gfizer

I did the exact same thing last year on the ONLY 1040A return I do. Unfortunately I didn't catch the mistake prior to efiling but you can rest assured that the IRS did so I got to pay the penalty and interest on my client's behalf. Stupid, stupid mistake that ended up costing me more than I charged the client to do the return. It won't happen again because I won't use the 1040A anymore.

Yeah. I had the same problem. I'm working on my own this year instead of through the law firm I've always worked for so I called ATX and gave them new billing AND shipping address. It's funny that they got the billing part right but my software shipped to the law firm. Go figure....

A taxpayer has asked me to respond to an IRS examination report on his 2005 return which he prepared himself. As an unenrolled preparer, if I understand correctly, I can only be appointed as a representative if I prepared the return and it is under examination. Is there any other way I can respond on his behalf other than preparing the response for him and having him notify me of any correspondence he receives? Thanks.

This question arose because the IRS is questioning the taxpayers deductions for alimony on his 2005 tax return. The taxpayer prepared the return himself which probably wasn't the wisest thing but is water under the bridge at this point. In a nutshell they are disallowing everything except for one $2000 maintenance payment he made by check. His mediation agreement which was entered as the parties' separation agreement and incorporated into the final decree stated that he was to pay his ex $2000 a month for 24 months months for a total of $48,000 in maintenance and a $22,000.00 automobile allowance. He was also to pay her health insurance premiums for a period of three years and was to pay her $7000 which was to be applied toward her personal credit card debt. The maintenance payments were to begin in October 04 and the balance of the $48,000 (less payments already made), together with the auto allowance (less any payments he had made if she purchased a car prior to the sale of the home), was to be paid to his ex from the sale proceeds of the marital home. The home sold in February 2005. She had already purchased a car (in October 04) prior to the sale of the home and he began making the payments on it at that time and then the balance of the $22000 was paid from the sale proceeds. He paid $2000 maintenance in January 05 which they are allowing but they are saying that the balance paid from the sale proceeds of the home are property settlement and not alimony. He is willing to concede this because he understands their reasoning but believes he should be able to deduct the amounts he paid for her health insurance premiums, the $7000 payment and the car payments he made for her prior to the sale of the home since these things meet all the requirements to be considered alimony. He wants to go on and pay the amount they say is due ($25000+) in order to stop the accrual of penalties and insterest and then argue with the IRS about these things. Would it be wise for him to do this? I'm assuming if he does he would need to mark his payment as "paid under protest" or something of that nature. As a side note, regarding the recapture issue, if the balances of the $48000 maintenance payment and the $22000 auto allowance paid from the home sale proceeds are excluded as the IRS proposes then his payments for the other things over the three years will be fairly equal and may not trigger the recapture.

Would it really eliminate them or would he just be subject to the recapture rules?

Taxpayer was obligated to pay the following items to his ex-wife pursuant to their divorce agreement: $48000.00 lump sum maintenance $22000.00 automobile allowance (i.e. he had to pay for the purchase of a car up to the 22,000 limit) Health insurance premiums for three years or until she had employer provided coverage, whichever was earlier. Would all three of these items be deductible as alimony on his tax return? The agreement does not specifically call them alimony but it also does not say they are not alimony payments. Any thoughts or suggestions? Thanx!