IRS Has Nearly $1 Billion in Unclaimed Refunds That Expire April 15

IR-2013-29, IRS Has $917 Million for People Who Have Not Filed a 2009 Income Tax Return:

Refunds totaling just over $917 million may be waiting for an estimated 984,400 taxpayers who did not file a federal income tax return for 2009, the IRS announced today. However, to collect the money, a return for 2009 must be filed with the IRS no later than Monday, April 15, 2013.

The IRS estimates that half the potential refunds for 2009 are more than $500.

Some people may not have filed because they had too little income to require filing a tax return even though they had taxes withheld from their wages or made quarterly estimated payments. In cases where a return was not filed, the law provides most taxpayers with a three-year window of opportunity for claiming a refund. If no return is filed to claim a refund within three years, the money becomes property of the U.S. Treasury.

For 2009 returns, the window closes on April 15, 2013. The law requires that the return be properly addressed, mailed and postmarked by that date. There is no penalty for filing a late return qualifying for a refund.

IRS Extends Deadline for Hurricane Sandy Tax Break

The Internal Revenue Service has postponed until Oct. 15, 2013, the deadline to make an election to deduct losses for the preceding taxable year from Hurricane Sandy.

Notice 2013-21 postpones until Oct. 15, 2013, the deadline to make an election under Section 165(i) of the Tax Code to deduct in the preceding taxable year losses attributable to Hurricane Sandy that were sustained in federally declared disaster areas in Connecticut, Delaware, District of Columbia, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Virginia, and West Virginia.

Last October, Hurricane Sandy struck the East Coast, causing severe damage in a number of states, the IRS noted. President Obama issued major disaster and emergency declarations under the authority of the Robert T. Stafford Disaster Relief and Emergency Assistance Act, for certain areas. The Federal Emergency Management Agency determined certain areas within those states and the District of Columbia to be eligible for Public Assistance or Public Assistance and Individual Assistance under the Stafford Act.

Section 165(i) provides that if a taxpayer sustains a loss attributable to a federally declared disaster occurring in a disaster area, the taxpayer may elect to deduct that loss on their tax return for the taxable year immediately preceding the taxable year in which the disaster occurred.

Section 1.165-11(e) of the Income Tax Regulations requires a taxpayer to make the election by filing a return, an amended return or a refund claim on or before the later of: (1) the due date of the taxpayer’s income tax return (determined without regard to any extension of time for filing the return) for the taxable year in which the disaster actually occurred; or (2) the due date of the taxpayer’s income tax return (determined with regard to any extension of time for filing the return) for the immediately preceding taxable year.

Section 1.165-11(e) provides that the return or claim should specify the date or dates of the disaster that gave rise to the loss, and the city, town, county and state in which the property that was damaged or destroyed was located at the time of the disaster. The election is irrevocable 90 days after the taxpayer makes it.

Section 7508A gives the Treasury Secretary the authority to postpone the time for performing certain acts under the tax laws for up to one year for a taxpayer affected by a federally declared disaster. Under that authority, the IRS is granting affected taxpayers a postponement until Oct. 15, 2013, to make an election under Section 165(i) for losses attributable to Hurricane Sandy.

To help the IRS identify affected taxpayers to ensure that they receive this postponement of the deadline to make the Section 165(i) election, they should include a reference to this notice, Notice 2013-21, with their return, amended return or refund claim on which they are making a postponed Section 165(i) election.

The return or claim should also include the other information requested in Section 1.165-11(e).

IRS Now Accepting All 2012 Returns

WASHINGTON — The Internal Revenue Service announced today that it has finished updating its tax-processing systems allowing all remaining individual and business taxpayers to file their 2012 federal income tax returns.

Over the weekend, the IRS completed reprogramming and testing of its systems for tax-year 2012 including all remaining updates required by the American Taxpayer Relief Act (ATRA) enacted by Congress in January. This final step clears the way for those claiming residential energy credits on Form 5695 and various business tax credits and deductions to file their returns.

The IRS began accepting 2012 returns in phases as it worked quickly to update various forms and instructions and made critical adjustments to its processing systems to reflect the current law. As a result, the agency began accepting most returns filed by individual taxpayers on Jan. 30. Additional returns could be accepted in February. All remaining returns, affecting in relative terms the smallest group of taxpayers, can now be filed. 

