Year-Round Strategies to make the tax laws work for you.  Click here to see the Planning Guide.

Section 1 — Introduction

Informing clients and other taxpayers about ways to save tax and achieve their financial goals is a proven way to build stronger and more profitable client relationships. That’s exactly what the 2011-2012 Tax Planning Guide from PDI Global, part of the Tax & Accounting business of Thomson Reuters, is designed to do. 

But to benefit fully from this versatile marketing, business development, client communication and relationship management tool, you need to distribute the guide in a way that maximizes readership and leverage it with other activities, such as seminars and follow-up calls. To help you do this, we’ve put together this Tax Practice Marketing Guide. In it we:

• Suggest ways to use the different versions and formats the guide comes in,
• Present ideas for leveraging the free Content Store articles you’re entitled to download for ordering your tax guide by the early-bird deadline,
• Show how to integrate your tax guide with other marketing activities,
• Sketch out sample direct marketing campaigns aimed at building your tax practice,
• Offer e-mail and Web marketing tips, and
• Provide sample e-mails and cover letters to use for distributing your guide.

The primary goal of the marketing activities we suggest is to increase awareness of your tax services and encourage readers to contact a professional advisor — namely you — for assistance in selecting and implementing appropriate tax planning strategies.

We hope you find this information helpful in building your tax practice. If you have any questions about the ideas we present here or other marketing and client communication matters, please call your PDI Global Account Coordinator at 800-227-0498.

We thank you for choosing PDI Global’s tax guide and wish you much success in using it to take your tax practice to the next level — and turn more of your potential into profit.

Section 2 — Getting the most from your PDI Global tax guide

Here are some tips for maximizing the effectiveness of your tax guide in increasing awareness of your tax services, generating new business leads and building stronger — and more profitable — client relationships.

Electronic guide

1. Post the guide on your website.

PDI offers three electronic options that enable you to post the tax guide on your site:

• WebTaxGuide. If you purchased this HTML guide, you’ve received a link to the guide in electronic format designed specifically to be read online. WebTaxGuide features content for high-net-worth individuals, as well as for general tax clients and business owners. WebTaxGuide is automatically updated through June 30, 2012, so visitors to your website will always see the most current tax information.
• Flex-E-guide. This HTML e-mail program (see below) has a customizable, attractively designed template that links visitors to WebTaxGuide. Flex-E-guide also features sophisticated tracking capabilities, so you’ll know who opens your e-mail and clicks on specific links.
• PDF of the print guide. When you buy print copies of PDI Global’s tax guide, you can receive a nonpersonalized electronic version of it in a PDF file you can post on your website. It will have the same layout and look as the print guide. Personalized PDF files are also available, and you can purchase a PDF without having to buy print copies.

Whether you post the HTML version or the PDF, you can increase your guide’s reach by putting a link to the tax guide not only on your home page, but also on your tax services, resources, and other relevant pages.

2. Post tax guide banner ads on your and other websites. 

To draw attention to your online WebTaxGuide, you can purchase a WebTaxGuide banner ad from PDI Global that’s branded with your logo and comes in three standard Web ad sizes. You can post the ad anywhere on the Web, including your firm’s website and your Facebook page or other social media site, as well as in your electronic newsletter. You can also have it placed as a (paid) ad on the website of a local newspaper, business association or other organization, or in the e-newsletter of a nonprofit or other entity.

3. Send an e-mail about the posted guide to clients, prospects and referral sources.

To let clients and others know about the guide posted on your website, e-mail a link that recipients can click on to view the guide. You’ll find sample e-mails later in this marketing guide that you can edit as you like and use for the message that delivers the link.

4. Use Flex-E-guide to send a high-impact HTML e-mail with links to specific guide sections.

Flex-E-guide gives you the advantage of being able to customize the HTML template that appears when a recipient opens the e-mail you’ve sent them. In addition to adding your logo, a personal message (and photo, if you like), you can customize the template to reflect your brand identity. You can also direct recipients to links on the page that will take them directly to specific chapters.

And when you purchase Flex-E-guide, you can use the distribution system — and the more than 50 templates provided with it — to send out other e-mails for your firm.

5. Follow up with a phone call or e-mail.

To leverage e-mails about your tax guide, you may want to follow up with a phone call to see if you could be of assistance or answer any questions about the subjects the guide discusses. If you use Flex-E-guide, you’ll have tracking information that shows what topics recipients have clicked on. So you’ll have an even firmer basis for making a follow-up call (or at least sending a follow-up e-mail) to ask if you can provide any further information about those or other tax topics.

6. Include a link to your tax guide in your firm’s e-mail signature lines.

By having at least your tax partners insert a brief message in their signature lines, such as “See our online tax guide for helpful tax-saving ideas” with a link to your tax guide, you can drive traffic to your website and increase awareness of your tax services.

Print guide

1. Include your tax guide in mailings, information packets and proposals.

PDI Global’s 2011-2012 Tax Planning Guide gives you a great way to introduce your firm to prospects or remind clients and referral sources about your tax services. As we explain in detail below, the guide is perfect for use in direct mail campaigns aimed at informing your target audience about the latest tax law changes, reminding them of various strategies they can use to reduce taxes, and suggesting that they contact you for tax planning and preparation services.

