Cathy

UPDATE: Just got off the phone with the Income Audit Division of the DOR. There will be no more credits issued for E85 Flex Fuel vehicles. All of those who have received the credit for "Flex Fuel" vehicles will have to repay it. I questioned whether the taxpayers who have to repay the credits can repay in installments without penalty and interest as the DOR's Customer Service Department was advising taxpayers who called to file amended returns claiming the credit for the Flex Fuel vehicles. I was then told that this type of payment arrangement was already being discussed....nothing final yet, but they do realize the taxpayers who have filed for and received the credit did so as directed by the Customer Service Department. Cathy

Battue, If I were you, I'd call the DOR first thing this morning when they open and ask to speak to someone in collections unless you have their direct number written on your demand letter. Better yet, if no one can give you a straight answer, ask for the email address to the legal department. Then email them to confirm for you that the "Emergency Ruling" issued on 4-30-12 means that you don't have to repay your refund. Not that it will do any good, but put "URGENT" in the subject matter. Good luck!

Jack, I had one of these...a teacher who taught the number of years required for forgiveness. I had the taxpayer make the call to the number on the letter and the matter was cleared up just by that call. Her refund was not delayed or affected in any manner. It is rather strange that the Dept. Of Education issued 1099-C's in these cases as they are the one that verified the student qualified for the "non-taxable" write off. Cathy, OOOOOPPPS......Sorry, Jack....I just skimmed over your post and caught the last paragraph. Anyway....hopefully the fact that the Dept. of Ed. is issuing the 1099-c's to teachers when not necessary will help you.....haven't researched the disability issue myself, but if it's the same as teachers....that explains the 1099-C.

Just saw that, Lynn.....clear as mud! :wall:

Hi Mac, Also happy to see another with my concerns! I called the DOR today just to see what they would say and was told "an auditor" would call me back after I asked her if the E/85 Flex Fuel vehicles qualified for the Alternative Fuel Tax Credit. Yesterday, I received the following response from the Policy Division (legal department) of the DOR: Ms. Dauthier, You are correct. The flex fuel vehicle is not eligible for the alternative fuel tax credit at this time, however, it is currently under advisement. The result will be posted on our website. Subscribers to our notification service will be notified through that service. Please feel free to contact me through this medium at any time. All inquiries are answered in the order in which they are received. This reply to your inquiry constitutes "informal advice" from the Louisiana Department of Revenue, as contemplated by Louisiana Administrative Code 61:III.101(D)(3), which provides that informal advice does not have the force and effect of law and is not binding on the Department, the public, or the individual seeking advice. Informal advice will have no effect on an audit. Confidentiality Statement The information contained in this electronic message from the Taxpayer Services Division of the Louisiana Department of Revenue is privileged and confidential. If you are not the intended recipient, the disclosure, copying, distribution, or use of any of the transmitted information, or any other action based on the contents of this information, is strictly prohibited. If you have received this transmission in error, please immediately notify the transmitter by e-mail or telephone at 225-219-7462. The Louisiana Department of Revenue is interested in improving customer service. Please help us evaluate the service you recently received by forwarding comments to [email protected]. Cheryl Bankhead Revenue Tax Specialist Contact Center Sure will be glad to get a straight answer from someone.....notice the "however" in her second sentence! There are several interesting threads on a group of LSU forums known as "Tigerdroppings" (under the "Money Talk" forum specificaly). My contributions to the forum are under "frb1951". There are several threads there....you may have to go back a couple of pages to find them but you'll be able to spot them by their titles. Another refund was received by one of the posters on 4-24-12. One of the threads has a link to an H & R block sign advertising the $3,000 Flex Fuel credit....no wonder! Please let me know if you hear anything else also.....2008 returns must be amended by 5-15-12 so the Department needs to make a final decision quickly. I think I'll drop an e-mail to John Kenneday's offce...maybe they can light a fire under the DOR. UPDATE: Contacted Kenneday's office..they referred me to the Governor's office. I contacted the Commissioner's office of the Division of Administration and informed them of the situation and asked that they try to get a resolution asap. We'll see what happens.....I've about had enough of dealing with inefficiencies in our State Agencies. Take care, Cathy

UPDATE: Louisiana DOR is demanding repayment of Flex Fuel refunds.....heard this from several people....a few have received letters from what I was told...not officially from the horses mouth yet.....but heard from a few taxpayers who are scorching hot....to say the least! Cathy

I did the same as you a week or so ago and it was accepted to my surprise. The only thing in this case is today is the deadline for filing a timely return. After it is accepted (assuming), be sure to document the fact that it was e-filed and accepted today for future reference, if needed. Cathy

JB, Don't do what I did....pay 100% of 1st son's college. He graduated and bought a Corvette convertible. His buddies who were doctors and lawyers kids went job hunting and found high paying jobs to start paying back huge student loans! My son dilly dallied and went into law enforcement and would be better off today had he gone straight into law enforcement rather than going to college (6 years at that). Cathy P.S. If son hasn't filled out a FAFSA already, get him to do it right away!

