McGowanPRO Professional Liability Blog / Resources / Articles

How the Affordable Care Act Impacts Accounting Firms

Posted by Gary Sutherland on Mon, Nov 23, 2015 @ 10:37 AM


The Affordable Care Act (ACA) was signed into law in 2010. One provision of the Act required that in 2014 all Americans must have qualified health insurance or face a "Shared Responsibility Payment." Additionally, the Act allowed insurance providers and large employers a one-year delay in reporting the coverage in 2014 to both the IRS and to the taxpayer. 

This change impacts your clients and their returns. Are you prepared?

NAPLIA recommends you instruct clients to complete an ACA Confirmation Letteras a standalone document separate from the tax organizer packet. This ACA Confirmation Letter specifically outlines:  

  • That the ACA requires health care documentation from all taxpayer(s) and members of the household who are dependents in order to avoid the individual shared responsibility. The health care documents are required by law and must be furnished to the accountant for preparation of client tax forms.
  • That in the event the taxpayer(s) does not have qualified health insurance formembers of the household who are dependents, the accountant will calculate the penalty and include it with the client return.

Because 2014 is the first year of ACA reporting requirements and the possibility exists for changes, delays and other modifications, our ACA Confirmation Letter language is drafted with respect to the available information as of January 21, 2015 and is subject to change without notice. There are several exemptions beyond the scope of this letter where the shared responsibility penalty would not be imposed. We suggest that the accountant modify the suggested language based on the profile of each accountant’s practice.

To view NAPLIA’s ACA Confirmation Letter CLICK HERE.

Tags: IRS

Hurricane Sandy relief through retirement plan hardship distributions and loans

Posted by Tom Henell on Tue, Dec 18, 2012 @ 01:12 PM

Much has been written regarding the exception from the hardship distributions rules resulting from retirement plan distributions and loans that have resulted from Hurricane Sandy.  IRS announcement 2012-44 fully addresses the rules governing these hardship distributions and loans. CPAs need to make their clients aware of this relief , but equally as important make them aware of the misconceptions ,and the tax impact of such a distribution. Many professional liability claims originate from the failure to clearly explain and document to clients the projected tax effect of retirement plan distributions.

This article addresses the IRS announcement and several misconceptions associated with the announcement. 

Tags: accountants, cpas, IRS

IRS Requires Continuing Education for Tax Preparer - Approved Providers

Posted by Tom Henell on Mon, Feb 20, 2012 @ 11:11 AM

As part of the new IRS tax preparer oversight efforts, tax preparers are required to complete 15 hours of continuing education.  This requirement, new this year, also requires that the annual education hours must come from IRS-approved providers.  CPAs, tax attorneys, and Enrolled Agents are exempt from the CPE requirements.

The 15 hours of continuing education must include 10 hours of federal tax law, three hours of federal tax law updates, and two hours of ethics each calendar year. Tax return preparers must provide their Preparer Tax Identification Numbers—another prong of the IRS’s tax return preparer regulation effort—to the CE providers so their continuing education can be properly reported to the IRS.

Visit the IRS website for a list of approved providers.

Tags: cpe, IRS, tax preparer