In the latest edition of his Federal Tax Update, Ed Zollars dives into the news and notes you need to know. This week is all about the IRS' recently announced K-2 and K-3 relief.
Internal Revenue Service
The IRS on Tuesday announced that "it intends to provide certain additional transition relief for this year from the Schedule K-2 and K-3 reporting."
Advocacy Update: Call to action leads to IRS relief
As the Legislative Session continues to make news here in Florida, the FICPA, other state organizations and the AICPA influenced national policy this week, successfully advocating for additional taxpayer relief from the IRS.
In our Feb. 11, 2022, edition of Advocacy Update, we cover:
- The IRS' suspension of automatic collection notices
- Our profession's ongoing advocacy efforts in the face of IRS service challenges
- Melanie Griffin's confirmation as Secretary of the Florida DBPR
- The status of key legislation in Tallahassee
- Recent DOR updates, and more
Latest News
IRS suspends automatic collection notices
In response to a call from the FICPA, other state societies and the Taxpayer Relief Coalition, the IRS on Wednesday suspended more than a dozen additional letters, including the mailing of automated collection notices normally issued when a taxpayer owes additional tax and the IRS has no record of a taxpayer filing a tax return. These mailings include balance-due notices and unfiled tax return notices.
You can read the full IRS news release here.
The FICPA worked with the AICPA and members of the Florida Congressional Delegation, requesting their signatures on a bipartisan letter asking the U.S. Treasury Department for improvements and taxpayer relief during the 2022 filing process.
The table below outlines the notices that have been suspended.
Individual Taxpayer Notices
| Notice/Letter Number | Title | Description |
|---|---|---|
| CP80 | Unfiled Tax Return | This notice is generally sent when the IRS credited payments and/or other credits to a taxpayer’s account for the tax period shown on the notice, but the IRS hasn’t received a tax return for that tax period. |
| CP59 and CP759 (in Spanish) | Unfiled Tax Return(s) - 1st Notice | IRS sends this notice when there is no record of a prior year return being filed. |
| CP516 and CP616 (in Spanish) | Unfiled Tax Returns – 2nd Notice | Request for information on a delinquent return as there is no record of a return filed. |
| CP518 and CP618 (in Spanish) | Final Notice – Return Delinquency | This is a final reminder notice when there is no record of a prior year(s) return filed. |
| CP501 | Balance Due – 1st Notice | This notice is a reminder that there is an outstanding balance on a taxpayer’s accounts. |
| CP503 | Balance Due – 2nd Notice | This notice is the second reminder that a there is an outstanding balance on a taxpayer’s accounts. |
| CP504 | Final Balance Due Notice - 3rd Notice, Intent to Levy | The IRS sends this notice when a payment has not been received for an unpaid balance. This notice is a Notice of Intent to Levy (Internal Revenue Code Section 6331 (d)). |
| 2802C | Withholding Compliance letter | This letter is mailed to taxpayers who have been identified as having under-withholding of Federal tax from their wages. This letter provides instructions to the taxpayer on how to properly correct their tax withholding. |
Business Notices
| Notice/Letter Number | Title | Description |
|---|---|---|
| CP259 and CP959 (in Spanish) | Return Delinquency | IRS sends this notice when there is no record of a prior year return being filed. |
| CP518 and CP618 (in Spanish) | Final Notice – Return Delinquency | This is a final reminder notice that we still have no record of a prior year tax return(s). |
Webinar, Hearing Underscore Tax Filing Relief Efforts
During the AICPA’s Feb. 8 webinar, “Is Help on the Way from the IRS for this Filing Season?” stakeholders discussed issues taxpayers and tax practitioners face as they enter a third filing season during the COVID-19 pandemic. Participants learned about the coalition’s recommendations that the group believes the IRS is able to immediately implement to provide relief to taxpayers and practitioners. The discussion included steps the coalition is taking, including conversations on Capitol Hill, to ensure the recommendations are adopted. Finally, stakeholders discussed their suggestions to help practitioners navigate a challenged tax-administration system.
In an additional effort, on Feb. 8, National Taxpayer Advocate Erin Collins participated in an oversight hearing with the U.S. House Ways and Means Committee regarding challenges taxpayers face for the 2022 filing season.
Among the hearing speakers was Congresswoman Judy Chu, author of the recent bipartisan letter to the Treasury Department urging the Department to bring immediate relief to filers by reducing the need to contact the IRS. The FICPA called on Florida Congressional representatives to support the letter.
The hearing included an update from Collins on IRS services and a discussion about the IRS’ transition away from the use of facial recognition technology.
