kcjenkins

:bday:

http://www.taxprophet.com/newsletters/0905nl.html If you don't subscribe to this newletter you probably should, but at a minimum, read this one.

I see it as the same way. Since VA is one of the seven states that still prohibits co-habitation, the FEDERAL code prohibits them from claiming them as a dependent. The prohibition is not in VA TAX CODE, it is in VA state law. Which is the "local law" that the feds are talking about. The feds never reference state TAX law, to determine how the federal tax law is applied. Note that the answer does NOT say, Yes, you can ignore state law on your Federal return, it merely says that the determination must be made at the Federal level first.

You can amend to go from MFS to MFJ but not the reverse. An amended return filed after the due date of the original return cannot change a binding election made in the original return. R.H. Macy & Co. v. United States, 255 F.2d 884 (2d Cir.), cert. denied, 358 U.S. 880 (1958); Aeolian Co. v. United States, 257 F.2d 24 (8th Cir. 1958); Rosenfield v. United States, 156 F. Supp. 780 (E.D. Pa. 1957), aff'd, 254 F.2d 940 (3d Cir.), cert. denied, 358 U.S. 833 (1958); Raymond v. United States, 269 F.2d 181 (6th Cir. 1959).

Hope you have a great :bday:

I think the main problem that us 'ordinary people' have with this is that it does not allow for any sort of recognition of the wide differences that a flat dollar amount may represent. I'll agree that even in the high cost areas, 250K is 'comfortable'. But not 'rich'. Those are two different things. While in my area it would be 'rich', in SF it's just slightly above barely getting by. Getting by, yes, but not 'rich' by any stretch of the imagination. Next, and even more important, since it is based on AGI, not TI, it treats a family of 10 the same as a couple with no dependents at all. And, as already mentioned, it also makes a difference how it is made. The couple who both work 60-70 hours a week to make that much, and perhaps have large 2106 expenses to earn it, is treated the same as the son of the billionaire who is getting the 250K from trust funds and investments, so that he can play all day, every day, and still make that much, and does not have any significant expenses to collect it. We've all seen clients who make the same amount, whatever the amount you want to name, and have very different amounts to spend on life style, because of all those other factors of family to be supported and educated, hours worked and expenses incurred, etc. I think most people consider 'rich' to include at least a significant amount of time free to enjoy the money. So there is a huge difference between the person who works all the hours possible, to make his $X and the person who gets the same $X without doing anything, or even the one who gets that $X for a 40 hour work week with 3 weeks of vacation. Also there is a big difference between the person who's income continues whether he works or not, vs the one who's income stopped dead the day he stops working. Many of us know that difference intimately. And finally, what about the impact on the charities? We all know that honest charities get a lot more 'bang for the buck' from the money they spend to deal with societal problems, over the same amount spent by government agencies. Due to things like volunteers vs well paid gov employees, ability to deal person to person, and many other factors. So taking money from the charities to divert it to government programs, however well intentioned, generally reduces the 'good' to society.

That often works because it turns off all those 'helpful' programs that you often don't even know are running, which can interfere with the installation.

Exactly. And remember, while we love this board, our membership is a tiny fraction of the 4000+ ATX users. So it's doubtful that they lost many 'regulars' to the TRX deal. Even among those of us here, a lot were just hesitant to make any change. I'd bet that the majority of those 500 ATX packages that TRX sold went to new users who never used ATX before.

Current use percentage.

Actually, the very first question was whether limiting charitable deductions is a good idea.

Review the 8582. On the E, review the red lines at the top of the form, to be sure that line 3 is checked. Also is there a 6198 in the return?

Me too, Joel. I guess we will soon find out if we made a good choice. One thing I do know is that I have yet to hear a single person who used TRX who did not like their support team. Also, someone else who purchased right after I did mentioned me as the person who referred them, and I got a check from TRX for $40 for the referral. Got the check two days after they signed up. I had no idea they even did that.

Well, it's generally possible to move it when all the client's records are with you, not with the client. But the closer to the date of the audit meeting it is, the less they are willing to change it, since they generally assume that this is primarily a delaying tactic. And whether it is or not, it screws up their scheduling, and they do not like that. Of course, you mist have a 2848 on file for the taxpayer, as well. So get the 2848 filed right away, get all the records into your possession, and THEN call and ask for the change. Good luck.

