwab: No no.

Roger Harris: No. So and now you you got negotiating power until you renew. That's true. But they're going to entice you with all those discounts to try to get you to, to move quickly.

Annie Schwab: Yes. And there's other you know, this is the time of year. [00:39:00] I know we said this in a previous podcast, but you know, look at your staff, you know, where are your pain points during tax season. Let's, you know, make changes. You know, if you have to hire reposition or same with your clients. You know, if there are clients that are major pain point for you or your staff, you know, consider disengaging if you know you're not making any money on them. And again, pricing is another thing. I mean, all of these kind of summertime, you know, business decisions or evaluations can be done software [00:39:30] staffing clients, um, or maybe enhancing services. You know, some of these, you know, doing advisory type stuff, I don't know, take I encourage you guys to, to take a minute after tax season and maybe like rate your tax season health or something. I don't know the best way to say it, but like where was the balance. You know, did you work more. Did you work less. Did you you know more on extension. Less on extension? Um, you know, what did your what did [00:40:00] your client base look like? Um, I don't know. It's it's easier to do when you, when you're not so stressed and so, you know, you know, just crunch and returns and whatnot. Um, but it's, it's important for you to, to like what you do and for your employees to be happy and your clients to feel appreciated. So. Yeah.

Roger Harris: Well, the other thing is go plan your CPE strategy for the rest. Oh, yeah. There you go scrambling around. You know, that's another 1st December. You know, figure [00:40:30] out where you want to go. Do you want to go to location and sit in a classroom. Do you want to go online? What kind of knowledge do you want to get? Or do you just want to find a way to go take a nice vacation somewhere and pick up some CPA while you're there? I mean, yeah, you know, this is probably the slowest time we have for a while because we've got extension deadlines that are going to start popping up before you know it. Uh, hopefully you're planning on doing some fun stuff during the spring and summer with your family. So [00:41:00] there's a lot of opportunities now after hopefully everybody has just come back from some wonderful weekend or three weeks or something, um, right after the April 15th deadline. But, you know, September, October fiscal year, um, whatever. They're all going to be here before you know it. So try to do as much planning and strategy. And because you hate to be chasing your CPE on the. Yeah, there's.

Annie Schwab: First five IRS forms this summer, five.

Roger Harris: Irs forms. [00:41:30] And let's see if I can remember them all. Okay. Uh, we're going to start in Chicago. Then we'll go to Orlando, then we'll go to Dallas, and we're going to go to Baltimore. And then we're going to go to San Diego.

Annie Schwab: I'll be in the Dallas. That's that's my neck of the woods. Yeah.

Roger Harris: They didn't tell us which two, two of them are already sold out.

Annie Schwab: Oh, really?

Roger Harris: Yeah. And you're talking probably 2000 people, uh, at each one of those now, I, they were speculating. All they knew was two had [00:42:00] sold out because it's, it's you're going to get I think you can max out at maybe 18 to 20 hours and it's less than $300 for the. Yeah.

Annie Schwab: The price is not bad.

Roger Harris: No. Depending on where you go, you know, you got hotel, you got travel. But yeah. Hey, you know those are some decent if you've never been to those places, it's a good reason to go and. Yeah, yeah, go tour San Diego while you're picking up. Yeah.

Annie Schwab: You'll probably see some pageant people. We're going to have people there.

Roger Harris: You will see some. You'll see me in all of [00:42:30] them on a Monday night before they actually start. And then at three of them we'll have a booth and we'll be there. And hey, if you're there, come by us. We'll if you come to any, we'll be in Chicago, Dallas, Dallas and Orlando.

Annie Schwab: Correct.

Roger Harris: So if you go to any of those forums, go to the exhibit hall, come by the pageant table and tell us you listen to the federal Tax Update podcast, and you might actually have high or we might we might give away what you want us to [00:43:00] talk about. Or, you know, we could I don't think we're going to record one. Over there. But you never know. You never.

Annie Schwab: Know. You never.

Roger Harris: See us. But yeah. Plan your CPE whether you do the IRS forums or whatever you can. And remember, your staff probably need CPE as well.

Annie Schwab: Yeah, yeah.

Roger Harris: So Annie, what else?

Annie Schwab: That's it. That's all I've got today, Roger. Well, I'm feeling.

Roger Harris: That's enough for us. Hope it was enough for our listeners. Um, again, if you have any ideas for future podcasts and something that you'd like us [00:43:30] to talk about. Besides, I keep, want to say, earned income credit. For some reason today the employee retention credit or, uh, beneficial ownership, let us know. Uh, we're always looking for topics. We're always listening for listeners. So, um, join us, send us some, send us some ideas and send us some listeners. Any final parting shots, Annie?

Annie Schwab: None for me. I'm feeling the summer heat here in Texas, I can tell you. Yeah. It's definitely not spring anymore.

Roger Harris: No, we're gonna go from complaining about [00:44:00] cold weather to it's too hot, but, hey, it's. It'll be here before you know it. Summer will be here, and then we'll be into fall and be football season. And I'll be happy.

Annie Schwab: There you go. Me too. I like football.

Roger Harris: All right, Annie, thanks as always. Glad to have you back. Thank you for my pleasure. Resource for this. Thank you for all you do. Thank you guys for listening and we hope to see you back soon on another federal tax Updates podcast.