Monthly Archives: September 2021

Regulation of Paid Tax Preparers Likely Coming Soon – Law Watch

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Coleman Jackson, P.C. | Law Watch Transcript
09.10.2021

Regulation of Paid Tax Preparers Likely Coming Soon

Welcome to Law Watch

My name is Reyna and I am the legal assistant here at Coleman Jackson PC a tax, litigation, and immigration law firm based in Dallas Texas.

Our topic today is “Regulation of Paid Tax Preparers Likely Coming Soon”.

This presentation is word for word of a question-and-answer session that I had with Attorney Jackson. I will only be relaying the information that Attorney Jackson and I discussed.

Reyna Munoz

Question 1:

So, Attorney, let’s get to it.  What is all this buzz that we’ve been hearing in the news about the regulation of paid tax preparers?

Attorney Coleman Jackson

About two or three weeks ago a proposed bipartisan legislation was introduced in the U.S. House of Representatives, proposing to authorize the U.S. Treasury to regulate paid tax return preparers and enforce minimum standards of competency to protect the American tax payer and protect the integrity of the federal tax system.  Earlier this year, President Biden had introduced The American Family Plan that also has regulatory protections for American tax payers which also seeks to regulate paid tax return preparers. Both of these measures have strong support by the American Institute of Certified Public Accountants and other professional organizations who have long supported measures to improve the competency and accountability of tax return preparer industry.

Reyna Munoz

Novice taxpayers go to these tax return preparers to competently advise them in complying with the tax laws and help them file their tax returns on time.  So that leads me to my second question.

Question No. 2:

How exactly does this proposed legislation expect to protect American taxpayers?

Attorney Coleman Jackson

Let us keep in mind that this is merely proposed legislation at this point.  It must go through the legislative process in both the House of Representatives and U.S. Senate and ultimately be signed into law by the President.  That may or may not happen and the terms of the bills announced in the House a few weeks ago and the legislation proposed by the President might change before it ever becomes law.

But let me just discuss some of the highlights of the proposed legislation to date:

The Proposed legislation will impose the following regulatory scheme with respect to paid tax preparers:

The IRS will have regulatory authority to regulate paid tax return preparers;

The IRS will have the authority to reinstitute the IRS’s 2011 Registered Tax Return Preparer Program.  This is the program that was challenged in Loving v IRS whereby the courts stated that the IRS did not possess the authority to impose certain mandatory requirements on paid tax return preparers.

The IRs will have the authority under the proposed legislation to sanction and revoke an incompetent or fraudulent tax preparer’s tax identification number; thereby, prohibiting the tax preparer from representing taxpayers before the IRS or filing tax returns for the public.

The proposed legislation has other provisions, but these three are the major ones. The bottom line is Congress and the President are trying to establish minimum competency requirements for tax return preparers.  The public has a right to expect competency and professionalism in those who they trust with their tax information and in those they rely on to help them comply with complicated tax laws.  Those who prepare tax returns should possess the knowledge and skill to accurately prepare tax returns and help taxpayers to take lawful tax positions.  These public policy goals seem to be the expression of the pending legislation.

Reyna Munoz

Question 3:

What if any laws protect taxpayers now from incompetent tax return preparers or those preparers that simply commit all kinds of unspeakable acts harming their clients?

Attorney Coleman Jackson

Well, there are various laws and regulatory bodies that regulate certain tax return preparers.  For example, lawyers are regulated by state licensing authorities.  Likewise, Certified Public Accounts (CPAs) are also regulated by state licensing authorities.  Enrolled agents are currently regulated by the IRS.

But currently there are unregulated tax return preparers who prepare tax returns as well.  This is the big problem because these unregulated tax return preparers are not subject to any accountability authority.  If a taxpayer has a problem with their lawyer, they can go to the State Bar and file a complaint.  If a taxpayer has a problem with their CPA, they can go to the State authorities who licenses CPAs in their State.