Lynn, Just had time to look up EchoFuel vehicles (aka Eco Fuel) and it appears they are vehicles that run on natural gas. Those type of vehicles are appropriate for the credit....it's the Flex Fuel vehicles like the truck I own (E85) which can run on an 85% Ethanol and 15% gasoline blend, OR, it can run on gasoline. The original law about the Alternative Fuel Credit was repealed and replaced by the legislature in 2009. The new bill is effective for vehicles purchased on or after January 1, 2009. The Customer Service Department at the DOR is telling people when they call to hurry up and file a 2008 amended LA return by 5-15-12 to get their $3,000 refund for these Flex Fuel vehicles....like the one I own. There are 2 problems I see with the 2008 "credick" which will be refunded to them (as they are saying) is that: 1. The law covering vehicles purchased in 2008 was repealed and replaced by the new law in 2009 but is for vehicles purchased on or after 1-1-09, and: 2. The original law that covered 2008 vehicles wasn't a $3,000 refundable credit, it was 20% of 10% (or .02%) of the cost of the vehicle, with the lesser of the .02% or $1,500. My vehicle was right at $30,000. Had I bought it in 2008, the non-refundable (but available for carryover for 3 years) credit would have been $600.00....not $3,000. One would have had to have purchased a $150,000 vehicle to get a $3,000 credit. Besides the #1 and #2....from what I've read in the Revised Statutes, the Flex Fuel vehicles don't qualify for the refundable credit....but as I'm not an attorney, I'll wait to get the word from the Legal Department at DOR before I file for the $3,000 refund so my clients won't have to pay the refunds back. Things are hopping at the capital with the legislature in session but hopefully, I'll hear something in the near future. And again.....your client's credit appears to be legit! Cathy

>>emotional swings<< Are you insinuating I have mood swings? You hit that nail square on the head! Thanks....again...your different points of view are thought provoking. No "financial problems" as she always maxed out her SEP and made other good investments. But, there again, anyone with their income here one day and gone tomorrow and facing brain surgery, chemo and radiation to extend their life for less than a year could feel they have financial problems and want to minimize expenses....anyone, except a few billionaires I can think of. My "little faith" was in regard to the level of care being offered by our local doctors and hospitals...not in the diagnosis. And before I tell you more irrelevant stuff, I'll sign off and get back to work. Thanks again, Cathy

Colleen, Original (cost basis) minus the principal payments plus the repo expenses sounds right to me. Then compare the FMV and the new basis and whichever is lower is the correct basis to use for depreciation. It just might end up being the FMV as you said the installment sale generated a loss. You did say "any help appreciated". So, from one fried brain to another, good luck! Cathy

Do you have any clients or children of clients attending BR Community College? If you do, tell them to make sure they have received all of the funding from their Pell Grants if they had any, also student loans need to be carefully scrutinized BEFORE they graduate or transfer to another university. Long story....just tell the students to pull and copy all financial records before they leave the college. Once they leave, their online account is shut down and tough luck if they owe the student mega bucks from Pell Grants for sure....I'm suspicious about student loans also, but that aspect has yet to be proven. Cathy Veterans on the GI bill may also be due refunds of personal funds paid. La Nat'l Guard along with full service vets both may possibly be in the....to put it nicely....catastrophic Financial Aid Office blunders.

