kcjenkins

Probably those that don't include it don't simply because they are unaware of the need for it. Often the letters are done by whoever does the church correspondence, who may be a volunteer, the Pastor or his wife, etc, in smaller churches. Even in large churches with paid employees, they often just assume that since churches are exempt, any contribution to them is deductible. Heck, in the old days, so did IRS agents. Nearly 20 years ago, however, Congress put tough rules into the tax code that require donors to have specific receipts for most charitable contributions. In the Durden Tax Court case, a $22,500 church contribution was disallowed because the receipt did not contain a no-goods-or-services statement. The Rules Under U.S. Tax Code Sec. 170, a taxpayer is allowed a charitable contribution deduction for a contribution or gift to or for the use of an organization organized and operated exclusively for charitable or educational purposes. Under Code Sec. 170(f)(8)(A), no charitable contribution deduction for any contribution of $250 or more is allowed unless the taxpayer substantiates the contribution with a contemporaneous written acknowledgment of the contribution by the donee organization that meets certain specified requirements. Under Code Sec. 170(f)(8)(B ), the donee organization must state in the acknowledgment whether the donee organization provided any goods or services in consideration, in whole or part, for the contributed property or cash. If so, the acknowledgment generally must include a description and good faith estimate of the value of any goods or services provided. (Reg. § 1.170A-13(f)(2)) Under Code Sec. 170(f)(8)©, a written acknowledgment is contemporaneous if it’s obtained by the taxpayer on or before the earlier of: (1) the date the taxpayer files the original return for the tax year of the contribution; or (2) the due date (including extensions) for filing the original return for the year. (Reg. § 1.170A-13(f)(3)) Even tho when challenged, they got a second letter that did include the statement, the Court ignored that letter as not being contemporaneous.

Sounds like you might need to update all the forms in the return. There is a button for that in the drop-down menus.

OMG YES! I'd contact the pastor, too, and explain the importance of re-sending EVERYONE a new letter containing the required wording. It is not optional.

Yeah, that will last about 6 months, usually!

That's great to know. Thanks for sharing that Ikntax.

Yeah, we want us to be magicians and pull a nice refund out of thin air. Time for lots of subtle mention of how expensive it would have been had they taken a deduction ,they were not entitled to, and had to pay it back later with PENALTIES AND INTEREST. How lucky they are to get it right up front. Etc.

It is still input there, but it then feeds to Line 7, rather than on Line 16b. On the Line 7 worksheet, it will show up on Line 7.

That makes a BIG difference, if it is a distribution due to disability, it is treated as 'earned income' until you reach age 59 1/2. What Disability Benefits Qualify as Earned Income for EITC? IRS considers disability retirement benefits as earned income until you reach minimum retirement age. Minimum retirement age is the earliest age you could have received a pension or annuity if you did not have the disability. After you reach minimum retirement age, IRS considers the payments your pension and not earned income. Benefits such as Social Security Disability Insurance, SSI, or military disability pensions are not considered earned income and cannot be used to claim Earned Income Tax Credit (EITC). You may qualify for the credit only if you,or your spouse, if filing a joint return, have other earned income.

It's OK, Rich, Judy and I are trying to be patient and help him understand what we try to do, so that he can then choose whether he wants to stay or go. He can stay, if he accepts that there will be some reasonable limits. Or, if he thinks they are unreasonable, he can leave.

Just because it is done does not make it legal. The rule is very clear and absolute, so it's a clear violation of Cir 230. I am amazed that a CPA firm would open themselves to losing their licence over a fee like that. The rule does not have a single loophole, even if some choose to ignore it.

I agree. Perfectly normal part of the business. For IRS matching reasons, on line 1 of the C, the 1099 would be listed on line 2 of the worksheet.

MORE INFO NEEDED. Was this his primary residence at the time of the foreclosure? If so, it could be treated as a sale of residence, and no need to have any of it taxable. Was it a recourse loan?

I AGREE

Thanks, Judy, glad you agree with me. And I too am tired of hearing about the 2012 program. We know it had all those problems, but it was what it was, and talking about it over and over serves no purpose. Lets get on to this year.

I agree that we can't know what she gave the preparer, but the rule on the check is absolutely clear "A practitioner who prepares tax returns may not endorse or otherwise negotiate any check issued to a client by the government in respect of a Federal tax liability."

It is actually illegal to handle a refund that way. Cie 230 § 10.31 Negotiation of taxpayer checks. A practitioner who prepares tax returns may not endorse or otherwise negotiate any check issued to a client by the government in respect of a Federal tax liability.

Certainly CCH should do that. But why are you yelling at Jack about it? He's just trying, rather successfully, to help people get the best possible results. Please give him credit for that. He has no power to make CCH do anything.

Here's hoping that is extremely temporary.

FTM, I am the one who locked that thread. Not because of you, but just because the thread had gotten off into pointless bickering by others. I thought you had already gotten your answers from Joel. And that it was turning pointlessly petty. Which was not your fault, even if your non-use of ATX was the EXCUSE for the sniping. If you have more questions for Joel, you might find using the Private Message system to be beneficial. You are certainly welcome to use the open board for any tax question, or practice management question. I'm sure you understand that non-users posting complaints about the program still used by the majority of our members is irritating to those who have made the decision to stay with it. So I'm asking you to ease off on that sort of post. We want this to be a friendly place. That is why the mods try to stop disagreements from turning into fights.

You're actually doing them a favor, it would cost a lot more than that for them to make the changes in their system.

And how did they have the refund deposited into the firm's account?

http://www.cpapracticeadvisor.com/news/10932169/cch-small-firm-services-partners-with-efilecabinet-to-offer-client-portals