Lee B

Copied from The IRS Mind website: "Many penalty abatement requests are denied – requiring the taxpayer to appeal the adverse decision: the IRS uses an automated decision-making tool to make penalty relief determinations. This tool is flawed and often produces incorrect adverse penalty determinations. Taxpayer often receive adverse penalty abatement determinations that appear not to consider all of the facts and circumstances. Taxpayers should appeal their decision to the IRS in order to have the entirety of their circumstances considered."

Copied from the IRS Mind website: "Many penalty abatement requests are denied – requiring the taxpayer to appeal the adverse decision: the IRS uses an automated decision-making tool to make penalty relief determinations. This tool is flawed and often produces incorrect adverse penalty determinations. Taxpayer often receive adverse penalty abatement determinations that appear not to consider all of the facts and circumstances. Taxpayers should appeal their decision to the IRS in order to have the entirety of their circumstances considered."

Given the details you provide this sounds like a knee jerk response. I think you would have a very good chance of getting this reversed in appeals..

"Rev Proc 2013-30 facilitates the grant of relief to late-filing entities by consolidating numerous other revenue procedures into one revenue procedure and extending relief in certain circumstances. This procedure provides guidance for relief for late: S corporation elections, Electing Small Business Trust (ESBT) elections, Qualified Subchapter S Trust (QSST) elections, Qualified Subchapter S Subsidiary (QSub) elections, and Corporate classification elections which the entity intended to take effect on the same date that the S corporation election would take effect. Generally, the relief under the revenue procedure can be granted when the entity fails to qualify solely because it failed to file the appropriate election under Subchapter S timely with the applicable IRS Campus and all returns reported income consistently as if the election was in effect. For purposes of this guidance, the “effective date” is the date the election is intended to be effective and cannot be more than 3 years and 75 days from the date relief is requested. To assist in determining if an entity qualifies for late election relief, Rev. Proc. 2013-30 includes flow charts, as well as specific guidance for each of the five categories listed above. If an entity does not qualify for relief under Rev. Proc. 2013-30, the entity may request relief by requesting a private letter ruling. The procedural requirements for requesting a letter ruling and the associated fees are described in Rev. Proc. 2021-1 PDF) (or its successor). Again, it is important to know that Rev. Proc. 2013-30 relief is only for late elections that would otherwise be valid. For example, the S election must still contain signatures from all the shareholders. Also, if there was an invalid shareholder or the corporation was not qualified during any part of the tax year, the S election is not valid for that year."

"Intuit developed the Non-filer Sign-up tool for the IRS and delivers this tool through its participation in the Free File Alliance." Interesting

If you want to seriously blame someone, blame the elected officials in DC and their appointed servants who created this situation.

https://www.irs.gov/credits-deductions/advance-child-tax-credit-payments-in-2021

Wouldn't you have to have a signed 2848 in order to do it for them? I think that the approach that Sara's firm is taking makes a lot of sense.

"Taxpayers who do not wish to receive the advance payments, whether for changes in income, status of dependents, or otherwise, will be able to opt out of automatic advance payments in order to avoid having to make a year-end repayment. The unenrollment process will be completed via a tool on the online IRS portal; however, this feature is not yet available as of their June 7, 2021, announcement and any alternate means to opt-out in the meantime have not been provided. A similar tool to be released later in 2021 will allow taxpayers to update relevant income and dependent information on the IRS portal so that they may receive a more accurate monthly credit payment."

Perhaps these returns or your program somehow reverted to an earlier version. First check the version of your program to make sure it's the current version. If it's not the current version, back up all of your clients before updating if it is, then reload forms on one of these returns to see if that fixes the problem.

This is not inventory, its an investment so it's just like buying and selling stocks,bonds, mutual funds or ETFs, except that you can that you can buy something directly thus skipping the intermediate step of selling for cash then buying something. Perhaps in that sense it's kind of like bartering.

