New School: The IRS Launches Educational Website

by Joshua on February 29, 2012

Imagine if a Graduate Tax program used this as its tag line — “ABC LL.M. in Taxation  – The Quick and Simple Way to Understand Your Taxes.”  I know my decision of which tax program to attend would certainly have been less agonizing, if I could choose a program where learning taxes was quick and simple.  Well, for those that have yet to embark on their graduate tax journey, you may want to check out the IRS’s new educational website called “Understanding Taxes” –where learning taxes is “quick and simple” and FREE!

There are two links on the Understanding Taxes homepage: One is for teachers that provides an “interactive tax education program for middle school, high school and community college classrooms.”  The other is for students and provides “middle schools, high schools, community colleges, and the general public with a technology-based instructional tool.”  For purposes of this post, I will focus on the Student site.

The Student site provides 38 lessons to students which are divided into two categories: “The Hows of Taxes” and “The Whys of Taxes.”  The lessons under “The Hows of Taxes” section include modules on payroll taxes and federal income tax withholding, wage and tip income, interest income, exemptions, and filing status to name a few.  Each lesson has a set of materials and a skill check (quiz) at the bottom of the lesson in order to test your understanding of the lesson.  For example, Module 1, relating to payroll taxes and federal income tax withholding provides a tutorial lesson, a fact sheet, and a simulation exercise where you attempt to help a retail store manager complete a form W-4.

“The Whys of Taxes” modules relate to various themes such as the history of taxes in the United States, fairness in taxes, and the impact of taxes to name a few.  Within each theme are lessons, which contain activities to help you learn the topic of the lesson and a little quiz to test your understanding.  I assume the IRS is expecting the lowest quiz scores to come from “The Whys of Taxes” lessons.

In addition to the separate “hows” and “whys” categories, you can access the lesson activities, tax tutorials, simulations, and assessments (quizzes) individually, through separate links provided on the Understanding Taxes Student main page.

In the end, I don’t expect “Understanding Taxes” to make US News’ top tax law specialty programs list next year.  However, for tax return preparers needing to brush up on a topic or individuals interested in learning a little something about how taxes affect their lives, Understanding Taxes is a simple and easy.


The Journal of Accountancy has published Tax Return Preparation Mistakes: How to Avoid or Mitigate Professional Liability:

Errors and omissions in preparing tax returns can occur easily. You might accidentally enter a number incorrectly, misinterpret a law, or misconstrue the client’s facts. Later, before an IRS audit, you might discover the mistake, raising gut-wrenching questions: Do you call the mistake to your client’s attention? Do you advise the client to file an amended tax return? If so, by acknowledging the mistake, have you essentially conceded that you have committed malpractice? What, if anything, can you do to limit your professional liability?

You can watch the video clip below to get a gist of what the article is talking about.


H&R Block has offered a little “Tax 101″ to the employed recent high school and college graduates in the form of questions and answers regarding certain employment tax forms (i.e. W-4) and the deductibility of certain expenses relating to their job.


IFRS Coming to CPA Exam in 2011

by Joshua on May 20, 2010

The Journal of Accountancy has reported that beginning in 2011, the CPA exam will test International Financial Reporting Standards (IFRS) in three of the four sections of the CPA exam:

Although the board does not disclose specific weightings at the topic level, it has made clear that it expects exam takers to exhibit adequate competence in international standards in much the same way that they should exhibit competence in U.S. GAAP and GAAS.

The board’s decision to include international standards is not contingent on action by the SEC to require or allow U.S. public companies to report under IFRS, according to senior AICPA exam staff. Rather, it reflects the reality of the interconnectedness of world economies and its impact on organizations operating in the U.S.

Click here to test your knowledge of International Standards by trying to answer sample questions released by the AICPA Board of Examiners in February.


From the Wall Street Journal:

H&R Block said it will cut 400 jobs and has shut 400 underperforming tax offices as part of a restructuring which the tax preparer said will save up to $150 million a year.