It’s also a good idea to include copies of the print guide in welcome packets or proposals with your firm brochure and other materials, and to mail them to your referral network to show how you can be of service to your contacts and their clients. Because of its tangibility, attractive design and extensive areas for personalization, a print guide can make a strong impression that enhances your professional image. A print guide’s physicality makes it especially effective for introducing your firm to prospects and providing valuable information that recipients will tend to hold onto. Make sure you also display some tax guides in your reception area and client meeting rooms.

2. Hand out guides at client meetings and sales calls, or use them as follow-up.

Take some guides with you to give out in face-to-face meetings, or send them out afterward as a way to follow up with those who attend. The guides are a lasting reminder of your firm and the services you provide. Many readers will keep them as reference items, so these booklets will have a favorable impact long after you distribute them.

3. Use them in conjunction with PDI Global’s Tax Seminar-in-a-Box.

This ready-to-use seminar program, which we’ll talk about more below, includes a fully scripted PowerPoint® presentation with speaker notes based on the WebTaxGuide version of our 2011-2012 Tax Planning Guide. To reinforce your presentation and provide participants with a lasting reminder of your brand, be sure to hand out a copy of our print tax guide to those who attend the seminar. And if you haven’t yet ordered your 2011-2012 Tax Seminar-in-a-Box, or need to order print guides for use with it, you can do so by calling 800-227-0498.

4. Send out the guide as a thank-you, or as a birthday or holiday gift.

The tax guide is a great way to thank clients for their business. Include them with tax returns or financial statements, send them out as a thank-you for payment, or present them as a birthday or holiday gift. Clients and referral sources will appreciate both the gesture and the helpful information you provide.

5. Complement the guide with PDI Global’s Tax Rate Card.

To enable you to easily provide clients and contacts with information about tax rates, standard deductions and exemption amounts — and keep your name top of mind for tax services — we’ve developed the pocket-size Tax Rate Card. This handy summary of key tax information — which can be imprinted in black ink with your name, logo and contact information — gives you a cost-effective way to show that you care about helping clients minimize their taxes. Use the 2011 version through the end of the year, and start using the 2012 Tax Rate Card next January.

You’ll find the card a versatile marketing and client communications tool that’s ideal for:

• Inserting in your tax guide or newsletter, and including in other marketing initiatives.
• Sending out with invoices, statements or other mailings.
• Using as a business card and handing out at meetings or seminars.
• Giving to clients and referral sources as a thank-you and to your staff for quick reference.
• Offering on your website to capture prospects’ names.

View a PDF sample, and then use our downloadable order form or call us at 800-227-0498 to order these greatly appreciated yet very economical tax planning (and for you, marketing) tools.

6. Follow up with a phone call or e-mail.

Giving or sending out the tax guide provides the perfect excuse for following up with a phone call to see if you could be of assistance or answer any questions about the subjects discussed. A phone conversation can help you learn about the taxpayer and identify ways you might be of service. At a minimum, the call helps to strengthen your relationship and can lead to an in-person meeting or request for assistance at a later time. If there isn’t time for a phone call, you might want to at least send a follow-up e-mail asking if you could provide additional information about any of the topics covered or others that the guide might not have been able to include.

Tax Seminar-in-a-Box

Presenting tax planning seminars is a proven way to demonstrate your expertise, build new client relationships, strengthen existing ones and increase interest in your tax services. PDI Global’s time-saving Tax Seminar-in-a-Box enables you to conduct successful tax planning seminars quickly, easily and cost-effectively. This professionally produced PowerPoint® presentation — complete with speaker notes — is based on the WebTaxGuide version of PDI Global’s 2011-2012 Tax Planning Guide. It therefore includes content for general tax clients and business owners, as well as for high-net-worth individuals.

To get the most from Tax Seminar-in-a-Box, brand the slides with your logo, insert your contact information, and edit the slides and notes as you like for different audiences. For example, you can leave out certain slides or add content of your own to create mini-presentations focusing on specific tax planning subjects. In addition, be sure to plan your seminars carefully. Allow enough time (it’s good to start about 12 weeks out) to allow for choosing a venue, advertising the seminar, sending and e-mailing invitations, and arranging for equipment and refreshments.  

Also, make sure your presenters are well rehearsed and you have a strategy for having firm members make contact with participants during the event and to follow up afterward. As mentioned above, giving participants a copy of the print 2011-2012 Tax Planning Guide as a takeaway is a good way to keep your firm name top-of-mind and encourage contact for more information or assistance.

Tax Law Change Updates

If a major tax law change occurs from now through June, 2012, you’ll receive an e-mail Tax Law Change Update. You can post it on your website and e-mail it (or a link to it) to clients, prospects and referral sources to inform them about the change. You can even print it out on your letterhead or template to use as a handout or include with guides you have yet to distribute. (If you’ve purchased the WebTaxGuide or Flex-E-guide, those guide pages will automatically be updated as changes occur, but it’s still a great idea to notify your contacts about the updated information.)

By immediately e-mailing these updates to your list of clients and contacts, you can quickly and easily get the word out about tax law changes — and position yourself as an advisor who’s thoroughly on top of the latest developments in tax law. They also provide another opportunity to “touch” your target audience and keep your name top of mind with clients, prospects, referral sources and the media.

Content Store articles

As a bonus for placing your order before August 31, you’re entitled to download up to 10 articles for free from our online Content Store. You can choose articles that provide more detailed information about specific tax subjects, such as home ownership, business ownership, education and investing, or you can select articles on other topics of interest to your target audience, such as cost segregation or determining the bid price for construction projects.

