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I think the most likely course of events will be along these lines: 1) Taxpayers who are assessed the penalty (tax) will begin to complain loudly, asserting that "nothing has changed" in spite of the executive order. The news media will be abuzz with stories of this type because it fits their narrative. 2) The administration will recognize that their credibility on this issue is in jeopardy. 3) There will be a strong push for administrative relief and threats that heads will roll if it isn't done. 4) If #3 doesn't achieve results, extreme pressure will be applied to congress to pass legislation granting retroactive relief from the penalty (tax) for individuals. 5) This will play out over several weeks or months, probably at least into mid-year. Depending upon implementation, people who have already filed at that point may find themselves outside the window for relief. Or they may have an option to amend - who knows? There is a strong sentiment in this country that Washington preens and postures, but nothing favorable to the average taxpayer ever gets done. They simply cannot allow that perception to continue if they are to maintain any credibility. =================== Or I could be wrong... ===================

I send them with whatever information I have. Lots of times you can find addresses online - especially for people who are (or who claim to be) running a business. Yelp, white pages online, etc. In the ssn field,leave blank or put "refused". I have never seen the IRS demand retroactive 28% backup withholding, but I *have* seen letters stating every new check must have that. Funny how oftentimes a client telling their vendor they are required to withhold 28% magically makes those w-9's appear. One client, years ago, had one recalcitrant vendor but they just kept paying anyway. I changed their QuickBooks vendor's info to print the check out to "NO MORE checks until W-9 received!" and the office lady did not know how to fix it so they were stuck. Worked like a charm in that instance, and I still chuckle over it.

Have you reviewed the withholding tables in Pub 15? Probably one reason the high earners owe is that their withholding is based solely on their W2 earnings. In my experience often the high earners also have high levels of interest, dividends and capital gains.

The Judge being interviewed is no slouch. I have always considered him to be pretty thoughtful. Even more so than my hairdresser. And my buddy who makes a living selling insurance. I agree, I'm taking a wait and see approach. It's January, after all.

I'm with Rich. I've only done two returns so far with CTC (Not ACTC) and the due diligence questions were making me dizzy. Then I realized, hey I know these clients, been doing their work for years, remember when their kids were born. I am absolutely sure they are eligible for the CTC and I am not going to take up their or my time attempting to obey the instructions for a million little boxes on the 8867. If anyone else claims their child, it will be a case of identity theft, not lack of due diligence on my part. If there is a statement from child care or maybe the child got Soc Sec from a deceased parent, I'll keep that in my records. But I am not going to torture most of my clients who have children into proving the kids live with them and are indeed theirs. Of course, we know most of our clients. New clients with kids will be a different story. For a few years we have not taken new clients with EITC. We send them to Block, saying the rules are so complex and we do so few of that type of return that Block preparers are better trained to help them. But geez, we can't turn away every new client who has children! Fortunately, we take very few new clients.

Tell him to mention to the preacher that if he saves the $695 that will mean he can put more in the offering plate. That might help in the decision making process.

Married couples who work and don't choose to withhold at the single rate will owe. If one spouse has a low wage, they never have enough withheld. I wish they would let people choose a flat % instead of having to Married but withhold at higher single rate with 0 allowances and $x additional tax. That's just too complicated. I tell clients they need x% withheld and they ask me how to do that, so I send them to paycheck city or do it for them.

The employer has several ways to pay a bonus (Per Pub 15). Some are easier for the employer (adding it to the next regular check, what most will do) and some are more accurate for the employee. Sounds like the employer did what most do, and the employee did not recognize the consequences. Employer did nothing wrong. Employee has to be aware that the proper deposit amount through the year (via withholding or other means) is their personal responsibility. The calculation which is likely best for the employee is too complicated for most to figure out... and employees HATE it when they get a bonus with any withholding... Get many who ask how to give a bonus with no withholding. This means employers will always take the easy way, and not use the annual; method, or the maximum method. Your situation is something I hear OFTEN from employers. They get a complaint form an employee that the employer did not withhold enough. I have to point out the employer has a simple (but complicated) requirement, and it is not to make sure the employee does not owe, or get a refund... Sounds like a good way to increase off season business, offer a mid or 3/4 year withholding review. Roll it into the prior year fee so it appears "free" the next year? Not too far back, the withholding tables were overly :"heavy". Employees who claimed the obvious would get relatively large refunds every year. One of the Bush presidents took advantage, and lowered the withholding to something close to accurate (at least for single earning households), and called it tax relief. I remember having to claim double dependents to get close to even, then having to claim one less than actual to get even. (Now I self manage, and withhold zero until December, but not many have that option.)

