JJStephens

Mike-- like you, I do a lot of clergy returns and have run into the same problem several times. I just recorded $1 of interest so that the return shows a positive gross income. That has always done it for me.

Help me thaw my brain freeze. Taxpayer's daughter is a college student but still lives at home (qualifies as a dependent). Parents provide all support except that she has a PT job to pay her tuition. Do mom & dad get to claim the tuition or is it lost (since she won't be able to claim herself on her own return)? BTW, this is my first post this year. I've periodically monitored the board (as usual, great stuff!) but haven't needed to ask till now. Just had a brain freeze on this one. Guess its from too many hours--in addition to my tax work I'm also pastoring full time and contending with a wife who is (finally) recovering from an 8 month long serious illness. But the weather is improving, she's getting better, only two more weeks of taxes and Easter's coming!

When I tried to load ATX yesterday it required that I create a User Name and now requires that I enter that user name every time I load the program. I am a one user operation. I suppose it's not that big a deal (more of a petty annoyance) to have to type in my name each time I start the program but just I don't understand why this suddenly started happening. Any thoughts?

I specialize in religious non-profits--therefore do a fair number of 990s. Over the past couple days I've submitted several who (as usual) waited till the last moment to get me their stuff just before the extended deadline. So far three of them have been rejected. The rejection code says the EIN is not recognized as a 990 filer and the return type does not match the IRS' files for that EIN. Two of them are returns that rolled over from successful e-filings last year. Anyone have the same problem? Any idea what to do (before I resort to calling the IRS)?

Client got ex'es 401k in the divorce. She is converting it to an IRA in order to withdraw funds for a down payment on a house (as you know, up to $10k is not subject to the 10% early withdrawal penalty for qualifying first time home buyers). Here's where things get interesting. She has to close within two weeks but the investment broker says it will take longer than that to transfer ownership of the 401k to her, convert it to an IRA and then do the withdrawal. The mortgage company says they will write the loan with a smaller initial down payment (but charge PMI) and then accept the balance when the IRA withdrawal comes through (and eliminate the PMI). Pub 590 says that in order to qualify for the early withdrawal penalty exception the money has to be used for 'acquisition costs' within 120 days of the withdrawal. It also defines the acquisition date (contract date for purchases; occupancy date for builds/rebuilds)--but does not indicate what the significance of that date is. In this case, the funds would be given to the mortgage company immediately upon receipt. What I'm unsure of is whether the withdrawn funds can be applied AFTER the closing date and still qualify for the penalty exception. Any thoughts (other than delaying the close, which the mortgage broker is apparently not willing to do)?

Lucho & Wendy--thanks for your feedback. Both were really helpful! Jerry

Like a lot of other EAs (& CPAs), I'm always on the lookout for free and/or cheap (er, I mean inexpensive) CPEs. I just got a flyer from The Tax School in Newark CA offering a variety of courses at what appears to be a reasonable fee (however, even 'reasonable fees' are no bargain if the material is lousy). They're offering several 24 CPE hour courses for $89 and will throw in a 2 hour ethics course for an extra $19. Their web site is at www.thetaxschool.com. Surprisingly, the 'testimonials' page on their web site has no entries (could just be a new page). The do have a good return policy (full refund including S&H) within ten days. My first couple questions are: have any of you heard of this outfit? Have you used their service? Is it any good? And a second question is: do any of you have other good, reasonably priced sources of CPE? Thanks, one and all, for your input. Jerry

Thanks for the feedback. They may or may not meet the 05 (see pg 3 of Pub 5329) exception (amount in excess of 7.5% of AGI). What I'm wondering is if they meet the 03 exception for total disability.

Taxpayer is totally disabled. Spouse has a qualified plan. Both are under 59.5. Does the spouse's withdrawal from her 401k qualify for exclusion from the additional 10% tax on early withdrawal by virtue of the husband's disability? I have a vague recollection that it does not but cannot find a definitive source.

I'm an Ohio based accountant. A tax-exempt (501c3) client is hiring an OK based employee. I've never done OK payroll before. The basic income tax withholding isn't an issue; but I'm interested in things like workers' comp, unemployment, etc (as they relate to a tax-exempt employer). Can anyone offer any tips and/or point me to a good (ideally free!) primer?

Sorry, folks. I know no one but me is interested in this . . . but a sad fact of my life is that this time of year I have no life and no one to share these little victories with except my fellow long-suffers. I just transmitted my final extended return . . . mine! I feared I was going to owe about $7K; turned out to be only $4600. I ought to be thrilled . . . but somehow I'm having a hard time getting excited about writing the check (deep sigh).