The move comes after another disappointing season for the industry’s leader on the retail side of tax preparation. H&R Block said last month it prepared 4.9% fewer tax returns this tax season than a year earlier despite increases in users of its online filing services.

Improvement in March wasn’t enough to offset the steep declines seen through the end of February. That led H&R Block to say in March it would likely miss its fiscal-year profit goal as the recession and high unemployment lead more people to do their taxes themselves.

The streamlining affects about 3.6% of H&R Block’s retail offices.

President and Chief Executive Russ Smyth said in a competitive environment, it “requires that we narrow our focus and invest in a few key initiatives that will have the greatest impact on attracting and retaining clients in our retail and digital channels, while eliminating other activities and their related costs.”

H&R Block expects a $28 million pretax charge from severance related costs, which will be reported in the fiscal first quarter, which ends July 31. Fourth-quarter results are due June 24.


Kiplinger: 71 Ways to Save on Taxes Now

by Joshua on May 17, 2010

Just because tax season is over (Technically over. Not including extensions), does not mean there are not ways to save on your taxes now. In fact Mary Beth Franklin lists 71 Ways to Save on Taxes Now .


In his May article in the Journal of Accountancy, Don Mcloughlin (vice president of marketing at ADP Small Business Services) lists 9 common payroll errors and provides tips and resources that may help prevent these common errors from occurring. Here is a list of the 9 common payroll errors from the article:

1. Apply the latest laws and regulations.

2. Don’t miss a deposit deadline.

3. Process wage garnishments correctly.

4. Don’t put too much reliance on payroll software.

5. Classify nonexempt employees correctly.

6. Don’t treat employees as contract workers.

7. Report fringe benefits.

8. Ensure that social security benefits are correct on W-2 forms.

9. Don’t mishandle withholding for employees who receive third-party sick pay.


The Journal of Accountancy has published “Changes in Tax Practice Standards Affect CPAs.” Here is an excerpt:

Expansions in the regulatory environment in recent years are forcing CPA tax practitioners to consider many new compliance issues. Those issues include expanded statutory penalty provisions, revisions to regulations, and modifications to binding AICPA ethics rules related to tax engagements. CPAs subject to this wide array of rules and regulations include those who take a tax position on or prepare covered federal tax returns, represent clients before the IRS, or are engaged professionally for tax services. Failure to comply with the rules can result in significant monetary penalties and/or professional disciplinary actions.

All CPAs should understand the regulatory environment that applies to tax practice and determine how they will comply with these increasingly restrictive rules of practice. This article discusses the regulatory and penalty provisions that apply to tax practitioners and offers compliance recommendations.


CPA Exam to Receive Makeover

by Joshua on May 3, 2010

This month, The Journal of Accountancy announced that the CPA exam will undergo its largest overhaul since moving from paper and pencil to computers.

Jan. 1, 2011, will mark the launch of what people behind the exam are calling CBT-e (Computer-Based Testing evolution).

While news of these changes is obviously important for those who plan to take the exam, accounting professors and CPAs who employ future CPAs will also need to be familiar with the new format in order to mentor candidates to increase their likelihood of passing.

Exam Section Changes

For Auditing and Attestation (AUD), Financial Accounting and Reporting (FAR) and Regulations (REG), three groups of 25 to 30 multiple-choice questions will remain.

The written communication tasks and long (30- to 40-minute) simulations will be dropped from these three sections. They will be replaced with six or seven shorter “task-based” simulations. The shorter simulations will look similar to sections of the current long simulations, however, using the shorter simulations will lead to reduced score reporting time in the future, Mills said.

The Business Environment and Concepts (BEC) section also will continue to contain three sets of multiple-choice questions. It will not include simulations, but will add three written communication tasks on BEC topics that will be weighted at a total of 15%.

Currently, multiple-choice questions account for 100% of the BEC score.

The changes to simulations and writing are apparent in every section and reflect what Mills says is an increased confidence in the simulations.