bertrans

I agree with cbslee that use of readily available public information is not spying. How often do local police nab someone for vandalism or mugging because the hoodlum was stupid enough to post and boast on Facebook? Government doesn't need a search warrant to browse social networks like they do to enter your home or business. Remember when the IRS used to have "lifestyle" audits? They'd see what kind of house you lived in, what car your drove, whether your kids went to private school, and then question how you did it all on your reported $20k income. Now they reconstruct your income through subpoenas of bank and credit card records etc., which is much tougher than the audits they replaced. They can still do lifestyle audits if they suspect unreported income, but they have to suspect someone first.

People who want to cheat or break the law better learn to be more surreptitious about it. I don't understand why people bother to rob banks or convenience stores anymore because the next day their mug is posted everywhere. So if you want to claim $10k income from your grinder shop, don't drive around in a new BWM and live in a $600k McMansion. Don't start a "church" with an address in the middle of 12 miles of cornfield you don't own. The IRS used to find out the truth about such things before, but it took them a while. Now they can use the internet, just like anyone else in the world.

kcjenkins is right on that we as preparers should be using these tools too. I had a "new" business that only sold one product a month. Invoices for raw materials were for huge amounts, but there was no inventory. The company had moved during its first year and I looked it up on the internet just so I could find the date of the move so I would know which town to file the assessor's report. Lo and behold, this "new" company had had a Facebook account for three years and customer review sites had reviews going back at least that long. I can only conclude that the gal had been doing this from home for some time and only decided to make it legal when she moved into a storefront. I didn't break any laws by googling the company, did I? Not anymore than a potential customer would by using the same tools. The IRS has the same right to access that public information as the potential customer and I did. If the owner didn't want the IRS to know, she shouldn't have advertised her wares on the internet.

There are two aspects of the Internet which are simultaneously simple and diabololical: #1 the Internet is forever; and #2 therre is no reasonable expectation of privacy on the Internet. Sic transit scutum.

On the single issue of foreign earned income, a TP may elect to do one of three things: he may, if he meets the requirements, exclude that income (there are ceilings),on form 2555 ; he may elect to deduct the foreign tax he paid by filing form 1116;or, he may elect to deduct foreign taxes paid on Schedule A. There is one essential caveat: in general, one may not take a deduction from income that one has excluded.

For the record....more than one person at IRS has told me mailing something certified is meaningless if they don't receive the return. I was told it's actually worse, because it disrupts the "posting sequence".

I agree wholly with the advice you were given: think about it. If uou send 'x' by certified mail and you get a signed receipt that 'x' was received, how do you go about proving what 'x' is??? And the cetrtified mail process does complicate the Service's mail procedure enourmously.

The description given of the call does not fit the profile of IRS communications with taxpayers; private agent lines are never disclosed, and agent ID numbers are required. I suggest that you go to www.irs.gov. and contact TIGTA (Treasury Inspector General for Tax Admininistration: the Service's Internal Affairs). Your report of this sort of thing is not the first that has been heard about. Good luck and do not respond to the call in question, since it is either counterfeit or an example of an IRS employee abusing his/her authority.

If this keeps up they may have to layoff a few revenue agents???

The furlough applies to all Service personnel; there is no indication that the result will be a larger termination.

I had a client once (a favour for a friend): he 'dropped off' his return and W-2. He had an ITIN, but the W-2 had an SSN - and a different name. The client had attached a yellow postit note to the W-2, with an arrow demurely pointing to the SSN, and the words: 'FOR WORK PURPOSE ONLY.' God bless this country.

PS: I did not prepare the return.

that's interesting about the totalization agreement...i didnt' realize about that.

i have one client with Russian social security; i picked up as income last year; would you know off top of your head if that is wrong.

Now i have another client, who is 75, but she was a teacher in England in her 30's and for like the last 30 years has been

getting some kind of pension from there...anyone familiar with this?

We have no totalisation agreement with Russia; we do have one with the UK, but more details of the case are needed.

>>she says it is to try to get more parties and sales<<

That may be a business GOAL, but it is not a business PLAN. Even as a goal, it totally lacks a profit motive. Stop using the misleading term "hobby" and show her what Pub 535 says about the subject. Also assure her that continuing to claim losses is more likely to attract IRS scrutiny than not continuing to claim losses.

