DANRVAN

Information on Wolters Kluwer Network and Service Interruptions

Dear Customer,

As you have noticed, certain Wolters Kluwer platforms and applications have been experiencing service interruptions since Monday. We want to apologize for any inconvenience this may have caused. Through this email, we want to inform you about what happened. 

On Monday May 6, we started seeing technical anomalies in a number of our platforms and applications. Our team immediately started investigating and discovered the installation of malware. As a precaution, in parallel, we decided to take a broader range of platforms and applications offline. With this action, we aimed to quickly limit the impact this malware could have had, giving us the opportunity to investigate the issue with assistance from third-party forensics consultants and work on a solution. Unfortunately, this impacted our communication channels and limited our ability to share updates. On May 7, we were able to restore service to a number of applications and platforms. 

While taking our services offline was precautionary, we wanted to act quickly to protect our applications. We regret any inconvenience and that we were unable to share more information initially, as our focus was on investigation and restoring services as quickly as possible for our customers. 

We have seen no evidence that customer data was taken or that there was a breach of confidentiality of that data. Also, there is no reason to believe that our customers have been infected through our platforms and applications. Our investigation is ongoing. 

We understand that you may have additional questions or remarks. Please feel free to contact your account manager, check the Wolters Kluwer News page for updates or contact Support at 800-930-1753.

The Wolters Kluwer Team

What I really did not catch was the need for immediate action vs long term resolution, which is beyond PPL.

12 hours ago, Max W said:

The client is having 85% of his paycheck garnished each time

I did not catch that part.

14 hours ago, TAXMAN said:

Levy was dated 4-23-2019. Does this make a difference?

Looks to me like the 10 SOL started on 11/3/08 and from what you are saying there were no conditions that would have extended the SOL.

12 hours ago, TAXMAN said:

TP has not done any of those things referred to in the link. TP said he has NOT gotten anything since the auditor put his account on uncollectible status 10 years ago. The

"Currently Not Collectible" status (CNC) does not suspend or extend SOL.

I would respond to the letter and refer to the SOL expiration date under section 6502  

Also point out that you are not aware of any factors that would have suspended or extended the SOL per IRM 5.1.19.

2 hours ago, Max W said:

The B trust is only a bypass trust if the terms of the trust designated as such.. This one has not.

But, anyhow, you finally got to the answer I was seeking.  Thank you.

Sorry if I am getting off topic, but the whole point of the B trust is to serve as a by pass, set up prior to death of first of spouse to shelter his/her estate tax exemption.

Why would it be created and funded for any other purpose?

The recapture of the credit produced a tax deduction.  The deduction eliminates the recapture.  What am I missing?

3 hours ago, Max W said:

It is not a by-pass trust. 

An "A - B" trust arrangement is an estate planning tool which creates two trust. 

The "A" trust is a marital trust.  

The" B" trust is a By-pass trust (also know as credit shelter trust) which is funded on D.OD. of the first spouse. 

Whatever you are dealing with, 654 election is only good for the first couple of years so no election if dealing with estate of spouse who died 4 years ago.

13 minutes ago, BulldogTom said:

Since we are on this topic, even though a client cannot utilize office in the home, I still put in the return the simplified method form if they have mileage expense claimed on the Sch C.   It is just my way of protecting my client on audit.   I am not sure if it would stand up, since I don't think ATX sends the form to the IRS.

Opinions if this is a good practice?

Tom
Modesto, CA

Deducting an expense not allowable by the tax code?

I would show total premium on line 29 and payback zero.  Sounds crazy but give your client the benefit of the doubt and let him decide. Explain to the client and document in writing how he wishes to proceed and consequences if IRS disagrees.

As I understand the situation, the instant he claims the excess PTC he is in effect not liable for it since he can then claim the repayment as a deduction.

If he pays back the PTC and does not claim it on line 29, then he is overstating his income by an allowable deduction.

It  seems like catch a 21 situation, but if the client wants to go that route I would fight for him.

The A trust would be the marital trust and the B trust would be the by pass trust which is funded on date of date.  In order to qualify for sect  645  the trust must be revocable at taxpayers death (actually the moment before),  seems like bypass trust would meet that qualification but better to consult legal dept.                                                                                                                                                                                                    

Are you thinking about making the election for the A trust or B trust? 

Also curious why?  There is the fiscal year advantage but the accounting can get sticky.

11 hours ago, GLJEANNE said:

But worth looking at the difference in the yearly deductions too.  The simplified gives you a tiny deduction, and over the years, that's a lot they could be saving. 

Also the tax savings  today will most likely out weigh the future gain considering SE and ordinary tax vs capital gain subject to 1250.

6 hours ago, Bart said:

I missed that the estate started in 2017.  I think you are correct Gail.  I thought Danrvan was saying the estate did not get a step up in basis.  Jeez April 10 and I am easily confused.  Imagine that.

That quote from 1.1014.4 (a)(2) is also confusing.  It is an illustrative statement of the general rule of that paragraph which basically means there is not a 2nd step up when the asset passes from the estate to the heir.

The preceding paragraph 1.1014.4 (a)(1) tells us the adjusted basis of depreciable of property passes from the estate to the heirs.

An estate is allowed depreciation per section 167(d), therefore adjusted basis includes deprecation allowed or allowable as with any other entity.

13 hours ago, Bart said:

There is no 3115.  There is no missed depreciation for the estate.  DOD step up basis starts everything from new.

After assets pass from estate, heirs get stepped up basis less depreciation allowable by estate.  Look up  Uniform of Basis Rules per reg 1.1014-4.

That can be significant if estate has a long drawn out duration.

In the situation I referred to above the estate had more income to off set in the current tax year so 3115 worked better than an amended return.

On 4/4/2019 at 3:37 PM, Gail in Virginia said:

  Now if that was the exact amount needed to get them in the sweet spot for EIC, I would definitely want to ask more questions.

Been in that situation Gail!

5 minutes ago, Yardley CPA said:

Can Form 3115 be used on a 1041 return?

Yep, recently did one from HR Block screw up.  They also overlooked to file an initial short year and accrual accounting  which would have offset income with legal expenses.

That article did not mention the case of Reuben v US  and over looked the end result of the Dorrance  case in which a zero basis was determined. 

In Reuben, the 9th cir relied on Dorrance in determining that the taxpayer had no cost basis.  

In both the Dorrance and Reuben cases, the courts were critical of the Fisher case in which the "Open Transaction Doctrine"  was applied in determining a cost basis.  In fact, the court in Fisher referred to it as a rare and extraordinary situation in applying the "Open Transaction Doctrine". 

The IRS indicates it will continue to litigate this issue and has 2 out of 3 cases in it's favor; and one weak case against it.

19 hours ago, Abby Normal said:

I never use the amend feature because I don't want two data files where you run the risk that the wrong one gets rolled over next year. I think it was a poor design choice by ATX.

I agree, never use it and like to keep a file as "originally filed" if I ever need to refer back to it.

and long term since the property was inherited 

You need to report the sale of brother's interest in the house in order to file a complete and accurate tax return.

Land goes on part 1.

1245 gains are QBI but not capital gains since they already receive tax preference.

Have researched for clients in the past and basis is zero.

2 hours ago, Christian said:

I have a client who despite having no need to file a federal or Virginia return continues to have state tax withheld insisting on filing a return. His federal return has now been rejected by the EFC I suppose because he has no need to file. Since there is no reject code indicated I have no way to address this as I am unable to delete the efiles and recreate. Anyone know a solution other than giving him a return to mail ? He is the only client I have ever had to not quit filing after advice to do so.

No explanation?  Try calling atx support?