NAEA advocates before the IRS for some common sense for same-sex partners

June 14, 2012

I’ve been on a temporary hiatus since the end of tax season. I’ve been in the middle of moving and doing some overdue traveling to see some relatives, and just haven’t been able to keep up the blog. I’ll be back soon with regular updates, but this recently hit my inbox from a professional organization I’m a member of, and I wanted to share it.

I know many of my clients and followers of the blog are in legal same-sex relationships in community property states, so I thought this would be of interest. NAEA is the National Association of Enrolled Agents, a large advocacy group for tax professionals and taxpayers. They recently met with the IRS on the same-sex partner issue. I must say I really liked their suggestions…in no small part because I’ve been making most of them myself for quite awhile now! :-)

NAEA GRC Chair Lonnie Gary, EA, USTCP and CSEA President Jean Nelsen, EA, joined by NAEA staff Bob Kerr and Jeff Trinca, represented NAEA and enrolled agents earlier this week at a senior level IRS meeting devoted to difficulties enrolled agents and taxpayers are facing with community property returns in which income is split between two federal tax returns. More specifically, those filing MFS (married filing separately) and registered domestic partners/same-sex couples fall into this bucket (the latter more significantly than the former) and face a variety of pre-filing, filing, and post-filing challenges.

Senior operations staff from Deputy Commissioner (Services and Enforcement) Steve Miller’s office attended, as did a group from Chief Counsel and a representative from Commissioner Shulman’s office. Jean and Lonnie outlined the problems these filers face: IRS cannot cross reference community property tax returns to one another or to IRP documents on the IMF; taxpayers cannot file electronically for a variety of practical reasons; IRS is ill-equipped to address filing and post-filing community property issues; and, erroneous CP-2000 notices and lengthy delays in resolving post-filing enforcement questions.

We didn’t go to the big house (as E@lert likes to call IRS headquarters here in DC) simply to reveal taxpayer and tax professional troubles to IRS. We also came with solutions and suggested a number of administrative/operational changes to overcome most of the troubles. More specifically, we proposed the agency: link the community property returns using a checkbox on Form 1040; create a community property allocation form that would populate the Form 1040 and would be part of the e-filed return and not an attachment to it; simplify the Form 1040 page 2 adjustment for taxpayer withholding; and, create a dedicated community property unit.

We were well-received and have promised two follow-up products: examples of notices IRS has issued to these taxpayers and a draft community property form, which we hope will be included in the next update to Publication 555.  

(May 25, 2012, NAEA E@lert)

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