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Sorry about the link which even I can't get to work now -- yet it's still viable in the post in TaxTalk where I first found it. I'll now try to attach the PDF to which it led. NYS Pass-thru Entity Tx FAQ.pdf

That exempt income should increase basis

If I was preparing this return, the only place I would enter it is on Line 6 Schedule M-1.

Parker Tax Research made it a matter of less than 3 minutes to find the attached pages 141-143 from the Joint Committee on Taxation's "General Explanation of Tax Legislation Enacted in 2015". Basically, Regulations pertaining to IRC Sections 168(e)(3) and (6) lay it out. (I don't know whether it's just me that takes longer to find the most authoritatiive answers via AnswerConnect.) Lshld Imp lives.pdf

I am with the "frog" on this one. How many of us think the IRS is going to look at HRB? JH? LIberty? They are not going after the pop ups either, cause they are gone by the time the return is reviewed. The revocation of the PTIN just gives the IRS another intimidation factor against legal preparers. Accept the audit findings or lose the ability to efile (which would shut you down). The PTIN was instituted to protect preparer's SSN. Now it will be a weapon used against us. Tom Longview, TX

i am supportive of this legislation especially since under current law the Treasury Department has to go to court and obtain a conviction in order to shut down a fraudulent preparer. However this will not halt the preparation of bad returns. My state of Oregon requires the Licensing of all Tax Preparers plus 30 hours of CPE every year. This law applies to every preparer except CPAs and Attorneys. Earlier this year I picked a new business client (Monthly Write Up, Payroll & Tax Returns). The prior preparer has been licensed since 1991, has a bigger office than mine with licensed preparers working for her. My client's 2019 1120S and 1040 were poorly prepared with a number of mistakes showing a real lack of tax knowledge. Just because you are licensed doesn't mean you are competent.

Gosh, Oh golly, you mean the IRS made a mistake. What is this world coming to? The clients would be best advised to put the money in a separate bank account, because sometime within the next 3 years they may receive a letter from the IRS. "Dear Taxpayer, In August of2021 we sent you a refund check for $3000.00. We are sorry to inform you that the person who calculated your refund was suffering from apoxia due to prolonged mask wearing. Said person made an error in determining your refund, which we have found in its totality to be unwarranted. Please accept our sincere apologize for this, but we demand that the $3000.00. plus interest of $27.33 be returned to us within 15 days, or interest will continue to accrue. Furthermore, failure to pay could subject you to collection action including levying your bank account and garnishing your wages. Joe Potatohead, Supervisor of Dumbbells"