Denver Colorado IRS Stakeholder Meeting Notes - John R. Dundon II, Enrolled Agent
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Denver Colorado IRS Stakeholder Meeting Notes

Denver Colorado IRS Stakeholder Meeting Notes

Bessie Castro-Zepeda, Colorado Department of Revenue

Tax Practitioners only helpline; M-F 8am – 430pm (303) 232-2419

Capital Gain Subtraction: For 2012 returns, the department will make every effort to verify required documentation was included in the filing of the return before contacting the taxpayer for more information. That is why it is important the following supporting documents be submitted with the return.

□ A DR 1316 form, “Colorado Source Capital Gain Affidavit” must be completed and included with the return (electronic or paper). With e-filed returns, attaching the form to the electronic return or submitting it as an E-Filer Attachment in Revenue Online is not sufficient. For electronic returns, the information must be data entered on the DR 1316 portion of the return.

□ A copy of the closing statements for both the purchase and sale of the property, or official documentation from the county detailing purchase date and price and sale date and price

□ Copies of the first two pages of the corresponding federal return, Schedule D and any Schedule D attachments

□ If the capital gain was received via a pass-through entity, documentation that the interest in the underlying business satisfies the required five-year holding period

□ If the capital gain is claimed on a 2009 or prior year return and was due to the sale of stock or ownership interest, documentation verifying it was held for at least five years prior to the sale, that the company was a Colorado company for at least five years prior to the sale, and that the stock was acquired after May 9, 1994.

If form DR 1316 is included, and the capital gain subtraction claimed is $100,000 or less, the department will continue its practice of reviewing the capital gain subtraction claim two to three years after the return is originally filed, when the IRS provides federal return information to Colorado’s Discovery Section.

For more information, see publication FYI Income 15.

Kenneth Cooper, IRS Examination

Western Area has a lot of priority projects and initiatives coming up in the future. The work plan has expanded exponentially, yet the resources are getting smaller. With this type of blueprint, there is a sense of urgency to close cases.

Our return preparer visits have decreased. This year we did less than half of what we did last year. The visits were more educational visits than audits. We have completed the return preparer visits for this filing season.

Our high income non-filer program consists of individuals with an income of more than $200,000. There is a high non-response from these types of high income non-filers.

1099K information reporting is up tremendously.

Goretti Lysek and Tamara Hobson, Automated Collection Site (ACS)

There are currently three new changes to ACS.

Individual cases that can be worked in ACS have increased from $100,000-$250,000.

ACS is no longer asking for substantiation on financials unless the account will not be paid within the statute of limitations.

BMF/trust fund accounts have increased from $10,000 to $25,000 and now if a client can pay within 120 days they can be setup on an installment agreement for $999,999, or less than $1 million.

Question: Is there a change of when liens are filed?

Response: Liens are filed and starting at $10,000 and up. If you’re on a direct debit installment agreement the amount increases to $50,000. And of course a lien can be withdrawn if less than $25,000.

Comment: An ACS letter was received two weeks after the date on the letter. Practitioner will send the information to Debbie, who will forward it to Goretti.

Comment: Financial review on partial pay installment agreement letter not received then it is defaulted before we get the paperwork for the financial information.

Comment: Direct debit installment agreement payments coming out two to three days late creates a default on the installment agreement

Response: There were some issues in late June with direct debit installment agreements going to Collection. About 54% were deemed late and now the program is being analyzed.

Comment: There seems to be a disconnect when we contact ACS and speak to three different people and receive three different answers about an installment agreement.

Stephanie Valencia, Taxpayer Advocate

Nina Olson’s report to Congress was released this week.

The alternative minimum tax patch has been fixed permanently.

Taxpayer Advocate office will not accept any return cases until March. Hardship cases will get looked at individually.

An open house will be held in Denver in March or April with case advocates and managers. Debbie Rodgers will receive the information to forward to all practitioners.

Andrea Ventura, Collection

Collection has a new Area Director Tom Mathews who reports to the Western area on January 14.

Trust fund recovery protests – If we receive new information within 60 days we can revisit the claim. The taxpayer uses Form 1153W to reopen the case.

Collection has new Form 433A and 433B Collection Information Statements. Form 433A has more details about wage earner/self-employed individuals. Section 5 includes monthly income and expenses. We can use the old forms until June 1, 2013.

Some issues with direct debit installment agreements are that the revenue officer did not get an original signature on the direct debit application, and the bank information was incorrect.

Question: The new collection information statement forms don’t ask for supporting information, why?

Response: Substantiation is still necessary in most cases.  A priority of the area Director is to reduce defaults on installment agreements.  The Revenue Officer determines what type of supporting documents may be required after making contact with the taxpayer or their representatives.