Pacun

I am assuming that tax payer is U.S. Citizen. She will stop being a Virginian when the reliquish to any ties to VA. So if she has a house, car, boats or any other ties to VA(register to vote, driver's license, CPA license, etc), she might be considered a Virginian. If you do not have any ties to a state, you are free on the very first day you move out. This is from the top of my head.

My original post was made yesterday at 3:16EST. I provided 3 replies to questions yesterday. Today when I woke up, I provided more answers to questions possed. We are going to the right direction but I know a lot of us would like to see a solid answer. I like the idea about going after the bank that allowed the deposit. I have noticed that some banks do not allow you to deposit someone else's check but some other allow this type of transaction. If this person would be working for the next 65 years, 3K yearly of passive NOL would be perfect. Unfortunedly, life is too short. It would be nice if this person had a bunch of money making money so that passive NOL could be use up earlier, but that's not the case either.

Can you break down the benefits of Theft or NOL if (as KC correctly pointed out) his basis is 0? Also consider that this client will no longer work. Based on all the answers I am getting, I have the feeling that everybody, except for Zeke, is saying... you lost your money and now you have to pay more than 50K to the IRS and more than 15K to the state. I feel that you are telling my client... since you are wrong, not only you lost your money and have to pay the IRS and the state BUT YOU ALSO are responsible for paying interest, penalties for not paying and penalties for underreporting your income by more than 75% and other penalties as the IRS and state WISH to impose on you because IRS is right and you are wrong. Am I correct, or I just got you offguard with this question? Which one is it? (Please do not think that I am taking this personally, "this is strictly business", Nice quote, isn't it? lol). PS. Thank all for reading and answering my post, I appreciate your efforts.

Client contacted Retirement office and was told that there was nothing they could do because the check was cashed. They sent my client a copy of the check showing that it was signed (supposely by my client) and deposited to the thief's account. They suggested that we filed a police report and we did. We contacted the bank, and they said that the deposit was made on an ATM and that they followed the government rules and therefore, NOT responsible. By the way, have you seen those houses where there is a box next to the door where the mail person deposit the mail? No need to break anything in order to get the mail... that's the standard throw out the U.S., isn't it? IRS has a 1099-R from the retirement company and needs my client to pay taxes on that money reported to them.

You mean that he needs to pay taxes on $200,000 since IRS has 1099-R? That's the answer I am getting from everybody since his basis was only 8K and there is no way he can itemized with only that loss. So, not only he lost $200,000 but he also has to pay taxes on it? Keep in mind that he did nothing wrong.

Thief forged his signature and deposited check on thief's account. Keep in mind that his basis was 8K.

Thief was not related to my client. My client invested $8,000 on this retirement account when he was a teenager. Hi is now 70 years old. He does not have any other itemizable deduction on the year in question.

The first state you start milking is the one with more money on your unemployment account.

Client asked for a lump sum retirement, had an emergency and traveled for more than 2 months. Check for $200,000 was sent to his house was deposited by someone else. Person that deposited check closed account and dissapeared. IRS wants his share of the $200,000 reported on 1099-R. What would you do if client came to you with these facts?

I like when Jainen comes hard on some of us because, believe me, I will never forget what was learned from that posting. This one seems to be one of those.

Jainen, Let's imagine for a moment that I got $15K from unemployment by mistake in 2005. I would repay it in 3 payments of $5K each year. Let say that my w-2 income is $90K for each of the 4 years in question. If I don't have any other itemized deductions, (based on your suggestion) I would have to pay taxes on the $15 and end of conversation. That's not what the IRS code intended. Before taking your suggestion, I would amend 2005.

Are still employed by the company that provided you with the 401K where you have the money you want to roll over?

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Yes. Wife is so..... smart. Trust me, I have seen realtors that get loans approved when the client has filed with an ITIN number reporting 10K gross on Schedule C and 3K as profit. To me, somewhere they bend the rules to get that person's signature on the closing date and get their money. Anyways, predatory is a hard word and I will not use. It is funny, how some realtors have sent hand written letters to my friend stating something like...my wife has fallen in love with your house and we would like to purchase it. Call me or email me at [email protected]. Today, since the wife doesn't speak English (but believed she could make a forturne on the house market), she called me and said "someone from the bank is here to repose the house"... I talk to the person and he said he was there to offer money so that we would save the house. I politely said, "we do not need any loans, we cannot even pay the ones we have". He started to persuade me and I said... no, thank you.

Nice catch KC.

Are we on agreement that ATX is the one that needs to worry about this? Some of us would be affected if we have a website and we post a Mini organizer where clients submit their info. If clients email us the information, we have no problem. Since I only use ATX for efile and I only receive information on emails from my clients (or in person), I DO NOT HAVE TO WORRY. Do we agree?

