PwC Denies Hacker Theft of Romney Tax Returns

BY MICHAEL COHN, ACCOUNTING TODAY

PricewaterhouseCoopers said it is working with the U.S. Secret Service after allegations that the tax returns of client Mitt Romney were stolen.

“We are aware of the allegations that have been made regarding improper access to our systems,” said a statement forwarded by PwC spokesperson Tanja Sullivan. “We are working closely with the United States Secret Service, and at this time there is no evidence that our systems have been compromised or that there was any unauthorized access to the data in question.”

The tax returns of the Republican presidential candidate were reportedly stolen from a PwC office in Franklin, Tenn. The hacker sent anonymous messages to PwC, as well as Romney’s campaign offices demanding a ransom of $1 million in a difficult-to-trace online currency known as Bitcoins for the tax returns, according to the Associated Press. He also reportedly sent packages to local Democratic and Republican campaign offices with a thumb drive containing some of the documents. In addition, he posted a message on a Web site popular with hackers known as Pastebin threatening to disclose the tax returns. Romney has refused to release any tax returns prior to his 2010 taxes, despite pressure from the Obama campaign. READ MORE

Slow US Hiring May Spur Fed

By Conor Dougherty and Damian Paletta

The Wall Street Journal

U.S. job growth slowed in August, signaling a stalling economy that could mute any post-convention momentum for President Barack Obama and spur the Federal Reserve to take further steps to stimulate the economy, according to this afternoon's Wall Street Journal. 

The Labor Department employment report, which draws more than its usual scrutiny as elections approach, said the U.S. added a seasonally adjusted 96,000 jobs last month. That is down from the 141,000 added in July and too few to make headway in putting the nation's 12.5 million unemployed workers back on the job.

The unemployment rate ticked down to 8.1%, from 8.3% in July, but for the wrong reasons. The jobless rate, based on a separate survey from the main job tally, fell as people gave up searching and left the workforce, not because they found positions. READ MORE

AICPA Sees Widespread Problem in Erroneous IRS Letters

BY MICHAEL COHN, ACCOUNTING TODAY

The American Institute of CPAs has written to Internal Revenue Service Commissioner Doug Shulman outlining its concerns with what it sees as a “widespread problem affecting numerous taxpayers”: erroneous letters from the IRS to taxpayers filing foreign trust forms.

In a letter from AICPA Tax Executive Committee chair Patricia Thompson, the Institute urged the IRS to investigate to determine the source of the processing problem so it would stop sending out the erroneous letters. The AICPA also recommended that the IRS should consider issuing an announcement that such erroneous letters do not require a response.

“The letters are inconveniencing taxpayers and causing them to incur unnecessary professional fees when practitioners must respond to the IRS explaining why the IRS letters are incorrect and request an abatement of the penalties,” the AICPA said in letter to the IRS on Tuesday.

The letters with erroneous conclusions are being received by taxpayers who filed Form 3520, Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts, for 2010 and earlier years.

The AICPA letter described six specific errors the IRS letters claim taxpayers have made, including filing Form 3520 late when it was actually filed on time.

IRS Streamlines Procedures for Nonresident Taxpayers

BY MICHAEL COHN

The Internal Revenue Service has issued new procedures to help nonresident U.S. taxpayers, including dual Canadian citizens, comply with U.S. tax laws even if they have previously undeclared foreign bank accounts.

The new rules, which were announced last Friday, eliminate civil penalties and make life easier for taxpayers who follow the IRS’s streamlined disclosure process. The program also provides retroactive elections for certain retirement plans and adds relief for Canadian citizens in the U.S.

The streamlined procedure is designed for taxpayers who present what the IRS considers to be a low compliance risk. All submissions will be reviewed, but the intensity of review will vary according to the level of compliance risk presented by the submission. For those taxpayers who present a low compliance risk, the review will be expedited and the IRS will not assert penalties or pursue followup actions. READ MORE

IRS Provide Relief to Isaac Victims

BY JEFF STIMPSON, ACCOUNTING TODAY

Following recent disaster declarations for individual assistance issued by the Federal Emergency Management Agency, the IRS announced that affected taxpayers in Louisiana and Mississippi will receive tax relief. Other locations may be added in coming days based on additional damage assessments by FEMA. 

So far, IRS filing and payment relief applies to Ascension, Jefferson, Lafourche, Livingston, Orleans, Plaquemines, St. Bernard, St. Charles, St. John the Baptist and St. Tammany Parishes in Louisiana, and Hancock, Harrison, Jackson and Pearl counties in Mississippi. 

The tax relief postpones various tax filing and payment deadlines that occurred on or after August 26. Affected individuals and businesses will have until Jan. 11, 2013, to file these returns and pay any taxes due. This includes corporations and businesses that previously obtained an extension until Sept. 17, 2012, to file their 2011 returns, and individuals and businesses that received a similar extension until October 15. It also includes the estimated tax payment for the third quarter of 2012, normally due September 17.

The IRS will abate any interest, late-payment or late-filing penalty that would otherwise apply.

The IRS is also waiving failure-to-deposit penalties for federal employment and excise tax deposits normally due on or after August 26 and before September 10, if the deposits are made by Sept. 10, 2012.

Details on available relief, including information on how to claim a disaster loss by amending a prior-year tax return, can be found on the IRS’s disaster relief page and the disaster recovery page.

The IRS has also issued general taxpayer advice for disaster planning in the new hurricane season.

IRS New Employee Training Criticized

BY MICHAEL COHN, ACCOUNTING TODAY

The experience for new employees at the Internal Revenue Service is not always positive, even though the IRS has taken steps to improve the onboarding process, according to a new report.

The report, by the Treasury Inspector General for Tax Administration, came in response to a request from the IRS for a review of its year-long “onboarding process.” TIGTA’s overall objective was to determine whether the IRS’s onboarding program was appropriately integrating new employees for positions in mission-critical occupations into their workforce to become productive employees as quickly as possible.

While the IRS has taken steps to make the new employee experience positive, managers whom TIGTA interviewed were not following best practices identified in the comprehensive guidance the IRS developed for them. As a result, some best practices that would help new employees feel welcome and help them become more productive were not fully implemented. For example, one-quarter of the new employees TIGTA contacted were not assigned a coach or mentor when they arrived, and approximately 29 percent stated that the onboarding experience did not accelerate their ability to reach full productivity. Read more