Lynn EA USTCP in Louisiana

I don't recall reading an exemption to 1099-MISC reporting if the vendor is paid via credit card. Anyone care to provide a source / citation? Thanks, Lynn Jacobs, EA, FNTPI, NP Kenner, LA

And, if the tax due is less than $50,000 it will be a 'small tax case', which the client may ask to be assigned to the Appeals Division at your nearest IRS office. Lynn Jacobs, EA, FNTPI, NP Kenner, La

Not a chance. His net worth (assets less liabilities) FAR exceeds the amount due to the IRS. He should take out an equity loan against his real estate and pay it off. Lynn Jacobs, EA, FNTPI, NP Kenner, LA

I suggest you contact Medlin software www.medlin.com and see if they can handle your requirements. Very user friendly and most affordable. Lynn Jacobs, EA, FNTPI, NP Kenner, LA

This, from the National Association of Enrolled Agents Lynn Jacobs, EA, FNTPI, NP Kenner, LA BECOMING AN ENROLLED AGENT FREQUENTLY ASKED QUESTIONS Q: I’ve heard that IRS is going to regulate all commercial tax preparers. Is this true? A: Yes. The IRS is increasing oversight of federal tax return preparers and has laid out its general roadmap in Publication 4832, Return Preparer Review. The agency’s increased oversight will be phased in over several years and implemented through a variety of new regulations, starting with the requirement that paid tax return preparers obtain and use a preparer tax identification number (PTIN). IRS is also proposing additional regulations requiring preparers to demonstrate competency on returns they prepare and to take continuing professional education. Q: What is an enrolled agent? A: An enrolled agent (EA) is a federally-authorized tax practitioner who has technical expertise in the field of taxation and who is empowered by the U.S. Department of the Treasury to represent taxpayers before all administrative levels—examination, collection, and appeals—of the Internal Revenue Service. In addition to taxpayer representation, enrolled agents often provide tax consultation services and prepare a wide range of federal and state tax returns. For more detail on how enrolled agents are regulated, Circular 230 provides the rules of practice for enrolled agents, certified public accountants and tax attorneys. The Office of Professional Responsibility (OPR) provides oversight to the enrolled agent profession, including the testing and renewal of enrolled agents. Q: How do I become an enrolled agent? A: There are two ways to become an enrolled agent: 1) work for the IRS for five years in a position requiring the interpretation of the tax code; or 2) pass all three parts of the Special Enrollment Exam (SEE) and pass a background check. Q: What are the three parts of the SEE? A: Part 1 covers Individuals, Part 2 covers Businesses, and Part 3 includes Representation, Practices and Procedures. A complete list of the topics covered under each part can be found on Prometric’s website in the Candidate Bulletin. Q: Where can I find information on becoming an enrolled agent? A: Visit NAEA’s website, click on Resources and select Becoming an Enrolled Agent. The section contains detailed information about the testing process, resources available to candidates and even information about how to keep your license once you’ve earned it. Prometric, the company selected by IRS to administer the SEE, maintains a website where candidates can learn more about the SEE and register for the test. Q: Is there an educational or experience prerequisite to becoming an enrolled agent? A: No. What counts is your knowledge of the tax code, which is proven by passing the SEE. Earning the enrolled agent license demonstrates your advanced knowledge of tax issues. Q: Does NAEA have a class to help me prepare to take the SEE? A: Yes. NAEA offers both an online prep and in-person review class. The extremely popular online program has five sessions per year, and each part of the SEE is given in each session. You may take the parts in any order you wish, but only one part in any given session. As a student, you learn by completing study assignments and quizzes as well as by attending periodic facilitator-led conference calls. NAEA’s program provides a start and a finish date, with the expectation that students will take the SEE at the end of the course. NAEA facilitators encourage students and help keep them on track. All facilitators are experienced enrolled agents, as well as qualified and engaging instructors. The in-person SEE review is an educational track at NAEA’s National Conference held each August. This class is designed for experienced tax professionals, and provides a review of all test areas. Contact NAEA directly for more information about this class. Q: How long is the online course? A: Parts 1 and 2 are eight (8) week courses and Part 3 is a six (6) week course. Q: Do I need to be available certain hours to participate in the online program? A: There are no set hours -- participants will have access to Gleim’s website 24/7. The online program is geared towards professionals with 3-5 years of experience, and NAEA recommends that students dedicate at least 20 hours per week to studying for the SEE. Students with less experience will need to study more in order to learn the material thoroughly. Q: How much is NAEA’s online course? A: NAEA member fee is $349 per section and non-members is $385. Purchasing all three parts at one time saves money; it’s $920 for members, and $995 for nonmembers. Materials are included in the registration fee, which consists of NAEA’s facilitation, and Gleim’s online program, textbook, test prep cd and an audio cd. Shipping and handling is also included. Q: May I join NAEA before I take the SEE? A: Yes, it’s a great idea. Non-enrolled preparers may join as Associates, which offers the same benefits and discounts with the exception of being listed as an enrolled agent. Associates cannot hold office or vote. Joining now provides access to the information which can help you achieve your goals and help build your career! Q: When and where is the test offered, and how much is it? A: The SEE is offered ten months a year (every month except March and April). You’ll need to schedule your test in advance by contacting Prometric, which has over 300 sites in the US as well as a number in foreign locations. A list of test locations can be found by clicking on the “Do More” box on the right hand side of the screen. Each part costs $101. Applicants will need a PTIN to schedule a test. Information on acquiring a PTIN is available on IRS’ website. Q: What types of questions are on the test? A: The SEE is a multiple choice exam, and each question has four potential answers. The question styles may include direct questions, incomplete statements or “all of the following except” questions. Q: How is the test graded? A: Prometric uses multiple versions of each test, and employs a scaled scoring process to ensure comparability between those versions. Each item in the exam is worth one point, and scaled scores are determined by calculating the number of questions answered correctly from the total number of questions in the examination and converting to a scale that ranges from 40 to 130. The IRS has set the scaled passing score at 105, which corresponds to a minimum level of knowledge deemed acceptable by those persons who will be practicing before the IRS. Q: I’ve heard that there are questions that don’t count on the test. Is this correct? A: Yes. Your test may include some experimental questions that will not be scored. If present, they will be distributed throughout the examination and will not be identified as such. These are used to gather statistical information on the questions before they are added to the exam as scored items. These experimental questions are not counted for or against you in your final examination score. Q: What happens if I fail? A: You’ll know as soon as you complete the test. A failing score is 104 or less, and the program will tell you your score only if you fail. Each part may be taken up to 4 times in any testing year. Q: What happens if I pass? A: Celebrate! Your score will not be released to you, only that you passed. Once you pass one part, you have two years to pass the other two parts of the exam. Q: Once I’ve passed all three parts, what do I do? A: Within one year of your final test, submit Form 23, Application for Enrollment, and an application fee of $125 directly to IRS. The IRS will take 60-90 days to process your application and conduct a background check, which will include your tax compliance as well as criminal background. Q: What do I need to do to keep my license, once I’ve earned it? A: Enrolled agents renew on a staggered schedule, based on the last digit of the enrolled agent’s social security number. To be eligible for renewal for the enrollment cycle, an enrolled agent must complete 72 continuing professional education (CPE) credit hours for the three year cycle, with a minimum of 16 CPE per year. Two CPE credit hours per year must be in ethics. Members of the National Association of Enrolled Agents are required to earn 30 CPE hours in each calendar year, including two hours of ethics. Members report their hours for the prior calendar year as they renew for the upcoming membership year. NAEA offers many opportunities for CPE each year, both in-person and on-line. Q: Is there someone I can talk to about all this? A: Yes. Contact us at [email protected] or 202-822-6232. NAEA’s state affiliates may also offer classes or other resources to help you succeed. We’re happy to help! National Association of Enrolled Agents 1120 Connecticut Avenue, NW Ste 460; Washington, DC 20036-3953 202-822-6232; 202-822-6270 fax; [email protected]; www.naea.org

