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I'm not Lion, but I had trouble last month and had to wait for the IRS letter in the mail to complete the process. The IRS couldn't i.d. me even though: previously had e-services setup in this name and address, have lived at this address with same mortgage for 22+ years, been a CPA since early 1980s with PTIN, CAF, and ERO all in same name, and have had the same phone contract and same phone number since I got a bag phone in the late 1980s, and used the VISA credit card through AAA that I've had forever in my name, kind of like the bag phone thing. The only thing I can think of is that the phone and credit card were initially acquired in my maiden name, but have both been in my current name since the early '90s. With all of that matching, it's very frustrating that the IRS still can't i.d. me.

The child tax credit is for children under the age of 17. The advance allows for children who turn 17 in 2021. Any other child, whether an 18-year-old student or 25-year disabled child does not qualify as a "child" for the credit. Your client's daughter does qualify her for the "qualifying relative" $500 deduction, but no child tax credits.

I can think of a few reasons to opt out

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?)

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.

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.

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.

Wait until they receive a penalty letter and then try this: ABC qualifies for an exception to the penalty you charged under IRC Section 6698(a)(1), because all two (2) partners, XZ, 222-22-2222, and YZ, 333-33-3333, reported all their shares of income and deductions timely on their joint 2019 income tax return Form 1040. Therefore, the partnership meets the criteria specified in Rev. Proc. 84-35, which says in part: “A domestic partnership composed of 10 or fewer partners and coming within the exception outlined in section 6231(a)(1)(B) of the Code will be considered to have met the reasonable cause test and will not be subject to the penalty imposed by section 6698 for the failure to file a complete or timely partnership return, provided that the partnership, or any of the partners, establishes, if so required by the Internal Revenue Service, that all partners have fully reported their shares of the income, deductions, and credits of the partnership on their timely filed income tax returns.” We trust that you will remove the penalty due to reasonable cause for small companies.

A quote from IR-2021-130: Anyone who lacks internet access or otherwise cannot use the online tool may unenroll by contacting the IRS at the phone number included in your outreach letter. https://www.irs.gov/newsroom/irs-announces-two-new-online-tools-to-help-families-manage-child-tax-credit-payments

Call them and they will refer to e file department and fix it. I had a few returns stuck in transmitted stage for days and it was fixed toute de suite

Wait 20 minutes or more then retrieve acks. If no luck, rehang again.

SMLLC's operating as sole proprietorships would follow the federal filing and file a Sch C for PA purposes. For LLCs that are taxed as C corps, PA would expect a corp return PA RCT-101 to be filed. Also, for periods prior to Jan 1 2016 for LLCs including those being taxed on Sch C as disregarded entities, PA required filing the PA RCT-101 for the Capital Stock/Franchise Tax. https://revenue-pa.custhelp.com/app/answers/detail/a_id/1382/related/1 https://revenue-pa.custhelp.com/app/answers/detail/a_id/972/related/1 I think it is odd that PA is asking for a 2019 corporate return. Maybe some of our PA preparers will chime in with more information on this specific issue.

My confusion lies in why the state of PA sent a notice looking for a corp return. I am asking if PA would not leave as a disregarded entity unless an election was made. Maybe it works differently in PA?

There are other reasons for having an EIN for a SP. Some financial institutions require an EIN before they will open a business checking account. Some owners want an EIN so that they won't have to disclose their SSN for identity security reasons.

Thanks so much. I like that quote.

https://www.irsmind.com/

Every IRS communication I've ever seen abbreviates the street name suffixes. They also drop 'The' at the beginning of business names.

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.

Instructions for tracing are on the IRS page that follows. https://www.irs.gov/newsroom/questions-and-answers-about-the-first-economic-impact-payment-topic-f-payment-issued-but-lost-stolen-destroyed-or-not-received

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

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.

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.

