Topic 30
REFUND AND AMOUNT OF TAX OWED
Overpayments
• The taxpayer’s total tax appears in the other taxes section line 61 on Form 1040
• The taxpayer’s total payments that were made (including refundable credits) appear in
the payments section Lines 62 thru 71 on Form 1040
• If the payments (Line 72) exceed the liability, the overpaid amount appears in the refund
section on line 73 on Form 1040
Overpayments (continued)
Taxpayers who have overpaid have a choice to:
• Apply any portion of the overpayments (Line 73) to the following tax year
(enter amount on line 75 Form 1040)
• Receive a refund using direct deposit. Fill out lines 74 a, b, c & d
• Receive a refund as a check. Fill out line 74a
• Purchase Series I Saving Bonds (See discussion on Saving Bonds)
IMPORTANT
A new field in the signature section at the bottom of Form 1040 labeled
Identity Protection PIN is designed to help prevent refunds from being
issued to an identity thief.
Identity Protection PIN
• If client received an IRS CP01A notice that includes the IP PIN, you must enter it at the
bottom of the Form 1040.
• If the CP01A notice was not provided to you by the client, leave the space blank.
• IP PIN has 6 digits and may begin with a zero
• New IP PINs are issued every year. (Generally sent in December)
• If joint return filed, IP PIN should be only used of the person whose SSN appears first
on Form 1040.
• If the IP PIN was misplaced by the client, he/she may call 1-800-908-4490 x245
Refunds
Refunds and U.S. Savings Bonds:
• Refunds can be directly deposited into a TreasuryDirect account to purchase U.S.
marketable securities and savings Bonds. More info can be found at
www.treasurydirect.gov
• Taxpayers who do not have a TreasuryDirect account also have an option of purchasing
savings bonds with their refunds by requesting savings bonds on Form 8888
Refunds (continued)
Direct Deposit:
• Encourage the taxpayer to use this option, because refunds received faster within 10-14
business days
• To Deposit refund into one bank account enter the routing and Account Numbers in the
appropriate sections of the return
• Use Form 8888 to allocate refund between accounts (up to 3 accounts can be used)
• Include the voided check in the file
• Verify the account and routing #’s.
CAUTION
If the routing or account numbers are not valid, the refund will be
delayed 4 to 6 weeks. If the direct deposit is rejected, a check will
automatically be mailed to the address on the return.
CAUTION
Direct deposit of a taxpayer's refund is to be made to an account (or accounts) only in the
taxpayer's name. Advise taxpayers their refunds may only be deposited directly into their
own accounts.
Tax Due
• The amount the taxpayers owe appears in amount you owe section on line 76 on Form 1040
• Advise the taxpayers that the payments of tax dues should be submitted on or before April 15
• Remind taxpayers that filling of extension to file does not extend the time for payment
Payment Options
• Check or money order submitted with Form 1040-V, Payment Voucher (mail it before
April 15th)
• Electronic funds withdrawal (the date can been chosen)
• Installment Agreement Request Form 9465 (Only offer to clients on the last week of
filling)
• Online Payment Agreement on IRS website which taxpayer can complete
• Fees are charged for setting up an agreement
• Form 9465 for Federal purpose (http://www.irs.gov/Individuals/Payment-Plans,-InstallmentAgreements)
• Form 3456 for CA purpose (https://www.ftb.ca.gov/online/eia/index.asp)
Third Party Designee
Sometimes taxpayers want to allow a friend, family member, or another person to
discuss their tax return with IRS if they will be overseas. Also, elderly parent may want to
allow their adult children handle their affairs. The designee should:
• Check the Yes box in the Third Party Designee section of the return
• Enter the designee's name, phone number, and any five numbers the designee chooses
as his or her personal identification number (PIN)
Avoiding Errors
• Double check routing and account number for direct deposit
and electronic withdrawal. If there is an error in the bank
information, the taxpayer will have to resolve any misdirected
funds directly with the bank.
• Ask taxpayers to compare the numbers entered on the return
to their checks or other account information.
QUALITY REVIEW
OF A
TAX RETURN
GOALS OF QUAILTY REVIEW
1) Result in fewer error notices from the IRS
2) Include correct amounts for taxes owed and refunds due
3) Ensure refunds arrive more quickly
3 METHODS OF QUALITY REVIEW
1) A certified designated reviewer: designated quality reviewer
—the preferred method used by CSULA VITA
2) Certified preparers review each other's work: peer review
3) Certified preparers review their own work: self-review, only
allowed if a second qualified person cannot be present
ESSENTIAL TOOLS FOR A
QUALITY REVIEW
1) Printed copy of the tax return
2) All source documents provided by the taxpayer
3) Completed intake and interview sheet
4) Publication 17
5) Publication 4012, Volunteer Resource Guide
6) TIP(The taxpayer should be present for and participate in the quality
review)
ESSENTIAL TOOLS CONT….
