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I think a lot of times the original poster gets the answer or affirmation pretty quickly. She finishes the return, client picks up and pays, she takes a nap, goes to dinner, and enjoys a movie while the rest of us try to think of every possible outcome to every possible scenario. This is why we are great. And also why they make jokes about us.

OP is happy as a clam

I also have had good success with the first time offender abatement - both over the phone and via snail mail. I have done a lot more snail mail lately since it takes a lot less time than enduring those incredibly long wait times on the phone. The old "taking the path of least resistance" idea. Doing the snail mail, we always get the "we received your correspondence and will reply within 60 days" letter. The next correspondence has always been, "OK, penalty abated". Keep your letter simple. Put your client's identifying information on it, attach the notice, state in the letter "relative to the attached notice we are hereby requesting abatement of all penalties associated therewith under the first time offender penalty abatement policy. This was taxpayer's first year as an S-Corp and the shareholders were mistaken about the due date of the return. Thank you for your cooperation in this matter." Always use the KISS policy when dealing with the IRS.

You might be able to use the First Time Abatement. I've had it approved over the phone a few tImes.

@jklcpa I will tell my husband this evening!

So my husband often says that this would be a GREAT science fair project; Just HOW happy ARE clams? And how can one tell? They make jokes about engineers, too. ;-)

I had a robo-call message on my machine a couple of days ago. This one was different! At the end of the "you have a fraud case and the IRS is going to arrest you unless you call blah-blah" the robo-voice ended with "God bless you" -- now THERE is proof the IRS did not make the call!

Thank you for your help.

Exactly. Even if I don't have time for a robo-call, I put the headset down and let the live person come on and talk to the air. If I can tie up their line for a minute, and if thousands of others do also, there's thousands of calls they can't make today.

See IRM 25.6.1.9.4.4 - "The joint return is deemed filed on the actual filing date of the joint return where only one spouse filed MFS and the other spouse did not file and had gross income in excess of the exemption amount."

Lion then posted:

We got a bunch over a few days, more than one a day. Hubby really wanted to play with them. But by the time he'd pick up, they were gone; and their callback numbers went to voicemail or didn't connect to anything. He's retired with time on his hands and wants to string one of them along!

Well I finally got a call today from one of the other IRS scammers that allowed me to talk to them. First question (female voice) "how much do you owe the IRS?" Me, well if you are calling me and you are indeed the IRS, then you should know what I owe. No response, me- I owe absolutely nothing and I have your phone number and will turn you and the number over to the FTC. Click caller gone. They used the name National Tax Services. I googled the name and there are some legitimate businesses with this name so the scammers are apparently stealing business names as well. I know I owe zippo and I also know if I did, the IRS would never call me. Boy this is getting frustrating.

Well, yes. But what I frequently do is make a note of what needs investigation, to be done in a non-time-crunched period. To get to that spot, though, sometimes I just need something that *works* for when I know what the result should be and just can't get it there.

OP didn't mention if her client has other foreign taxes paid. My clients with a K-1 often have more K-1s plus lots of other investments with total foreign taxes running more like $800 and requiring the full Form 1116. Or, are children with no tax liability so we want the 1116 carry forward to use in a later year. Or, had foreign earned income in the mix. There are options with foreign taxes and foreign income, just like with education credits/adjustments/deductions. Knowing how to input in your software for ALL the options makes it easier to calculate the best option for a given client in a given year, while you save time by putting your software to work for you. (That's why this is a great forum with users of different software to chime in!)

The thing is about bypassing the 1116 altogether and putting it all on the 1040 directly, we are still supposed to calculate the FTC with any limitations that might apply that would reduce it. Does anyone actually do that? Rhetorical, don't answer. For $61, I'd force the flow of it to page 2 of the 1040 and move on.

No need to call Drake. It happens when there are foreign amounts on a 1099-INT. It should be entered on the 1099-DIV screen and it won't be a problem since the worksheets aren't transmitted to the IRS. Just don't print the worksheet for the client if it will be questioned why it is on a DIV worksheet.

Call Drake. Ask them where to input. Let the software "flow" the amounts for you. And, charge the client even if you use a short cut. Let them see on your invoice your price for K-1s. They pay plenty for those investments, especially if they purchased via a broker who told them it's just like owning stock! So, let them pay you for the tax reporting consequences of their decisions. Some of them have multiple activities that must be reported separately. And, wait until they make partial sales of their shares and you have to work with basis adjustments and ordinary income. Explain to them that it's not stock or a mutual fund; it's a company and they are a partner. Charge them now and explain to them why, so when you need to charge them even more for partial sales, for instance, you've prepared them.

The 1116 is really automatic. You just need to learn what boxes have to be entered on the K1 input. BUT if you have less than $300 single/$600 married in foreign tax, you can delete the 1116 and the tax will automatically show up on the 1040. Boom!

Yes, you can put the foreign taxes from the K-1 on the sch A instead. However, if you still want to use the 1116, you don't have to break out between passive and general income categories if this client is a limited partner with less than 10% in the ptnship and does not activity participate. That is stated in the form 1116 instructions starting at the very bottom left of page 5 of the instructions. In this instance, the form's instructions references the reg sec 1.904-5(h)(2) where this is stated. As a matter of fact, I think that this same rule should also allow you to bypass the 1116 altogether and enter directly on the 1040 since it is only $61. The rule for reporting directly on the 1040 is if it's under the dollar thresholds, is all in the passive category, and is reported on a 1099DIV, 1099INT, or a K-1. It seems like it meets all the criteria to me.

Can I put the $61 on Sch A and be done with it? I'm going to charge a lot more than the $61 credit to prepare the 1116 forms....

Agent 99 was a hottie. Tom Newark, CA

We need Maxwell Smart's "Cone of Silence" for all our conversations! Who remembers "Get Smart"?

That's when you turn the ringer off at night and set the message machine to scold fiercely.