Terry D EA

Wow, this got shoved way down the list and I didn’t see it until now. I haven’t had any issues filing SC. Just NC with the date push back.

Yes, it is. Sad to say it is not full proof or 100% either. Just responded to a CP3291A for a client who paid using Direct Pay in June of 2021 to pay the amount proposed in the CP2000 they received. We have the confirmation statement, bank account showing the draft responses etc. I had a client yesterday insist on writing and mailing a check cause they've done it this way for years. I strongly suggested the direct draft through the software. Some folks are still old school and resistant to change. I like that idea. Drake now generates a transaction summary form for the client to sign they authorized the direct draft or direct deposit. To include a form like you mention is a small task in Drake. That way the client can't say they weren't advised of the risks.

I have been concerned about "constructive receipt" as well. Transferring the funds to the husband's account seems to fall under the "constructive receipt" as well. <<<<<there is a "loophole" such that if the grant is greater than the tuition and fees, the college is not required to issue a 1098-T.>>>>> Not being required to issue the 1098-T and telling the student they don't need it is two completely different things. I am holding this one until I get the account statement.

The is a first for me. Client paid out of pocket for part of their tuition. The remaining funds came from financial aid. The college chose to split the financial aid between semesters. For this semester, they did not return to school but plan on doing so in the future. The college did not issue a 1098-T and when asked they told the client they didn't need one. I told them to go back and ask again and get a printout of their account. The unused excess is being held by the school and a check has not been placed in the client's hands. So, the excess is not taxable income yet correct? What if she transfers the funds to her husband's account (they both attend the same school) for his education does it become taxable income? At first glance I say no, cause she never had the funds given to her. This sort of mirrors what the college told her by giving her three options which were use it for yourself in the future, accept a check, or transfer it. Opinions or a refence would be great.

Looking at Pub 501, the possibility for a married person to file HOH does exist. The language is "Considered Unmarried" and one of the reasons given is the spouse did not live in your home for the "last" 6 months of the year. A temporary absence is considered living in the home. I would proceed with this and get utility bills or some other proof of both residences. I would also ask a series of questions including a one night stay and document the answers. Do your due diligence. Maybe too extreme, but I might create a form with the questions that includes a jurat statement and have them sign it. You can't be too careful today.

Only two options, MFS or MFJ and that's it. Living together or not. The only exception I am aware of is if they are living apart for more than 6 months of the year and have a separation agreement then they may be considered unmarried. If you got married on Dec 31 at 11:59 pm you are married for the whole year.

Client brought me a 1099 Consolitdated DIV today. There are nearly 30 pages of short term and long term transactions. The broker summary page only identifies total proceeds, cost basis and gain or loss. Is it safe to use "Various Trades" with various date acquired and a middle of the road sale date on the 8949? Then attach a pdf of the broker's statement to the return and form 8453. I would like to see if the broker would provide a .csv file which I could import in Drake. If I have to enter each transaction, I will be here for the rest of the week. Curious as to how others would or have handled this.

I recently completed one of these with a lot of questions and one of those questions was the mileage. The mileage that Uber/Door Dash reports is the mileage of the trip for the customer and as Pacun stated, it may include milage when the app is turned on. They do not break it into any detail. In my case, my client has a home office for transacting their Uber business. Mind you, this person is well in the five digit figures, and spends nearly all their time driving folks, hanging out at airports; etc. To error on the side of caution, and because there doesn't appear to be any code or regulation, I did not take the commute mileage to either pick up the passenger or go to the airport. I did use the report mileage and did advise my client to keep a better mileage log. I agree with Tom and Abby on this.

I was informed earlier that NC would not accept any returns until mid-February and then Drake Support had stated February 17th was the anticipated date. This notice released Feb 14th now extends it to Feb 28th. One difference, it appears you can transmit the returns but they will stay put for processing the 14th. NCDOR Issues Update On Opening Of 2022 Tax Season Raleigh, N.C. Feb 14, 2022 Tax law changes included in last year’s budget delayed the North Carolina Department of Revenue’s (DOR) finalization of tax forms, updates for tax systems, and approval of tax preparation software. Accurately processing 2021 tax year returns and issuing refunds in a timely manner is a priority for the NCDOR. Agency employees are working continuously on testing and certification requirements that are necessary in order to open the North Carolina tax season and have made significant progress. The target date to open the tax season is the week of Feb. 28. Taxpayers can expect to begin to receive refunds in early April. We continue to encourage taxpayers to file electronically. Specifically, in regards to certifying tax preparation software, agency employees are working diligently to approve these requests. Tax software providers are notified by NCDOR once their software is approved, thus allowing taxpayers to begin filing their tax returns. Some software products have already been approved. The list of approved tax preparation software products for businesses can be found at this link. The list of approved tax software products for individual income tax can be found at this link. Other products are being approved on a daily basis. Taxpayers should routinely check to confirm if their tax preparation software has been approved. The NCDOR funds public services benefiting the people of North Carolina. We administer the tax laws and collect the taxes due in an impartial, consistent, secure, and efficient manner.

Thanks, I looked at this and it is good info. I guess I’ll start with the PPL in the morning. Is there any other contact info for EA’s

Update. All of the descrepancies have been resolved. FYI- The amounts reported on the 1099K form are amounts either swiped, chip read, or manual input from the customers cards. This is a gross amount and not the amount actually deposited. Uber takes significant fees from the driver's which I knew. I think the taxpayer in this case led me down the wrong road by starting this conversation stating that Uber told her these were the amounts she received which was indeed incorrect. After I deducted the UBER fees, the amounts matched the bank deposits perfectly. So, note to self, don't let the client confuse you. I feel a bit embarrassed by this but will use the excuse that this all came about at a time when we were experiencing various technology issues and my brain was partially out to lunch.