Got mine. Scanned it. Made it searchable. Happy camper.

The last couple of years I have been using EFileMyForms online and they let you e-file without ssn's. Before that, using the FIRE system, you CAN e-file as long as not more than 25% of the 1099's are missing ssn's.

FWIW here is ADP's opinion. https://www.adp.com/tools-and-resources/adp-research-institute/insights/insight-item-detail.aspx?id=6E5431A7-B2DD-4E5F-9C24-F5113672829F

Did you check the box at the bottom of the 1099R input sheet?

Good Girl....And You're welcome...

Careful, my SWMBO would object. Just because she does not have taxable earnings does not mean she works or earns less than I do Back in the last century, when SWMBO was getting taxable pay, we set her to withhold nothing. It was for appearance, as it irritated her to get such a small net check for her part time gig. I raised my WH to make up the difference. I hear often the employee says their (insert name here, could be tax person, friend, neighbor, person next to them on the bus) said to withhold a flat %. Makes me cringe, since there is no proper way for the employer to comply, so it puts the employee, employer, and advice giver at odds, and sometimes involves a fourth party (me!). IMO the flat % advice is worthless as the employee has to translate the flat % to some allowable combination on a W4. My suggestion would be to calculate an actual liability amount for the year, plus some % cushion over, plus let the client choose their hoped for refund. With the projected liability, and cushion amount, the chances of being at under withhold penalty are nil. Divide that amount by their pay frequency, and give them that number as the amount to watch for. Then they have something they can compare apples to apples on their stub, and can adjust easily, via W4. Have them check in 1/2 way and 3/4 through the year by sending an image of their current stubs. Seconds to review and suggest changes.

<Payroll hat> PUB 15 is what employers MUST follow, for the last valid W4 the employee provides. Whether or not it meets the needs of the employee is up to the employee to determine. Employers have enough to worry about and have no business delving into or discussing whether or not the withheld amount will accomplish what the employee is hoping to accomplish. </Payroll hat> If someone ends up owing, the preparer likely can offer advice as to the estimated total liability based on estimated earnings for the next year. If the person is not making any other tax deposits besides withholding, it is easy to divide liability by paydays per year. That amount, if not what is withheld already, can be achieved by creating and submitting a new valid W4, with an amount in the additional withholding area. While not proper, many will set their W4 as married and a high number of allowances, and try to get their employer to essentially withhold a fixed amount via the "additional" withholding field on the W4. Some will use a W4 which results in zero withholding, and make regular deposits on their own. Some will do a combination, where they check their liability before the end of year, and make a deposit just before end of year (me) if needed. (I am not fond of loaning money to anyone for free, so I seek no refund, and want to owe just below the under withholding threshold.)

Great idea.

If you know what town the person lives in you can use "General Delivery" for the street address. Although the post office did away with the "General Delivery" system some years back, they will still send it to that town. I've done that; a few are sent back but mostly not and IRS has never (that I know of) billed any of my clients for the missing information. If the employee comes later in person to get a copy, no harm's done since only the 1040 address really matters. Also, one client lists his own address on the 1099 if he can't get theirs and those go through alright. The number's a different thing; no way around that, but I've never seen or heard of a fine or letter from IRS over a few missing numbers. Usually Social Security sends a letter about a year later asking for the number. I've written on the letter that the person would not furnish it, have no idea where he/she is, and sent it back. Generally that concludes the matter, but once I got an SS letter again the next year, wrote the same thing, sent it back and never heard anything else (letter/fine from anybody) again. While I've never seen IRS assess fines for two or three missing numbers or addresses, I have seen penalties assessed against clients for LATE FILING of 1099s

Folks, thank you so much! Saved me a ton of research. I've downloaded Signature Flow.

https://www.irs.gov/individuals/international-taxpayers/filing-forms-w-2-and-1042-s-without-payee-tins Paper file with the affidavit attached and payer should keep documentation that shows it exercised due diligence in trying to ascertain the TIN and other information, otherwise IRS can assess the penalty. Does not getting the required information also open up the possibility that the IRS will try to collect the 28% wtihholding from the payer that should have been withheld because of not having a W-9 from the payee at the time payment was made?

