The USA Patriot Act of 2001 is a law that is both controversial and perhaps something many are not well-informed about. The acronym "USA Patriot Act of 2001" stands for "Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism."
As a tax preparer I have found, over the years, greatly expanded requirements on the industry. For example, we are now required to inquire whether the taxpayer has any "interest in, control over or signature authority over any foreign bank account or trust..." The Patriot Act has affected the way I go about providing service to people needing to file their tax returns.
So, I did some reading. I thought I would summarize the essential elements of this law. Here goes:
Title 1: Enhancing Domestic Security Against Terrorism.
Title 2: Enhanced Surveillance Procedures.
This title provides for wiretapping and surveillance in new and "creative" ways; "sneak and peek" warrants; "roving wiretaps;" and the ability of the FBI to gain access to documents that reveal the patterns of US citizens. This Title has several sections on details.
Title 3: Anti-money Laundering to Prevent Terrorism.
This title provides for restrictions on accounts and foreign banks. There are many technical details covered in this Title.
Title 4: Border Security.
This Title addresses the role of the Border Patrol, the US Customs Service, the Dept of State and others.
Title 5: Removing Obstacles to Investigating Terrorism.
This Title provides for National Security Letters (NSLs). These are an administrative subpeona used by the FBI, CIA and the DoD - it is a demand letter issued to a particular entity or organization to turn over various records and data pertaining to individuals. They require no probable cause or judicial oversight and contain a gag order preventing the recipient from disclosing the letter was ever issued.
Title 6: Victims and Families of Victims of Terrorism.
This Title provides for payments, the eligibility and criteria and the program to help people who have suffered as the result of terrorism.
Title 7: Increased Information Sharing for Critical Infrastructure Protection.
This Title affects the ability of law enforcement to counter terrorism activity that crosses jurisdictional boundaries.
Title 8: Terrorism Criminal Law.
This Title defines terrorism and the rules to deal with it. It also defines "domestic terrorism" to more broadly include mass destruction, assassination or kidnapping.
Title 9: Improved Intelligence.
This Title amends the National Security Act of 1947 and directs the Director of Central Intelligence to make foreign intelligence a priority.
Title 10: Miscellaneous.
This law has been extended in whole or in part several times. Portions have been struck down by the courts (e. g., NSL) and then were rewritten and put back in the law. Most recently Preident Obama renewed the law on Feb 27, 2010 - his signature was entered by auto pen while he was in France
There are many controversies surrounding this law. More information is available through such sites online as the ACLU (who published a fact sheet) and DOJ website.
As a tax preparer faced with having to deal with this law and so many others I now have a greater understanding why there is a mountain of papers generated when I finish and print a tax return and why so many disclosures, identify proofs and other procedural requirements have entered into the business of completing a tax return. Life got more complicated and the Patriot Act is one reason...
Yeah - now paid preparers must take and pass a test with the IRS. The tests costs $116. And then there is the cost of getting the PTIN (preparer tax identification number).
The due diligence requirements are incredible and the penalties on preparers are pretty stiff.
Audits are not fun! I assist people in audits all the time. Amending tax returns more than once is never fun. Never pay somebody a fee to amend your return unless you are absolutely certain they know what they are doing...
The IRS is really going waaayy over board on cases I am involved with currently...
Examples:
(1) one guy lives with a woman and they have two children of their own. They are not married. She has a child by another marriage, so there are three kids in the home. Obviously they file separate returns. They own a house together. Both were audited. Her audit is complete. His is not - the IRS wants him to have a paternity test on the two kids he and this woman have together...
(2) another client needed an amendment to claim the "tuition and fees education tax credit." This credit can be as much as a $4,000 subtraction from total income. Taxpayers receive a Form 1098-T. This form shows in box 1 the "amount paid" to the university while box 2 shows the "amount charged" for the education year. Forms 1098-T are notoriously inconsistent between colleges and the amounts reported are sometimes flat out incorrect... However, because the amount in box 1 for the audit I am working on now does not show and amount the IRS is saying they aren't going to allow the claimed credit... Of course, there have been hundreds of others who had no entry in box 1 and their credit did not get the IRS excited... just this one! So, the audit goes on - I will argue with the IRS in tax language and provide copies of receipts and records of the taxpayer having actually paid the amount billed.
There are other examples of pursuing issues with taxpayers that exceed any resemblance of "reasonableness..." I understand the legal requirement of the IRS to collect taxes" but, in all seriousness, asking a client to get a paternity test!! That is an example of government over reach and unwarranted (my opinion)...
I was audited for 2010. I did make 2 honest errors associated with a corrected 1199D; in addition, I generally bolloxed up the schedule D (lol). But when I got my response to the amended return, I notice that the examiner (or the typist who inputs the amended data) reflected the "sales data" as cost basis data and vice versa. SOOOOOOO--an amended amended return. Ain't life grand? The IRS sure has a way of insuring their own job security. lol