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Yes, regarding my client above, we mailed the response to the CP2000 with a check. IRS cashed the check, but they have not processed the letter, response form, and amended return labeled "CP2000." I want to tell the client to ignore the 2626C, but they want us to do something. I think it might be awesome if IRS would stop sending notices until they catch up. Sending incorrect notices is not working.

@Terry D, As for problem #1, keep trying to fax it and keep a copy of the transmission log. Also, even though you've prepared a written response with documentation, be sure to include the page that has the 3 boxes where the client indicates no agreement, partial agreement, or agrees to all the changes. See my response on that immediately above. Each of those tells the IRS' computer what type of response you are sending to the proposed changes. For problem # 2 suggest either you or the client check the online transcript of account. Even though the 1st stimulus payments were made by direct deposit that does not mean that the 2nd payments were made in that same manner. Checks could have been lost in the mail or prepaid debit cards assumed to be junk mail. I agree with Deb that a trace may need to be put on the payments if clients' accounts show they were paid. Several of my clients received stimulus payments that were not in even dollar amounts and they assumed that it was the prior year's tax refund, and told me they never received the stimulus payments.

You can unfreeze your credit temporarily so the IRS can verify your identity. The IRS uses Experian, at least they did when I had to do this. Anyone know for sure if that's still current? By the way, neither I nor my husband can set up secure accounts. "There is something in your file that prevents..." No IRS employee has been able to get me in since the very, very old eService days prior to their redo a few years ago. And, the code they say they mail me, over and over again, never arrives. Someday I'll make an appointment at an IRS Service Center. I read somewhere that the IRS thinks 30% of taxpayers will be able to use their secure access. Not a very high number.

One of my client already received their refund without the verification.

"Request non-assertion of accuracy penalty in an audit or underreporter notice due to reasonable cause: when a taxpayer I audited or has a CP2000 notice, the taxpayer must contest the penalty during the audit or CP2000 process prior to the assessment. Taxpayers need to argue that they made a reasonable attempt to properly report their tax liability. Reliance on a tax pro, ignorance of the law, and other factors can be considered in requesting non-assertion of the penalty. If the accuracy penalty is already assessed, the taxpayer must request audit or CP2000 reconsideration to have the penalty abated."

Very true; never file an amended return with a CP2000 letter. New schedule D with transactions plus stmts from Fidelity, yes. They'll take it from there, unless there are other factors you want to include. If you do decide to include the 1040, write on it in bold "DO NOT PROCESS - supplementary information ONLY."

Yesterday morning my cycling partner tells me his kids are coming over for Father’s Day. He reveals to me his daughter is a customer service supervisor out of Andover. What? I need to talk to her. She basically told me what I already knew. They’re seriously backed up, too many people still working from home while trailers loaded with returns and not enough experienced people manning the phones. Good luck to us all.

The "Update portal" which may be used to opt out of the payments is now available here: https://www.irs.gov/credits-deductions/child-tax-credit-update-portal I don't see much reason to opt out, but you can also use it to see what you'll get, and future enhancements will allow: changing bank account information changing mailing address changing family status and income (will this allow opting in?)

Late last week I took a free IRS online CPE class about the new Tax Pro Online System which the IRS will be rolling out next month. The Tax Pro Online System will require both the Tax Professional and their client to have active "Secure Access" accounts set up. A very key issue is that you and your client have to both be using the same address which has to be an exact match with the address in the IRS database. Using abbreviations like St, Ln or Dr won't work.

cbslee: where's your quote from?

My client (subject of another thread) received his first CP2000 and responded via fax (has a record of it) with his Partial Agreement stating the cost basis needed to be accounted for, including the broker copy of the formerly missing account with the cost basis shown, and asked for more time to contact me/his preparer/EA. He's a lawyer for a major bank, so his verbiage was perfect, thorough, common language. The IRS did stop sending him notices for two months. This week, his second CP2000 arrived. Cost basis still NOT taken into account. He wants to fax his own cover letter, so I sent him instructions, talking points, and 11 pages of documentation (2 pages from CP2000, 2 pages from broker, 5 pages re Schedule D, and 2 pages of 1040, all appropriately marked up and read for his signature and cover page.

jklcpa and BulldogTom, There is a Section 280A problem in this case. This is because: Prop Reg 1.280A-1(e)(5)(ii) provides that use by a beneficiary of the Trust is treated as use by the Trust. Prop Reg 1.280A-1(e)(2)&(3) provides that although there is an exception to Section 280A when a taxpayer rents out the residence as a principal residence to another (related) person for FMV rent, when the residence is rented out to persons having an interest in the residence, the exception applies only if the residence is rented out pursuant to a "shared equity financing agreement." Such an agreement requires an agreement between two or more persons who have an interest in the residence. (The reason for this requirement is that the Regs assumed that a person who is renting it out is not renting it out to himself. The case of a trust is an anomaly, where the beneficiary does not really own the residence but is deemed to own it.) A workaround solution to the problem is to have a partnership own the residence. The partners would be: (1) the Trust which owns 99.9% and (2) a Trust with a different beneficiary (even a relative) which owns 0.1%. The two trusts would make a "shared equity financing agreement." Note that the proposed regulations were issued in 1983. Technically, they are not binding, and are merely an indication of the IRS position on this matter. We could argue that the proposed regulations are poorly drafted, and there is no policy reason to require a "shared equity financing agreement" in our case. On the other hand, Section 280A(d)(3)(B)(i) does provide that the above exception "shall apply to a rental to a person who has an interest in the dwelling unit only if such rental is pursuant to a shared equity financing agreement." The Code does not define "an interest"; it is the proposed regs which do. As I have a client in this situation, I am interested to hear your reactions.

The same thing happened to a new client couple of mine this year. They received a CP2000, handled it themselves, and made payment in agreement of all changes. The IRS computer never cleared it from its system because they failed to send back the page with the box marked agreeing to the changes. I was lucky to get through to an agent on the practitioner priority line who explained what happened and was able to see the payment in their system.

I have a client who received a CP2000 due to a missing 1099B. He mailed back his reply with the appropriate schedule D and statement to address on notice. That was over 6 months ago but IRS computer keeps sending notices. I mentioned this to my friend's daughter and all she could say was yeah, that's a problem.

Too many returns falling thru the cracks, which will be in limbo for many months.

May qualify for the Other Dependent Credit

As to not getting the second payment, many were sent debit cards and mistook them for junk mail and discarded them. It's possible this is the case with your clients, so perhaps starting a trace is the way to go. Just a thought.

I've been trying for days to fax a response to a Letter 2626C from an Operation Manager. The fax line is off the hook. The telephone number given is fully automated. My money is on you.

Copied from the Office Of Personnel Management website: Holidays for Federal Employees New Year's Day (January 1). Birthday of Martin Luther King, Jr. (Third Monday in January). Washington's Birthday (Third Monday in February). Memorial Day (Last Monday in May). Independence Day (July 4). Labor Day (First Monday in September). Columbus Day (Second Monday in October). Veterans Day (November 11). Thanksgiving Day (Fourth Thursday in November). Christmas Day (December 25

I think they only get what they paid. In a "normal" year, the amount that they have to pay back from the PTC would be added to the amount paid in the tax year the PTC was related to. So my first thought is that they cannot take an amount that was not paid out of pocket or repaid on the reconciliation form. UNRESEACHED - so take it for what it is worth. In this crazy year, crazier things have happened. Tom Modesto, CA

My first thought is that deducting the forgiven payback amount is like double dipping, but then so is deducting proceeds of a tax-free PPP loan used for business expenses.