To get your articles, simply go to the home page of our website, pdiglobal.com. At the top right of the page, use the “Sign in” link to log in to the account we’ve set up for you. (Use the username and password we e-mailed to you with your order fulfillment.) On the Content Store search page that then opens, follow the instructions to look for articles on specific topics. Then select and download the articles you want.

Our system will keep track of how many you download. You can select and download all 10 articles at once or one at a time, but you must make your bonus article selections by Dec. 31, 2012.

You can edit and byline the Content Store articles as you like and use them in a variety of ways to cultivate relationships with prospects, as well as strengthen relationships with clients and referral sources:

• E-mail the articles to contacts you think would be interested in the topics discussed.
  For example, send the article on business taxes to business owners and the article on education to people with children. To maximize impact, flow the articles through your branded e-mail template so they have a look that enhances your professional image. (You can edit E-mail #5 on page 23 and use it for a message introducing the article.)
• Post them on your website to complement your tax guide and improve search results.
  The more tax-related information you have on your website, the more you’ll be regarded as a knowledgeable tax advisor, and the more likely that your firm will show up in search engine results on topics the articles discuss.  
• Use them to add more tax-related content to your newsletter.
  You can add the Content Store articles to your PDI Global newsletter by inserting them into the Flex-E-letter e-mail template or having them printed on the back page of your print newsletter. Similarly, you can incorporate them into a newsletter that your firm produces.
• Byline and print them out on your letterhead or article template so you can:
  • Mail the articles to contacts you think would be interested in the subjects covered. (You can use Letter #5 on page 24 as a cover for the article.)
  • Include them with your tax guide, or with proposals for tax-related services.
  • Submit them for publication in local media.
  • Hand them out at conferences and client meetings.
  • Use them as follow-up to conversations with clients and prospects.
  • Use the articles as content for social media posts and messages.
    To drive more people to your website and encourage contact with your firm for tax services, post messages on your Facebook page and LinkedIn or Twitter profile that contain links to the articles (and tax guide) on your website, or send a message or tweet to your social media contacts to let them know about the articles. By spreading the posts and messages over a several-month period, you can keep your firm’s name top of mind and demonstrate your expertise in various tax practice areas.

You may want to send out and/or post roughly one article per month both before and after tax season to keep your tax planning services top of mind.  (See “Sample Direct Marketing Campaign Schedule” on page 9.)

Section 3 — Marketing with PDI Global’s tax guide

Direct marketing is a proven way to increase brand awareness, strengthen existing client relationships and build new ones. To make it easy for you to use PDI Global’s tax guide for this purpose, we’ve developed a series of letters and e-mails you can modify to fit your needs, print on your letterhead or insert in your e-mail template, and send out to market your tax services. Each
e-mail/letter focuses on a specific tax planning issue or problem, shows the benefit of addressing it, and encourages the client or prospect to contact your firm:

• E-mail/letter #1 is for sending the guide to individuals and business owners prior to calendar year end. By choosing the appropriate wording option, you can use the
  e-mail/letter for clients, prospects, and referral sources and media contacts.
• E-mail/letter #2 is for sending out the guide to client or prospect individuals during tax season. Optional language makes it suitable for use as follow-up (without the guide) to
  e-mail/letter #1 sent before year end with the guide.
• E-mail/letter #3 is for sending the guide to business owner prospects, either before year end or during tax season. It can also be sent without the guide to business prospects after tax season.
• E-mail/letter #4 is designed to be sent out without the guide to prospects — both individuals and businesses — after tax season.
• E-mail/letter #5 is for use with the bonus Content Store articles you’re entitled to download for ordering early. When appropriate, add a personal note that relates specifically to the person you’re sending the article to, so you can build rapport and encourage readership.

The direct marketing campaign we suggest below will enable you to “automate” some of your prospecting and client relations activities. But we can’t stress enough that follow-up is essential to achieving results. By following up the e-mails/letters with a phone call or personal e-mail, you can introduce your firm, set up appointments, and learn more about the person’s service needs. At a minimum, you’ll strengthen your relationship with the contact. Keep in mind that while e-mail is OK for someone you know, a phone conversation is typically more appropriate for prospects.

Sample direct marketing campaign

The chart below provides ideas for a communications campaign you can conduct to grow your tax practice. The shaded areas indicate the periods for carrying out the actions indicated. Note that this marketing campaign includes use of a tax newsletter, tax rate card, and tax seminars, in addition to the direct marketing letters/e-mails and tax guides.

*    E-mail/letter with the 2011-2012 Tax Planning Guide. (E-mail/letter #3 can also be used after tax season           without the guide.)

**  Use the 2011 Tax Rate Card through year end, and then switch to the 2012 version in January.

As the campaign schedule shows, we recommend that in addition to the tax guide, you separately e-mail or mail out a personalized tax newsletter, such as PDI Global’s bimonthly Tax Impact, available in electronic and print formats. The reason for this recommendation is simple: Regular contact is still one of the best methods for converting prospects into clients and developing new business from existing clients.

To keep in touch on a more frequent basis, you can also e-mail or mail PDI Global’s Tax and Accounting Alerts (you get roughly 18 alerts a year) or tax articles from our online Content Store. (Be sure to take advantage of the 10 free Content Store articles you’re entitled to receive for ordering by the early-bird deadline — see page 6 for details.) If you post the alerts or articles on your website, you can simply e-mail short summaries with links to the full text. These communications will reinforce your message to clients, prospects, and contacts and cost-effectively position your firm as the go-to source for tax advisory services.

