As CPAs make ready for the 2018 tax filing season, many of the measures enacted in late 2016 and first effective for that tax year bear continuing attention in the 2017 tax year, such as the ongoing requirement to renew individual tax identification numbers (ITINs), described below, which can particularly cause problems if the need for renewal is not noticed until the return filing deadline.
The 2018 deadline for filing individual returns is April 17, since April 15 falls on a Sunday and the next day, Monday, April 16, is Emancipation Day, a federal holiday in the District of Columbia. The beginning date for e-filing returns had not yet been announced as of this writing. Preparers might keep in mind the change, new for 2016 returns and subsequently, allowing refunds to be issued no sooner than Feb. 15 for returns claiming an earned income tax credit (EITC) or additional child tax credit (Sec. 6402(m)). For all returns, CPA preparers can tear out for reference the handy quick guide to key thresholds, limitations, and other amounts updated for the 2017 tax year that accompanies this article.
REVIEWING FIRM PRACTICES AND PROCEDURES
With fewer new tax law requirements this time around, CPAs might find they have greater opportunity to focus on their own practices and procedures. Good resources in this respect include a recent column, "Tax Practice Management: Kicking Off Tax Season With Engagement Letters and Organizers," The Tax Adviser, Dec. 2017, tinyurl.com/ yab9mvkw. Also, the AICPA Tax Section provides tax practice resources that many CPAs rely upon. See the AICPA Resources section in this article for the Tax Section and more.
One area of practice and procedures that has continued to be in the spotlight is cybersecurity for taxpayers and, increasingly, for firms as well. Last year saw new use of taxpayers' driver's licenses by states as taxpayer identifiers, including a few states that required entering a driver's license or state-issued identification number for filing state returns. Others recommended entering a number, saying it would expedite return processing (and leaving unclear whether its omission would slow it). Many preparers found the requirement or recommendation problematic, not having obtained the numbers in their organizers or other client correspondence and then had to contact clients again to get them. To address this, firms might include a request for driver's license numbers in their organizer questionnaire, perhaps with an explanation to clients who could well be shellshocked by this point by nearly continuous news of data breaches and be reluctant to put one more personal identifier on a form--even to their trusted adviser--unless persuaded of its necessity.
Speaking of data breaches, it remained to be seen at this writing what the impact may be on tax identity theft in the wake of credit reporting company Equifax's revelation in September 2017 that 145.5 million individuals' personal information may have been compromised by hacks of its databases. Equifax also was under contract (suspended in October) with the IRS to verify taxpayers' identities for the Service's Secure Access registration for online taxpayer access to transcripts (also hacked before this measure was in place) and tax accounts, and for obtaining identity protection personal identification numbers. The suspension of the Equifax contract has delayed the IRS's rollout of Secure Access registration as the Service works to find a new vendor.
The IRS has said no taxpayer data was involved in the Equifax breach, but the company acknowledged that stolen data included names, Social Security numbers, birthdates, addresses--and some driver's license numbers. The IRS appears to have made inroads in 2016 and 2017 in its ongoing...