This memo just came out from one of the insurance companies on the CT exchange. They probably know more about what's going on than most of us. We know there has been a lot of news around the president’s Executive Order to Repeal and Replace the ACA or Affordable Care Act (also known as Obamacare). Here are some facts: >Did the executive order repeal or replace the ACA? No, it did not. The ACA has not been repealed or replaced at this time. >How does the executive order affect 2017 coverage? It Does Not. The Connecticut Insurance Department assures us that plans that customers enroll in during this Open Enrollment will be honored for the entire year according to state regulation. >Do I still need to enroll? Yes. The law still requires residents to have coverage. >What happens if I don’t enroll? You could pay a tax penalty of $695 or more, and you won’t have coverage for your healthcare needs.

Well, shoot! After reading this thread I called a broke, poor-devil, one-man-band Schedule C'er who'll have to cough up $695 soon and advised an extension to see how this plays out. Says he never got one before, is scared to start (superstition rules - what can you say?), hold off 'til 4-15, and he will talk to the preacher about it ("Is it right?"). Sure hope divine intervention from that Troubled Waters, Healing Hands, Rising Sun, and Souls Harbor outfit can do him some good 'cause I cain't.

I look at it this way. Jack is right, we are the unpaid auditors for the IRS. We get paid by our clients. Has ANYONE on this board ever been subject to one of these compliance audits? I believe the answer is NO. Why? Because, we do the returns right. Our returns are not getting kicked out by the boat load with bad AOTC, CTC, EITC or other issues on a regular basis. I do my due diligence, and I send away those that do not meet my criteria to be my clients. Sorry, if you have all those above things, and I do not have any idea who you are and you just walked in off the street, you are walking back out. That is my defense. I do not believe that the IRS is going to go after a preparer with one bad return. They are looking for patterns, and if you have a number of stinky ones, then you are much more likely to get the visit. IF, for some reason the IRS shows up at my door to do a compliance audit on this issue, I should be in very good shape. And any issues that might arise? I pick up the phone and call the client and here comes the missing info. Rich

In thinking about this a little more, there is NO WAY I would advise a client to go ahead and file if the return includes a penalty (tax) under ACA. I'm not going to be the one holding the bag if something happens in the coming months to relieve them of the penalty and for some reason they can't get it back. I'll suggest an extension and then a "wait and see" approach. If they choose to go ahead and file, then I've given them the best advice, and they made the potential wrong choice.

Look at it as a positive. They long ago forced you to work as their unpaid data entry clerk. So becoming an auditor is a promotion.

From an opinion piece on Fox News today: http://www.foxnews.com/opinion/2017/01/26/andrew-napolitano-trump-has-committed-most-revolutionary-act-ive-seen-in-45-years.html If a client faces a $695 or +$1,000 penalty, why would they want to pay it with the knowledge that it probably won't be returned to them if they pay it, and it won't be collected if they don't because the ACA is dead? Seems like a hard sell...

The right click also works in the situation you just described. Drake usually provides multiple ways to accomplish the same task. By the way, if you haven't experimented with macros in Drake, you should do so. They can save you lots of data entry time, especially for repetitive entries.

I called Drake Friday afternoon, Saturday morning and Monday late - no waits on any of them for that lost password. OLTPro has never been an issue calling them at even peak times.

Thanks Elrod that will do the trick.

It was my understanding (which may be totally wrong) that the under the law as passed the IRS could send letters demanding the penalty be paid, but enforcement/collection was limited to withholding refunds. I have seen clients who owed both tax and penalty get *two* letters - one for the tax portion, and a separate letter for the aca penalty portion. Perhaps they will simply stop sending the dunning letters as a cheap first step - and save us all the postage. What they do with refunds - Magic 8-Ball says "Answer hazy, ask again later"!

Elrod, thanks for this and for continuing to be part of this group! We're so happy you couldn't stay away or leave us!

I gotta agree with Catherine. My experience with Drake so far??? Excellent and as it stands, if the rest of the season goes like it is now, then there will be no questions at renewal time.

Drake answers in three rings (but not on Sunday, at all). If they need to investigate and get back to you, they do. Meanwhile, I am still waiting for the callback from ATX/CCH from Feb2013 that they promised within 48 hours. (No, that particular problem was never solved. After trying several more times, my final call was to Drake.)