But remember: No matter how informative your tax guide or how compelling your message, it still is not enough to simply send out a guide, newsletter or tax alert and wait for business to come in. You need to proactively contact prospects, clients and referral sources to see how you can be of service or answer questions about the tax-related subjects the publication discusses.

Remember, too, that to comply with the IRS regulations under Section 7216 of the Internal Revenue Code, you cannot send non-tax-related information to tax-return-only clients without their permission. But unless your tax guide customization includes information about your non-tax services, you won’t need consent to send out PDI Global’s tax guide. (For more on this regulation, see our whitepaper, “How Section 7216 regulations and Revenue Ruling 2010-4 may affect your marketing program.”

Web marketing tips

Adding an online tax guide like PDI Global’s WebTaxGuide or a PDF of the print guide to your website can be a cost-effective way to provide clients and others with information about the latest tax law changes and tax planning strategies. But you can’t assume that just because you post the guide on your website it will be seen and read. If someone doesn’t visit your website and click to view your tax guide, it won’t matter that it’s there.

Nevertheless, you can take steps to increase the likelihood that your tax guide will be viewed by visitors to your website and recipients of your e-mails. Here are some suggestions for maximizing the impact of your electronic tax guide:

• Prominently highlight the link to your online guide on your home page — as well as other appropriate pages, such as your tax services page — and include text inviting visitors to look through your guide.
• In all communications — letters, newsletters, press releases, e-mails and marketing pieces — include an invitation to visit your website (include URL address) and view your online tax guide.
• Hand or mail out PDI Global’s Tax Rate Card personalized with the URL for your website and an invitation to view your online guide.
• Run a tax quiz on your website that encourages visitors to look up the answers in your online guide.

For more suggestions about ways to increase traffic to your online guide, see the WebTaxGuide marketing tips on our website, pdiglobal.com.

E-mail marketing tips

PDI Global’s e-mail Flex-E-guide enables you to send out a personalizable HTML e-mail front page to clients and contacts that has links to the various chapters of WebTaxGuide. In addition to an
e-mail about the guide in general, you can use Flex-E-guide to periodically send out e-mails that link to a specific section of WebTaxGuide, such as investing, so you can target specific audiences.

If you use a different e-mail program to send out links to your online guide, it’s best to have the links open directly on the guide (or the guide section you’re directing attention to) or on your home page, where ideally the link to your online guide is prominently displayed.

Also, take care to craft a subject line that gets recipients to open your tax guide e-mail — for example, “Three things you need to know about the new tax law,” or “Will one of these triggers subject you to the AMT this year?” Here are some other things you can do to maximize the likelihood that your tax guide e-mail is opened:

Personalize the sending address. Clients and other intended readers are more likely to open an e-mail addressed personally to them from one of your partners than a generic e-mail from your firm. Recipients are also more likely to click on a link to your guide if there’s a personal message from someone they know, especially if the message (or subject line) points out some tax law or strategy a partner thinks would be of particular interest to a recipient.

If you use Flex-E-guide, you can easily download each partner’s list separately, add the partner’s personal message on the page that appears when the e-mail opens, and send it out with an address that makes it look as if the e-mail is coming directly from the partner. Flex-E-guide also makes it easy to segregate your mailing list into groups, such as business owners or high-net-worth individuals, and send an e-mail that links directly to the section(s) of the guide that may be of special interest to them.  

Make sure you have a good, up-to-date list (and permission to e-mail). As in direct mail, the quality of your list is perhaps the single biggest determinant of a campaign’s success. E-mail addresses change more frequently than postal addresses, so you’ll need to regularly maintain your database if you want to avoid a lot of bounce-backs.

Of course, if you don’t have e-mail addresses for everyone you want to send a tax guide to, you’ll need to get them. Just make sure you also have permission to e-mail everyone you’d like. If you
e-mail people, such as prospects, without their permission, you’ll annoy them and possibly risk being blacklisted for sending spam. For more on e-mail best practices, see our whitepaper, “E-mail Do’s and Don’ts,” on the e-mail/online newsletter page of our website, pdiglobal.com.

Use Flex-E-guide’s tracking system to identify service opportunities. Because Flex-E-guide enables you to see which sections of the guide a recipient links to, you can determine their possible interest in specific tax services. By asking in a follow-up e-mail or phone call whether you could provide more information about a particular matter, you might learn how you could be of service — and generate additional revenue for your firm.

Social media marketing tips

If your firm has a profile page on Facebook, LinkedIn, Twitter or similar social networking sites, include in your profile an invitation to review your online guide, as well as the address of your website where the link to your guide can be found.  Also, ask appropriate partners to put an invitation to view your guide, with the tax guide URL, in their personal profiles.

In addition, consider the following to drive people to your online tax guide:

• On LinkedIn, include a description of your online guide, as well as the URL for it, on the Products & Services page for your firm, as well as on the main profile page.
• On Facebook, periodically post excerpts from the guide — or simply an invitation to view it — on your Wall; be sure to give the URL for your online guide with your posts about it. 
• On Twitter, ask partners to tweet about relevant tax guide topics from their own Twitter accounts, with a link to your online guide for more information on the topic involved.

• If your firm has a blog, you may want to periodically include in it an appropriate excerpt from your online tax guide, with the URL for it.