With just six weeks to go before this year’s April 15 deadline, the IRS reminds taxpayers that the best way to file an accurate return is to e-file, choose direct deposit if expecting a refund and take advantage of the wide variety of tax-filing and tax-help resources available on IRS.gov.

IRS to Enable Remaining Tax Forms by Early March

The Internal Revenue Service plans to allow more of the remaining tax forms that have not been available for electronic filing yet this tax season to go through during the first week of March. In an email to software developers and transmitters on Wednesday, the IRS noted that due to late legislation, the IRS delayed startup for the tax forms listed below until the first week in March. To ensure there are no issues with accepting the forms for downstream processing, the IRS is asking software developers and transmitters to adhere to the following plan: The schemas and business rules will be deployed in the Production environment during the March 3, 2013 Sunday maintenance window. When the Production environment becomes operational at 7:00 am Eastern Time, transmitters should only send their stockpiled inventory of tax returns they have held back, evenly spread throughout the day on Sunday, This will allow the IRS’s Modernized e-File system team to quickly review the reject trends for the returns to ensure the schemas and business rules work as intended. “Please do not enable online filing for the forms until the IRS officially announces the processing of these forms targeted for the first week of March,” the IRS asked. Barring any problems, the IRS will then send out a QuickAlert email early in the week announcing the official opening. At that time, it will ask companies to enable online filing for these forms.

IRS Intensifies National Crackdown on Identity Theft; Part of Wider Effort to Protect Taxpayers, Prevent Refund Fraud

WASHINGTON – Continuing a year-long enforcement push against refund fraud and identity theft, the Internal Revenue Service today announced the results of a massive national sweep in recent weeks targeting identity theft suspects in 32 states and Puerto Rico, which involved 215 cities and surrounding areas.

The coast-to-coast effort against 389 identity theft suspects led to 734 enforcement actions in January, including indictments, informations, complaints and arrests. The effort comes on top of a growing identity theft effort that led to 2,400 other enforcement actions against identity thieves during fiscal year 2012.

The January crackdown, a joint effort with the Department of Justice and local U.S. Attorneys offices, unfolded as the IRS opened the 2013 tax season. IRS Criminal Investigation expanded its efforts during January, pushing the total number of identity theft investigations to more than 1,460 since the start of the federal 2012 fiscal year on Oct. 1, 2011.

“As tax season begins this year, we want to be clear that there is a heavy price to pay for perpetrators of refund fraud and identity theft,” said IRS Acting Commissioner Steven T. Miller. “We have aggressively stepped up our efforts to pursue and prevent refund fraud and identity theft, and we will continue to intensely focus on this area. This is part of a much wider effort underway for the 2013 tax season to stop fraud.”

The national effort with the Justice Department and other federal, state and local agencies is part of a larger, comprehensive identity theft strategy the IRS has embarked on that is focused on preventing, detecting and resolving identity theft cases as soon as possible.

The identity theft effort – which intensified in January as the 2013 filing season opened – involved 734 enforcement actions related to identity theft and refund fraud. The effort led to actions taking place throughout the country involving 389 individuals. The effort included 109 arrests, 189 indictments, informations and complaints, as well as 47 search warrants.

In addition to the criminal actions, IRS auditors and criminal investigators conducted a special compliance effort starting on Jan. 28 to visit 197 money service businesses to help make sure these businesses are not assisting identity theft or refund fraud when they cash checks.  The compliance visits occurred in 17 high-risk places identified by the IRS covering areas in and surrounding New York, Philadelphia, Atlanta, Tampa, Miami, Chicago, Houston, Phoenix, Los Angeles, San Diego, El Paso, Tucson, Birmingham, Detroit, San Francisco, Oakland and San Jose.

A map of the locations and additional details on the January enforcement actions and compliance visits are available on IRS.gov. The latest updates on the identity theft enforcement efforts and individual cases are available on a special Identity Theft Schemes page on IRS.gov. More information on enforcement actions can be found on a DOJ Tax Division page.