Technically speaking a husband-wife LLC can be treated as a disregarded entity but only if in a community property state. The problem is for those not in community property states, then the IRS would be looking for a partnership return. It's been about 6 years since I originally wrote this, but here is a quote that I continue to repost each time this subject comes up:

Copied from The IRS Mind website: "Many penalty abatement requests are denied – requiring the taxpayer to appeal the adverse decision: the IRS uses an automated decision-making tool to make penalty relief determinations. This tool is flawed and often produces incorrect adverse penalty determinations. Taxpayer often receive adverse penalty abatement determinations that appear not to consider all of the facts and circumstances. Taxpayers should appeal their decision to the IRS in order to have the entirety of their circumstances considered."

I just had a request for a first-time penalty abatement denied too, even though taxpayer has always been current. The reason given in the IRS letter was that he did not qualify for "reasonable cause," which is not what we asked for. Has artificial intelligence been answering these requests? If so, it's certainly not very intelligent.

Given the details you provide this sounds like a knee jerk response. I think you would have a very good chance of getting this reversed in appeals..

General Announcement: If you have kids, I ain't doing your return anymore. It's bad enough to have to do the 8867 for every return with a kid and a child tax credit or a education credit. A bigger pain when EIC triggers. But this is really going to be a nightmare!

Hopefully, they'll be sending 1099-Gs at the end of the year. Clients aren't going to remember any of this at the end of they year.

I tried this year, and hubby tried just a couple weeks ago. I had the OLD e-Services since it opened, have lived in and owned and have a mortgage on this house since 1978, been an EA since the late 1990s with PTIN, CAF, and ERO, have had the same AT&T cellphone contract and same cell number since the late 1980s or early 1990s, and have a mortgage and a couple of credit cards in my name only. Anything prior to 1994 would have had my previous last name, but all were updated to my current name in 1994. The IRS says that AT&T told them my cell is NOT in my name; but AT&T tells me that it IS in my current name, and the bills come in my current name. The gal on the e-Help desk told me to unfreeze my Experian account, which I did each time I tried to work through this. They say I will get a code in the mail, but they've said that each time I call for years and years and years, and nothing comes in the mail. They tell me to make an appointment at an IRS Service Center, but none are open around here. Two more TAC offices open tomorrow, one of which is not too long a drive. However, the services they provide do NOT include help with Secure Access or any services to tax professionals. I may try again after 15 October.

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.

I am speechless. My client filed their 2018 return in January of 2020, three months after the extended due date. I requested a waiver of the penalty for medical reasons. My client has a chronic, progressive motor neuron disease, and I have watched him struggle over the past three years. In 2019, during treatment for this disease he suffered tremendously, physically and mentally, and as a result, we were not able to file timely. My request for relief from the penalty attached a letter from his doctor describing the progress of the disease and the effects on his physical capabilities and upon his physical and mental stamina. This was the basis of my argument that he had reasonable cause to file late. The IRS responded, after thirteen months that "the..taxes were not taken care of in a timely manner because the taxpayer is impaired and is no longer able to attend to their personal business. However, if a taxpayer continues to maintain responsibility for their own affairs, they are responsible for taking care of their own taxes." I did not state in my letter that he was no longer able to attend to their personal business. What I did say is that the onset of the disease created a struggle for him to prepare his paperwork in a timely fashion, but that he was ultimately able to do so while learning to live with the limitations imposed upon him by his disease. The final insult is that I also requested an abatement of the penalty using the First Time Penalty Abatement Waiver. They denied it as they said a review of his account history shows that 'we have charged similar penalties in the past'. They have not. I will take this to the Office of Appeals, but I am very angry. Is this simply the IRS, overworked, denying all requests for a waiver of penalties? It took them over a year to respond, with them sending correspondence saying we need another XX days to respond. My client will be confined to a wheel chair soon. He has filed 2019 and 2020 timely, but I am aware of the weekly decline in his ability to handle his affairs. What a sad situation and it is amplified by the IRS's illogical response. It is illogical in my opinion, but I am not sure how to argue about their position. Obviously he was ultimately able to handle his affairs, he simply could not get it done in a timely fashion.