Our firm is a leader in the tax preparation field and has been recongnized for our efforts on numerous occations. We have also been very proactive in working with both the Internal Revenue Service and U.S. Congress to ensure fair taxation for all Americans.
In the News
December 9, 2013
Local Tax Professional Earns Enrolled Agent Status
National Association of Tax Professionals, Appleton, WI – Allen I. Orwick of LFS Professional Services, Inc., Lakota, North Dakota has reached a personal and professional milestone in his career by studying and passing the Internal Revenue Service’s (IRS’) intensive enrolled agent exam covering all aspects of federal taxation. The award of the enrolled agent (EA) designation recognizes demonstrated knowledge and assures clients that the tax professional is up-to-date on the latest tax law changes and has unrestricted practice rights, allowing them to represent clients before any office of the IRS regarding any matter.
The right to represent taxpayers before the IRS is awarded only to selected groups of individuals, including attorneys, certified public accountants (CPAs), enrolled actuaries, and enrolled agents. To retain the status of an enrolled agent, individuals must complete a minimum of 16 continuing education credits (CPEs) per year, and a total of 72 CPEs in each three-year cycle along with adhering to stringent rules of professional and personal conduct.
If you need assistance with any taxation issue, you should seek the help of a tax professional. As a professional tax preparer and member of the National Association of Tax Professionals (NATP), Allen I. Orwick can assist you with a review of your tax history and answer questions on how taxation issues may impact your future. Mr. Orwick has been involved in the tax accounting industry for over thirty-three years and is owner of LFS Professional Services, Inc., 208 Main Street N, Lakota, ND 58344. His office phone number is 701-247-2458.
The National Association of Tax Professionals (NATP) exists to serve professionals working in all areas of tax practice through tax education, federal tax research, tax updates and tax office supplies. NATP members work in offices that assist over 16 million taxpayers with tax preparation and planning. The average NATP member has been in the tax business for over 20 years and holds a tax/financial designation and/or a college degree. Formed as a nonprofit organization in 1979, NATP has grown to more than 25,000 members nationwide who include registered tax return preparers, enrolled agents, certified public accountants, accountants, attorneys and financial planners. The national headquarters is located in Appleton, WI.
Learn more at www.natptax.com.
Taxation Rules Changed for CRP Payments
FARGO, N.D. - One seldom discussed provision of the 2008 Farm Bill changed the way retired farmers are charged taxes on land they have enrolled in the Conservation Reserve Program (CRP).
Rep. Earl Pomeroy (D-N.D.) held a news conference in Fargo July 1 announcing that the new farm bill exempts retired farmers from paying self-employment tax on their CRP income.
In the past, retired farmers paid income tax, but not self-employment tax on their government CRP payments. But, in 2003 the Internal Revenue Service ruled that retired farmers would need to pay self-employment tax on the CRP payment in addition to the regular income tax. The self-employment tax is a 15.3 percent tax that goes to Social Security and Medicare accounts, which is assessed to those individuals who are self-employed.
Pomeroy was joined at the news conference by Allen Orwick, a Lakota, N.D., tax accountant, who first brought the rule change to the Congressman's attention. Prior to the 2003 IRS ruling, CRP payments to retired farmers were treated as rental income and not subject to self-employment tax, but with the change in rules, the CRP tax bill increase for Orwick's retired farmer clients, which numbered about 50, averaged between $1200 to $1500.
I contacted Representative Pomeroy's office and started the ball rolling and had a conference with the IRS in Bismarck that also included Neil Harl, Roger Johnson and others where we tried to show how the repeal of the rule would be of benefit to the tax payers, Orwick said.
Harl is a leading ag economist at Iowa State University known for his expertise in farm tax matters, and Johnson is the N.D. Ag Commissioner.
The request to the IRS to suspend the rule fell on deaf ears and the ruling remained in place.
We think they (the IRS) got the call wrong Pomeroy said. Instead of fixing this they made it worse - they fixed it wrong.
The IRS commissioner assured me they would take a look at the ruling, and in late 2006 they came out with a definitive ruling that left the early ruling in place and, in fact, expanded upon the theme that any payment from the federal government should have a self-employment tax attached to it.
Later, Orwick was asked by Pomeroy to testify before the House Ways and Means Committee on the IRS rule change, since the most meaningful way to address the problem was to put language in the farm bill that would exempt these payments from the self-employment tax. It required the cooperative efforts of finance committees in both the House and Senate to make the necessary legislative changes.
I really commend Allen Orwick for helping us in Congress clean this issue up and commend the Senate Finance Committee, which Sen. Kent Conrad (D-N.D.) plays such an important part, in getting this in the Senate farm bill.
According to Pomeroy, this corrective action couldn't have come at a better time, when there is a lot of pressure to take land out of CRP. The 2008 Farm Bill allows for 32 million acres of CRP land, which is considerably less than what was allowed for in the 2002 Farm Bill because of the anticipation of land coming out of the program.
North Dakota has about 3.2 million acres enrolled in the program. Many of those acres signed up early in the program were classified under the "highly erodible" acreage requirement, and need to remain enrolled in the program, Pomeroy said.
It's hard enough, given that the temptations of the profitability of production, given what land rents are now commanding, to keep the land in CRP, Pomeroy said. And then you have Uncle Sam coming in and taking another 15 percent of it ... it's a bit much. So I think getting this fixed at this point in time will help us keep some of the acres in CRP that otherwise might have come out. And we are going to give fair treatment to our retired farmers in the process.
Robert Carlson, president of the North Dakota Farmers Union, also spoke at the news conference and called the farm bill provision regarding CRP sensible legislation.
CRP is really rental income. When you think about it, you are leasing your land to the federal government for a period of 10 years and agree to certain conditions in return for the rent they are paying, Carlson said. It really is rental income and I am glad we got it fixed.
Pomeroy noted that for those who have been billed for the self-employment tax in the past and have not paid the assessment, the IRS will not demand payment on that item. However, the provisions weren't made retroactive, so those who have paid this tax over the past few years will not be getting refunds.
Exemplary Electronic Return Originator
LFS Professional Services, Inc. is an industry leader in the Internal Revenue Service e-file program, first using the system in 1998 to e-file 1997 tax returns. In 1999, our firm was chosen as an Exemplary Electronic Return Originator. The purpose of this award is to recognize excellence in the IRS e-file program and to demonstrate that IRS e-file works well in all kinds of tax practices. Only one ERO from each state is selected for this honor and LFS Professional Services, Inc. was chosen to be the first award recipient from North Dakota.
IRS Practitioners Secure Messaging System (PSMS) Prototype
In 2000, Allen Orwick and LFS Professional Services, Inc. were chosen to participate in the Internal Revenue Service Practitioners Secure Messaging System (PSMS) Prototype. The purpose of this pilot program was to provide tax practitioners with an electronic means to resolve client account related issues. This project was the result of a request made by the National Association of Enrolled Agents (NAEA) in a proposal to an Internal Revenue Service (IRS) Request for Agreement issued in November 1998.
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