News

In an article published by The Wall Street Journal on October 4, 2024, Ashlea Ebeling reports on the growing issue of tax refund check theft, with millions of dollars in refund checks being stolen from the mail. According to the IRS, nearly 10 million taxpayers received paper refund checks last year, making them a target for fraud. Even replacement checks are being stolen, leaving taxpayers in a cycle of requesting new ones.

Rep. Nicole Malliotakis (R., N.Y.) has handled 218 cases of stolen refund checks in her district, totaling $3.8 million. One taxpayer, Bennett Grimm, has had multiple checks stolen and is still awaiting his $96,000 refund after the sale of his medical practice.

The IRS is working on a technological fix that will allow taxpayers to switch from paper checks to direct deposit, but it is still years away. IRS Commissioner Danny Werfel urges taxpayers to opt for direct deposit, which he says is faster and safer. Meanwhile, the Treasury Department continues to deal with the rise in mail theft-related check fraud and has prosecuted several individuals involved in these schemes.

The IRS is also modernizing its system to address this issue, but for now, those affected must go through a lengthy refund trace process. Despite efforts, the thefts persist, putting pressure on the IRS and Treasury to find more immediate solutions.

(Source:  Ashlea Ebeling, "Millions of Dollars in Tax Refund Checks Are Getting Stolen," The Wall Street Journal, October 4, 2024)

Christopher J. Frizzell, EA, President of the Oklahoma Society of Enrolled Agents, has issued the call for the Annual Meeting of the Members of the Oklahoma Society of Enrolled Agents, to take place on Tuesday, October 29, 2024, at 12:10 p.m., at Francis Tuttle Technology Center, Room D1750, 12777 North Rockwell Avenue, Oklahoma City, Oklahoma 73142.

The Bylaws Committee of the Society has proposed revised bylaws and made a motion to the OSEA Board of Directors to submit the proposed revised bylaws to a vote of the membership with a recommendation that the members pass the motion and adopt the revised bylaws. The Board of Directors approved the motion and set the vote of the members to be held at the Annual Meeting. The proposed revised bylaws may be accessed here. The report of the Bylaws Committee may be accessed here.

Nominations will be received and elections for officers and directors will also be held at the Annual Meeting. The following positions are open and will be filled by election:

• Vice President (who also serves as President-Elect).
• Directors at Large Positions # 2 and #4. These Directors will serve from January 1, 2025, through December 31, 2026.

On September 27, 2024, the Oklahoma Society of Enrolled Agents (OSEA) officially adopted a comprehensive Code of Conduct and Ethical Rules, reinforcing the organization’s commitment to maintaining the highest professional standards among its members. This new framework aims to provide clear guidance for ethical behavior and professional practice, aligning with Treasury Department Circular 230 and the organization's own professional conduct standards.

Key Provisions of the New Rules:

1. Confidentiality: Members and Associates must maintain a confidential relationship with their clients, disclosing information only when authorized or legally obligated. They must also ensure that employees understand and uphold these confidentiality standards.

2. Conflicts of Interest: The rules emphasize avoiding conflicts of interest, requiring full disclosure and consent from all parties before representing conflicting interests. Members and Associates are also required to disclose any related business interests that may affect their representation.

3. Professional Representation: Only Members may identify themselves as “Members of the Oklahoma Society of Enrolled Agents,” and Associates may use the title “Associates of the Oklahoma Society of Enrolled Agents.” The use of these titles is restricted to individuals and may not be used by firms or organizations.

4. Advertising and Public Communication: Members and Associates may engage in public communications and advertising, provided they conform to the professional and dignified standards set forth by Circular 230. Misleading or deceptive solicitation practices are strictly prohibited.

5. Competence and Care: Members and Associates are required to undertake only those tax matters that they can complete with professional competence and to exercise due care in all engagements. This includes obtaining sufficient relevant data to provide a reasonable basis for conclusions or recommendations.

6. Integrity and Objectivity: The OSEA Code of Ethics underscores the importance of integrity and objectivity in all professional dealings. Enrolled Agents are encouraged to continuously strive to improve their competence and to promote the reputation and welfare of the profession.

