Seattle IRS infested with Bed Bugs?

Could the IRS office in Seattle, Washington be infested with bed bugs? That’s the question being asked as investigations get underway after an IRS employee complained about getting bitten at work.
The Occupational Safety and Health Administration (OSHA) confirmed receiving complaints from an IRS employee that she was bitten by bed bugs while on two floors of the Henry M. Jackson federal building on Second Avenue that houses the IRS office.

In fact David Mahlum, deputy regional administrator for OSHA said the IRS had known about the pests since as early as the summer for it received complaints about insect bites at that time. This prompted the OSHA to send a letter to the IRS dated November 18 that said, “It is alleged (that) management has known of the presence of these parasites for several weeks and has taken no action to remedy the situation.”

The IRS took action the day after receiving the OSHA letter and hired an exterminator who surveyed the building and found an infestation on the twentieth floor and duly fumigated the premises. But till now, it is uncertain whether the bites were by bed bugs or other insects in the building.
According to Mahlum, “They found enough evidence to treat a floor.” Nevertheless he admitted that no one is sure about the actual type of insect that caused the bites nor how far the infestation had spread.

Mahlum said the situation is being continuously monitored for now.

The IRS has no comments on the matter other than saying through its spokesman, Richard Panick that the IRS is merely a tenant of the premises that is managed by the General Services Administration. “So any issues dealing with any events, with anything that occurs in the building, would be coordinated by GSA,” Panick said.

Rapper Owes IRS $90,000?

Rapper Bow Wow is alleged to be in debt to the IRS for $91,105.61, according to court documents obtained by TMZ.com. Bow Wow, whose real name is Shad Gregory Moss, allegedly owes taxes from 2006. Consequently, the government has filed a tax lien on the rapper’s property in Florida.

In response, Bow Wow has denied the news. In his blog, bowwowunderrated.blogspot.com, Bow Wow wrote, “TMZ (is) saying they are about to runa story on me thats once again “Not True” as im sitting in my beautiful condo as of RIGHT NOW that they said i dont have anymore.” He went on to urge his fans and blog readers “not to believe anything the media writes or blogs its their job to entertain the minds of the simple minded”.

The IRS is launching the next part of its monitoring system aimed at regulating tax preparers called the new Registered Tax Return Preparer competency test. The regulatory initiative began last year with the imposition of the Preparer Tax Identification Number (PTIN) that all paid tax preparers have to register for. Tax preparers holding a PTIN have to pass the competency test by 31 December 2013 (with the exception of CPAs, enrolled agents and tax attorneys who have their own examinations set by their respective professional groups).

Upon passing the competency test, paid tax preparers will be given a new designation, Registered Tax Return Preparer. Holders of a PTIN have to renew their PTIN registration and complete 15 hours of continuous education every year in order to maintain their Registered Tax Return Preparer status.
IRS Commissioner Doug Shulman said, “This is another major step forward in our effort to enhance tax preparation service to millions of taxpayers. People should feel assured that the person they hire to prepare their federal tax returns has a working knowledge of the tax code. The majority of tax return preparers are reputable professionals but the few bad apples cause great harm to taxpayers and the industry.”

The IRS has engaged a third party test vendor, Prometric Inc. to handle the technical aspects of the program. The initial test covers preparation of the Form 1040 and related schedules and begins next week. It will take between 2 to 6 weeks to receive the results after taking the test. During this time, the IRS will validate the tests and determines the pass/fail score. The validation should be completed by middle of January. Those taking the test thereafter will no longer have to wait and instead will receive their scores at the test center immediately upon completing the test, which will be computer-based.

The cost for the test is set at $116 covering both the fee for the IRS and Prometric Inc. Initially, the test will have to be taken at certain centers only, but eventually the test will be conducted at over 260 centers nationwide. It is estimated that over 315,000 tax preparers will be taking the Registered Tax Return Preparer test. Those who pass the test will be awarded a certificate certifying them as Registered Tax Return Preparers.

Other regulatory measure being taken by the IRS to monitor the tax preparation industry include conducting background checks on tax preparers to ensure they do not have criminal records and a mandatory tax compliance check (for obvious reasons). The IRS will award the Registered Tax Return Preparer certificates to those who pass the RTRP test but may still subject them to future background checks.

There is no change in the process of becoming an enrolled agent. One has to pass a vigorous three-part Special Enrollment Examination that covers individual and business standards and representation rules. In addition, all enrolled agents are to undergo 72 hours of continuing education every three years.

The IRS says it will give greater scrutiny to the Earned Income Tax credit for the coming tax year 2012. This comes after a government watchdog questioned the agency on billions of dollars worth of credit it gave out this year. In October, Congress approved an increase of the fine on paid tax preparers for not verifying the eligibility of those who apply for the Earned Income Tax credit from $100 previously to $500. The Earned Income Tax credit is the largest form of credit paid out by the IRS each year, amounting to more than $55.1 billion in 2009, out of which $11 billion was likely paid out wrongly, according to IRS estimates.

The Treasury Inspector General for Tax Administration (TIGTA) J. Russell George wrote a stinging report in which he faulted the IRS for making potential improper payments involving two other refundable credit programs, one for higher education and the other for families with children in connection with the Earned Income tax credit. The report indicated that more than $18 billion of the $101 billion paid out under the 3 credits could have been done improperly.

The inherent danger in awarding the Earned Income tax credit is that as a refundable credit, it is can be paid out in cash in excess of the tax owed, instead of offsetting part of the tax liability. As such, the Earned Income tax credit is always subjected to abuse.