Client received this notice a few days ago. This notice of deficiency is referencing CP2000 that my client received last summer. The client is elderly and sometimes forgetful. However, the original CP2000 was for income he did not report from Fidelity. He did not give me the information at the time the return was prepared. After many battles with Fidelity, we finally received the 1099R forms to verify the amounts the IRS proposed. We timely filed an agreement and electronically paid the tax through the IRS pay.gov system. Also, asked for penalty relief for first time abatement and for reasonable cause. The IRS has denied this but thanked us for the payment proposed on CP2000. Yes, I have the payment confirmation and bank statement that reflects the payment. Now the notice of deficiency is for the entire amount from the CP2000 plus additional penalties and interest. I want to respond to the notice of deficiency by sending our position and evidence via the fax number they provided. Other than my fax machine giving me a successful sent report, how can I prove we responded timely to avoid our rights to petition that tax court if necessary. I called the number on the notice and it is all automated. Would it be best to call the practicioner priorty line or just draft the letter of response and fax what we have and keep our fingers crossed? None of this is reassuring to the client. If I send it all in certified mail, who knows when they'll get it or even open it. What a conudrum

Thanks, I will be meeting with this client again on Friday. I will have her log in and look at everything we can find. I post the results.

Once again, I agree. But, the OP doesn't state when the property became available for rent. Can't determine the number rental days. All he says is there was no rental use of the home in 2021. Doesn't say whether it was available for rent any time during 2021. If it was not made available for rent anytime during 2021, then no rental days no expenses. Waiting to see what the OP says.

Yep, thanks

I have the report from Uber and it doesn’t match the deposits. The report does match the totals of the 1099nec and 1099K. There is a huge difference that must be looked into. Again, hard to argue with bank statements

Thanks for the replies. I agree with both of you. I don’t know how this was allowed. The taxpayer is getting me an annual transaction report from the HSA account. Just have to wait for more info. It’s always comforting to get feedback from folks here. Thanks

Taxpayer revc’d 1099K and 1099NEC. So far so good. The amount of the taxpayers deposits received per their bank statement is approximately 26K less than the total of both forms. My first take is use the forms, but it’s hard to argue with bank statements. Yes, have all bank statements for 2021. Anyone know a contact number for Uber? I’ve done some research and can’t find anything. All else fails, I will report the income from the bank statements and wait for the CP2000. Too early in the season for this stuff.

Wouldn’t the donor’s basis be reduced by the depreciation that was taken and should have been taken? Adjusted basis is the Donor’s basis correct? Son gets adjusted basis.

Taxpayer had major medical expenses in 2021. They qualified for a Christian assistance program that deposited funds for the expenses to the taxpayer' HSA. The total deposited is way over the limit at 40K. All of the medical expenses were paid from the HSA so I'm not sure as to what the balance is in the HSA to determine if they will be assess the excise tax. I need to clarify that the funds received are not included in taxable income and appear to be treated as a reimbursement to pay for the expenses. Only amounts the taxpayer actually paid out of pocket could be included on Sch A. However, I don't think they will be able to itemize anyway. Am I correct in my thinking regarding any of the amounts received from the Christian program for the expenses are not taxable income? Bills were submitted to the Christian program and then funds were deposited in the HSA, then the bill was paid from the HSA. In my opinion, it all becomes a wash and the only thing to look at is the balance in the HSA. Thoughts and opinions.

I agree totally. When it becomes available for rent determines when to begin deducting expenses. If it was available for rent all year but never rented, the same applies. So, if it was available for rent in let's say, September and you collected two months pre-paid rent in 2021 to be rent beginning in 2022, the pre-paid is income for 2021 and deduct the associated expensed for 2021 including the depreciation. Judy, can you give a reference for the rule you mentioned?

Yes, definitely bring back the good old days. I don't do the satellite or cable subscriptions to watch TV. Cust the cord many years ago. If you can get the ME TV Channel, they play a ton of the old shows. Spectrum has picked up this channel but mainly it is available on an antenna. I always watch Perry Mason twice a day and of course, he always wins. It is interesting to see the cast of characters who played on his show(s). Will never stop laughing at Tim Conway and Harvey Korman in the Carol Burnett show. Good old clean wholesome shows. Antenna TV is another one. For us, the antenna, a Roku stick with hulu and Philo for a total cost of about 35.00 per month works perfect. I digress.

I agree, but it would be nice if all credentialed preparers, EA, CPA & Attorney's could fall under some type of exception. Granted, just because you have the letters behind your name doesn't mean you are 100% honest. Just with a license on the line, I would one would give deep consideration to doing anything that would end their career. Just sayin.

That is the six million dollar question. Most probably won't even know what we're talking about. It will take extra time, but each person should create an account with the IRS to access their information. It would be nice if the IRS would provide us with a tool to check and verify what the client received. That is, if the information the IRS has is correct. Hence all of the issues with the stimulus payments.

Hi Tom, I'll put my 2 cents worth in. First, I agree with all of the previous responses you received. Personally, I would want to see all of the previous worksheets regardless of what the taxpayer has to do to get them. They were his at the time the returns were prepared anyway. Like you, why does the 4797 exist if there were no sale or a scrapped asset? Abby is correct distributions reduce basis and I don't see how they would release the suspended losses either. It sounds as though the previous preparer may have been confused as well or maybe they were privy to information you don't have. Can you see the K-1 forms from the previous years? That may help with deciding what to do. Your idea of assuming ordinary passive losses and netting the losses against ordinary income in the future would seem to be the best approach. However, I would want to cover my *&^ a bit. I literally hate that word assume.