More 1099R's have come across my desk this year with the box checked for 'taxable amount not determined', and unless I am given information otherwise, the amount is fully taxable. Lynn Jacobs, EA, NP Kenner, LA

Child's return - capital gains and losses of a child are not reported on the parent's return. The child must file his/her own tax return for these types of transactions. Lynn Jacobs, EA, NP Kenner, LA

Are you a member of NAEA? Their weekly E@Lert had this as one of their topics recently. OPR suggests you wait to call until April 9th if you haven't received your renewal card by that time. Lynn Jacobs, EA, NP Kenner, LA

Do you have a preparer and hourly rate entered in the Hourly Billing Rate drop down Forms menu? Click on 'Forms', 'Billing Rates', add a preparer to Hourly Rates then close the Billing Rates box. If it's in an open return, you have to close (save) the return and re-open it. Upon reopening, the hourly billing tab at the bottom of the invoice should allow you to add the # of hours. Lynn Jacobs, EA, NP Kenner, LA

This question was posed to me by a client who lost their home in Katrina. The home was completely demolished, and the lot sat empty from 9/2005 through August or Sept 2009 when a new home was completed and the taxpayers moved into their new home. During the years in between Hurr. Katrina and the time they moved into their new home in Sept/Oct 2009 they have lived with the wife's parents. The IRS defines a new home buyer as someone who has not owned and lived in a personal residence for 3 out of the last 5 years. My client asked if, under their particular circumstances, they would qualify as a new home buyer. Will a newly constructed home built on their pre/post Katrina lot qualify? Anyone out there have an answer to this? I researched the IRS Q & A page for FTHBC but did not find any topic exactly on point. Thanks so much, Lynn Jacobs, EA, NP Kenner, LA

