NCCPAP Endorses Regulation of Tax Return Preparers

According to the IRS, 62% of individuals who currently have a PTIN are not otherwise credentialed, meaning that there is no oversight, regulatory body or authority where individual taxpayers can file a complaint if desired.

The proposed legislation to rectify the regulation of tax return preparer is S.1192/H.R.3330, “The Taxpayer Protection and Preparer Proficiency Act of 2019.” Back in 2010, the Internal Revenue Service announced that it would be regulating tax return preparers. This was challenged in the case of Loving v. IRS, in which the IRS lost by summary judgement, which was then appealed in the D.C. Court of Appeals, and then denied. Once the appeal was denied, then IRS Commissioner John Koskinen stated that the IRS would wait for Congress to enact legislation. The current legislation, if passed, would give the U.S. Department of the Treasury, and subsequently, the IRS the authority to regulate tax preparers. This legislation has support from members of both political parties in the Senate and House of Representatives, as well as from our organization, The National Conference of CPA Practitioners (NCCPAP).

In the case of S.1192/H.R.3330, this legislation could not be timelier. Currently, anyone can start a business claiming that they prepare income tax returns for individuals and businesses. All that is required is for that individual to obtain a Preparer Tax Identification Number (PTIN) from the IRS; however, no one checks their level of competency. When the IRS had attempted to regulate tax preparers unilaterally, they were requiring those who were not a CPA, EA, or Attorney to: (1) pass a minimum competency exam; and (2) take continuing education courses to maintain their knowledge of current tax law. The exam was a one-time event, and continuing education courses is something that all CPAs, EAs and Attorneys must do on an annual basis, as required by their certification bodies.

With all that has occurred with regard to the COVID-19 pandemic, NCCPAP feels that individuals and businesses who engage a tax return preparer, need to have confidence that those they engage are both competent and current. In addition, federal and state governments, which rely on tax revenues to operate and provide services, should support this legislation so that no one is claiming any deductions for which they are not eligible. Unfortunately, there will always be fraudulent tax returns prepared and submitted. Fortunately, the IRS and state taxing authorities are catching up with the criminals and reducing the amount of fraudulent refunds, both in quantity and amounts paid. The proposed legislation will greatly help in this fight against fraud.

The National Conference of CPA Practitioners (NCCPAP) endorses S.1192/H.R.3330 and in the strongest possible terms requests that it be passed on its own or incorporated into any future legislation being considered.

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NCCPAP Endorses the Small Business Expense Protection Act of 2020 (S.3612)

As the month of July comes to a close, there are several aspects of the CARES Act, that are scheduled to end, which will impact both businesses and individuals. Currently, Congress is busy working on additional legislation that would assist those businesses and individuals who are still affected by the pandemic.

As this legislation is being discussed, there are two issues that NCCPAP would like to bring to the attention of Congress for immediate consideration for this pending legislation. When the CARES Act was originally written, there were several portions of it that were ambiguous and subject to interpretation. With regard to the Paycheck Protection Program (PPP), established by Section 1102 of the CARES Act, the original intent of Congress was for any funds used under this program, and subsequently forgiven, to be treated as deductible expenses of the business. However, the Internal Revenue Service, misinterpreting Section 1106 of the Act which states that any monies received under PPP “shall be excluded from gross income” by reason of forgiveness, concluded that the expenses be excluded from business deductions for income tax purposes. This ruling is in direct contrast to the intent of Congress.

On May 5, 2020, Senator John Cornyn of Texas introduced S.3612, “Small Business Protection Act of 2020”. This bill specifically states that “no deduction shall be denied or reduced, no tax attribute shall be reduced, and no basis increase shall be denied, by reason of the exclusion from gross income.” The legislation, if passed, would overturn the ruling issued by the IRS under Notice 2020-32. This has a direct impact on all businesses. Furthermore, if the business is an S Corporation, Partnership, or Sole Proprietorship, the individual taxpayers would also be affected. As of this time, this legislation has bi-partisan sponsorship, and the number of sponsors is growing.

The National Conference of CPA Practitioners (NCCPAP) endorses S.3612 and in the strongest possible terms requests that it be passed on its own or, at a minimum, incorporated into any future legislation being considered. In addition, NCCPAP supports adding automatic PPP loan forgiveness for any loan amount under $150,000 to any future legislation.

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June 2020 IRS Update From NCCPAP

NCCPAP has released their monthly IRS update. Highlighted topics include Economic Impact Payments, Nationwide Tax Forums, Pension Plans & COVID-19, Small Business/Self-Employed Division, and Qualified Business Income Deduction. Learn more in the post below.

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NCCPAP Supports H.R.7010

On May 28, 2020, the United States House of Representatives passed H.R.7010, the Paycheck Protection Program Flexibility Act of 2020, by a vote of 417-1. The National Conference of CPA Practitioners announces its support of this legislation.

When the CARES Act was passed in March, many of its provisions were designed to assist the small business owner; however, they were written vaguely and became subject to interpretation by the U.S. Department of the Treasury in a way unintended by the legislation. Other aspects did not fully take into consideration the effects of the economic shutdown across the country. This newly proposed legislation is an attempt to rectify some of those effects.