Maybe I should have griped sooner. As soon as I posted the original venting I tried again for the umpteenth time . . . and they all went through! Maybe I'll make it home in time for dinner after all!!!

Like a lot of you I am pulling my hair out trying to transmit some last minute e-files and extensions. I keep getting messages that say (in effect), 'there's nothing wrong with the file--we just can't handle it right now.' The ATX web site says it's due to high volume and their best solution is to just keep trying. Every try that is rejected requires reloading the return and recreating the e-file. Arrghhh! I've been trying since 1pm (it's now after 6pm) to send about a dozen files. I've spent at least two of those hours (at a time I don't have an extra 2 minutes to spare) recreating e-files only to have them rejected again. I was wavering on renewing with ATX. I waver no more. I was a gnat's eyelash from jumping to Drake or TRX last fall. I'll be contacting them tomorrow. I know I'm not the only one with a tale of woe. Just needed a place to vent a bit.

Wow! That's simple. Sure wish the instructions had told me that a couple hours ago! Thanks for the info.

I set up the sole beneficiary as 100%. I also tried setting the tier 1 and ier 2 percentages to 100%--to no avail. All the K-1 dollar amounts are still blank. I'm sure it's something simple that I'm not doing--a 'head space error'. I'm just at a loss where to go next. I can't imagine that I'll be able to get through to tech support today (or ever, if many posts on this site are to be believed).

Are you saying there does not need to be a trust return? I'm not doing the beneficiary's return, just the trust.

I've only done a handful of trusts but none of them were grantor trusts. I'm a bit befuddled how to proceed--hopefully someone out there can point me in the right direction. If I understand things correctly, everything (income & expense) should pass through to the trust beneficiary (question #1: do I understand things correctly?). It seems to me that all the income & expense info should flow to Sch K-1. . . but the K-1 is blank. Am I missing something on getting the info to flow to the K-1? There is a Grantor Trust Information page that appears to have all the inc/exp info--but it doesn't print unless I manually select it. It includes a statement that says, "Please note that partnership K-1 information is not included on this tax information letter. Do not prepare your individual tax return until this information is received. For more information please consult your tax advisor." Does that simply mean that if the trust received a partnership K-1 (which it did not) that any such K-1 info is not included on that report? Any help you can offer will be immensely appreciated.

A single member LLC can be treated as a 'disregarded entity'. If so, for tax purposes the LLC is essentially ignored and the owner reports biz income and expense as though it was a sole proprietorship (e.g., on Sch C).

I have started having all my clients sign a 2848 as a precaution. My question is when to send them in. Should I send them immediately or wait till there is a need and then fax it on a case-by-case basis? I know that if a 2848 is present the EF Info sheet defaults to adding it to the 8453 this year; however, I think that is only required if the 8879 signer is the POA. I don't sign the 8879s; therefore, I have been routinely unchecking that box (I hope that by doing so I haven't caused irreparable global warming/cooling or some other horrible malady).

I ran into the same thing a couple years ago. Called the IRS. They said standard rate applies only to passenger vehicles, light vans and light trucks--all others, including motorcycles, have to use actual expenses. Sorry, but I don't recall the cite.

We all run into curious situations that make us scratch our heads and ask 'whose bright idea was that?!?!' This one just came up for me. Clients are a blended family. The mortgage on the home in which they live is in the name of his ex. The 1098 has the ex's name/SSN. She has never lived in that house & has never paid a dime on it; clients paid 100% of the mortgage payments. I don't have a clue why it's in her name. There is nothing in the divorce decree stipulating any of this--best I can figure is that it was an oversight on the part of the attorneys. To make matters even more curious, client is mortgage loan originator and (deep sigh) his current wife is my daughter. I just discovered that they haven't filed for several years because of this and other curiosities--they seemed to be afflicted by the "if we ignore it, it will go away" syndrome (another deep sigh). In any event, my question is: can they take the mortgage interest deduction?

Are the forms from the same area in Armenia as the bananas??

I had actually thought of this some time back and had decided not to pursue it on that basis . . . but then forgot. Oh, the agony of year-end induced senility. No, I don't sign checks.

The malpractice issue is an angle I hadn't even considered. On the other hand, I do payroll for 20+ clients and it sure would be convenient to be able to sign 941s, W3s and 1096s.

I'm a relatively new EA. I know that except in very limited circumstances I cannot sign a personal income tax return on behalf of a client. If I have a 2848 signed by the client, can I sign Forms 1096 or W3 on their behalf? What about biz returns and 990s? If so, what do I need to do to make everything kosher. I thought I could but I cannot find a cite to back up my thought.