The identity theft push over the last several weeks reflects a wider effort underway at the IRS. Among the highlights:

• The number of IRS criminal investigations into identity theft issues more than tripled in fiscal year 2012. The IRS started 276 investigations in fiscal year 2011, a number that jumped to 898 in fiscal year 2012. So far in fiscal year 2013, there have been more than 560 criminal identity theft investigations opened.
• Total enforcement actions continue to rapidly increase against identity thieves. This category covers actions ranging from indictments and arrests to search warrants. In fiscal year 2012, enforcement actions totaled 2,400 against 1,310 suspects. After just four months in fiscal 2013, enforcement actions totaled 1,703 against 907 suspects.
• Sentencings of convicted identity thieves continue to increase. There were 80 sentencings in fiscal year 2011, which increased to 223 in fiscal year 2012.
• Jail time is increasing for identity thieves. The average sentence in fiscal year 2012 was four years or 48 months – a four-month increase from the average in fiscal year 2011. So far this fiscal year, sentences have ranged from 4 to 300 months.

More information on IRS Criminal Investigation efforts is available on IRS fact sheet FS-2013-12.

In addition to the national “sweeps” effort announced today, IRS work on identity theft and refund fraud continues to grow. For the 2013 filing season, the IRS has expanded these efforts to better protect taxpayers and help victims.

To stop identity thieves up front, the IRS has made a significant increase for the 2013 tax season in the number and quality of identity theft screening filters that spot fraudulent tax returns before refunds are issued. The IRS has dozens of identity theft screens now in place to protect tax refunds.

These efforts helped the IRS in 2012 protect $20 billion of fraudulent refunds, including those related to identity theft, compared with $14 billion in 2011.

By late 2012, the IRS assigned more than 3,000 IRS employees — over double from 2011 — to work on identity theft-related issues. IRS employees are working to prevent refund fraud, investigate identity theft-related crimes and help taxpayers who have been victimized by identity thieves. In addition, the IRS has trained 35,000 employees who work with taxpayers to recognize identity theft indicators and help people victimized by identity theft.

“We are strengthening our processing systems to watch for identity theft and detect refund fraud before it occurs,” Miller said. “And we continue to put more resources on helping people who are victims of identity theft and resolve these complex cases as quickly as possible.”

Taxpayers can encounter identity theft involving their tax returns in several ways. One instance is where identity thieves try filing fraudulent refund claims using another person’s identifying information, which has been stolen. Innocent taxpayers are victimized because their refunds are delayed.

To help taxpayers, the IRS has a special section on IRS.gov dedicated to identity theft issues, including YouTube videos, tips for taxpayers and a special guide to assistance. For victims, the information includes how to contact the IRS Identity Protection Specialized Unit. For other taxpayers, there are tips on how taxpayers can protect themselves against identity theft.

If a taxpayer receives a notice from the IRS indicating identity theft, they should follow the instructions in that notice. A taxpayer who believes they are at risk of identity theft due to lost or stolen personal information should contact the IRS immediately so the agency can take action to secure their tax account. The taxpayer should contact the IRS Identity Protection Specialized Unit at 800-908-4490.  The taxpayer will be asked to complete the IRS Identity Theft Affidavit, Form 14039, and follow the instructions on the back of the form based on their situation.

Taxpayers looking for additional information can consult the special identity protection page on IRS.gov.

IRS To Accept Returns Claiming Education Credits by Mid-February

WASHINGTON - As preparations continue for the Jan. 30 opening of the 2013 filing season for most taxpayers, the Internal Revenue Service announced today that processing of tax returns claiming education credits will begin by the middle of February. 

Taxpayers using Form 8863, Education Credits, can begin filing their tax returns after the IRS updates its processing systems. Form 8863 is used to claim two higher education credits -- the American Opportunity Tax Credit and the Lifetime Learning Credit.

The IRS emphasized that the delayed start will have no impact on taxpayers claiming other education-related tax benefits, such as the tuition and fees deduction and the student loan interest deduction. People otherwise able to file and claiming these benefits can start filing Jan. 30.

As it does every year, the IRS reviews and tests its systems in advance of the opening of the tax season to protect taxpayers from processing errors and refund delays. The IRS discovered during testing that programming modifications are needed to accurately process Forms 8863.  Filers who are otherwise able to file but use the Form 8863 will be able to file by mid-February. No action needs to be taken by the taxpayer or their tax professional.  Typically through the mid-February period, about 3 million tax returns include Form 8863, less than a quarter of those filed during the year.

The IRS remains on track to open the tax season on Jan. 30 for most taxpayers. The Jan. 30 opening includes people claiming the student loan interest deduction on the Form 1040 series or the higher education tuition or fees on Form 8917, Tuition and Fees Deduction. Forms that will be able to be filed later are listed on IRS.gov.