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NCCPAP’s Membership Benefits

The National Conference of CPA Practitioners (NCCPAP) is a nationwide organization offering its members:

  • A national voice presenting your views to Congress, the profession, the business community, and state boards of accounting.
  • Quality, accredited Continuing Professional Education seminars on local and national levels.
  • National newsletter.
  • Membership Guide and Referral Directory. 
  • Practitioners helping practitioners.  Join in on our latest discussions and follow our recent blogs.
  • Cooperative buying program offering discounts on products and services used by CPA firms.

The National Conference of CPA Practitioners provides you and your firm with valuable discounts, informational tools, and the enhanced services you need to succeed in today’s business environment. NCCPAP wants to be your business partner in a whole line of affinity programs.

NCCPAP’s Capitol Hill Conference

Normally, May is when the NCCPAP (National Conference of CPA Practitioners) Board of Directors, Tax Committee, and other members go to Washington, D.C. Their purpose is to meet with members of Congress, the IRS, U.S. Department of the Treasury, and others who create the laws, and the interpretation of those law, that affect taxpayers. This highlight of the year involves a twelve-month-long process. They set an agenda, select those government representatives to visit, match NCCPAP members with them, and confirm in-person meetings. This year, NCCPAP will organize a small group of its members and likely visit Capitol Hill in the fall. In the meantime, this video showcases the importance of this event, what has been accomplished over the years, and the impact it has on members—and the CPA profession, in general.

NCCPAP Supports the Small Business Expense Protection Act of 2020 (S.3612)

NCCPAP appreciates the efforts of Senator Chuck Grassley, Senator Ron Wyden, and their colleagues in the United States Senate to help small businesses across the country during the current COVID-19 pandemic.

In an open letter to Senators Grassley and Wyden, NCCPAP President Neil H. Fishman, CPA, CFE, FCPA, CAMS and Co-chairs of the NCCPAP Tax Policy Committee, Stephen F. Mankowski, CPA, CGMA and Sanford E. Zinman, CPA wrote, “At this time, NCCPAP wants to give our support to S.3612, the ‘Small Business Expense Protection Act of 2020.’

“It is clear to us that when the CARES Act (H.R.748) was passed, the intent was to provide assistance to small businesses and their owners once they were able to restart their operations. On April 30, the IRS issued Notice 2020-32 stating that businesses participating in the Paycheck Protection Program (PPP) would not be allowed to deduct expenses that their PPP funds were used for, even though they met the criteria for forgiveness. This, in our opinion, contradicts the intent of the previously passed legislation, which was written to assist small businesses, not hinder them.

“It is our hope that this legislation will become law, and that once the economy is allowed to restart, small business owners will get the full benefit of the CARES Act, as it was intended.”

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Call for Immediate Action Regarding the SBA’s Paycheck Protection Program

The National Conference of CPA Practitioners is calling for immediate action regarding the Small Business Administration’s Paycheck Protection Program (PPP) as a number of larger businesses have received a majority of the funds.

In an open letter to Mnuchin and Carranza, NCCPAP President Neil H. Fishman, CPA, CFE, FCPA, CAMS and Co-chairs of the NCCPAP Tax Policy Committee, Stephen F. Mankowski, CPA, CGMA and Sanford E. Zinman, CPA wrote, “This PPP Loan program was designed to assist small businesses in retaining employees during the COVID- 19 crisis by providing business owners with funds to be able to retain and pay their employees while their businesses were affected by the current situation. While intended to be meant for small businesses, the majority of the funds have been given to larger business entities. Small businesses may never recover.”

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NCCPAP’s Open Letter to Treasury Secretary Mnuchin and SBA Administrator Carranza

The National Conference of CPA Practitioners is calling on the Treasury and the Small Business Administration to operate the CARES Act the way it was intended, and that is to help more small businesses and independent contractors.

In an open letter to Mnuchin and Carranza, NCCPAP President Neil H. Fishman, CPA, CFE, FCPA, CAMS and Co-chairs of the NCCPAP Tax Policy Committee, Stephen F. Mankowski, CPA, CGMA and Sanford E. Zinman, CPA wrote, “The CARES Act created a ‘working capital advance’ within the Economic Injury Disaster Loans (EIDL) program at the SBA intended to help small businesses by awarding grants of up to $10,000 per business.

“This loan advance did not have to be repaid even if the application was denied and the advance was supposed to be made within 3 days. At the time it became law, there were no restrictions. NOWHERE is there indication as to how the amount is to be determined.

“With your announcement, the determining factor for the amount to be issued will be based on the number of employees. Therefore, you have, in effect: eliminated ALL Independent Contractors with no employees, and eliminated any other business entity that does not have employees.”

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March 2020 NPL Update from NCCPAP

Immediate Past President and current Tax Chair, Stephen Mankowski, CPA, recently attended the March 2020 IRS NPL meeting. Highlighted topics include: An update from Commissioner Rettig and important COVID-19 Compliance Issues.

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