Sara EA

I use Firefox for both IRS stuff and Vanguard (and everything else). Very few sites don't play nice on it. The program automatically blocks trackers, and you can turn off animation for each site. I hate bouncing ads!

It depends on what state you're in. It's a crime to fail to file a return in NY, punishable by fines and prison time. Best to let an attorney handle it.

Free tax prep?

You may want to hold off and refer your client to a tax attorney. If the corp should have been filing in NYS and may owe big time, but the state doesn't know about them, they will often strike a deal. The attorney tells them they have a delinquent client who owes $XXX and is willing to come forward and pay $whatever. The state may just agree or at least negotiate because if the client doesn't come forward and never gets caught, it gets nothing. Penalties and interest go away with the deal. (I learned this from a guest speaker in my master's program. His clients found $10 million in cash in a deceased relative's attic--the person owned a lot of real estate in NYC and collected much of the rent in cash. The attorney presented an anonymous deal to the state and negotiated from there.) It will cost your client but you should give them the option. I know what you mean by having to jump through hoops to give away money. Our stupid grocery store with its stupid loyalty card and stupid rewards points gave me the option of donating my rewards to the local food bank. When I tried to do that, I learned I had to download an app to my phone to make the donation. While I had no problem with giving away my points, I was not going to give away my privacy and allow them to track everywhere I go and everything I do.

IRS Newswire today states it will send both Letter 6475 (EIP) and Letter 6419 (Advance CTC) in Jan 2022. Yes! I imagine the agency didn't like correcting the recovery amounts any more than we did trying to pin them down. Because these letters will arrive in Jan when tax docs start arriving, hopefully most clients will know enough to put them aside with their other tax stuff.

You're kidding, right Kev? Transcripts for 2021 aren't available at the start of tax season, so that may crimp your plans.To open an IRS account, you not only have to get through all the security questions but upload a photo ID and send them a selfie taken with a cell phone. Can/will all your clients do that? I can do it, but it would require unfreezing my credit reports, take a lot of time, and I don't want to. Might be better to just say you will assume each client got the $1400 stimulus unless they prove a different amount. As for the CTC, IRS is supposed to send a letter in Jan so require that.

We send a client questionnaire to everyone and an organizer to those who use them. (We got so many blank ones back we stopped trying with everyone.) This year's questionnaire will start with a warning that "Your return will not be started until this questionnaire is completely filled out and returned." First questions will be the 2021 stimulus amount and the advance child tax credit received. We already have virtual currency questions as well as foreign accounts, changes in banking info or address, etc. Last year we added a question about cash charitable contributions and a blank to fill in the FMV of noncash contribs, with an explanation that FMV is the amount you paid for new items like toy or food donations or what the charity will sell them for if used. It saved a lot, but not all, phone calls when clients claim $4k in used clothes.

Interesting that you can no longer contest answers. Every exam cycle some "correct" answers were contested by individuals and the professional associations, and a few were always changed and scores adjusted. (Some actually had two correct answers; sometimes the law had changed but the question hadn't been updated so all responses were considered correct.) Unless the test writers suddenly got perfect, chances are that some of the "correct" answers on the tests taken now aren't the only ones or are wrong, but you have no way to argue. Lion, I too took the HRB EA prep course, taught by Maureen Murray in North Haven. I too did nothing but study for months and HAD to pass all four parts because I was never going to go through that again. And Terry, I had not even had a course in corps when I took the SEE, but I studied everything I could and passed on the first try. It's possible, so go for it!

Lion, you and I must have taken the EA exam together! It was in 2004 at a hotel in Bristol, near ESPN and its huge satellite dishes. I was kind of glad we couldn't take our exams home. When I got back I opened a beer and went out on the deck to enjoy the relief and marvel at the hurricane-threatened sky. If I had had the exam questions, I would have been in the house frantically looking up things I wasn't so sure of. And Gail, not only were no calculators allowed, but no phones (lest you call a friend on the West coast where they started the same exam three hours later and divulge some of the questions). The proctors announced they would follow you to the restroom to assure no phone calls were made, but they never did that. With today's phones, you could probably send pics of the entire exam from your watch. Are calculators and/or phones allowed now? Does everyone get the same exam?

I wish you success, not luck! Back in Catherine and my days, the exam was four parts over two days (8 to 4:30). The third part was corps, which has now been rolled into the business/entities part. That change puts all the worst cougars in one cage. Everyone thought individuals would be a breeze, but that was not at all the case. I too passed all four parts on the first try, but my corp score was barely passing. Back in those days, you got to take your exam home with you because everyone got the same one at the same time. You could contest answers graded wrong, and the professional associations dug in and did just that. After the corrections (two answers correct, all answers correct), my corp score went into the high 80%s. Can anyone contest answers anymore? A disadvantage we had is that passing scores were curved, like the CPA exam, so if a bunch of geniuses happened to take the test when you did you might not pass with the same score you earned at a different sitting. Do your best, answer every question even if it's a wild guess, and do NOT go back and change any answers. Time again, that practice has proven to be fatal.

Contact the IRS liaison for your area. They deal with systemic problems. Explain that the computer is not reading the form and fortunately for this client, the refund will be corrected. How about the other taxpayers who had the same issue but didn't get through to such a patient agent? Ask that all such returns be reviewed. The liaisons can make sure problems with IRS systems get fixed.

