IRS Oops on E-Services E-mail

error-63628_1280Earlier this month, the following e-mail arrived in my inbox (and in many other tax preparers’ inboxes):

Congratulations!  Your e-filing firm is eligible to use the e-Services incentive products.  The following incentive products are now available:

Disclosure Authorization allows you to submit Form 2848, Power of Attorney and Declaration of Representative, and Form 8821, Tax Information Authorization electronically.

Electronic Account Resolution enables you to expedite closure on clients’ account problems by electronically sending/receiving account related inquiries. You may inquire about individual or business account problems, refunds, installment agreements, payments or notices.

Transcript Delivery System provides online tax return transcripts, account transcripts and a record of account for both individual and business taxpayers.

Remember that you must have a power of attorney on file before accessing client’s records using Electronic Account Resolution or Transcript Delivery System.

Principals or Responsible Officials can grant their employees access to these e-services through the on-line e-file application.  First, add individual employees to the e-file application using the Delegate User function.  Next, activate the individual e-services for an employee using the Delegate Authorities link.

I was excited to receive this because it seemed to indicate that the IRS was bringing back the ability to elecronically file power of attorney forms.

I wanted to jump on this right away, but caution told me to sit on it for awhile so I flagged the e-mail for follow-up later this week.

My caution proved to be justified when I received the weekly “E@lert” published by the National Association of Enrolled Agents. Other EAs had received the same e-mail and asked NAEA about it. NAEA asked the IRS for more information and here’s what happened:

The response (to us as well as to the members who received the initial message — some as many as nine times): a follow-up “oopsie” e-mail. Subject line: Disregard email about e-services products. The full text follows:

“If you received an Oct. 23 email notifying you that you are eligible for e-services Incentive Products (TDS, DA, EAR), please disregard as this email was inadvertently sent. We apologize for any inconvenience this may have caused.”

That’s quite a mistake to “inadvertently” send an e-mail to practitioners, implying that online services were available again when they really aren’t. Especially since the IRS doesn’t intend to send a follow-up retraction to all of us who got the original e-mail.

Thank goodness NAEA published the IRS retraction, because otherwise I would have tried using the system again to submit power of attorney forms and I would have been confused as to why it wasn’t working.

Of course, I have long been confused as to why the IRS did away with the ability to submit power of attorney forms online, as I blogged about in the past.

Image courtesy of user Geralt on Pixabay.com

Meet Joe the Window Washer

window-washer-30554Meet Joe.

He’s a window washer, one of the best in the country. He’s developed his own window-washing systems and cleaning solutions.

Joe’s business is the envy of other window washers. They call him, wanting to know his secrets.

Joe’s customers love him.

Joe started his business because he had a knack for washing windows, and he wanted freedom from “workin’ for the man.”

Joe just wants to wash windows and be left alone by the world.

He hates the government. He hates regulations. He hates paperwork, whether it’s government-related, or insurance-related or bank-related. Paperwork really bothers him.

He’ll grudgingly file a tax return at tax time, but that’s the extent of what he’s willing to do when it comes to dealing with bureaucracy.

Joe has thought about expanding his business. His customers and friends tell him he could have a window-washing empire. Some even suggest franchising.

But Joe doesn’t want the hassle and headaches associated with growth and expansion.

He knows he’ll probably never get fabulously wealthy. He knows his business will die when he dies or retires. And he’s okay with that, because he would probably have to hire an attorney to help with planning, and he thinks attorneys are money-sucking leeches.

If Joe works with an accountant, the relationship consists solely of Joe handing the accountant a sheet of paper with Joe’s back-of-the-napkin tally of income and expenses for the year so the accountant can plug the numbers into a tax return and get it filed for another year to keep the government off his case for another year.

Joe has no interest in having an accountant keep his books, or give him business advice. What a waste of money!

Joe just wants to wash windows and be left alone.

Joe is fictional. But he describes more than a few of the small business owners I work with.

And here’s something important that needs said: It’s okay to be Joe the Window Washer.

So much of what we read about entrepreneurship focuses on growth and expansion. If you’re not growing and expanding, you’re a failure.

With Joe the Window Washer, I’m saying it’s okay to keep your business small and manageable. It’s not a matter of “don’t grow your business.” It’s more a matter of “don’t grow beyond your means to successfully manage it.”

That means you have to know yourself and what you can handle. It might mean deciding to keep your product or service offerings and territories small and manageable. It might mean not hiring employees.

It’s okay to be Joe the Window Washer, but it’s important to know that about yourself before you get too far along in growing your business.

And it’s okay to change your mind as the years progress. You might start as Joe the Window Washer and then change in a few years and decide to hire employees or go for big growth.

Or maybe you go for big-time growth at first, and then realize you made the wrong choice and you decide to downsize. That’s okay too.

Joe will be making more appearances on this blog in future posts so look for him to appear again.

Image courtesy of user Nemo on Pixabay.com

My Response to the IRS Saying I Can’t Speak On My Own Behalf

lion-159448Some readers have been curious as to how I responded to the IRS saying I’m not authorized to speak on my own behalf.

