jainen

>>this is going to drag out for a while, I'm afraid.<< Not at all. Simply phone with the client in your office. You might just tell the client to do it, but then you couldn't charge a fee for looking like a genius. All you want to say is the 14 days thing and please send the two transcripts.

>>it would go on a 4684 but the form states personal use<< Ummm, that form has two pages?

>>since it was a direct transfer, they were not required to issue the 1099-R<< That's news to me too, but the Instructions for Form 1099-R do indeed say, "do not report a transfer between trustees or issuers that involves no payment or distribution of funds to the participant, including a trustee-to-trustee transfer from one IRA to another IRA,"

>>IRS does not know about her deposit into IRA<< Form 5498 and 1099-INT will be in her transcript (you need both transcripts, return and account). Doctor's office will likewise provide an account record. Since that is all so simple, you'll be able to resolve this very quickly. CP-2000 is just a proposal--tax has not yet been assessed. Call the collections number on the form and ask for a 14 day hold so you can respond.

>>a better way to handle this<< Form 3115 is straightforward and transparent, with automatic approval. But boring--IRS always appreciates a bit of creative accounting, and may even honor you with a closer look!

>>they are wrong 50% of the time<< Sometimes one has to be careful asking the right question. Sometimes one has to be careful listening to the answer.

>>Here is what I found in that pub...<< Yes, I know about that paragraph on page nineteen. But I specifically said page EIGHTEEN! Go back and read about "Days used as a main home before or after renting."

>>once the IRS has sent the money to the loan creditor, that money isn't come back to the client from the IRS.<< That's the IRS position if you DISPUTE the debt--you have to work it out with the agency that requested the offset. But injured spouse is different. In fact, according to the Instructions for Form 8379 it is EASIER to get your refund if you wait to file until after the offset has been processed. Really, I'm not making that up! It only takes 8 weeks that way, instead of the normal 14 weeks!

>>They don't own anything...There are no obligations...other than his student loans from 45 years ago.<< That with a 32K credit card sounds like insolvency to me.

>>recommended an attorney to manage the transfer<< That's to make sure he gets clear title from whatever entity claims to be selling the boat.

>>I have a letter from the Board of Benefits services from her denomination stating that up to 100 percent can be designated housing allowance<< Okay, but how much actually WAS officially designated in advance? According to Pub 517, "A definite amount must be designated. The amount of the housing allowance cannot be determined at a later date."

>>Is there an IRS form for a taxpayer needing a payment plan?<< In my opinion, nobody needs a payment plan unless and until they can't pay for an extended period of time. The fee is $105 and you get locked into a schedule you may have trouble with later. And you know what? The IRS agrees with my opinion! See the instructions to Form 9465 for details on several options.

>>Just talked to the IRS, and you must count the days that the person lived in it, even it if it was before it was considered a rental.<< Wrong. That's only if you use the property in between rentals. If you rent it for more than 12 months, the vacation rules don't apply after the property is converted. See page 18 of Pub 527.

>>what would you do?<< Oh, sorry--now I see your point!

>>I recreate it to match prior years<< How can you do that? You have to know the month placed in service, amount allocated to land, capitalized cost after bonus/179, maybe separate elections for state, all sorts of things. How can you even know whether the asset previously had the correct recovery period?

>>"under the min retirement age " is about the min soc sec age<< It refers to the company retirement age, which could be 55 or lower. Pub 596 says, "Minimum retirement age generally is the earliest age at which you could have received a pension or annuity if you were not disabled." But if you paid the premiums yourself, a disability pension is not earned income.

>>I have never seen where they convert from direct deposit to paper check as a result of additional processing.<< I have. It was a big problem in the early days of RAL. It usually meant there was an offset for back taxes or child support. I would guess it now relates to internal security procedures, as kc suggests. Obviously IRS isn't going to discuss that, so for all we are allowed to know their letter just means whatever it says.

>>any idea what this could be about?<< Sounds to me like they had to do some additional processing on his tax return, so they weren't able to honor his request for direct deposit of his tax refund and are sending him a check instead.

>>they are not accredited with the US Dept of Education<< NOBODY is, dig? Name me one school! How about Harvard? According to their web site, "Harvard University is accredited by the New England Association of Schools and Colleges (NEASC)." Yale explains, "The United States has six regional accreditation associations plus many other national accreditors for faith–based and career–oriented schools and for other specialized and professional programs. In contrast to other countries where quality assurance often is conducted by large governmental ministries, here this process is independent and peer–based." It's the American way, and it's written into the tax regs.

>>The credit always follows the dependency<< No it DOESN'T! Read page 15 of Pub 970--or just read the instructions to the form you're filling out. A family can shift the education credit to a dependent, even when the family income is otherwise too high to be eligible!

>>Only the person entitled to claim the dependency exemption can claim the education credit<< What's going on in this thread? Pub 970, Tax Benefits for Education, is written at about the 5th grade level. It takes each credit individually and spells out exactly Who Can Claim the Credit and Who Cannot Claim the Credit. It says, "You cannot claim the American opportunity credit for 2012 if any of the following apply....You are listed as a dependent on another person's tax return (such as your parents')." It uses identical wording for the Lifetime Learning Credit, and in prior-year versions of Pub 970. It does NOT say a dependent can't claim the credit. A standard strategy for parents with high AGI is to skip the exemption so the dependent can qualify. This strategy is offered by the IRS itself in a chart on page 15 of Pub 970. That, in turn, is taken from Reg Section 125A-1(f).

>>I go by what is presented to me on paper.<< I'm uncomfortable about pursuing this; it might be too delicate a subject. But there is no more fundamental aspect of my job than filing with the right taxing agency. The great guide to getting along with the tax police, Circular 230, says we can accept whatever the client just says--as long as it's complete and consistent. Obviously a PO box is not complete support for residency, and it may not be consistent with other paper such as a W-2 or charity receipt. I appreciate that your clients, like this one, have long-term loyalty. And I know that none of us can achieve that without a sympathetic ear, and occasionally even a deaf ear. But really, you could have taken care of this for him with a 5-minute call (not counting the time running the speaker phone on hold, of course).

>>workshops that the district had paid for<< In the original post the teacher was paid to take a class, which is different from paying for a class. If it was from the regular employer, it should have been on the W-2 so you should report it on Form 8919. Otherwise, Line 21 but prepare for an IRS letter.

>>this cannot be considered wages<< According to Pub 596, Earned Income Credit (EIC), "taxable benefits you receive under your employer's disability retirement plan are considered earned income until you reach minimum retirement age."

>>under the second tab<< Okay, the company released a new version of MN today.