“To allow taxpayers access to the IRS online accounts, there are serious privacy concerns with the use of this technology,” Committee Chairman Bill Pascrell said. “I look forward to working with the IRS and the Administration to find solutions that balance the need for identity-theft protections against privacy concerns raised by this technology.”
Town Hall Covers K-2/K-3 Disclosure Requirements
Many FICPA members also have asked questions and expressed concerns about the recent IRS announcement regarding Schedules K-2 and K-3 disclosure requirements.
The AICPA’s Foreign Partnership Reporting Task Force has been tackling K-2/K-3 issues and questions since the draft forms were released in 2020 and continues to work on behalf of members and taxpayers to try to streamline the reporting process. However, members need to be aware of the reporting requirements for their passthrough entity clients (partnerships and S corporations).
Lisa Simpson, AICPA vice president – firm services, discussed the K-2/K-3 issue in the AICPA’s Feb. 3 Town Hall.
Here are related resources:
- Navigating the new Schedules K-2 and K-3 – The Tax Adviser, September 2021
- K2/K3 – Making Sense of New International Passthrough Reporting Requirements – AICPA Podcast on Practitioner Insights
- AICPA Foreign Partnership Reporting Task Force comment letter (September 2020)
Senate Confirms DBPR Secretary Melanie Griffin
On Feb. 8, the Florida Senate Committee on Regulated Industries confirmed Melanie Griffin as secretary of the Florida Department of Business and Professional Regulation.
“In many ways, this opportunity was never a given,” Secretary Griffin said. “Having first been told it was not financially possible for me to attend my dream school, The Florida State University, generous donors funded scholarships that made it possible for me to receive my finance degree from FSU. Thank you to everyone that invested in me, and please note that I’ve paid it forward by mentoring hundreds of students and young professionals to give them the same chance that I have had, thanks to generous donors.”
Griffin, of Tampa, is an Attorney with Shumaker, Loop & Kendrick and senior advisor for business-to-business relationships for Shumaker Advisors Florida. She is also the Founder and Owner of Spread Your Sunshine, a business that provides speaking and professional-training services; and designs, manufactures and sells inspirational products and gifts. Griffin is president of the Hillsborough Association of Women Lawyers Executive Board of Directors; serves on the Florida State University College of Law Board of Visitors; and is a Fellow of The Florida Bar Foundation. She earned her bachelor’s degree in finance, master of business administration and juris doctor degree from Florida State University.
“Since law school I’ve been a business attorney for just shy of about 15 years, and I also am a small business owner, which give me a unique perspective on government, and how we can better serve our clients and constituencies,” Griffin said. “I am now officially in month two on the job, and honored to work with Gov. DeSantis and our team at the agency to play such a critical role in growth and professional success for so many Floridians.
“This session we are working to increase operational efficiencies and enhance levels of service for licensees with new, technology-focused ideas,” Griffin said. “The Governor’s Freedom First budget included major investments that would modernize the technological capabilities of DBPR and minimize the burdens of government processes by delivering new, meaningful long-term benefits for all of the industries licensed and regulated by DBPR.”
We warmly congratulate Secretary Griffin and look forward to continuing our longstanding partnership with DBPR.
CPA Evolution will impact today’s interns; how can firms prepare?
As we head into the 2022 “intern” season for firms, CPA Evolution recently published a new article: CPA Evolution will impact today’s interns; how can firms prepare?
The article, written by Carl Mayes, AICPA senior director – audit & accounting quality, is targeted to public accounting firm leaders as they consider their hiring and training plans for 2022. It highlights what firms need to consider to attract candidates, and how firms can assist universities as they make curriculum changes in advance of the new CPA exam, to be released in January 2024.
2022 Bill Tracker
SB 1090: Corporate Income Tax by Sen. Joe Gruters
Referred to Finance and Tax; Appropriations
Adopts the 2022 version of the Internal Revenue Code for purposes of the state corporate income tax code; revises the timeframe during which the adjustment of the corporate tax rate based on net collections exceeding adjusted forecasted collections applies; provides for retroactive operation; provides applicability for adjustments taxpayers must make to adjusted federal income with respect to bonus depreciation, etc.
Effective Date: Upon becoming a law.
Status: In appropriations
SB 1382: Tax Administration by Senator Joe Gruters
Referred to Community Affairs; Finance and Tax; Appropriations
Prohibits taxpayers from submitting certain records in tax proceedings under certain circumstances; authorizes the Department of Revenue to respond to contact initiated by taxpayers to discuss audits; clarifies conditions for application of an exemption for sales taxes for certain nonresident purchasers of boats or aircraft; deletes a tax exemption for building materials used in the rehabilitation of real property located in an enterprise zone; revises the period in which, and conditions under which, the executive director of the department may adopt emergency rules; excludes certain benefit charges from the employer reemployment assistance contribution rate calculation, etc.