Why you need both print and electronic guides  

Keep in mind that to maximize the marketing impact of your tax guide, you should consider using both print and electronic versions. Not everyone prefers e-mail, so open rates can be less than 50%. This means that many of your intended readers may never even see the guide and your branding or message.

If you want to make sure your target audience at least looks at the guide (and sees your firm name, logo and contact information), you’ll often do better mailing or handing out a print guide. For more on the need to use both formats, please see our whitepaper “Why you need both print and electronic tax guides” on the tax guide page of our website, pdiglobal.com. 

Also, try to find out which type of guide each intended recipient prefers. Have partners ask clients, prospects and contacts about their preferences for a print, PDF or HTML format. Alternatively, include a response form in billings or correspondence asking recipients to indicate their preferences, or post a form on your website where visitors can indicate whether they wish to receive a print guide. (With Flex-E-guide, you can include a link on the e-mail template to a preferences form on your website.) Enter these preferences into your database, and provide the guide in the format each contact prefers. Integrating print and e-mail guides will enable you to optimize both impact and cost-effectiveness. 

Section 4 — E-mails / direct mail letters for use with PDI Global’s tax guide

Below are descriptions of the sample campaign e-mails and letters, as well as suggestions for making them work for marketing your tax practice. Drafts of the e-mails and letters follow. You can modify them as you like and print them on your letterhead to present the tax planning guide and promote your tax services.

E-mail/letter #1: Tax-saving ideas you can’t afford to overlook in today’s economy

This piece has alternative wording designed to present your 2011-2012 Tax Planning Guide to clients, to prospects, or to referral sources and the media. It emphasizes the importance of tax planning in an uncertain economy and encourages recipients to contact you for more information or assistance. It should go out as soon as possible to get people thinking about taxes and steps they can take before year end to reduce their tax liability.

Both the e-mail/letter and the tax guide emphasize the importance of careful planning to take full advantage of various credits, exemptions and tax-reduction strategies. We suggest sending out the letter in waves over several weeks — ideally before year end — to give your people enough time to follow up, especially with clients. While this piece is designed for a fall campaign, you can use it at other times as a cover letter or e-mail when sending out the guide.

E-mail/letter #2: You may still be able to reduce your 2011 taxes — if you act now!

The second piece encourages prospects and clients to think about ways to minimize their taxes for current and future tax years. It also encourages them to contact you for help with filing their 2010 returns and developing tax plans to meet their short- and long-term goals. The e-mail/letter is intended for wave distribution during January, February and March with phone/e-mail follow-up.

Note that the next-to-last paragraph has alternative lead sentences to use, depending on whether or not you have already sent the 2011-2012 Tax Planning Guide (or an e-mail linking to it) to the person. Be sure to include a copy of the guide (or a link to it) for recipients who may not have been part of your first mailing or otherwise did not receive your guide.

E-mail/letter #3: Don’t let state and local taxes ruin your bottom line

Since this third piece focuses on businesses, you can use it in lieu of e-mail/letter #1 to send out the guide to business prospects before or after tax season. If you use this letter before year end, include the optional line announcing that the guide is enclosed (or attached). This e-mail/letter takes the angle that many prospects may not be getting the expert tax advice — especially about state and local taxes — they need to save tax and improve their businesses’ profitability. Send out and follow up as with the other letters.

E-mail/letter #4: Did you pay more tax than you had to this year?

This piece is designed to help you develop relationships with individuals and business owners who are unhappy with how much tax they paid for 2011, possibly because they don’t have a tax advisor or are dissatisfied with the one they have.

By offering to review a prospect’s financial situation and identify steps they might take to maximize future tax savings, the message gives you the option of charging for an initial tax consultation, or providing it at no charge to prospects in the hope of coming away with a tax planning engagement. (You may want to consider testing both approaches to see which one provides the best long-term results for your firm.) We suggest sending out this piece in May, June and July while taxes are still fresh in prospects’ minds, and following up as indicated above.

E-mail/letter #5: Tax and accounting ideas from [Firm Name]

This e-mail and letter are to be used for sending out the bonus Content Store articles you’re entitled to download for ordering early. You can send the articles one at a time to all contacts every few weeks to inform them about various tax subjects. Or you can send just the articles you think would be of particular interest to certain clients, to match subject matter to client type.

Note that you’ll need to insert the article title in the subject line of the e-mail and the body of the letter. You’ll also need to change the wording in the first line of the e-mail, depending on whether you attach the article or flow it into the body of the e-mail.

Don’t forget to say thank you — and stay in touch

To leverage your campaign’s effectiveness, have partners send a personal thank-you note after tax season to clients you helped with their taxes. The note can thank them for giving your firm the opportunity to be of service and encourage them to call with any tax-related questions.

If you send out a tax or other newsletter, you can include the note with the newsletter. If you don’t have a tax newsletter, consider using one. As we mentioned before, newsletters are a great way to stay in touch and provide helpful information to clients on a year-round basis. Many PDI Global newsletters deal with tax issues, often on a niche-specific basis. But you might especially want to consider Tax Impact, Focus, Management & Tax Concepts and <a href="http://www.pdiglobal.com/content-publi

The IRS has released much-anticipated temporary and proposed regulations on the capitalization of costs incurred for tangible property. They impact how virtually any business writes off costs that repair, maintain, improve or replace any tangible property used in the business, from office furniture to roof repairs to photocopy maintenance and everything in between. They apply immediately, to tax years beginning on or after January 1, 2012.