Since my dispute with the IRS is over a silly clerical matter, I’m fine with sharing details relating to this case.

To recap: I think my company is supposed to use Form 941 to report payroll; the IRS says I’m supposed to use Form 944.

All payroll taxes have been paid. This is purely a clerical matter over which form to use for my very simple payroll reporting.

If the IRS had simply said, in their September 22nd letter, that they think I’m supposed to file Form 944, I would have dropped the matter and filed Form 944 because it’s not a big deal.

But since the IRS said I’m not authorized to speak on my own behalf, I had to reply.

I kept the snark to myself (snark is for this blog, not official correspondence with the IRS) and I think I was blunt but professional throughout:

Dear IRS,

I am the president of Dinesen Tax & Accounting, P.C. and am writing in response to LTR 3007C, dated September 22, 2014. A copy of the letter is enclosed.

The letter indicates that you cannot make changes to my company’s account as requested on August 12, 2014, because I hadn’t given permission to my “accountant” to act on my behalf.

That letter from August 12th was from me. My company is an accounting firm and I am an accountant, but the letter I sent on August 12th was me writing as the president and sole shareholder of Dinesen Tax & Accounting, P.C., on behalf of my company.

Dinesen Tax & Accounting, P.C. is not my “client,” they are the company that I own.

I continue to maintain that my company should be a Form 941 filer for 2014. However, if the IRS wishes for us to use Form 944 for 2014, and Form 941 for 2015, I am fine with that.

As your records no doubt indicate, all payroll taxes have been paid in a timely fashion, so this is really just a clerical matter as to which form to file.

If you have any questions or need further information, please call me.

(Image courtesy of OpenClips on pixabay.com)

Letting My Hair Grow Back: DIY is Not Always Better

Me, back when I thought a shaved head would save me big bucks.
Me, back when I thought a shaved head would save me big bucks.

In June 2013, I decided to shave my head. My logic was, why should I pay someone $10 or $15 each month just to cut my hair?

I’ll just shave it off and be done with it. No more haircuts, no need for shampoo. I felt like I had made a brilliant decision.

About 6 weeks ago, I scrapped the whole “shaved head thing.” I’m growing my hair back and will be paying someone else to trim it every now and then.

Why?

Because the cost savings associated with doing it myself DIDN’T EXIST.

In fact, I believe I spent MORE MONEY shaving my head than I did on paying someone else to cut it.

I ran through razor blades more quickly. I used far more shaving cream. Since I shaved my head in the shower, showers took twice as long, resulting in more water usage.

Those are true dollars-and-cents costs.

What’s the point of this personal anecdote (or “Oprah Crap” as one reader calls my personal stories)?

The point is: DIY is not always better. Paying a professional to help you is not always bad.

With tax preparation, I tell people the following: if you feel comfortable doing it yourself, you know what you’re doing and you have time to do it, then certainly you should try doing it yourself. But know your limitations and know the value of your time.

With business bookkeeping and accounting: at first, it will make sense to keep the books yourself. But as your business grows, you’ll feel the crunch of time, and keeping the books yourself will be a major drag.

DIY is great sometimes, but it’s not always the most efficient or most cost-effective strategy.

The IRS Says I’m Not Authorized to Speak On My Own Behalf

IRS Notice 9-23-14Filed under “dumb but true things the IRS does.”

A few months ago, I received a letter from the IRS, in which the IRS disputed which payroll form my company should be filing. Without going into all the details, the short version is: I think I’m supposed to file a Form 941; the IRS thinks it should be a Form 944.

In August, I wrote a letter to the IRS, asking them to please update their records to show that I am to use Form 941 as my reporting form.

Last week, I got the following letter back from the IRS.

This is in response to the inquiry of August 12, 2014, from your accountant. We have no record that you authorized him to act for you in this matter. Please notify him that we have replied directly to you. If you wish to authorize a third party to represent you, please complete Form 2848, Power of Attorney and Declaration of Representative.

Where to even begin?

The first page of the letter is attached as an image to this blog post. As you can see, after the IRS tells me that I am not authorized to speak on my own behalf, they go into excruciating detail about the history of payroll forms. The rambling details continue onto a second page.

Here are the thing that stand out to me:

  • A human at the IRS must have looked at the letter I sent in August. This human then made a conscious decision to send me this letter in response. How could this human not make the connection between my company and me? I even signed the letter as “President, Dinesen Tax & Accounting, P.C.”
  • Once the mind-numbing detail of the history of payroll forms is over, the letter apologizes to me for any inconvenience the IRS may have caused, and then the best part of all….
  • The IRS says they are sending a copy of the letter to my authorized representative — meaning, a second copy of the letter was included in the mailing I received.

So to recap:

  1. The IRS says I am not my own authorized representative so they can’t make the changes I requested
  2. The IRS sent me a duplicate copy of their letter because I am my authorized representative

Or at least, this is my interpretation of things.

This isn’t 850 days of incompetence like with the identity theft saga I helped a client deal with, but it’s awfully crazy.