The adoption of these rules marks a significant step for OSEA in reinforcing its dedication to ethical practice and professional excellence. Members and Associates are expected to adhere to these standards, ensuring that they continue to serve the public with the highest level of integrity and professionalism.

For more details on the complete set of rules, please refer to the official document released by OSEA.

Retired fire, EMS, and police personnel can reduce their taxable earnings by up to $3,000 for medical insurance premiums paid during a calendar year under the HELPS Retiree Act. ​

Prior to 2023, there was a requirement that the premium had to be deducted from the retiree’s pension check to qualify for the HELPS tax reduction. This is no longer the case following the adoption of the Federal Secure 2.0 retirement law.

• Premiums paid directly for health, accident, or long-term care insurance qualify for the tax credit.
• The reduction is claimed on the retiree's personal 1040 tax form on Line 5B or a similar adjustment. ​
• Married couples where both parties are retired Police/Fire/EMS may take a reduction of up to $6,000. ​
• The tax break is not available to surviving spouses.

Our member Pam Redinger has offered to embroider with the OSEA logo any shirt a society member wishes to submit to her.  She is presently asking for $12 per shirt to recover her costs, and if the shirts need to be mailed back to the member she would want those additional costs recovered as well.  

She can be reached to discuss details directly via email (pam@fandfaccounting.com).

Thank you Pam for making this offer available to our members!

The IRS recently issued a reminder to taxpayers regarding the tax implications of crowdfunding contributions and distributions, a timely notice as the popularity of online crowdfunding continues to grow. Whether funds are raised for personal causes, charitable endeavors, or business ventures, taxpayers and their Enrolled Agents should be aware of the associated tax responsibilities.

Understanding Crowdfunding Income

Crowdfunding involves raising small amounts of money from a large number of people, typically via online platforms. The IRS emphasizes that, depending on the circumstances, funds received through crowdfunding may be considered taxable income. Taxpayers must report the income unless it falls under certain exceptions, such as qualifying gifts.

When Crowdfunding is Taxable

Taxpayers must include crowdfunding proceeds in their gross income if:

• The funds are used for business purposes.
• The contributors receive something of value in return.
• The taxpayer does not demonstrate that the funds are gifts.

Funds used for a business or those that provide contributors with rewards or perks are almost always taxable. On the other hand, if the funds are given freely and without expectation of return, they may qualify as non-taxable gifts.

Reporting Requirements

Crowdfunding platforms and payment processors might issue Form 1099-K if the total payments exceed certain thresholds, typically $600. Taxpayers and their Enrolled Agents should ensure that they report this income correctly, even if they do not receive a Form 1099-K. Failure to report income accurately could result in penalties, additional taxes, or other sanctions.

Gifts vs. Income

A key consideration for taxpayers is distinguishing between gifts and income. A gift, as defined by the IRS, is money transferred to another person without the donor expecting something in return. If the funds raised meet the IRS criteria for a gift, they may not be taxable. However, the donor’s intent and the specific facts and circumstances surrounding the transaction are crucial in making this determination.

Documenting Contributions

Proper documentation is essential for both taxpayers and those who contribute to crowdfunding campaigns. Taxpayers should keep detailed records of all funds received and spent, including the purpose of the crowdfunding campaign and the intent behind the contributions. This documentation is critical if the IRS questions the nature of the funds during an examination.

Action Steps for Enrolled Agents

As trusted advisors, Enrolled Agents should educate their clients on the tax implications of crowdfunding. Advising clients to maintain accurate records, understand the distinction between gifts and income, and comply with reporting requirements can prevent future tax issues.

For more detailed guidance, Enrolled agents can refer their clients to the IRS’s Fact Sheet on this topic and other resources available on the IRS website.