Updated information will be posted on IRS.gov.

IRS Seeks to Return $153 Million in Undelivered Checks to Taxpayers; Recommends e-file, Direct Deposit to Avoid Future Delivery Problems

Video: Undeliverable Refunds: English | Spanish | ASL
Podcast: Undeliverable Refunds

WASHINGTON — In an annual reminder to taxpayers, the Internal Revenue Service announced today that it is looking to return $153.3 million in undelivered tax refund checks. In all, 99,123 taxpayers are due refund checks this year that could not be delivered because of mailing address errors.

Undelivered refund checks average $1,547 this year.

Taxpayers who believe their refund check may have been returned to the IRS as undelivered should use the “Where’s My Refund?” tool on IRS.gov. The tool will provide the status of their refund and, in some cases, instructions on how to resolve delivery problems.

Taxpayers checking on a refund over the phone will receive instructions on how to update their addresses. Taxpayers can access a telephone version of “Where’s My Refund?” by calling 1-800-829-1954.

While only a small percentage of checks mailed out by the IRS are returned as undelivered, taxpayers can put an end to lost, stolen or undelivered checks by choosing direct deposit when they file either paper or electronic returns. Last year, more than 78.4 million taxpayers chose to receive their refund through direct deposit. Taxpayers can receive refunds directly into their bank account, split a tax refund into two or three financial accounts or even buy a savings bond.

The IRS also recommends that taxpayers file their tax returns electronically, because e-file eliminates the risk of lost paper returns. E-file also reduces errors on tax returns and speeds up refunds. Nearly 8 out of 10 taxpayers chose e-file last year. E-file combined with direct deposit is the best option for taxpayers to avoid refund problems; it’s easy, fast and safe.

The public should be aware that the IRS does not contact taxpayers by e-mail to alert them of pending refunds and does not ask for personal or financial information through email.  Such messages are common phishing scams.  The agency urges taxpayers receiving such messages not to release any personal information, reply, open any attachments or click on any links to avoid malicious code that can infect their computers.  The best way for an individual to verify if she or he has a pending refund is going directly to IRS.gov and using the “Where’s My Refund?” tool.  

IRS hasn't properly tested new e-file system, audit finds

BY JOSEPH MARKS 11/29/2011

The Internal Revenue Service's transition to a new system for electronically filing individual and business tax returns has been hindered both by insufficient testing and not enough filers using the system, according to anauditor's report released Monday.
The IRS has been gradually implementing the Modernized e-File systemsince 2004, but began accepting standard individual 1040 forms only in February 2010.
The agency plans to fully implement the new electronic filing system during the upcoming 2012 tax season and to retire its legacy e-filing system in October 2012 before the 2013 filing season begins.
The new system allows for faster electronic processing than its predecessor and it enables filers to attach documents as PDFs rather than to mail them separately.
So few people have used the new system, however, that the IRS has little assurance it is prepared to accurately process the volume of a full season of filing, auditors said.
"Any disruption in the processing of [electronically] filed individual tax returns after the IRS retires its legacy e-file system could be catastrophic to the success of the IRS' e-file program," the report said.
The IRS received fewer than 9 million individual tax returns through the new electronic filing system through mid-April of this year, about one-fourth of the 35 million forms it expected for the tax season. During its most active day of the season, the system processed about 330,000 returns compared with more than 3.3 million processed by the legacy system on its busiest day, auditors said.
The agency also has failed to sufficiently test the new system's ability to process specific forms, auditors said. The IRS completed accuracy testing for less than 10 percent of the 2010 returns it had pledged to review, they said, and did the majority of its testing during the first two weeks of the 2011 filing season. Only about 16 percent of all forms filed through the new system had come in at that point, auditors said.
Auditors recommended the IRS ramp up its accuracy testing for documents filed through the new system and promote the system more during the upcoming filing season to give it a more rigorous workout than in previous years.

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IRS adjusts deductions to comment for inflation

Inflation, not something generally profitable for consumers when it comes to prices, will have a conflicting outcome for taxpayers in 2012.

The Internal Revenue Service says personal exemptions and customary deductions will boost for taxation year 2012 since of inflation. That means, for example, that a value of any personal and contingent exemption, accessible to many taxpayers, is $3,800, adult $100 from 2011.