Your comment is absolutely correct: if she continues filing Schedule C's with a loss, year after year, she will be increasing her chances of having all returns with an open assessment statute examined as a section 183 audit.

Although an individual who represents himself as a professional gambler is still limited, on Schedule C, to deducting losses only up to winnings, he may also deduct all ordinary and necessary business expenses he incurred in the course of carrying out his business activity.

However, if the taxpayer was a "Non-Resident Alien" in that tax year, then they do not qualify for the EIC according to the 8867.

[emphasis added.]

Yet I heard a woman on local Spanish-Language radio here the other day openly saying that this is possible and people are leaving money that is theirs on the table. So this is being discussed even on the airwaves.

I just don't know how that question regarding Non-Resident Statis can be ignored. The question posed is not asking about the client's status at the time of completing the 8867; it's asking what the person's status was during the actual Tax Year being filed.

This was covered in my post: if the potential qualifying child meets all of the other criteria.

The comments here are quite germane; the analysis, as usual in tax law, is the result of combining various IRS statements about identifying numbers (section 7701, throughout, in particular.) Once the general principle of amending after receipt of a valid SSN is accepted, then, it follows necessarily that other years with open refund statutes may also be amended (provided that the dependent meets certain other conditions.) What I find, on the other hand, quite frankly depressing, is the argument made by some of my clients to the effect that a marriage license is retroactive........Takes all kinds.

You may amend every return on which there is an open refund statute of limitations.

If the tax ssessment is paid (the penalties and interest can still be outstanding), your response will be considred a claim; send the case to the Accounts Management Operation of your original Service Centre. Recons are for cases where the tax has not yet been paid and follow a diffrent procesure.

Be aware that if there are any possible credits to be claimed and such credits require that both TPs and the qualifying children have SSNs, then the credits will not be allowed.

>>the SOL has tolled<<

You need a legal dictionary to understand this usage of "toll." It means to delay, suspend or hold off the effect of a statute. For example, the three year statute of limitations is tolled during periods of medical incapacity, so a person qualifying under that rule could have more than three years to claim a refund.

Thank you for the correction; it cleared up a misconception I have had for quite some time. Thank you again.

The governing code section is 6511; throughout that section, the phrase used is 'refund or credit'; thus, as the other posters have properly observed, once the SOL has tolled, any resulting overpayment is barred both for refund AND offset (e.g., credit elect.).

You can change from MFS to MFJ within 3 years of the due date of the original return (without regard to extensions); tyou can change from MFJ to MFS by the due date of the original return (including extensions). IRC section 6013.

Unfortunately, Columbia is not one of the nations which have signed so-called totalisation agreements with the US - had it done so, your client would not be subject to SET, FICA or MEDICARE taxes.

As usual, you neglected an important part of the statement. So are you stating that Americans who work full time should live in poverty? Are you saying that only the members of the lucky sperm club are entitled to a living wage? Your statements sound as if you belong back in the feudal system. It sounds like you are saying if you are born into a family that encourages and supports you to have minimally an undergraduate degree you are worthy. If you are born into a family that's poverty ridden, you are just going to stay that way. I thought you right wing zealots were big believers in personal responsibility. There are thousands of Americans working full time, live in poverty, and have to medical care. What's there incentive to keep working? Too bad for them? I've got it, you don't like Hillary Clinton. You are right wing. You are Republican. When did this new site become a zone for the ultra conservatives? I haven't had time to read much lately, (putting in a new computer system) but I used to have a lot more respect for you KC when you talked about tax. I agree to disagree. I will check in on this site soon, and if it continues to be a love fest for the right wing moral majority I will move on. lbb

"Seventh, let's ensure that people who work hard every day can support their families and save for the future. I do not believe anyone who works full-time in America should draw a wage that puts that person below the poverty line. If you are a full time worker you should make more than poverty.

Now that we've finally reach the minimum wage, let's expand and simplify the Earned Income Tax Credit so no one working full time lives in poverty."

Let it be assumed, for the sake of argument, that every statement in your post is correct. A simplification of the Earned Income Credit would still, inevitably, lead to increased abuse and outright fraud. But that would be perpetrated by the deserving and genetically disenfranchised, and would therefore be 'fair'.