CAUTION:
•If Form 13164-C and all supporting documents do not match what is reported on the
return, either make the appropriate changes or follow up with additional questions to
the taxpayer and return preparer.
•Next, compare the questions on Form 13164-C, Section C, with the information on the
return.
•Check returns for accuracy—review social security numbers, double-check math, and
verify amounts transferred from schedules and tax tables.
FORM 13614-C & QUALITY REVIEW
1) Verify name, address and SSN match Form 1040 (Form 31614-C
does not show SSN)
2) Use photo ID to verify taxpayer's identity
3) Use social security cards or ITIN letter to verify name and
SSN/ITIN on the return
4) Verify date of birth and phone numbers
SIGNING FORM 1040
CAUTION:
•A return is not considered to be valid, and refunds are not issued, unless the return is
signed.
Both spouses must sign and date a Married Filing Jointly return.
•For deceased taxpayers, review documentation authorizing the executor of the estate
to file the final return. See Publication 559 for details.
•Returns should be signed by the taxpayer(s) after the quality review is complete
CONCLUDING THE INTERVIEW
PRINTING AND STORING RETURNS
1) Use the tax software to print the entire return, including all forms, schedules, and
attachments
2) Make sure the taxpayer names and social security numbers are legible on every
sheet
3) Assemble the packet:
–Start with Form 1040
–Place each form, schedule, and attachment in numeric order, based on the sequence
number shown in the upper right corner of the form
–Show the taxpayers the printed copy of the tax return, verifying once more the name,
SSN, ITIN, address, filing status, dependents, income, expenses, deductions, credits,
payments, and finally, tax refund or balance due
FORMS TAXPAYERS KEEP
1) Form 1040 with all forms, schedules, and attachments
2) All other tax-related documents, including Forms W-2 and 1099
3) If applicable:
–Form 8332, Release of Claim to Exemption for Child of Divorced or Separated
Parents (or similar statement)
–Power of Attorney
4) For e-file returns, taxpayers must also keep a copy of the signed Form 8879,
IRS e-file Signature Authorization
FORMS TAXPAYER KEEPS CONT….
Important:
Tax Records Envelope, if available, place the return and supporting
documents directly into the envelope, or use an alternative.
Emphasize to taxpayers that they should bring this year's return to
next year's appointment.
DATA THE SITE KEEPS
1) A master backup disk containing all electronically transmitted
returns unless the site is using an internet-based software
2) Signed copies of IRC 7216, Consent to Disclose and Consent to
Use Notices, are recommended to be retained for three years
AVOIDING A BALACE DUE NEXT YEAR
1) PAYING TAXES DURING THE YEAR
2) Mostly from wages or pensions, suggest they adjust their withholding
3) Primarily from self-employment or investments, suggest they consider
making or increasing their estimated tax payments
4)
For some taxpayers, a combination of increased withholding and estimated
tax payments may work best.
AVOIDING A BALANCE DUE CONT…
1) ADJUSTING OF WITHHOLDINGS
2) MAKING THESE CHANGES WITH THEIR EMPLOYERS WITH FORM W-4
3) MAKINGING THESE CHANGES WITH THEIR PENSIONS WITH FORM
W-4P
4) MAKING THESE CHANGES WITH GOVERNMENT PAYMENT WITH FORM
W-4V
CLOSING THE CONTACT
1)
2)
3)
Ask taxpayers, "Do you have any questions before we say goodbye?“
Advise taxpayers how to get answers to questions that may come up later.
Encourage taxpayers to consider volunteering if they seem interested in learning
more about tax preparation. Provide them with contact information or take their
contact information, depending on your site's procedures.
4)
Ensure that you have the contact information needed to reach the taxpayers in case
there are any problems with the e-filing of the return. It should be clear to taxpayers
that you need accurate information to contact them if there should be a problem
with the electronic transmission of their return (such as an invalid social security
number). The return is not "filed" until the electronic system "accepts" the return.
5)
Thank the taxpayers for using the service.
CLOSING THE CONTACT CONT…
1. The Site Coordinator or designee will transmit all the e-file returns
2. The Site Coordinator or designee receives an acknowledgment for each
successful e-file, or a reject notice if there was a problem with the electronic
file. The most common problem is a name or social security number that
does not match IRS records.
3. If the e-file is rejected, the Site Coordinator or designee needs to contact the
taxpayers to resolve the problem.
4.
If the return is not being e-filed, the taxpayers must mail the signed copy of the tax
return, along with copy B of all Forms W-2 and any Forms 1099-R with withholding.
Taxpayers who are filing a state return may need another copy of the return and
Form(s) W-2. Make sure the taxpayer knows the correct address for mailing the
return(s). The correct address for every state may be found in the Publication 17.
Advise the taxpayer that the return must be postmarked by the April filing due date.