1.- Duplicate your client. 2.- Make sure you have the version you need by opening a new client and verifying that version 19 of form 4562 is being used on new client. 3.- Associate or link asset entry to a dummy schedule C or schedule E, 4.- discard form 4562, 5.- Save your changes. 6.- Add new form 4562 and associate or link Asset entry to this form. 7.- Discard any dummy schedule C or E created. Maybe reentering information to Asset entry form is easier. Also keep in mind that this is a work around which can be used if your program is NOT working properly due to installation/update problems, programming mistakes and/or user error. This is not a tested solution.

I think a taxpayer cannot reopen returns after an audit was not favorable. It does not make sense for the government and they are laws that will prevent a taxpayer from: 1.- The year it is audited, goes to H&R Block. Then, since results are not favorable to him/her... 2.- two years later he comes to me. If he does not get favorable results, he 3.- Finds a good tax lawyer and tries to win. Imagine that the IRS reopens each time the audit. Don't you think that the law will say... "why didn't he go to the tax lawyer to begin with"? Now, after each audit, you have 30 days to challenge the results within the IRS and 90 to challenge it in court. I know his statue of limitations is over based on the letters the IRS provided him with. I am going back to my original suggestion, I would amend 2006 and forget about the other years.

I thought about it and I think that we will put it on the market as soon as lawyers have their hands off the property. I was going to wait until April, but there is no reason because the value wont be any better, and you are right, interest will eat him.

Last year, at age 70.5, my friend and new client qualified for a 450K house. 13 month later, he was behind on payments and I decided to help him (I advised him NOT to purchase a house because of his age, but wife, 51, insisted and made him sign). 3 month later, she purchased a second home under her name. Her house is gone since she stopped making payments 3 months after purchasing it. Anyways, I am trying to help him save his house. He is behind 15K, plus attorney fees (total now is $17,613.17) on mortgage and the bank sent him a letter stating that they were going to foreclose his house next month. He has until August 7, to pay full amount. Anyways, I called the mortgage company and I said, can we negociate with you? and they said sure. I said, we are going to send you 9K now and we want you to add the rest to the amount owed. They start asking financial questions and they said... no, he does not qualify for the adjustment. This was the situation when he got approved for the house. He was working, that was the only thing he had and he qualified for the loan. Now, he is STILL working, he is now collecting social security and a Union pension. (He was not collecting before because he thought that while working he could not collect but I filed all his ss forms and pension forms as soon as he became my client). Anyways, I told the person helping us over the phone... so, he doesn't qualify now... but his income situation has imporved 100%. He politely reply that he was not the original person who qualified my client for the loan. I guess banks are now doing their job and stopping people to enter into debt that they cannot afford. A BIT TO LATE for greedy people that thought the house market was the place to invest. In this situation, we are going to pay the full amount and continue to make payments for the next 6 month and then we are going to sell the house.

I think you will have a hard time for previous years. I understand your willingness to pursue something that H & R block left hanging but it could be difficult and expensive to your clients. At the end of the day, not only will they owe the IRS, but they will have invested on your services. I would amend 2006 and leave the other years alone. If you decide to pursue, I would follow KC's advice.

Well. Both Old Jack and Jodi are right. I live in DC and the electric wires go underground and I have never had a power outrage in the last 20 years I have lived here. I recommend people to purchase UPS all the time, BUT I have never purchased one to use in DC for myself because I do not need it and I feel it is a waste of money. When I travel to my country it is a different story. One time I went there and I noticed that the electricity went off almost everyday. My friends had a "land phone" that it is a cell phone connected only to the electric outlet without a battery that will hold charge. (I have not seen one of these phones here in the US, which makes me believe that Japan has that market). A lot of times we lost phone conversations and I kept trying to reconnect to no avail. The following day I was informed that the power was interrupted, SO, I paid $120 for a UPS and took it to my country (they are heavy too, and I don't recall if I paid another hundred bucks to the airline for excess baggage). I asked them to connect the TV, VCR, and telephone to the USP. Now, I do not get disconnected and we can talk for the 30 minutes and their TV also will last longer. This is my theory, you can save the UPS money if (both apply): 1.- You have good data backup habits, 2.- You live in an area where there are few electric outrages. My two cents.

If you reboot your PC (warm boot) and you still get the message that the time is not correct on your BIOS, you need to purchase a batter for your CMOS chip (I love to use big words). If you reboot and your PC ask you for the date, you need a battery. You might also need a BIOS update in case (seldom happens), your firmware is corrupt.

Check your W-2's and 1099s and make sure that employer's SS# or EIF are correct. Somewhere, a SS# or EIN is not correct.

JohnH... JohnH... (you are our older brother and we respect you) We would love for you to embrace efiling as everybody else did or will do in the near future. Efiling is a simple as using this forum. I started with my own flawless return just in case there were problems with efiling. After you nail a couple of returns, you will feel confident and you will LOVE it. WHOEVER is not using the 100 efile returns included in the price of ATX is making a mistake. JohnH, if you have 2006 returns that you have not filed yet, please efile them... you have all time of the planet now and you will be able to correct any errors. You have my email address and I can help you if you need me. As you know, I am in debt with you when you spent your money, time and effort by mailing me those needed, previous years 1099s and 1096 forms.