Happy Thanksgiving. . .

. . . from the Taxpayer Advocacy Panel!

First-Time Homebuyer Credit Extended to April 30, 2010; Some Current Homeowners Now Also Qualify

WASHINGTON — A new law that went into effect Nov. 6 extends the first-time homebuyer credit five months and expands the eligibility requirements for purchasers.

The Worker, Homeownership, and Business Assistance Act of 2009 extends the deadline for qualifying home purchases from Nov. 30, 2009, to April 30, 2010. Additionally, if a buyer enters into a binding contract by April 30, 2010, the buyer has until June 30, 2010, to settle on the purchase.

The maximum credit amount remains at $8,000 for a first-time homebuyer –– that is, a buyer who has not owned a primary residence during the three years up to the date of purchase.

Education Credit Audit

Highlights

Highlights of Report Number: 2009-30-141 to the Internal Revenue Service Commissioner for the Wage and Investment Division.

IMPACT ON TAXPAYERS

Tax credits are available to help taxpayers offset the costs of higher education. These credits are available to certain taxpayers who pay qualified education expenses for higher education. The Hope Credit is limited to eligible students enrolled in their first 2 years of post-secondary education and can only be claimed for 2 tax years. The Lifetime Learning Credit is also available for the first 2 years of post-secondary education as well as an unlimited number of years in the future. Some taxpayers are claiming Hope Credits to which they are not entitled.  

Virtual Worlds & IRS

Last week one of my law professors required the students to set up a Second Life account, and we attended class at the college of law’s virtual campus.

Second Life is a “3D virtual world imagined and created by its residents.”   Businesses and universities are evolving with technology.

1040 Instructions to Include Information about the Taxpayer Advocacy Panel

The most exciting change to the 1040 instructions (Individual Income Tax Form) this year is the inclusion of information about the Taxpayer Advocacy Panel. This information will educate more taxpayer about our existence.

Just about everyone has something to say about taxes and the IRS. As a federal advisory committee, we have the power to influence the IRS. After all, we are all working towards the same goal–an IRS that is responsive to suggestions, an IRS that works more effectively for all taxpayers, and an IRS that delivers significantly improved service to taxpayers.

With your suggestion and comments we can create a friendlier IRS.

Millions of Taxpayers Could Owe Taxes As A Result of Making Work Pay Credit

The Treasury Inspector General for Tax Administration (TIGTA) today publicly released its review of the Internal Revenue Service’s administration of the Making Work Pay Credit (MWPC).

The MWPC, a provision of the American Recovery and Reinvestment Act of 2009 (the Recovery Act), applies to most taxpayers who earn income during 2009 and 2010. The credit is advanced to taxpayers by their employers through reduced withholding, resulting in an increase in take-home pay.

The Taxpayer Advocacy Panel meets with IRS Commissioner Doug Shulman

The Taxpayer Advocacy Panel recently met with Commissioner Shulman. The Panel informed the Commissioner that like any large organization, there is room for improvement. TAP advised the commissioner about opportunities that exist to improve customer service, particularly in the area of improved communication, telephone service, and correspondence audits. The Panel also suggested that the IRS move forward more aggressively with the use of e-mail by its agents.

The Commissioner asked the Panel to give him the top ways that the taxpayer’s experience with the IRS could be improved.  First, the Panel explained that the top reason is the complexity of the tax code. It makes compliance, even for well-meaning taxpayers, very challenging. The second reason is the lack of effective communication when a taxpayer tries to deal with the IRS; the monolithic, unapproachable nature of the IRS as an institution. The commissioner is very focused on improving the IRS’ customer service, and appears to be very focused on tax-preparer regulation. As one Panel Member stated, the Commissioner “understands that for the voluntary tax system to succeed, taxpayers need to feel like they’re being treated fairly and professionally.”

Pittsburgh’s Mayor to Propose a 1 % College-Education Privilege Tax

Pittsburgh Mayor Luke Ravenstahl plans to propose a 1 percent college-education privilege tax to council today, in a move that’s likely to set off a fight with the city’s schools of higher learning.

College and university representatives met with the mayor on Wednesday and argued against the tax, which would be assessed on a college student’s tuition. It technically would not be a levy on the students or their schools, but rather on the privilege of getting a higher education in Pittsburgh.

Read more:http://www.post-gazette.com/pg/09313/1011971-53.stm#ixzz0WTkAcuVT

Do you have complaints or suggestions for the IRS?

Do you have complaints or suggestions to improve the IRS? If so, the Taxpayer Advocacy Panel wants to hear! Next month the Panel will convene in Washington, D.C. for its annual meeting. The Panel will be working on issues that YOU—the taxpayer—have brought to our attention. During our meeting we will hear from the IRS Commissioner, the National Taxpayer Advocate, and others. Our goal is to make sure that the IRS is delivering the best services possible to U.S. taxpayers, and we will not stop till that goal has been achieved. We have a lot of work to do, but we cannot do it without YOUR input. If you have something to say then SPEAK UP! Follow the link to comment on our secure server: http://improveirs.org/comment/comment.shtml

IRS Seeks to Return $123.5 Million in Undeliverable Refunds

WASHINGTON — The Internal Revenue Service is looking for taxpayers who are due to receive a combined $123.5 million in the form of 107,831 refund checks that were returned to the IRS by the U.S. Postal Service due to mailing address errors.

“We are eager to get this money into the hands of taxpayers, so don’t delay if you think you are missing a refund,” said IRS Commissioner Doug Shulman. “The sooner you update your address information, the quicker you can get your refund.”