Oklahoma Society of Enrolled Agents Announces Decision to Remain Independent Affiliate and Open Membership to All Enrolled Agents

The Oklahoma Society of Enrolled Agents (OSEA) proudly announces that its membership has voted to remain an independent affiliate of the National Association of Enrolled Agents (NAEA). In addition to this decision, the membership has also voted to remove the dual affiliation requirement, opening OSEA membership to all Enrolled Agents, and associate status for those not yet enrolled, regardless of their membership status with the NAEA, effective September 1st, 2024.

This significant decision underscores OSEA’s commitment to serving the unique needs of Enrolled Agents in Oklahoma. By maintaining its independent affiliate status, OSEA continues to focus on providing tailored resources, support, and advocacy for its members within the state. The removal of the dual affiliation requirement ensures that OSEA remains an inclusive and accessible organization for all Enrolled Agents, expanding opportunities for professional growth, networking, and education.

“We are excited about the future of the Oklahoma Society of Enrolled Agents and the expanded inclusivity this change brings,” said Edward Moore, Vice-President of OSEA. “By opening our doors to all Enrolled Agents and future Enrolled Agents, regardless of their affiliation with the NAEA, we are creating a stronger community that can better serve the needs of tax professionals across the state.”

OSEA will continue to offer a wide range of benefits to its members, including continuing education opportunities, legislative advocacy, and networking events. The organization remains dedicated to supporting the professional development and success of Oklahoma’s Enrolled Agents.

For more information about membership or upcoming events, please visit eaok.org or contact Edward Moore at eyrtax@gmail.com.

About The Oklahoma Society of Enrolled Agents (OSEA): The Oklahoma Society of Enrolled Agents is a professional organization dedicated to supporting Enrolled Agents throughout the state of Oklahoma. OSEA provides education, advocacy, and resources to help its members excel in their profession and serve the public with the highest standards of ethics and expertise.

In a move to enhance cybersecurity, the IRS now mandates the use of multi-factor authentication (MFA) for all tax professionals accessing tax software products. This requirement, aimed at protecting sensitive taxpayer data, follows increasing cyber threats targeting tax professionals. MFA adds an extra layer of security by requiring users to provide two or more verification factors to gain access, significantly reducing the risk of unauthorized access. Tax professionals are encouraged to implement this security measure immediately to safeguard their systems and client information.

For further details, you can view the full article here.

OSEA President Chris Frizzell has called a special member's meeting of the Oklahoma Society of Enrolled Agents.  More details and registration is available in the events section of eaok.org, or by clicking here.

In December of 2023, the National Association of Enrolled Agents proposed three changes to its bylaws and held a vote of its members.  The changes were adopted. 

The adopted changes were (1) to eliminate the additional continuing education requirement for membership of 30 hours per year, (2) to eliminate the dual requirement that NAEA members must also be members of their state affiliate society and vice versa, and (3) to allow the creation of chapters. 

Members of the Oklahoma Society of Enrolled Agents must now decide whether we wish to remain an affiliate, like we are now and as we have been, or become a chapter of the NAEA. 

In simple terms, the difference is that as an affiliate we would retain our corporate nonprofit existence along with our bank account, IRS continuing education provider registration, and officers and directors, while if we became a chapter we would give up those things and be operated by the NAEA with a committee of local volunteers. 

The decision of the OSEA members will take effect on September 1, 2024.  There are other details. 

For background information, please log in to your NAEA account, navigate to "About NAEA" then to "NAEA Governance Changes," where you can review an abundance of information, including PowerPoint presentations of the chapter structure and the affiliate structure in the future, frequently asked questions, and a link to discussion threads on the NAEA Member Web Board. 

Or, you can link directly to the NAEA web page at https://www.naea.org/naea-governance-changes-2023/ (Web Board requires login).

OSEA will hold a town hall via Zoom in the first part of August to discuss the vote, answer questions, and hear from the members.  Watch for an announcement by email when the date is set, and check the OSEA website at https://www.eaok.org for updates.

A special meeting will be called in mid-August to vote on whether OSEA will become a chapter of the National Association of Enrolled Agents or will remain an affiliate.  We hope all members will participate.  Watch for an announcement by email when the special meeting date is set, and check the OSEA website at https://www.eaok.org for updates.