The problem is how do you regulate and protect the public from incompetency.  There  are long established tax laws against malfeasance and fraud committed by tax return preparers.  Congress has also over the years passed due diligence requirements of tax return preparers.  And the IRS has had the power to impose various penalties on tax return preparers who  unlawfully disclose or use taxpayer information and who advise taxpayers to take unlawful deductions and other unfounded tax positions and commits tax fraud.

Finally, most States have professional mal-practice laws and consumer protection laws that might give some taxpayers a legal remedy in tax preparer cases.  But those laws can be complex and have extremely short statutes of limitation.  What the attorney is saying is this: it is costly to sue in Texas and most other states and most taxpayers probably don’t know where to start in holding a tax return preparer accountable.  Whenever anyone sues a tax preparer in court, it’s wise to hire a lawyer.  Lawyers are expensive; lawsuits take time and the wheels of justice turns slow.

All the while, the wronged taxpayer may have to pay the IRS back taxes, penalties and interest for problems caused by an incompetent or unethical tax preparer.  The attorney believes that this is at the core of the proposed regulation of paid tax return preparers.   The trusting public needs a remedy that is quick and effective in getting unscrupulous and incompetent tax preparers out of the market place.

Reyna Munoz

Question No. 4

How likely is this legislation to become law that is designed to protect taxpayers from their own tax return preparer?

Attorney Coleman Jackson

Answer No. 4:

I don’t know.  All I can say is that several different pieces of legislation are in process.

And some powerful regulatory organizations like the American Institute of Certified Public Accountants and the National Tax Return Preparers have publicly come out in favor of some if not all of the measures that we’ve been discussing in this video.

We have to wait and see whether some of these protections will actually become law.  The legislative process can be slow, but Attorney Jackson believes that these changes are needed based on some of things that he has seen over the years in representing taxpayers, many of whom were harmed by their tax return preparers through no fault of their own.  They were innocent victims.  It’s a shame and hopefully some if not all of these regulatory measures will become law.

Reyna Munoz

Question No. 5

Our listeners just have to continue to listen to our Legal Thoughts Podcast, watch our Law Watch videos and read our blogs because our law firm communicates regularly on topics in taxation, litigation and immigration that might educate our audience in the areas of law that we practice.

Question NO. 5:

Attorney, am I right about this?  You do intend to monitor the progress of the legislation designed to protect American taxpayers from incompetent or unscrupulous tax return preparers?  I mean this is an important development because most folks are just at the mercy of their tax return preparer

Attorney Jackson

Definitely. Anyone interested in learning more about this and other topics dealing with taxation, contract litigation and immigration can follow our Legal Thoughts Podcast, Law Watch videos and blogs by going to www.cjacksonlaw.com.  All of our publications are free of charge and are designed to educate our clients and the general public on legal topics that we think might be of importance to them.

Attorney Jackson sees the right to practice law as a privilege and publication of these items are our way of giving back to the public and hopefully helping people understand the laws and their legal rights.  They do not constitute an Attorney-Client relationship between our firm and the listeners of the podcasts, viewers of our videos or readers of our blogs.  People should seek legal representation of their choosing.

We are very likely to monitor the developments on the tax preparer regulatory front and alert our listeners either by follow up podcast like this one or by Law Watch video published on our U-Tube Channel or by blogs.  Again, our viewers can access all of these for free by going to www.cjacksonlaw.com.

Reyna Munoz’ Concluding Remarks

I’d like to take the time to thank Attorney Jackson for providing us with this information about proposed legislation designed to protect American taxpayers from incompetent or unscrupulous tax return preparers.

Our listeners who want to see more videos like this one should subscribe to our channel and listen to our Legal Thoughts Podcast on Apple Podcast, Google Podcast, Spotify or wherever they listen to their podcast.  You can follow our blogs by going to our law firm’s website at www.cjacksonlaw.com.

This is the end of Law Watch for now

Thanks for giving us the opportunity to inform you about the “Regulation of Paid Tax Preparers Likely Coming Soon”.

This has been a presentation based on a question-and-answer session with Attorney Jackson. Find our contact details in our description box. See you in our next video.

