Sawyer Adams

If there was ever any doubt about how much tax Continuing Professional Education has changed, and how quickly change is happening, just take a quick look at a [tax CPE course] catalogue from a few years back. You'll be amazed at the differences!

It is easy for most tax professionals to get caught up in the chaos associated with keeping up with the IRS's continuing education tax requirements that many forget some of the basic -- but often most critical -- facts. It is imperative that enrolled agents, certified public accountants and other professional groups representing tax payers understand these fundamentals before enrolling in any tax CPE course - otherwise it could end up costing them.

The Internal Revenue Service is increasingly concerned with what it calls the "tax gap." This term is applied to the difference between the income tax that is actually paid by taxpayers and the amount of tax that should be payable under the law.

A registered tax agent is required to follow a regulation of the IRS relating to disclosure of the tax information supplied by clients. This is one of the standards of enrolled agent ethics. Tax professionals who fail to comply with the IRS regulation may incur a $1,000 fine and one year in jail for each violation.

Starting in January 2011, brokerage firms must begin tracking the cost basis and holding period of sold securities. This information will then appear on every Form 1099 along with sale proceeds that is issued for the 2011 tax year.

When taxpayers receive property by ways other than purchase, some complex tax events are triggered. There are various taxes affecting transferred property. In addition, some important record keeping is required by recipients of transferred property. A registered tax agent is usually beneficial at sorting out the correct tax consequences for property received as a gift.

Taxpayers who itemize deductions are entitled to some commonly overlooked miscellaneous deductions. Most types of miscellaneous deductions are only tax-deductible to the extent their total exceeds 2 percent of adjusted gross income. However, some expenses are not subject to this limitation.

As more tax revenue is sought to alleviate the growing US government budget deficit, the IRS is working to assure reporting of income from all sources-including miscellaneous income. Expanded requirements are in place for reporting of paid amounts on Form 1099. In addition, the IRS requires tax professionals to follow ethical standards for helping taxpayers identify and report all sources of income. Enrolled agent continuing education requirements include an enrolled agent ethics course.

Employers are entitled to tax deductions for mileage reimbursements to employees. However, the types of records maintained affect tax reporting by the employer as well as the tax impact on the employee.

Some of the tax deductions permitted for a primary residence are also available for a vacation home. But the reporting of these expenses depends upon whether the vacation home is occasionally rented. A taxpayer is best assured of following the tax reporting procedure applicable to his situation by using the services of a tax enrolled agent.