Issue #1

Hello and welcome to the first issue of Spidell's Tax Season Tribune! We hope to provide you with a bit of a respite from filing season by sharing stories we find interesting, but not necessarily fit for our publications like the California or Federal Taxletter. We will also provide an occasional important tax update, but our goal is to give you a chuckle or two. Happy reading!

Valentine gift suggestions from a tax professional to his or her Valentine

  1. A box of Chocolate 1040 bars — to order, check out:
  2. File Form 0214 ILOVEU, Application for Automatic Three-Month Extension of Time for Romantic Dinner, with your loved one
  3. An FBAR of chocolate — imported, of course
  4. A CD with you covering:

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New IRS guidance on ACA

Due Diligence

The IRS has issued guidance on due diligence and penalty relief for preparers and taxpayers. On its website, the IRS has issued two sets of "Return Preparer Best Practices" with respect to:

Both begin by noting that there are "no special or specific due diligence requirements related to Affordable Care Act (ACA) issues." Under general due diligence requirements, tax preparers may rely on statements made by their clients. However, preparers may not do so blindly.

Penalty Relief

The IRS is providing limited penalty relief for taxpayers who have a balance due only on the 2014 return as a result of reconciling advance payments of the Premium Tax Credit against the credit allowed on the tax return. (Notice 2015-9) Specifically, the Notice provides relief from penalty for late payment of a balance due (IRC §6651(a)(2)) and the penalty for underpayment of estimated tax (IRC §6651(a)).

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Portion of FTB headquarters closed temporarily due to doo-doo

On the morning of January 26, FTB headquarters received a package that staff determined contained a brown liquid with a strong odor. This triggered an evacuation and a Level 2 HazMat situation that closed down parts of the agency for approximately two hours. The 100 employees on the floor where the package was delivered were evacuated. A Sacramento Metro Fire spokeswoman said HazMat crews donned protective suits with gas masks, then entered the building, tested the substance and concluded that it wasn't dangerous — just smelly. It was determined that the package was full of dog poop. The package was not addressed to a particular employee, and it is unknown who sent the package, officials said.

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Tell us about your FTB audit problems

The FTB is working to improve the timeliness and accuracy of their audit process, as well as the lag time in processing amended returns, particularly those with large refunds. As part of this improvement project, Spidell will be participating in a roundtable discussion with the FTB. We know that some of you have had issues with your FTB audits. We would like to hear about those problems so we can share them with the FTB. Please e-mail me at by February 18 so I can bring your concerns to the roundtable discussion.

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A few fun facts about this week's writers:

Lynn Freer, EALynn Freer, EA, is struggling to prepare her uncle's trust return — with a foreign beneficiary and withholding. But she really loves to work on her blog.

Tim Hilger, CPATim Hilger, CPA, is busily preparing taxes today. Tim is a golf nut who has played courses in all 50 states and often reminisces about his younger days shredding on his bass guitar.

Renée Rodda, J.D.Renée Rodda, J.D., when not writing, researching, and helping Spidell customers, enjoys riding her horses, Eli and Ava.