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Client always whines because she owes. They have several 1099-Rs with little or no withholding. Same with W-2s. I tell them every year it would be good to have more withheld. OK, they say. No, they never have more withheld. So, today she actually tells me, "But they won't withhold more than that". Mmmm hmmmm. I Google "How do I have more withheld from my (insert name of company) retirement?" I print the W-4Ps and addresses for all the companies. Print W-4s, too, and highlight line 6. It's one thing to ignore my advice, it's another to treat me like a fool. It was worth a Google. No, no forms with get completed. But it's not wasting time if you enjoy it. It was the same feeling you get when you mess with scammers. It was worth it.

I'm watching the Hurricane Matthew news and praying that everyone will be safe. My son has a vacation bungalow a block off the ocean in New Smyrna Beach, FL. I may have to drop everything and go help with cleanup. I am working late on tax returns and office work so I can get there if needed. It's going to be a late night at the office.

On the "scams" about owing taxes, etc.. Here is a url for an article about "India Call Centers" taking in (this case alone) $150 K daily (55 M - yearly) "collecting IRS taxes. Doesn't matter to them if they REALLY WERE OWED OR NOT, collections were good regardless. They did good business and had numerous floors of offices and affiliates to get the needed information (U.S. based and others). http://www.msn.com/en-us/money/companies/fake-call-centers-in-india-scam-americans-of-millions/ar-BBx4xsM?li=BBnb7Kz

Hmm, maybe after that will be those 709s that you weren't at all worried anyone would ever find out about... even after having read the technically correct answer. Last year it was "reality, too much effort, and who's ever going to find out" and now it's "known/should have known, ethics, and circ 230". Pick one.

I have filed late ones every year for the very same reason you stated. I have never seen a penalty assessed. But I do hear that January 2017 is the year they will start assessing the penalties. Who knows.....we can only do what they bring us. every year I tell them I need before end of January and still they wait.

I've never tried, but I did find the following that might help you decide if it's possible or put it back in the lap of the client: "The penalty will not apply to any failure that you can show was due to reasonable cause and not to willful neglect. In general, you must be able to show that your failure was due to an event beyond your control or due to significant mitigating factors. You must also be able to show that you acted in a responsible manner and took steps to avoid the failure." https://www.irs.gov/instructions/i1099gi/ar02.html#d0e2122 My lady in my thread about "they won't withhold more than that" once tried (all by herself) to get out of failure to file penalty because a family member had an accident on Oct 20. That went over like a fart in a space suit. But I digress.

I think what confused you ILLMAS (if not the links above!) is that the 1099B shows the wrong cost basis. Look to see that it says "cost basis NOT reported to IRS," which it should say because the broker has no idea how much the employer included in wages. The client's cost basis is the amount paid for the stock plus the amount included in wages. If sold the same day or thereabouts, the result is usually a wash or a small loss, which is the broker's commission. (The commission gets added to basis too.) I have a client who gets about $300k added to wages from restricted stock options each year. And every year he gets a loss of $45 that the broker charged.

SFA...Be safe and Gods speed to your son.

My sister and family are in St. Simons Island GA. No one answers there now so I am hoping they have evacuated. Someone on the radio said she doesn't expect her home to still be there on return. Scary!

I'm praying that everyone stays safe, whether you are in the hurricane's path or helping family and friends in need.

You mean having a place to go to the bathroom isn't an ordinary and necessary expense for a farmer?

I've never seen a penalty assessed for a late-filed 1099-MISC. (But maybe that will change now that the amount has been upped to $250)

You may be right. When I asked her if there were assets in her farm Maintenance and Repair, she said, "Yes, $2,000 for bathroom remodeling."