Cindy Hockenberry, research supervisor for the National Association of Tax Professionals said, “The IRS is really stepping up enforcement.” Initially, the IRS will focus on the earned income credit, but "they're going to be branching out into other areas”, according to Hockenberry. The National Association of Tax Professionals represents more than 21,000 Tax preparers, Attorneys, Accountants and enrolled agents who work independently or for tax preparation companies like H&R Block.

The administration of the Earned Income tax credit has gained the attention of the politicians, in particular those from the GOP who have been rather vocal in demanding greater policing of how the credit is awarded. As a result, IRS deputy commissioner for services and enforcement, Steve Miller told a House Ways and Means subcommittee in May, “We must balance the mandate to get refunds to those eligible as quickly as possible with ensuring that the money goes only to individuals who are eligible to receive it.”

The Earned income tax credit was passed by Congress in 1975 and is meant to offset the burden of Social Security taxes for the poor. It has been expanded several times as an incentive to work being supported by both sides of the political divide.

In September, the TIGTA issued a report stating its finding that in 2009 about $4.2 billion, or 15% of $28.3 billion in additional child tax credits was paid to workers working illegally in the US. As a result, legislation is now being drafted to narrow the eligibility to obtain a refundable child tax credit.

A professor working in Amarillo College had her car, a 2010 Nissan Altima, and $17,238.77 seized by the IRS. IRS agents claim Professor Theresa D’Costa Jiwa, 56, deposited $370,000 into her bank account between August 2009 and June 2010. A federal search warrant affidavit disclosed that Jiwa subsequently transferred most of the money into another bank account she used for property transactions. The money was then used for house renovations on her Canyon residence and to buy several other properties in Randall County.

Professor Jiwa, who works in Amarillo College as an English professor, draws a salary of $58,000 per annum as at last year. She has not been charged with any crime and continues her duties in the college.

According to IRS Criminal Division officer Brian Wolfe, Professor Jiwa’s deposits “were structured to evade currency reporting requirements.” However, the affidavit did not say from where she got the money. Attempts to contact Jiwa at her Randall Canyon home were fruitless.

The money seized by the IRS was held in a Bank of America account that the professor opened in July 2009, with only $25 initial deposit. Banking records show that Professor Jiwa deposited almost $374,100 into her bank account between the 10 odd month period in question.

The IRS became suspicious of the transactions because according to federal law, deposits exceeding $10,000 must be reported to the US Treasury Department. If the deposits are made over multiple times, they can all be taken as one deposit and if the bank receives or expends more than the $10,000 limit during one day. In Professor Jiwa’s case, several deposits of less than $10,000 were made into various Bank of America branch accounts all over East Pennsylvania.

In August 2009, Jiwa also opened a money market savings account with an initial deposit of $18,000. She then transferred $369,400 into this account. $321,000 of this amount was spent on services and products from 3 local Amarillo businesses – Heller’s Helping Hands Sprinkler & Landscape Inc., Texas Legacy Land Title and McGavock Nissan. Subsequently in December of that year, Jiwa paid almost $26,000 by check to buy the Nissan Altima.

Her spending spree continued the following year with purchases of 6 lots from Diamond V Real Estate and Investments worth $144,907.93. The money came from Professor Jiwa’s money market account. The total value of the lots comes up to almost $145,000 as valued by the Potter-Randall Appraisal District.

Jiwa’s principal residence is located at an upper-class Canyon neighbourhood in the 8500 block of Bryeson Lane, according to court papers. In addition, she also owns another house in Prescott Street. The values of these two homes are $261, 683 and $41,674 respectively. Jiwa owes taxes amounting to $3,110 on the first home and $732 on the second one.

After launching the registration exercise in which 740,000 tax preparers thus far has participated, now the IRS is contemplating fingerprinting the preparers in its ongoing bid to further regulate what IRS Commissioner Doug Shulman called ‘unscrupulous preparers’. Each fingerprinting will cost between $60 and $90.
The IRS has made it a rule that all paid tax preparers including CPAs, tax attorneys and enrolled agents must register themselves and obtain their Preparer Tax Identification Number (PTIN). According to IRS statistics, more than 60% of tax preparers do not fall into the above three groups. These ones will also be subject to a compulsory competency test, which is not required for CPAs, tax attorneys and enrolled agents. So far, so good.

But when it comes to fingerprinting tax preparers, it may be another ball game altogether simply because of the intimate personal nature of the exercise. The IRS says it is needed to help the IRS weed out problems like in cases where tax return preparers try to steal your personal data.
One party that has objected to the proposed fingerprinting exercise is the American Institute of Certified Public Accountants (AICPA) who contend that the exercise would put undue burdens on accounting firms who have many assistants preparing the tax returns but do not sign them. Having to fingerprint non-licensed and non-signatory tax assistants is too troublesome, according to the AICPA.
The AICPA also says fingerprinting duplicates the work done by some CPA firms when hiring staff. In addition, the AICPA feels that CPAs should be exempted from fingerprinting because of their regulation by state boards of accountancy.

Furthermore, if the non-licensed and non-signing tax assistants are not required to sit for competency examinations or register for a PTIN, then why should they be fingerprinted? As an alternative, the AICPA has proposed conducting a background check for non-signing staff involving consumer reporting agencies.

The AICPA is not along in its objection as other groups have also voiced their dissent, causing the IRS to put the fingerprinting exercise on hold for now. In his address to the AICPA national conference, Commissioner Shulman said, ““We have decided to hold off fingerprinting while we consider issues that have been raised and have further discussions with interested parties.” But Shulman did not give any time frame for the delay.

Other points brought up by stakeholders and adopted by the IRS in its regulation program include exempting non-signing preparers supervised by a CPA, attorney or enrolled agent from testing and continuing education requirements; requiring registered tax return preparers to include a disclaimer in their advertisements that they are not endorsed by the IRS; and being more flexible in the approval process for providers of continuing education materials under the program.