These so-called “repair regulations” are broad and comprehensive. They apply not only to repairs, but to the capitalization of amounts paid to acquire, produce or improve tangible property. They are intended to clarify and expand existing regulations, set out some bright-line tests, and provide some safe harbors for deducting payments.

The regulations are an ambitious effort to address capitalization of specific expenses associated with tangible property. The regulations affect manufacturers, wholesalers, distributors, and retailers—everyone who uses tangible property, whether the property is owned or leased. The rules provide a more defined framework for determining capital expenditures.

Most taxpayers will have to make changes to their method of accounting to comply with the temporary regulations and will need to file Form 3115. Taxpayers who filed for a change of accounting method following the issuance of the 2008 proposed regulations will probably have to change their accounting method again.

The IRS has promised to issue two revenue procedures that will provide transition rules for taxpayers changing their method of accounting, including the granting of automatic consent to make the change. The regulations require taxpayers to make a Code Sec. 481(a) adjustment; this means that taxpayers will have to apply the regulations to costs incurred both prior to and after the effective date of the regulations.

The new regulations provide rules for materials and supplies that can be deducted, rather than capitalized. The rules provide several methods of accounting for rotable and temporary spare parts, and allow taxpayers to apply a de minimis rule so that they can deduct materials and supplies when they are purchased, not when they are consumed.

Costs to acquire, produce or improve tangible property must be capitalized. The regulations address moving and reinstallation costs, work performed prior to placing property into service, and transaction costs. Generally, costs of simply removing property can be deducted, but costs of moving and then reinstalling property may have to be capitalized.

To determine whether a cost incurred for property is an improvement, it is necessary to determine the unit of property. Generally, the larger the unit of property, the easier it is to deduct expenses, rather than have to capitalize them. The regulations provide detailed rules for determining the unit of property for buildings and for non-building tangible property. For buildings, the IRS identified eight component systems as separate units of property, requiring more costs to be capitalized. However, the new rules also provide for deducting the costs of property taken out of service, by treating the retirement as a disposition.

The new regulations require virtually every business to review how repairs, maintenance, improvements and replacements are handled for tax purposes, with both mandatory and optional adjustments made to past treatment as appropriate.

Please feel free to call this office for a more targeted explanation of how these new regulations impact your business operations.

The fate of the employee-side payroll tax cut along with a host of tax extenders and other expired provisions could be decided in coming weeks. A conference committee of House and Senate members is negotiating a full-year extension of the payroll tax cut and could add some or all of the tax extenders to a final package. Lawmakers also could extend the payroll tax cut without acting on any tax incentives.

Payroll tax cut

The Temporary Payroll Tax Cut Continuation Act of 2011 extended the employee-side OASDI tax cut through the end of February 2012. The employee-share of OASDI taxes is 4.2 percent for the two-month period, rather than 6.2 percent. The employer-share of OASDI taxes remains at 6.2 percent for the two month period. Self-employed individuals also benefit from a two percentage point reduction in OASDI taxes.

Unless extended, the employee-share of OASDI taxes is scheduled to revert to 6.2 percent after February 29, 2012. The White House and the leaders of the two parties in Congress agree that the payroll tax cut should be extended a full-year. They disagree, however, how to pay for the extension; even if it should be paid for at all.

Congress could extend the two-month payroll tax cut through the end of 2012 without paying for it. The 2011 payroll tax cut was unfunded. Congress appropriated to the Social Security trust funds amounts equal to the reduction in payroll tax revenues. The 2011 payroll tax cut was estimated by the Congressional Budget Office cost approximately $111 billion. Extending it through the end of 2012 is estimated to cost just as much if not more.

House Republicans reportedly have proposed a number of revenue raisers to offset the cost of extending the payroll tax cut through the end of 2012. One GOP proposal would extend the current pay freeze for employees of the federal government. Another GOP proposal would require higher-income individuals to pay increased Medicare premiums.

One possible revenue raiser, increasingly under discussion by Democrats, is a change in the taxation of so-called carried interest. Current law generally taxes carried interest as capital gains and not as ordinary income. Past efforts to change the tax treatment of carried interest have failed to pass Congress.

Extenders

The so-called tax extenders, popular but temporary tax provisions, expired at the end of 2011. Many taxpayers are surprised to learn that their particular tax break, whether it be the state or local sales tax deduction, the teachers’ classroom expense deduction, or the research tax credit, are temporary. The extenders have been routinely revived many times in the past. This year, however, could be different. Faced with record federal budget deficits, lawmakers may decide to extend only some of the expired provisions.

President Obama’s FY 2013 proposals

President Obama is expected to release his fiscal year (FY) 2013 federal budget proposals in early February, which will reignite debate over the Bush-era tax cuts. President Obama is expected to urge Congress to allow the Bush-era tax cuts to expire after 2012 for higher-income taxpayers, which President Obama defines as individuals earning more than $200,000 or families earning more than $250,000. In recent weeks, there has been speculation that President Obama may revisit those definitions in his FY 2013 budget, possibly raising the amounts.

Few Capitol Hill observers expect Congress to take any action on the Bush-era tax cuts before the November elections. Instead, Congress may take up some of President Obama’s other proposals. As in past budgets, President Obama will likely propose to extend some energy tax breaks for individuals and businesses, extend tax incentives for education and provide some targeted-tax breaks to businesses. President Obama has also promised to introduce proposals to encourage U.S. companies to “insource” jobs at home.