Let's not take this "known or should have known" mandate so seriously. Schedule A itself is optional, so I assume the various components in it are each optional in their own right. If you can have $20k in qualified mortgage interest or state income tax withholding and still choose to take the standard deduction (perfectly legal), why can't you have $20k in charitable contributions and choose to claim half of them? In your case, though, where the client has the right documentation, encourage him to take the tax break he deserves. Tell him you will take his foolproof receipts to any audit and he won't have to worry himself about it. Tell him that one of our presidential candidates declared himself a "genius" for knowing how to work the tax code and that claiming documented contributions is a "no brainer." Seriously, teach him that those carryovers last for five years, and who knows if he'll need them in that time. This discussion reminds me of a problem raised in my Master's program. Many Jewish people give large sums to their synagogues and in return receive preferential seating and other social perks (just like in the BC days). Students wondered if the full amount of their donations counted for the deduction because they got something in return. There were a bunch of IRS agents in the course, and they all agreed that never in a million years would they get away with digging into the intent of the donation. The only thing they were taught to watch for was tuition to religious school disguised as a donation. Your client has nothing to worry about.

I agree with Joan and Michael, and I have clients whose fact patterns are similar to Michael's. I also have some wealthy elderly clients with only investment income who are now giving away large sums of money to universities and places of worship that also well exceed their AGI. I report the actual full amount of contributions that are documented, and if the AGI limitation creates a carryover, then that is what is reported.

just make sure none of the items are subject to 30% limitation and you are good to go. I have clients that give millions over their income [neg income due to real estate depr] and never had an issue.

An audit of charitable contributions rarely requires bank statements unless the donations are directly debited. Receipts (with the required disclaimers, of course) or cancelled checks/credit card statement if under $250 per donation.

You are out of line this time, Jack. The question was not "how likely is this to be questioned?" It was "what's the correct way to file in this situation?"

The OP asked how to properly file the gift tax return to make the election. I gave the technically correct answer so that he knows the proper way to do that, and he will decide how best to advise his client. If you don't want to do that then don't, but I don't know why you are taking such exception to me providing the OP with the technically correct answer here.

So it's your contention that if no one will EVER look then it's ok to miss an election, or to not file, or to file incorrectly, and that's how you advise your clients as an enrolled agent? Nice! /s The OP now has the correct answer. He can now decide how to properly advise his client.

Which, to read the instructions or to file properly? The OP asked how to file the gift tax return properly to make the election. He didn't ask about the effort or whether that effort is "too much". I would not suggest that the client forego filing and miss making that election, but in any case that is up to the client to decide, not the preparer.

Because the funds came from an account solely in the wife's name, technically she gave the entire gift and she is electing to split the gift with her husband, so she needs to file a 709 and check the box electing the split for that to be valid. Husband must sign her 709 in the designated area for the split to be valid. If the the husband made no other gifts, there is an exception that allows him to not have to file a 709 as noted in the instructions, so only the wife needs to file. Wife would check "no" on line 17, and the husband must sign on line 18 of page 1 of the wife's form 709: Consent of Spouse Your spouse must sign the consent for your gift-splitting election to be valid. The consent may generally be signed at any time after the end of the calendar year. However, there are two exceptions. The consent may not be signed after April 15 following the end of the year in which the gift was made. But, if neither you nor your spouse has filed a gift tax return for the year on or before that date, the consent must be made on the first gift tax return for the year filed by either of you. The consent may not be signed after a notice of deficiency for the gift tax for the year has been sent to either you or your spouse. The executor for a deceased spouse or the guardian for a legally incompetent spouse may sign the consent. When the Consenting Spouse Must Also File a Gift Tax Return In general, if you and your spouse elect gift splitting, then both spouses must file his or her own, individual, gift tax return. However, only one spouse must file a return if the requirements of either of the exceptions below are met. In these exceptions, gifts means transfers (or parts of transfers) that do not qualify for the political organization, educational, or medical exclusions. Exception 1. During the calendar year: Only one spouse made any gifts, The total value of these gifts to each third-party donee does not exceed $28,000, and All of the gifts were of present interests. Exception 2. During the calendar year: Only one spouse (the donor spouse) made gifts of more than $14,000 but not more than $28,000 to any third-party donee, The only gifts made by the other spouse (the consenting spouse) were gifts of not more than $14,000 to third-party donees other than those to whom the donor spouse made gifts, and All of the gifts by both spouses were of present interests. If either of the above exceptions is met, only the donor spouse must file a return and the consenting spouse signifies consent on that return