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I can't speak for anyone else, but I am CERTAINLY getting an education reading these posts. Thanks for all the insights into how this process works and the warnings concerning the pitfalls.

You are so far over your head you don't even know you're drowning. Your client needs knowledgable and qualified representation, and you aren't even attempting to educate yourself on the issues you are clueless about. Have you even reviewed the 19 pages of documents that were sent by your client? Have you read the tax treaty (if there is one with Columbia) to see if the dividends are taxable? It's a de minimus amount, but providing proof for your position on them could go a way towards convincing the auditor that you are competent, for which you'll need all the help you can get, because you certainly are not convincing me. Case law, facts & circumstances are what will prove or disprove the deduction.

"It should be re-labeled as "entitlement"....especially when someone files a Schedule C to get it." MsTabbyKats, I don't usually reply to these threads, but I must take umbrage with your blanket statement. I have many clients who file a "C", and have for years. They are drywallers, roofers, auto mechanics, lawn care providers, housekeepers, and even insurance salesmen. Some have employees, some use other IC'S. All keep good records, and have provided for their families quite well, and gladly paid any tax due. The last few years, though, after the economy tanked, many of them have gotten the EIC, much to their surprise. I'm sure you meant those who file a "C" with poor or nonexistent records (who we shouldn't even be filing for anyway), but your statement maligns many hard working people who are having a hard time right now.

Looks like they noticed how fast Drake is (any maybe some other competitors). Good thing for ATX they realized smart tax preparers equate speed with greater revenue. One would get the impression they didn't know that until now.

Agreed. To me, this thread has been especially enlightening in several areas. And fascinating.

Joel: I'm glad you pointed out that clarification. In reading some of the other responses, I realized that some people took my reference to "speed" to mean how fast the program crunches the numbers. That's a part of it, but far from the whole story. Speed includes how fast it loads, how fast it processes updates, how fast it prints, how fast it backs up, etc. It also takes into account how long we might spend watching an hourglass spin or how many times we have to recover form a crash and re-enter data. Because the ultimate measure of speed isn't how quickly the program does any of that, but rather how quickly it allows you to move on to the next project. That's how we evaluate effectiveness if the merchandise we are selling is our expertise. Slow software forces us to leave inventory gathering dust on the shelf.

I agree it is new stuff I did not know especially with 1040NR. I am more interested in finding out what the final resolution was and why? One thing that bothers me is that the client faxed a 19 page document to the IRS that may have stuff that could undercut his claim. I sincerely hope that does not happen. It would be like shooting yourself! When i deal with a desk audit, I have the client bring me all the supporting documentation for review before it is sent to IRS. Few years back one of my client under audit for business expenses on 2106 thought that she would impress the examiner by sending her receipts for charitable donations to prove how good she is at keeping records. I advised her against it and thankfully she followed my instructions. You never give any more info to IRS than is absolutely necessary to resolve the issue or the question!

>>If the auditor needs more.........<< The auditor doesn't need any more. According to you, "The letter he got says if he disagrees he should have a conference with a local appeals officer.." That sounds to me like the case is already closed. Your employer letter could backfire because it only says the education is not needed for the current job. It does not address the key question, whether an MBA would qualify him for a different job. Your tuition statement could backfire because it shows the scholarship was not used for tuition. According to the NYU website, "International students are not eligible for scholarships." I guess somebody else gave him a scholarship, probably identified in the 19 pages, which was used for non-academic living expenses. Interest and dividends, as you have already noted, CAN be taxable to a student on an F visa. More research is needed. Good luck with your phone call this morning. I would expect the auditor to take the easy way out, inviting you to send in your documentation. That will NOT re-open the audit. It might be considered a request for appeal, but more likely it will just be a tactic to get you off the phone and burn up some time for the client to exercise his rights. That's usually how it works.

Yes, politics at all levels is essentially the art of selling influence and buying votes. By the time they get on the national scene, they are already owned by one or more special interests. You're right - we're crossing the line here. I'm going to stop. Not because I don't find it interesting, but I have lots of work to do. Need to earn that income so I can pay those taxes, and at several levels I'm grateful to have that sort of problem.

Beautiful family, Jack. I'm glad you had a lovely day with your kids.

I don't see how ATX could ever beat Drake in speed - it never has in the past. I think they only way they can beat Drake's speed under current conditions would be to enable ATX to sense what you're about to do on the keyboard and do it for you. Maybe some sort of mind-reading capability. (Yes, I know I'm exaggerating.) But who knows, maybe ATX is learning their lesson and they can magically fix it. They certainly are telling us that is the case with this latest missive. Past history doesn't suggest that is likely, but if they ever do succeed at this I'll certainly acknowledge their accomplishment. Aside from having moved to Drake for purely business reasons, I have no hidden agenda or loyalties of any kind. This is all about business for me.

My husband is 5'9" and our two boys are 6'3" and 6'4".....go figure. (Junk food???????????) Glad you had a great Father's Day. "We" did too.

My Father's Day gift! All 4 (I count my son-in-law as one of mine) kids took me to lunch at Red Lobster. Me and my lovely wife in the back row. Kids, left to right: Daniel, Rebekah, Stephanie & Nathan. Nathan is the son-in law. Best Father's Day Ever!!!

Congratulations, JohnH! What a wonderful way to celebrate Father's Day!

I agree with you Jack until the point where the software is slowing me down so much that I can't get my clients returns filed on a timely basis. This past tax season, that is what I felt like was happening with ATX. Speed isn't primary but I do want a software that will let me work to my capacity and not the other way around.

Saw this sign in a business: We do three kinds of work here. Good-Cheap-Fast. You may have any TWO. If it is Good and Cheap, it will not be Fast. If it is Good and Fast, it will not be Cheap. If it is Fast and Cheap, it will not be Good. There is much more to evaluating tax software than how fast a person can put the information in. As I strive to become a professional of professionals, speed is about 3rd or 4th priority. In my business, I have clients, not customers looking for the "fast food" version of tax preparation.

I have never been a great fan of refundable credits because the opportunity of distorting facts to fit the situation to claim the credit. When I see how they filled out the organizer and how they answer the checklist questions, I can tell what they are trying to achieve.

Ordained by whom?

It was an extra special Fathers' day for me. I had the honor of baptizing my youngest grandson in this morning's service.