The new customary reduction is $11,900 for married couples who record a corner taxation return, adult $300. It is $5,950 for singles and married people filing separately, adult $150 compared to 2011, and is $8,700 for heads of household, adult $200.

The IRS says scarcely dual out of 3 taxpayers take a customary reduction when they record their taxes, rather than itemizing such personal deductions as debt seductiveness paid, free contributions and state and internal taxes.

Another acceleration composition relates to taxation corner thresholds, that will boost for any filing status. For a married integrate filing a corner return, that will meant a taxable-income threshold that separates a 15-percent corner from a 25-percent corner is $70,700. For taxation year 2011, it was $69,000.

For taxation year 2012, a extent warranted income taxation credit for low- and moderate-income workers and operative families rises to $5,891, adult from $5,751 in 2011. The extent income extent for a EITC rises to $50,270, adult from $49,078 in 2011, according to a IRS.

The credit varies by family size, filing standing and other factors, with a extent credit going to corner filers with 3 or some-more subordinate children.

The reduction on unfamiliar warranted income will be $95,100 in 2012, an boost of $2,200 from a extent reduction for taxation year 2011.

Several taxation advantages are unvaried in 2012. For example, a additional customary reduction for blind people and seniors stays $1,150 for married people and $1,450 for singles and heads of household.

For sum on other acceleration adjustments, revisit a IRS website duringwww.irs.gov.

IRS Launches New Round of Preparer Office Visits

NOVEMBER 22, 2011

The IRS has sent letters to tax return preparers whom the IRS has identified as at high risk of not complying with their responsibilities as return preparers. The IRS will follow up with office visits to some of these preparers who appear to have serious compliance issues. The IRS has posted a number of frequently asked questions on the program on its website.

This is the third year the IRS has run a preparer compliance program, and this year’s version represents an expansion and modification of last year’s “10,000 letters” campaign. This year, the IRS plans to send approximately 21,000 letters to preparers, informing them that the IRS has identified serious compliance errors in their tax return preparation. It plans to visit approximately 2,100 of those preparers in their offices.

Unlike prior years, the IRS said the current program takes a more-targeted approach as it focuses on preparers who appear to not be in compliance with their professional responsibilities. In a speech to the AICPA’s National Tax Conference on Nov. 8, IRS Commissioner Doug Shulman said, “the IRS will send letters to tax return preparers who have been identified as ‘high risk.’ The letters are intended to bring to these return preparers’ attention that we’ve noticed some questionable traits on a number of their Schedules A, C or E.”  

In addition, the IRS plans to move many of the office visits out of tax season. Last year, the AICPAstrongly emphasized to the IRS that CPAs operate their practices on a year-round basis, and the scheduling of any office visits during the very busy months of January through April constitutes an unnecessary hardship. 

The AICPA has been actively engaged with the IRS on this issue, challenging various components of the program, and its discussions with the IRS continue.

IRS Begins Competency Test Scheduling

The IRS is forging ahead as part of its master plan to increase oversight of tax preparers across the country. In addition toPreparer Tax Identification Number (PTIN) registration, the IRS will require certain paid tax preparers to pass a competency test by December 31, 2013.

It’s the certain in the phrase “certain tax preparers” that’s still causing controversy. Enrolled Agents (EAs), Certified Public Accountants (CPAs) and attorneys are exempt from the new testing and education requirements since the IRS believes that these groups already have stringent guidelines in place.

Those tax return preparers who do not have the EA, CPA or attorney designation – or are otherwise exempt – must pass the competency test by the deadline. If they do, they will be designated as a Registered Tax Return Preparer. To maintain the designation, those tax return preparers must complete 15 hours of continuing education credits each year and renew their PTINs.

The fee for the test is $116 which includes a cut for a third party vendor,Prometric. This fee is in addition to the fee for PTIN renewal. Yup, it’s getting a whole lot more expensive to do returns these days.

Test scheduling begins next week (way to start off the holiday season, right?) and can be done using the online PTIN account at www.irs.gov/ptin (payment is due at the time you sign up). If you don’t have an online PTIN account, you can schedule an appointment and pay for the test by calling 855-477-3926.

The test will cover the form 1040 and related schedules. You can find out more information about what’s included on the test from this prior post.