"Small Business Administration funding for the Paycheck Protection Program has been exhausted; however, $6.2 billion remains available for underserved areas. Applications that are already in the pipeline will likely be approved and funded. The state tax treatment for PPP loans and forgiveness varies from state to state, and there continue to be changes. The Restaurant Revitalization Fund is for more than just restaurants, Mankowski noted. “It includes caterers, bars, wineries, and other entities in the food industry. There have been over 300,000 applications. $2.7 billion has been distributed, with monies set aside for women, minorities, veterans and others.” The Shuttered Venue Operators Grant program had 11,600 applications by the beginning of May. Eligible applicants may qualify for grants equal to 45% of their gross earned revenue, with the maximum amount available for a single grant of $10 million. $2 billion is reserved for eligible applications with up to 50 full-time employees. Economic Injury Disaster Loans are, in fact, loans and therefore are not forgivable, Mankowski noted. “They are not to be confused with the EIDL Grants (of $1,000 per employee), which are forgivable," he said. "Loans have been increased to $500,000 per entity. If you previously applied for a loan, you can also apply for increases.” The SBA has been using Form 4506-T, which allows a lender (in this case, the SBA) to verify with the IRS that the forms supplied to prove the applicant’s income match those in the possession of the IRS. “

"It’s been a busy year for the Internal Revenue Service. More than 136 million federal tax returns have been filed so far in 2021, with over $254 billion in refunds processed, despite the problems caused by the shutdowns and additional legislation generated by the pandemic. The service shared a number of additional stats at a recent update meeting with stakeholders, according to Stephen Mankowski, the tax chair at the National Conference of CPA Practitioners, including: 94% of refund returns were filed electronically, with 92% direct deposit. The IRS answered 9.9 million calls, with the month of March at times experiencing 1,500 calls per second. A thousand IRS employees will be added by summer. Advance child tax credits will begin to be sent out by July 15, 2021. Nationwide Tax Forums will begin — virtually — on July 20, 2021. New applications for FIRE (Filing Information Returns Electronically) will be available in September." . . . . . . . . . "Darren Guillot and De Lon Harris have been designated as co-commissioners of the Small Business/Self Employed Division since Eric Hylton’s retirement at the end of March. Much thought was put into the configuration of the department, including compliance with various offices, such as Examinations and Enforcement, and incorporating many aspects under the Collection Division. Regarding COVID, things are changing rapidly, with the safety of taxpayers and employees remaining paramount. Only a few in-person interactions are occurring with the consent of the taxpayer and representatives in accordance with CDC guidelines. More than 90% of SB/SE Exam employees are still teleworking. Currently, the SB/SE is looking to hire 3,100 new employees, including 1,300 revenue agents and 400 in campus for correspondence exams, according to Mankowski. “There will be more hires in 2022,” he said. “Some of the staff will be specifically assigned to work against abusive promoters, tax scams, and abusive tax shelters.” Collection will continue to be a stand-alone division. Automated levies have been halted since April 2020 due to COVID. Installment agreements have been modified to include new tax debt. The automated levy program will be returning soon, but the IRS wants to ensure that no additional stimulus payments could be affected by this program. Collection is hiring 518 specialists, including bilingual employees. They are also working on “voice-bots” to help implement online payment agreements and set up installment agreements or transcripts. The program was created in December 2020 and turned over to IT in March 2021. Next year, it is expected that these bots will be able to address many of these calls and help increase the level of service to over 50%. In addition, the Automated Collection System will be increased with new staff hiring. The IRS currently has 1,921 revenue officers in the field, with over 650 more officers to be hired this year. This allows growth as the current staff needs to be trained. Due to low staff, they are looking to bring on new employees to focus on high-income deficiencies and delinquent filers. Meanwhile, delays on processing refunds continue, according to Mankowski. “Congress kept tweaking some of the qualifications for the stimulus payments recovery rebate credit based on different years’ returns,” he said. “One agent told me that from the start of filing season he had more than 800 calls with an Error Code 900 issue. When a taxpayer files a return and qualifies for additional stimulus money based on a prior year’s return, it gets moved into that category. When you call, you’re told the return will need additional processing to recalculate the recovery rebate credit. They estimate it will take 10 weeks from the date of filing.” Roger Russell Senior Editor, Accounting Today

Doesn't make sense to me????

Especially when they don't even bother to implement a solid operating agreement and if they have one they don't follow it. Too many clients think all they have to do is register with their state, get an EIN and file a tax return, then they're golden.

Your tendency to abbreviate and not complete explanations and questions leaves me unsure of what the your clients situation really is and what are the questions you are asking???

I do live payroll processing so this last year has definitely kept me on my toes.