I actually prefer the Regs to the Code because they usually contain great examples. Anyone who has taken an EA prep course is well-versed in triple negatives ("underline all the NOs and NOTs and count them backwards).

If they insisted they didn't get the stimulus, I did enter zero. Some did and their refunds were short. Not my problem. The only pattern I discerned of people who said they didn't get the money were MFJ returns where a spouse had died. I had enough of those where the surviving spouse said no second stimulus was received to believe them. I put in zero for the second and in all cases the rebate recovery was paid. At least I believe it was because if not I'm sure I would have heard about it!

Half of taxpayers probably don't remember receiving their stimulus. Most of those discover they did when we make them look it up. I had one who says he did look it up after I asked, still swore he didn't get it, and then looked it up again when he got the IRS notice. Sure enough, he got it. I would trust the IRS on this one. He can set up a taxpayer account and see what they sent him and how. Someone on this board said their client who didn't receive the stimulus discovered IRS had a issued a debit card, which is why it didn't show up on the bank statements. This is NOT OUR PROBLEM to solve but the client's. We've given up trying to help and just give them IRS phone numbers.

I have a client who ELECTRONICALLY paid $5k with his extension. Turns out he had a huge refund, which came in $5k short. IRS transcript shows the $5k received. This coupled with the other comments here suggests the IRS is now so dysfunctional they aren't even keeping track of the money. Okay, so they can't answer phones or timely look at faxes or correspondence or do enough audits, but keeping tabs on the money? Hey, they're part of the US Treasury, whose job is to account for the money. We might need a new accounts receivable department.

If that is the case, no OIH in deduction?

These things happen when the software automatically populates fields and we're too busy to attend to minute details. (Anyone pay attention to some brokerages that changed addresses last year?) I looked over the revised Pub 1345 for efiling and was hit with the requirement that if a client has moved and the tax forms have the old address, we are supposed to enter it into the space provided. I guess I always knew that but stopped doing it long ago. Also, any handwritten or typed tax form has to be marked nonstandard. Such items may seem insignificant and don't affect the numbers at all, but I guess they're important to the efile and identity theft guards.

The advance payments end in 2021, so unless congress decides otherwise there will be no advance in 2022. Reminds me of years ago when IRS offered advance EIC payments so the money could arrive monthly to help with bills instead of all at once at tax time. After a few years they discontinued that option because of lack of interest. Anybody remember that? An issue this year will be that people will be surprised when their refund is lower than usual because they already got some of the credit. For example, if they normally get a CTC of $4000 for two children, this year they are entitled to $6000 but already got $3k, so the credit on their tax return will be $3k instead of $4k. They might notice that. I am so not looking forward to the coming tax season!

An LLC is a business structure granted by state statute. For federal tax purposes, it is disregarded. All it does it protect (sometimes) an owner's personal assets from being seized in a lawsuit against the company. That's why it's called a Limited Liability Company. It does not make a passive activity active. Real estate professionals who meet the material participation tests file Sch C, not Sch E, and can claim home office. Your client's single rental property likely is a passive activity (unless it's a huge complex that he works on full time). In a nutshell, forming an LLC and putting property into it is a state classification and has nothing to do with federal taxation. To the IRS, it's still whatever type of business it is and all the usual rules apply.

I do a lot of deceased taxpayer and estate returns and would NEVER check the box that there is no court appointed rep if that is not the case. The refund will come to the person who signs the 1310, who is supposed to distribute it according "to the laws of the state." What is s/he doesn't? If a court-appointed rep, the refund is paid to the estate, and the court verifies that it is distributed according to the state law or will. If you check that there is no court appt on the 1310 just to be able to efile, you may be cheating the other beneficiaries (or creditors) out of their rightful share if the payee just keeps the refund. Don't do it. I also don't understand how you can attach docs that aren't listed on the 8453.

What will we put to verify identity on the ELF screen? Last year's AGI automatically populates in UT, or we take it from last year's return if we didn't prepare it. These numbers come from the original return, so we ignore amendments. Now that IRS is changing AGI, without an amended return, what number will go there? UT and I'm sure most other programs automatically updated returns when the unemployment mess got cleared up. It wouldn't if we never entered the return again after it was efiled, but we had to enter many to amend the state. So the new numbers will get proformaed. Is this another reason tax season 2022 will be a time-consuming disaster? (In addition to no one remembering the $1400 stimulus that came over a year ago by he time we see them, advance child tax credit, increased state refunds because of unemployment, and on and on and on.)

Read the trust document. Ask questions of the trustee (the ones in my first post). Rather than have the potential tax liability hanging over them, maybe suggest they just pay the tax bill and distribute the remainder.

What kind of trust? If revocable the house will be part of the estate and IRS will have claim to its piece. Irrevocable, it depends. Did the deceased have a retained life estate? Regardless of whether it was written or unwritten, if he lived in the house and paid the bills the house is part of the estate. Did he put the house into trust after the IRS debt was noticed? Did it go to the trust after death? In either case the IRS may have claim on it.

Charging that kind of money for audits and you only need a few clients a year!

Sinister! All that money this crook owes might buy the IRS a new computer or two or a few printers or maybe some phones and people to answer them.