I’m no test maverick so I will admit to not having a complete understanding of how these things are decided but the initial word on results is a bit confusing. Apparently, the guinea pigs who sign up in the beginning won’t receive their test scores for two to six weeks; this will “allow the IRS to validate the exam and determine the pass/fail cutoff.” After those details are worked out, future test-takers will receive their scores immediately upon completing the test.

It’s clear that there are some kinks to be worked out. I know a lot of tax pros have concerns about how smoothly the testing will go – especially after the fiasco that was the initial PTIN registration. It has to be better this time, right?

–

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IRS Focuses on "High Risk" Return Preparers

Shulman Says IRS Will Focus on ‘High Risk’ Return Preparers

November 08, 2011, 10:41 PM EST

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By Steven Sloan

(Updates with Shulman comments on compliance starting in third paragraph and on budget cuts in seventh paragraph.)

Nov. 8 (Bloomberg) -- Internal Revenue Service Commissioner Douglas Shulman said the agency will place greater focus on return preparers it identifies as “high risk” in the upcoming tax filing system.

“Beginning soon, the IRS will send letters to tax-return preparers who have been identified as high risk,” Shulman said today at a conference in Washington sponsored by the American Institute of Certified Public Accountants. “The letters are intended to bring to these return preparers’ attention that we’ve noticed some questionable traits” on some of their returns.

Beyond the letters, Shulman said the IRS will beef up its compliance efforts by making more personal visits to preparers with “egregious” error rates and scrutinizing earned-income tax credit claims.

The moves are part of a push inside the agency to bring greater consistency to the tax preparation industry, which is dominated by companies such as Jackson Hewitt Tax Service Inc. and H&R Block Inc. The agency launched a program earlier this year requiring tax preparers to register with the government.

Tax Credit

Shulman’s comments reflect the agency’s struggles to ensure taxpayers aren’t taking advantage of benefits offered through the tax code, such as the earned income tax credit. A Treasury Department watchdog told a House Ways and Means subcommittee in May that improper payments from the earned-income tax credit total between $11 billion and $13 billion annually.

“We will conduct in-person visits with EITC return preparers to discuss due diligence requirements, assessing penalties against those who are found to be noncompliant,” he said.

Shulman also criticized congressional efforts to cut the budget for the IRS and other federal agencies. Under a House proposal, the IRS would receive $11.5 billion for fiscal 2012, down from $12.1 billion it received this year.

Such budget cuts would make it more difficult for taxpayers to connect with IRS employees to ask questions or work out payment plans, he said. And reducing the agency’s funding would hurt its ability to collect much-needed revenue for the U.S., he said.

“My view is that we’re pretty unique since we actually raise the funds needed to run the government,” Shulman said. “If you’re having a conversation about the deficit, you shouldn’t cut our budget because it actually adds to the deficit.”

After the speech, Shulman declined to comment on settlements that might be worked out between the U.S. and Swiss banks accused of hiding from the IRS the assets of U.S. clients. Credit Suisse Group AG, Switzerland’s second-biggest bank, said today it was ordered by the Swiss government to hand over client information after an IRS request.

--Editors: Jodi Schneider, Don Frederick

To contact the reporter on this story: Steven Sloan in Washington at ssloan7@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net

IRS Ramping Up!

IRS Chief Offers Ideas to Make Tax System More User-Friendly

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By John D. McKinnon

While the GOP presidential candidates continue talking up a fundamental tax-code overhaul, the Internal Revenue Service is working on a few ideas of its own for streamlining and simplifying the system.

The IRS plans are less sweeping and ambitious than the flat tax proposals being pushed by the likes of Rick Perry or Newt Gingrich, or Herman Cain’s 9-9-9 plan. But they could stand a better chance of being implemented, given the big political obstacles facing fundamental reform. They probably will become elements of any big revamp.

In a speech to the American Institute of CPAs, IRS Commissioner Doug Shulmanoffered new details on his vision for making the current tax system more user-friendly. A key element involves faster data matching to detect errors on returns quickly, so taxpayers can fix them during the filing season. That would reduce the need for time-consuming audits that now occur years after the fact.

“We’re moving away from the after-the-fact, or `look-back’ model – where we chased after taxpayers who had to hunt for, or recreate records and documentation – to one where we’re reducing burden,” Mr. Shulman said in remarks prepared for the AICPA. “This is a tectonic shift.”