Economic Impact Payments and other Tax Benefits for those Experiencing Homelessness | Legal Thoughts

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Coleman Jackson, P.C. | Transcript of Legal Thoughts Podcast
Published June 28 ,2021

Economic Impact Payments and other Tax Benefits for those Experiencing Homelessness

Legal Thoughts is an audio cast presentation by Coleman Jackson, P.C., a law firm based in Dallas, Texas serving individuals, businesses, and agencies from around the world in taxation, litigation, and immigration legal matters.

This episode of Legal Thoughts is an audio cast where the Attorney, Coleman Jackson is being interviewed Mayra Torres, Public Relations Associate of Coleman Jackson, P.C.  The topic of discussion is “Economic Impact Payments and other Tax Benefits for those Experiencing Homelessness“. You can listen to this podcast by clicking here:

If you enjoy this podcast, make sure to stay tuned for more episodes from the taxation, litigation, and immigration Law Firm of Coleman Jackson, P.C. Be sure to subscribe. Visit the taxation, litigation and immigration law firm of Coleman Jackson, P.C. online at www.cjacksonlaw.com.

TRANSCRIPT:

ATTORNEY:  Coleman Jackson
LEGAL THOUGHTS
COLEMAN JACKSON, ATTORNEY & COUNSELOR AT LAW

ATTORNEY:  Coleman Jackson

Welcome to Tax Thoughts

  • My name is Coleman Jackson, and I am an attorney at Coleman Jackson, P.C., a taxation, government contracts litigation and immigration law firm based in Dallas, Texas.
  • Our topic for today is: “Economic Impact Payments and other Tax Benefits for those Experiencing Homelessness”.
  • Other members of Coleman Jackson, P.C. are Yulissa Molina, Tax Legal Assistant, Leiliane Godeiro, Litigation Legal Assistant, Reyna Munoz, Immigration Legal Assistant and Mayra Torres, Public Relations Associate.
  • On this “Legal Thoughts” podcast our public relations associate, Mayra Torres will be asking the questions and I will be responding to her questions on this important tax topic: “Economic Impact Payments and other Tax Benefits for those Experiencing Homelessness”.

Interviewer:  Mayra Torres, Public Relations Associate

  • Good afternoon everyone. My name is Mayra Torres, and I am the public relations associate at Coleman Jackson, P.C.  Coleman Jackson, P.C. is a law firm based right here in Dallas Texas representing clients from around the world in taxation, litigation and immigration law.
  • Attorney, thank you for joining us today to discuss Economic Impact Payments and other Tax Benefits for those Experiencing Homelessness.
  • Question 1:
  • Could you give us a general overview of the struggles people experiencing homelessness face in getting the economic impact payments?

Attorney Answers Question 1:

  • Good afternoon Mayra. Yes, I can give a general overview of the struggles people experiencing homelessness face in getting the economic impact payments.
  • There are many misconceptions about who can receive Economic impact payments and who is eligible.
  • Individuals who earned less than $75,000, or $150 if filed jointly, in 2019 or 2020 are eligible for the three rounds of economic impact payments. In 2020, the IRS issued two Economic Impact Payments as part of the economic stimulus efforts. The first payments were up to $1,200 person and $500 per qualifying child. The second payments were up to $600 per eligible person and $600 per qualifying child. For 2021, eligible taxpayers who did not receive the full amount, can claim it as the Recovery Rebate Credit when filing a 2020 tax return. These stimulus checks are a great addition to individuals’ income but for people who need it the most it can be hard to get.
  • Economic payments are sent automatically to most people, but the IRS can’t issue payments to eligible American when information is not available in the IRS’s system. This is due in part to the fact that some individual’s income is low enough that filing a tax return is not required.
  • People might be hindered from claiming economic Impact payments or other tax benefits because they do not have a permanent address or a bank account, or a job. However, as long as they have a Social Security number and are not being supported by someone else who can claim them as a dependent, they are eligible to get economic impact payments as well as other tax benefits.