Effective Date: July 1, 2022
Status: CS by Finance and Tax Committee - YEAS 7, NAYS 0
Pending reference review under Rule 4.7(2) - (Committee Substitute)
SB 1276: Legislative Review of Proposed Regulation of Unregulated Functions by Senator Manny Diaz
Referred to Regulated Industries; Governmental Oversight and Accountability; Rules
Provides that certain requirements must be met before adopting the regulation of an unregulated profession or occupation or the substantial expansion of regulation of a regulated profession or occupation; requires the proponents of legislation that proposes such regulation to provide certain information to the state agency that would have jurisdiction over the proposed regulation and to the Legislature by a certain date; requires such state agency to provide certain information to the Legislature within a specified timeframe; provides an exception, etc.
Effective Date: July 1, 2022
Status: Introduced
SB 1302: Criminal History Information by Sen. Danny Burgess
Referred to Regulated Industries; Appropriations Subcommittee on Criminal and Civil Justice; Appropriations
Prohibits an applicable board, or the Department of Business and Professional Regulation if there is no such board, from inquiring into or considering the conviction history of an applicant for licensure until it is determined that the applicant is otherwise qualified; prohibiting the applicable board, or the department if there is no board, from denying an application for licensure of a person based solely or in part on an applicant’s criminal history; provides requirements for determining if such criminal history directly relates to the practice of the applicable profession; provides requirements for court-ordered sealing of certain records that were automatically sealed by the Department of Law Enforcement under specified provisions, etc.
Effective Date: July 1, 2022
Status: Voted favorable by Regulated Industries - YEAS 8, NAYS 0
In Appropriations
To view more legislation the FICPA is tracking during the 2022 Legislative Session, log in to your member account and visit our Advocacy Action Center.
2022 Legislative Session: Important Dates
- Feb. 26: All bills are immediately certified
- March 1: 50th-day rule (Senate) – last day for regularly scheduled committee meetings
- March 10: After the 58th day (March 9) of a regular session, the House may consider only returning messages, conference reports and concurrent resolutions
- March 11: 60th day – last day of Regular Session
DOR TIPs
Since the last issue of Advocacy Update, the Florida Department of Revenue has published these helpful Tax Information Publications (TIPS).
Administration
New Worlds Reading Initiative Tax Credit and Strong Families Tax Credit
Feb. 7, 2022
Florida’s New Worlds Reading Initiative was established in 2021 under the Florida Department of Education to improve literacy skills and promote a love of reading by providing high-quality, free books to students in kindergarten through fifth grade who are reading below grade level. Florida’s Strong Families Tax Credit was established in 2021 under the Florida Department of Children and Families to provide services to prevent child abuse, engage absent fathers in being more active in their children’s lives, provide books to eligible children, and assist families of children with chronic illness.
Communications Services Tax
Change in Local Communications Services Tax Rate Beginning May 1, 2022
Jan. 27, 2022
Beginning May 1, 2022, the local communications services tax (CST) rate for the Town of Astatula will change. The total local CST rate includes: (1) the local rate imposed under the CST statute; and (2) any county discretionary sales surtax imposed under the sales and use tax statute.
Contribute
The Florida CPA/PAC supports the politicians who stand up for CPAs. We back the candidates and incumbents who will ensure CPAs and their clients are included in the legislative process. It is your voluntary contributions that help protect the CPA license.
Please note: Contributions are strictly voluntary and are not deductible for federal tax purposes. The Florida CPA/PAC is an entity completely separate from the FICPA. The Florida CPA/PAC is supported solely by the voluntary contributions of members of the FICPA and others.
In response to a call from the FICPA, other state societies and the Taxpayer Relief Coalition, the IRS on Wednesday suspended more than a dozen additional letters, including the mailing of automated collection notices.
“The actions taken today by the IRS signals their desire to help taxpayers, but we believe that there is more they can do and respectfully disagree with the IRS’s assertion that congressional action is needed to suspend the automatic issuance of notices,” said AICPA President & CEO, Barry Melancon.
Earlier this week, the FICPA contacted all members of the Florida Congressional Delegation to ask for their signatures on a bipartisan letter asking the U.S. Treasury Department to improve this year’s tax filing season process.
2022 Department of Revenue and Internal Revenue Service Updates
Click the links below for the latest updates and resources from the FICPA, AICPA, DOR and IRS. FICPA & AICPA Resources FICPA Advocacy Update Archive AICPA Town Hall Archive From the IRS Hurricane Ian Updates IRS Newsroom IRS News Release and Fact Sheet Archive Special Filing Season Alerts Special