If the state law makes it illegal to co-habitat, then he can not claim her. An individual meets the relationship test if, for the taxable year of the taxpayer, she has as her principal place of abode the home of the taxpayer and is a member of the taxpayer's household. § 152(d)(2)(H) . This individual need not be related to the taxpayer in any way. Reg. §1.152-1( This provision is designed to enable friends, distant relatives, and, in some cases, domestic partners, who are not otherwise relatives under the rules on dependents to qualify as dependents of the taxpayer by meeting the member of the household test. However, the provision is limited, in that an additional rule provides that such that an individual is not considered a member of the taxpayer's household if the relationship between the parties is in violation of local law. §152(f)(3) .

The Obama administration has proposed limiting the itemized deduction for charitable contributions (and some other items) for higher income individuals at 28 percent to help fund health care reform. The change would impact individuals earning $200,000 or more and married couples with incomes above $250,000 and would be effective for tax years beginning after December 31, 2009. The administration projects the provision would generate $266.6 billion over 10 years.

Right. The hard part is convincing the IRS that the expenses on the C are truly legitimate business expenses, that belong on the C rather than the A. They are very tough on that issue.

Sorry, but I think it better not to. Clearly tho, the issue was not "an elevator" but "in the IRS building". Let's just leave it at that.

I'm sorry to hear that, Bill. It does not matter how old you are, when you lose your Mother it's very hard. My prayers will be with you.

Thanks, Jainen, glad you corrected me on that. I knew I should have looked it up.

http://news.yahoo.com/s/ap/20090526/ap_on_...d_irs_urination DETROIT – An agent used surveillance cameras to confirm a smelly suspicion: Someone had been urinating in a freight elevator at an Internal Revenue Service data center in Detroit. Authorities filed a criminal charge Tuesday against Michael Hicks. In an affidavit, treasury agent Delmaria Scott said she interviewed Hicks in January 2008 and he admitted urinating in the elevator for months. Scott said Hicks did it "because he felt he could get away with it." It cost $4,600 to clean the elevator. Hicks, who was a contract employee at the IRS, was charged with damaging federal property. A defense lawyer was not listed. Gina Balaya, a spokeswoman for prosecutors, says the government was unsuccessful in trying to resolve the case without a criminal charge.

Don't have time to look up a cite, but I believe it does.

Hope you have a great :bday:

An IRS spokesperson has indicated that IRS is looking to make it easier for taxpayers to comply with the IRS cell phone recordkeeping requirements. Under Code Sec. 162(a) , individuals may take deductions for all ordinary and necessary expenses incurred in carrying on a trade or business. The expenses are considered tax-free working condition fringe benefits, subject to federal income tax withholding, FICA, and FUTA, if they are incurred by an employee on behalf of an employer. Cell phones are currently included in the definition of "listed property," as defined in Code Sec. 280F(d)(4) . Expenses related to listed property may not be deducted for income tax purposes under Code Sec. 274(d) unless the employee substantiates by adequate records, or by sufficient evidence corroborating the employee's own statement: (1) the amount of the expenses; (2) the time and place of the expenses; (3) the business purpose of the expenses; and (4) the business relationship to the employee of the persons involved in the expenses. In addition, employees must document their personal use of the property, and the employer must include such use in the employee's income on Form W-2. Relief is on the horizon. Anita Bartels, Senior Policy Analyst, IRS Small Business/Self-Employed (SBSE) Employment Tax Operations, noted at the American Payroll Association's (APA's) 27th Annual Congress how time consuming the current rules are. For example, all of the personal items on a cell phone bill need to be highlighted. This can be a massive project if an employer has 500 employees with cell phones. Bartels was asked if IRS would accept a signed agreement between an employer and employee which said that a certain dollar amount of the monthly bill was for personal expenses. Bartels said the agreement would help but IRS would probably look at all the phone bills anyway if the employer was audited. IRS has been waiting for legislation to be enacted that would ease the recordkeeping requirements in the antiquated rules, but so far that hasn't happened. Bartels said IRS might soon take matters into its own hands by issuing guidance that would simplify the rules. IRS is looking to accept any reasonable arrangement between the employer and employee. For example, under the proposed revised rules, IRS may consider an arrangement under which a company required employees to pay 35% of their cell phone bills to be acceptable. An arrangement where an employer provides a taxable cell phone allowance to employees would also meet IRS's recordkeeping requirements. YOU MIGHT ALL WANT TO SPREAD THE WORD TO YOUR BUSINESS CLIENTS TO CALL THEIR CONGRESSPERSON AND ASK THEM TO SUPPORT THIS CHANGE.

Yes, the 05 would be carried forward, even if the 06 and 07 are first carried back. An awkward situation, but not YOUR fault, it's the client's fault. So don't feel bad about the extra work it causes, he's paying for your time and knowledge of the law, and the law gives you no options because of HIS delay.