Interviewer:  Mayra Torres, Public Relations Associate

Question 2.

  • Attorney, you mentioned that some individual’s income is low enough that they don’t have to file taxes. Can they still file a tax return if that is the case?

Attorney Answers Question 2:

  • Mayra, even though there is not a filing requirement for these individuals, they can still file a tax return to claim all the Economic impact payments and tax benefits they are eligible for.
  • Like I said the IRS needs information from people who don’t usually file a tax return. Even if an individual did not have any income in 2019 or 2020; or their income was not large enough to require them to file, they should still file a basic 2020 tax. This only way for the IRS to have that information is for people to file a basic tax return.
  • If an individual hasn’t filed a tax return in years, they can still qualify for the first two Economic Impact Payments when they file their 2020 return by claiming the Recovery Rebate Credit. There’s a special section on IRS.gov that can help: Claiming the 2020 Recovery Rebate Credit if you aren’t required to file a tax return. For the current third round of payments, people who are experiencing homelessness usually qualify to receive $1,400 for themselves. If they are married or have dependents, they can get an additional $1,400 for each of their family members.
  • Filing a 2020 federal income tax return that provides very basic information about the person is something that can be done electronically using a smartphone or a computer. When the IRS receives the return, it will automatically calculate and issue the Economic Impact Payments to eligible individuals.
  • Like I previously stated, as long as an individual has Social Security number and are not being supported by someone else who can claim them as a dependent, they are eligible to receive Economic Impact Payments and other tax benefits under the various programs, such as, the original CAREs Act and the American Rescue Plan Act of 2021.

Interviewer:  Mayra Torres, Public Relations Associate

Question 3:

  • Attorney, I know many individuals received their stimulus check through direct deposit.
  • What if an individual does not have a bank account to include on their tax return for direct deposit?

Attorney Answers Question 3:

  • Answer No 3:
  • Mayra, many financial institutions will help a person who doesn’t have a bank account to open a low-cost or no-cost bank account. Individuals who open accounts will then have an account and routing number available when they file and claim a direct deposit of the Economic Impact Payment.
  • The Federal Deposit Insurance Corporation (FDIC) website has all the details, in both English and Spanish, on opening an account online. The site can be reached by going to https://www.fdic.gov/getbanked.
  • Among other things, people can also use the FDIC’s Bank Find tool to locate a nearby FDIC-insured bank. In addition, Bank On, American Bankers Association, Independent Community Bankers of America, National Credit Union Administration have all compiled lists of banks and credit union that can open an account online.
  • Veterans can visit a website to view the Veterans Benefits Banking Program (VBBP) and learn how to access financial services at participating banks at https://veteransbenefitsbanking.org
  • For those with a prepaid debit card, they may be able to have their refund applied to the card. Many reloadable prepaid cards or mobile payment apps have account and routing numbers that can be provided to the IRS. Individuals would need to check with the financial institution to ensure the card can be used and to obtain the routing number and account number, which could be different from the card number.

Interviewer:  Mayra Torres, Public Relations Associate

Question 4:

  • Attorney, what happens if an individual is not able to choose the direct deposit option to receive their money from the IRS?

Attorney Answers Question 4:

  • If they are unable to choose direct deposit, the IRS can mail a check or debit card for the tax refund and the third Economic Impact Payment to an address of the individual’s choice.
  • Now this does not have to be a permanent address. Individuals experiencing homelessness can list the address of a friend, relative or trusted service provider, such as a shelter, drop-in day center or transitional housing program, on the return filed with the IRS.

Interviewer:  Mayra Torres, Public Relations Associate

Question 5:

  • Attorney, are there any resources available for low income individuals to help them file their taxes with the IRS?