Somethings just don't make any sense

IR-2021-123, June 4, 2021 WASHINGTON — The Internal Revenue Service is sending more than 2.8 million refunds this week to taxpayers who paid taxes on unemployment compensation that new legislation now excludes as income. IRS efforts to correct unemployment compensation overpayments will help most affected taxpayers avoid filing an amended tax return. So far, the IRS has identified 13 million taxpayers that may be eligible for the adjustment. Some will receive refunds, which will be issued periodically, and some will have the overpayment applied to taxes due or other debts. For some there will be no change. The American Rescue Plan Act of 2021 (ARPA) excluded up to $10,200 in unemployment compensation per taxpayer paid in 2020. The $10,200 is the maximum amount that can be excluded when calculating taxable income; it is not the amount of refunds. Earlier this month, the IRS began its programming review of tax returns filed prior to the enactment of ARPA to identify the excludible unemployment compensation. The IRS also is making corrections for the Earned Income Tax Credit, Premium Tax Credit and Recovery Rebate Credit affected by the exclusion. Taxpayers who have qualifying children and who become eligible for EITC after the exclusion is calculated may have to file an amended return to claim any new benefits. The IRS can adjust tax returns for those who are single with no children and who become eligible for EITC. The IRS also can adjust tax returns where EITC was claimed and qualifying children identified. To date, the IRS has reviewed over 3.1 million returns, with more than 2.8 million receiving refunds. The IRS plans to issue the next set of refunds in mid-June. The review of returns and processing corrections will continue during the summer as the IRS continues to review the simplest returns and then turns to more complex returns. Taxpayers will receive letters from the IRS, generally within 30 days of the adjustment, informing them of what kind of adjustment was made (such as refund, payment of IRS debt payment or payment offset for other authorized debts) and the amount of the adjustment.

"BuzzFeed News found President Joe Biden’s Venmo account after less than 10 minutes of looking for it, revealing a network of his private social connections, a national security issue for the United States, and a major privacy concern for everyone who uses the popular peer-to-peer payments app. On Friday, following a passing mention in the New York Times that the president had sent his grandchildren money on Venmo, BuzzFeed News searched for the president’s account using only a combination of the app’s built-in search tool and public friends feature. In the process, BuzzFeed News found nearly a dozen Biden family members and mapped out a social web that encompasses not only the first family, but a wide network of people around them, including the president's children, grandchildren, senior White House officials, and all of their contacts on Venmo." . . . . . . . . . "Privacy Advocates and journalists have warned about Venmo’s privacy problems for years, yet the PayPal-owned app has persisted with features that can place people — including the president of the United States — at risk. While many critics have focused on how the app makes all transactions public by default, Venmo’s friend lists are arguably a larger privacy issue. Even if a Venmo account is set to make payments private, its friend list remains exposed. There is no setting to make this information private, which means it can provide a window into someone’s personal life that could be exploited by anyone — including trolls, stalkers, police, and spies. No other major social network or service has contact-based friend lists that are publicly accessible by default to anyone — and that cannot be made private. People use Venmo to get paid, often using their real names. They often also import their phone contact lists or Facebook friend lists — which the app highly encourages when you sign up — creating networks where people automatically “friend” dozens if not hundreds of other Venmo users to allow them to find people they want to pay more easily. Venmo makes it impossible for users to hide their list of friends. To remove someone as a friend, a user has to unfriend the person manually."

The Wall Street Journal: "The Consumer Financial Protection Bureau is probing the way that Venmo, the digital money-transfer service operated by PayPal Holdings Inc., treats customers who the company says owe it money for transactions that went awry. In a regulatory filing Friday, PayPal said it had received a “Civil Investigative Demand” from the CFPB “related to Venmo’s unauthorized funds transfers and collections processes, and related matters.” The company said the CFPB had requested documents and answers to written questions, and that it was cooperating with the regulators. Venmo’s debt-collection tactics were the subject of articles in The Wall Street Journal in 2019 and 2020. The company has threatened to dispatch debt collectors on users who overdraw their accounts, even when those users are victims of scams, The Journal previously reported. Venmo continued its aggressive collection efforts during the coronavirus pandemic."

So your balance in a Venmo account is just an electronic number. It's not a bank account, it's not FDIC Insured,it's not real money.

There is no logical reason for interest income on a 1 year or longer Certificate of Deposit to be taxed at a different tax rate than capital gains. There is not a single serious economic study that supports the "Trickle Down" economics that you are espousing.

Since fintech is all about gathering as much information about you and your clients as possible and using that information to make more money, I will continue to limit my use and involvement to the extent possible! Equifax anyone?

Many of these proposals will not be in the final bill that passes