On some issues, such as energy and education, lawmakers may find common ground but negotiations are likely to go down to the wire. Our office will keep you posted of developments.

If you have any questions about the payroll tax cut, tax extenders or the various tax proposals under discussion, please contact our office.

The IRS reopened its offshore voluntary disclosure program in early 2012 in response to what the government described as strong interest among taxpayers. The reopened program, the third of its type in recent years, encourages taxpayers with unreported foreign accounts to make full disclosures in exchange for a reduced penalty framework. Like its predecessors, the terms and conditions of the reopened program are very complex. The IRS has promised to provide more details. In the meantime, the prior offshore disclosure programs are guides to how the IRS intends to implement the third, reopened program.

Previous disclosure programs

The IRS launched two previous offshore disclosure initiatives: one in 2009 and another in 2011. Both programs offered reduced penalties in exchange for full disclosure. In early 2012, the IRS reported it received 33,000 voluntary disclosures from the 2009 and 2011 offshore initiatives. The government has collected over $4.4 billion from the 2009 and 2011 programs. The IRS predicted it will collect more revenue as it continues to work cases.

Reopened program

The reopened program operates very similarly to the 2009 and 2011 programs but with some key differences. The previous programs were temporary. The 2011 program ended in mid-September 2011. The reopened program has no set end date. The IRS cautioned, however, that it could close the program at some future date. The decision to end the program is solely at the discretion of the IRS.

The reopened program requires taxpayers to file all original and amended tax returns and include payment for back-taxes and interest for up to eight years as well as pay accuracy-related and/or delinquency penalties. Additionally, taxpayers must pay a penalty of 27.5 percent of the highest aggregate balance in foreign bank accounts/entities or value of foreign assets during the eight full tax years prior to the disclosure. In comparison, the highest penalty in the 2011 program was 25 percent. IRS officials have said that the penalty was increased because the agency does not want to reward taxpayers who did not participate in the 2009 or 2011 disclosure programs because they anticipated that a future penalty would be lower.

In limited circumstances, taxpayers may qualify for a 12.5 percent penalty or a five percent penalty. Generally, taxpayers whose offshore accounts or assets did not surpass $75,000 in any calendar year may qualify for the 12.5 percent penalty.

The requirements for the five percent penalty are very narrow. The IRS has explained that taxpayers must meet four conditions: (1) The taxpayer did not open or cause the account to be opened; (2) the taxpayer exercised minimal, infrequent contact with the account, for example, to request the account balance, or update account holder information such as a change in address, contact person, or email address; (3) except for a withdrawal closing the account and transferring the funds to an account in the United States, the taxpayer did not withdraw more than $1,000 from the account in any year for which the taxpayer was non-compliant; and (4) the taxpayer can show that all applicable U.S. taxes have been paid on funds deposited to the account (only account earnings have escaped U.S. taxation).

The penalty amounts in the reopened program are not set in stone, the IRS cautioned. It may eventually increase penalties in the program for all or some taxpayers or defined classes of taxpayers.

Quiet disclosures

One goal of the three programs is to caution taxpayers against so-called “quiet disclosures.” A quiet disclosure occurs when a taxpayer files an amended return and pays any tax delinquency without making a formal voluntary disclosure. The IRS warned taxpayers making quiet disclosures that they risked being sanctioned to the fullest extent allowed by law.

Critics

The offshore disclosure programs were not without their critics. The National Taxpayer Advocate recently told Congress that the IRS should streamline what is a very complicated process. The National Taxpayer Advocate also reported that IRS examiners were assuming that all violations were willful unless a taxpayer presented evidence to the contrary. It is possible that the IRS may revisit some of the terms and conditions of the reopened program in light of the National Taxpayer Advocate’s report.

If you have any questions about the reopened offshore voluntary disclosure program, please contact our office.

Taxpayers with children should be aware of the numerous tax breaks for which they may qualify. Among them are: the dependency exemption, child tax credit, child care credit, and adoption credit. As they get older, education tax credits for higher education may be available; as is a new tax code requirement for employer-sponsored health care to cover young adults up to age 26. Employers of parents with young children may also qualify for the child care assistance credit.

Dependency Exemption

In addition to the personal exemption an individual taxpayer may take for him or herself to reduce taxable income (Line 42 on Form 1040), that taxpayer may also take an exemption for each qualifying dependent who has lived with the taxpayer for more than half of the tax year. A dependent may be a natural child, step-child, step-sibling, half-sibling, adopted child, eligible foster child, or grandchild, and generally must be under age 19, a full-time student under age 24, or have special needs. The amount of the exemption is the same as the taxpayer’s personal exemption, $3,700 for the 2011 tax year and $3,800 for the 2012 tax year.

Child Tax Credit

Parents of children who are under age 17 at the end of the tax year may qualify for a refundable $1,000 tax credit. The credit is a dollar-for-dollar reduction of tax liability, and may be listed on Line 51 of Form 1040. For every $1,000 of adjusted gross income above the threshold limit ($110,000 for married joint filers; $75,000 for single filers), the amount of the credit decreases by $50.

Child and Dependent Care Credit

If a taxpayer must pay for childcare for a child under age 13 in order to pursue or maintain gainful employment, he or she may claim up to $3,000 of his or her eligible expenses for dependent care. If one parent stays home full-time, however, no child care costs are eligible for the credit.