Attorney Answers Question 5:

  • Yes Mayra, individuals can visit IRS.gov an click the File Your Taxes for Free link. Through the IRS’s Free File System, individuals with an AGI of $72,000 or less can file at an IRS partner site. The fastest and easiest way to claim the 2020 Recovery Rebate Credit and Earned Income Tax Credit (EITC) or to get the third Economic Impact Payment is to file a return electronically using IRS Free File. It can even be done using a smartphone or computer
  • If an individual would prefer to receive in-person assistance in filing their taxes and earn moderate income or less, can receive free tac help from trained community volunteer tax preparers. Through VITA (Volunteer Income Tax Assistance) and TCE (Tax Counselling for the Elderly), volunteers prepare basic tax returns at thousands of tax help sites nationwide-e. To find the nearest, location visit https://irs.treasury.gov/freetaxprep or call 800-906-9887. VITA/TCE site availability is updated throughout the filing season, so check back if there aren’t any sites listed nearby.

Interviewer:  Mayra Torres, Public Relations Associate

Question 6:

  • Attorney, what other tax benefits can homeless and low income taxpayers be entitled to receive when they file a tax return?

Attorney Answers Question 6:

  • Mayra, for those experiencing homelessness who have a job, filing a return can have benefits such as getting a refund based on various tax benefits, especially the Earned Income Tax Credit (EITC) for low-and moderate-income workers and working families. To get the credit, federal law requires that a worker live in the U.S. for more than half of the year and meet other requirements, such as having a valid Social Security number, claim a certain filing status and be a U.S. Citizen or resident Alien all year. Therefore, individuals experiencing homelessness, including those who reside at one or more homeless shelters, can meet these requirements.
  • For 2020, the income limit is $15,820 for singles with no children ($21,710 for couples with no children). The income limit is higher for people with children. For example, the limit is $50,594 for singles with three or more children ($56,844 for couples with three or more children). Those who make less than this amount must also meet other eligibility requirements. Because it’s a refundable credit, those who qualify and claim the credit could pay less federal tax, pay no tax, or even get a tax refund. The EITC can put up to $6,660 into a worker’s pocket. The amount varies depending upon the worker’s income, marital status, and other factors. The EITC has special qualifying rules for military members, clergy members and taxpayers and their relatives with disabilities. To find out if they’re eligible, individuals can go on IRS.gov and use the EITC Assistant. It’s available in both English and Spanish.
  • Even if a individual isn’t required to file a tax return, they should still do so to claim the 2020 Recovery Rebate Credit and Earned Income Tax Credit (EITC) and to receive the third Economic Impact Payment under the American Rescue Plan Act of 2021. Bottom line:  File a tax return because you might be entitled to receive 2020 recovery rebate credits and the earned income credit even though you do not earn enough money to ordinarily file an annual tax return.

Mayra Torres’ Concluding Remarks

  • Attorney thank you very much for this very comprehensive and informative presentation on this topic:  “Economic Impact Payments and other Tax Benefits for those Experiencing Homelessness.”
  • Our listeners who want to hear more podcast like this one should subscribe to our Legal Thoughts Podcast on Apple Podcast, Google Podcast, Spotify or wherever they listen to their podcast. You can follow our blogs by going to our law firm’s website at cjacksonlaw.com.  Everybody take care for now!  Come back in about two weeks, for more taxation, government contract litigation and immigration Legal Thoughts from Coleman Jackson, P.C., which is located right here in Dallas, Texas at 6060 North Central Expressway, Suite 620, Dallas, Texas 75206.
  • English callers: 214-599-0431; Spanish callers:  214-599-0432 and Portuguese callers:  214-272-3100.

THIS IS END OF “LEGAL THOUGHTS” FOR NOW

  • Thanks for giving us the opportunity to inform you about the “Economic Impact Payments and other Tax Benefits for those Experiencing Homelessness”.
  • If you want to see or hear more taxation, government contracts litigation and immigration LEGAL THOUGHTS from Coleman Jackson, P.C. Stay tune!  Watch for a new Legal Thoughts podcast in about two weeks and check our law firm’s website at www. cjacksonlaw.com to follow our blogs.  We are here in Dallas, Texas and want to inform, educate and encourage our communities on topics dealing with taxation, litigation and immigration.  Until next time, take care.