Leaderboard

It worked! First client received refunds of $8K and $9K plus interest. Waiting to hear from next 2 clients I also amended. I'm hearing that it depends on who is looking at the return, so may be luck of the draw. They deserved it, made my day. Client told me to pick the restaurant. Of course I will include the cost of the meal in income, I hope I remember to write it down after the $50 bottle of wine.

When I look into a mirror I see my IT guy.

My IT Guy is irate and testy......

Publication 3920 states that terrorist attack related injuries and illnesses that contributed to retirement would be totally tax free. Since 2009 the City of New York has made taxable a portion of all disability pensions for monies received after 20 years of service. The publication states that taxpayers should have agency (fire and police in my cases) issue an amended 1099R. City won't do it stating legal mumbo jumbo issues. I have a few guys who would like to file an amended return with attached documentation from pension bureau stating pension is due to WTC related injury or illness. Do you think this will fly and worth a try?

Not only did client make my day but you guys did too! Elrod, those glasses look very familiar to me. Had my physical recently and Doc said 1 or 2 glasses a day, but I don't remember him saying anything about the size of the glass or how high, so I will use my good judgment.

Bill.....Remember to fill your glass first....

Great, thanks Abby.

Contents of Elrod's link:

This was very helpful Judy, thank you for taking the time to put it together. Last year I was one of a few "firefighter" preparers who was conservative on this subject as some of us did prepare a 1040X for the '17 returns. Some taxpayers did see the relief but others were asked by IRS to get a corrected 1099R which is not possible. It all depended on who was at the other end of the 1040X. I've attached the memo put out by NYC's Law Department for their feelings on this issue. I can see where they are coming from and it is the reason I didn't believe it was worth preparing an amended return last year. But with the few who did receive relief, good news spreads fast (we had a saying, telephone, telegraph, tell a fireman). So it's the luck of the draw, and I may as well join in. Thanks, Bill WTC Disability Memo V2 - (# Legal 8411565) (004).pdf

FDNY, it's part sec 101 of the Victims of Terrorism Tax Relief Act of 2001 that was H.R. 2884 found in this link. Check out the full text here: https://www.congress.gov/bill/107th-congress/house-bill/2884/text And the code references are there in the text of the bill, specifically referencing sec 6013(f)(2)(B) and sec 692. Also, there's this non-official news brief: https://www.gillibrand.senate.gov/news/press/release/gillibrand-reminds-9/11-first-responders-survivors-of-possible-tax-relief-available-through-irs , and this Journal of Accountancy article that came out shortly after the bill passed. Hope these links help with your documentation.

Thanks Catherine, maybe someday it will happen. All the city has to do is request a ruling.

Thanks Bulldog, I will give it a try attaching the disability determination letter which does state pension was granted due to WTC related illness. I will also attach the corresponding section of pub 3920 to help along the agent whose desk the 1040X lands on. The explanation from the city's corporation counsel is aware of this but the fact that a certain part of the pension is from accumulated additional contributions and interest by the retiree it is not considered part of the regular pension. The letter also states they would like to see a more substantial authority from the IRS. Worse that can happen is IRS asks for a corrected 1099R. We know where that will go. I will pass along your thanks to those members who were affected, all of them came down with weird form of cancer. Thanks again, Bill

Solid documentation being IRS code, not pubs. But their own code - now THAT they would have a very hard time arguing with!

Absolutely. And thank your clients for their service and heroism. The argument is substance over form. The law clearly states that the money is tax free, regardless of what the paper from the payer says. It is no different than getting a 1099 for Misc Income that should have been coded to rents. Just because the amount is in the wrong box does not change the substance of the transaction. Just make sure you have your documentation solid and be ready to appeal if the IRS denies the claim. Tom Modesto, CA