I, too, will never again purchase through a 'service bureau' such as TRX or Guardian. I was among the 500 (or so) who met the TRX 4/30 deadline to purchase ATX TTO at a bargain. I'd been using the software for several years and was happy to get in on a price break. BUT, the aggravations I've had since then are definitely not worth it, in hindsight. Now, my other subscription (TaxScripts) has me branded as 'through TRX' so it took several phone calls and emails to get that renewal set up and working properly. And now, I would like to have prior years of ATX MAX (2001 - 2004) and ATX won't sell them to me since I'm branded as a 'TRX' customer and I'll have to call TRX. TRX says they don't have the programs and I'll have to call ATX. Once I explained that I'd already called ATX they said they'd see what they could do, and it would be at no charge. Now I know that ATX charges $100 for the CD with all prior years on it. I'm not holding my breath for these older programs. I've decided Intelliconnect is NOT for me. I just can't stand that a research product requires hours of tutorials in order to adequately use it. So I've already purchased a subscription to Tax Analysts research. I'd investigated RIA and BNA, but they were both out of my budget. So, next year its still ATX but with the MAX program and not TTO. PS and if anyone has the name and phone number at ATX for me to call directly to purchase the 2001-2004 tax programs I'd really appreciate it. This runaround really 'gets my goat'. Lynn Jacobs, EA, NP Kenner, LA

I've been using "Other - not on list", which worked well. Didn't know there was an 'Unkown' option. Sometimes, though, the system has automatically added the 1116 after which the foreign tax didn't show up properly. Once the 1116 was deleted then the foreign tax flowed to the proper line. Thanks for that. Lynn Jacobs, EA, NP Kenner, La

Cathy, while I tell my clients that the IRS refund cycle (for e-filed returns with direct deposit) is generally 2- 3 weeks, I NEVER tell them the state refund should appear in their accounts within 3 - 4 days. What I will say is that in most instances the state refund will appear sooner than the federal. So, IMO a 5 - 7 turnaround is still GREAT! And remember last year, or the year before when the state refunds were being issued AFTER the federal? My 2 cents worth. Lynn Jacobs, EA, NP Kenner, LA

The 'no statute on non-filed returns' applies to IRS ability to collect. For non-filed returns they can continue to attempt to collect forever. Filing the return brings into play the 10-year collection statute. However, for 'refund' type returns, the burden then becomes the taxpayer's. The taxpayer has 3 years from the original due date of the return to file in order to still be able to receive the refund. One day past that, and they're out of luck. Lynn Jacobs, EA, NP Kenner, LA

My research concludes that the repayment of he 'defaulted' loan, for which a 1099-R had been issued in a prior year, results in no deduction in the year repaid (see IRS Notice 82-22). However, that amount becomes basis for the 401(k), so that when MRD's have begun, it is not taxed again. I'd appreciate hearing if anyone has come to a different conclusion. I'd appreciate hearing if anyone concurs with my conclusion. Lynn Jacobs, EA, NP Kenner, LA

New client (nonfiler type). In 2002 took out loans from her 401(k) and defaulted on the payments. Received a 1099R for the default for 2002. But in 2006 she wanted to take out another loan and the administrator required that she repay the loan (the one that had been defaulted and for which a 1099R had been issued in 2002) before getting the 2nd loan. Oh, and she defaulted on the 2nd loan too (no surprise there, huh?). I expect to be able to show the repayment as a deduction against AGI (line 21). Or is it properly shown as an itemized Schedule A deduction? I've never had this issue come up before. Anyone else have words of wisdowm to impart? Thanks, Lynn Jacobs, EA, NP Kenner, LA

NC and SC EA Society's also have joint 16-hour CPE sessions in May, 19th - 21st. http://www.nc-sea.org/CPEseminars.htm Lynn Jacobs, EA, NP Kenner, LA

Verify her name. I had one reject 6 times before I found the right name combination. Lynn Jacobs, EA, NP Kenner, LA

In ATX the Clergy Worksheets have not been released yet. Per their website, they are noted "Final Pending from Tax Agency". Once they are available and updated you should be able to e-file the return. Lynn Jacobs, EA, NP Kenner, La

Those of us from New Orleans don't see the 'joke' in this. Lynn Jacobs, EA, NP Kenner, LA

Have you tried the 'synchronize with EFC'? I usually do that before trying to send my first e-file, which was successfully sent this morning. Lynn Jacobs, EA, NP Kenner, LA

Have you looked at form 4835 (farm rental income and expenses; (Crop and Livestock Shares (Not Cash) Received by Landowner (or Sub-Lessor)) (Income not subject to self-employment tax)) and its instructions? Lynn Jacobs, EA, NP Kenner, LA

If you do NOT have a FEIN, then for this purpose your EIN is your SSN. Lynn Jacobs, EA, NP Kenner, LA

simple google search yielded: http://www.irs.gov/pub/irs-pdf/p2043.pdf Lynn Jacobs, EA, NP Kenner, LA

I couldn't find the ALS Script, either. So I used Lucinda Handwriting, regular, size 12. Lynn Jacobs, EA, NP Kenner, LA