Adoption Credit

Taxpayers who have incurred qualified adoption expenses in 2011 may claim either a $13,360 credit against tax owed or a $13,360 income exclusion if the taxpayer has received payments or reimbursements from his or her employer for adoption expenses. For 2012, the amount of the credit will decrease to $12,650, and in 2013 to $5,000.

Higher Education Credits

There are two education-related credits available for 2012: the American Opportunity credit and the lifetime learning credit. The American Opportunity credit amount is the sum of 100 percent of the first $2,000 of qualified tuition and related expenses plus 25 percent of the next $2,000 of qualified tuition and related expenses, for a total maximum credit of $2,500 per eligible student per year. The credit is available for the first four years of a student's post-secondary education. The credit amount phases out ratably for taxpayers with modified AGI between $80,000 and $90,000 ($160,000 and $180,000 for joint filers). The lifetime learning credit is equal to 20 percent of the amount of qualified tuition expenses paid on the first $10,000 of tuition per family. The phaseout for 2012 ranges from $52,000 to $62,000 ($104,000 to $124,000 for joint filers). Parents also find tax relief in saving for college though Coverdell accounts, section 529 plans and specified U.S.. savings bonds.

Extended Health Care Coverage

Effective since September 23, 2010, the new health care law requires plans to provide coverage for children until they attain age 26. Further, effective on or after March 30, 2010, children under the age of 27 are considered dependents of a taxpayer for purposes of the general exclusion from income for reimbursements for medical care expenses of an employee, spouse, and dependents under an employer-provided accident or health plan. Therefore, a plan must provide coverage to a child who is still a dependent up to age 26; but can do so up to age 27 without income tax consequences. A child includes a son, daughter, stepson, or stepdaughter of the taxpayer; a foster child placed with the taxpayer by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction; and a legally adopted child of the taxpayer or a child who has been lawfully placed with the taxpayer for legal adoption.

Child Care Assistance Credit (for businesses)

Employers may take up to $150,000 of the eligible costs of providing employees with child care assistance as tax credit. These costs may include a portion of the costs of acquiring, constructing, improving, and operating a child care facility.

If you have any questions about these provisions and how they may benefit you, please contact our office.

The Treasury Department is authorized to offset a taxpayer’s tax refund to satisfy certain debts. A spouse who believes that his or her portion of the refund should not be used to offset the debt that the other spouse owes may request a refund from the IRS.

Offset

If an individual owes money to the federal government because of a delinquent debt, the Treasury Department’s Financial Management Service (FMS) can offset that individual's tax refund (and certain other federal payments) to satisfy the debt. The debtor will be notified in advance of the offset.

A taxpayer’s refund may be reduced by FMS and offset to pay:

• Past-due child support
• Federal agency non-tax debts
• State income tax obligations, or
• Certain unemployment compensation debts owed a state.

FMS advises taxpayers by written notice of an offset. FMS has explained that the notice will reflect the original refund amount, the taxpayer’s offset amount, the agency receiving the payment, and the address and telephone number of the agency. FMS will notify the IRS of the amount taken from your refund.

Form 8379

If a taxpayer filed a joint return and is not responsible for the debt of his or her spouse, the taxpayer may request his or her portion of the refund by filing Form 8379, Injured Spouse Allocation, with the IRS. Form 8379 may be filed with the original return or by itself after the taxpayer is aware of the offset.

The IRS has instructed taxpayers filing Form 8379 by itself to attach a copy of all Forms W-2 and W-2G for both spouses, and any Forms 1099 showing federal income tax withholding to Form 8379. Failure to attach these items may result in a delay in processing by the IRS.

The IRS has reported on its website that it generally processes Forms 8379 that are filed after a joint return has been filed in approximately eight weeks. The timeframe for processing a Form 8379 that is attached to a joint return is approximately 11 weeks (14 weeks if the joint return is filed on paper).

As an individual or business, it is your responsibility to be aware of and to meet your tax filing/reporting deadlines. This calendar summarizes important tax reporting and filing data for individuals, businesses and other taxpayers for the month of February 2012.

February 1

Employers. Semi-weekly depositors must deposit employment taxes for payroll dates January 25–27.

February 3

Employers. Semi-weekly depositors must deposit employment taxes for payroll dates January 28–31.

February 8

Employers. Semi-weekly depositors must deposit employment taxes for payroll dates February 1–3.

February 10

Employees who work for tips. Employees who received $20 or more in tips during November must report them to their employer using Form 4070.

Employers. Semi-weekly depositors must deposit employment taxes for payroll dates February 4–7.

February 15

Employers. Semi-weekly depositors must deposit employment taxes for payroll dates February 8–10.

Monthly depositors. Monthly depositors must deposit employment taxes for payments in January.

February 17

Employers. Semi-weekly depositors must deposit employment taxes for payroll dates February 11–14.

February 23

Employers. Semi-weekly depositors must deposit employment taxes for payroll dates February 15–17.

February 24

Employers. Semi-weekly depositors must deposit employment taxes for payroll dates February 18–21.

February 29

Employers. Semi-weekly depositors must deposit employment taxes for payroll dates February 22–24.

March 2

Employers. Semi-weekly depositors must deposit employment taxes for payroll dates February 25–28.

March 7

Employers. Semi-weekly depositors must deposit employment taxes for payroll dates February 29–March 2.