Inform clients of significant changes in tax law through client newsletters. Retain a distribution list of such communications, including the dates transmitted to document that the client was informed of these changes.
Alert clients about other filing obligations such as Financial Crimes Enforcement Network (“FinCEN”) Form 114, Report of Foreign Bank and Financial Accounts (“FBAR”), state and local income tax returns, and the consequences of non-compliance. Ask clients to schedule their appointments to discuss tax planning issues prior to year-end. If a tax projection will be prepared or tax consulting will be performed, obtain a separate signed engagement letter for these additional services. Sample tax planning and tax consulting engagement letters are available to policyholders in the Policyholder Resource Center.
Arrow.svgContact clients who have historically procrastinated providing their tax return information and consider providing incentives to them for early submission. Ideas on how to incentivize clients can be found in the article The Early CPA Gets the Return (Done on Time). In addition, provide these clients with deadline dates by which all information must be received. If information is not received by the designated date, consider terminating the client relationship. Not sure if it is time to terminate? Read the article Take a Hike: Ending Client Relationships for other items to consider.
Advise clients about the proposed regulations that will change the partnership audit rules for partnership tax years beginning after December 31, 2017. Tell clients to consult with their attorneys about revising partnership and limited liability company agreements in order to address these changes. AICPA Tax Section members may utilize the Letter to Advise Clients on Partnership Audit Changes as a starting point. Items to be addressed in a revised partnership agreement and the client letter include but are not limited to:
    • Whether the IRS may collect any additional tax, interest, and penalty directly from the partnership at the highest individual tax rate or to take any adjustments into account from the partners in the reviewed year
    • Who will be designated as the partnership representative
    • For eligible partnerships, whether or not to elect out of the new partnership regime
    • Who should make decisions related to new elections that will be available, the partnership representative or someone else
    • Which new tax terms and concepts may require adjustment to partnership operating agreements
What to do now … before the big rush
4 ways to help clients prepare
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