Thanks, If you found the story interesting, then I'm halfway home free with the 5329 being used for the Doc's disability.....the reason she left her employment. Who wants a Doc practicing medcine on them with a highly aggressive brain cancer and one who also has to be supported in order to stand up straight. Lost my husband to lung cancer in 2010 which had spread to his bones and brain before we realized he was sick. Now I can look back and see instances where his judgement, etc had been failing for about a year before his dx. So I can completely why her Docs wouldn't let her work. I had the Code Sections already but didn't have the time to plan my defense when we get the CP2000 letter next year. Your quote from the Pub made me all warm and fuzzy inside in the interim. I know....more irrelevant stuff! Again, thanks!!!!! Cathy PS. I'm not really a moron....it's just this IPhone that makes it appear that way! :)

Thanks, Lynn. This is going to be very interesting if it's allowed to stand. Most vehicles on the market today will qualify for the credit. I read the history of the 2009 bill and the financial impact study and it's evident that the financial impact study wasn't banking on so many vehicles qualifying. Bobby's going to have major problems on his hands. It's going to make the retirement issue seem so minor! Cathy

Glad to see you're still up. ? For you. My client, an ER doc came to me last Jan. Walking while leaning on her sister. The Doc had just been diagnosed with the most aggressive brain cancer there is. I went the next day for the biopsy as she's also a personal friend. 10 days later she was told she needed surgery ASAP. I talked to her sister who was the retired Director of Nurses at a major, high profile university and begged her to take her sister back home to her University Medical Center as I have little faith in our local docs and hospitals. The Doc also got one of her friends who is an MD at MD Anderson to look at her MRI and he gave the same diagnosis as our local docs but he also encouraged her to go back he with her sister. Sister's docs and hospital ran tests and said yes, it did appear to be that type of cancer, but since it was so aggressive, they wanted to wait a month or two to start treatment if the biopsy didn't make it spread and unoperable. Fast forward to April of 2011. Doc had to quit her job and was in the process of filing for social security disability. The lady at the SS office told her it would not be a problem to have her approved for disability. Doc out of work now for 3.5 months with no income and a hefty 4th quarter payment she hadn't sent in because of her Jan. 2011 diagnosis. I suggested and she did draw out enough from her Sep to fund her tax balance, her 2010 Sep and her withholding taxes for the withdrawal. There would be no penalty as she was disabled. And certainly a Doc who would undergo any type treatment on her brain wouldn't or shouldn't go back to work. Fast forward again to end of Jume, 2011. Doc went back to sister's doc and hospital to begin treatment. Guess what now? Tumor is gone! Whether it was a divine intervention or the biopsy done in January shook up the immune system to take care of the tumor naturally, it's not there. After Going through an extensive round of tests, Doc is back in the ER....a reduced schedule but is back. She will be watched very closely for several years. That was the good news......do you think the SEP withdrawal because of disability will hold up for the elimination of the penalty? Thanks for your opinion. Cathy

Have any of you been questioned about the $3,000 alternative fuel tax credit on Louisiana returns? I've heard it more than once that some preparers are taking this credit if their clients purchased a Flex Fuel vehicle. These are the vehicles being commonly sold today that will run on either gas or the ethanol blend. I had researched the law (RS 47:6035) and saw where the "qualifying property, etc..." I'm writing from memory...anyway...cannot be equipment that can run on gas or diesel. I called the Dept. of Rev. today after hearing more and more about people actually getting the $3,000 tax refund to see if I was the only one who didn't know about this credit....me and all of the dealerships who would be screaming from the top of their lungs if the credit was legit! To my amazement, I was told by a customer service rep that yes, these flex fuel vehicles do qualify. She then referred me to a bulletin about the old law that RS 47:6035 repealed in 2009 as I think the original law could have been misconstrued to mean flex fuel vehicles. I emailed the DOR legal department asking for guidance on the situation. I spoke briefly with a receptionist at the legal Dept,'s office and she informed me that the legal Dept. Is taking a look at the situation. I expect to hear from one of their attorneys next week as they have been very helpful in the past when other issues needed addressing. I'll post back next week what I hear but in the interim, have any of you been approached about this "Alternative Fuel Tax Credit"? Cathy

Priceless, John! Reminds me of the clients who bug you after tax season with their major problem for the following year. After hours of research and guidance they remark that their problem was so simple afterall. It's like they don't want to acknowledge all of the work prior to preparing the return......oh yes, I'm billing time!

Linda, Also, the withdrawal will be reported on her 2012 return as it was withdrawn in 2012. Unless her account was properly established in 2011, her deposit would be considered a 2012 deposit. Need to do some research for sure before you show a HSA deposit on her 2011 return. Cathy

Linda, $3,050 is the maximum 2011 contribution for an individual (under age 50). My only concern would be to make sure the account was legally established in January of 2011. Did she make a deposit in January of 2011? If not, you might need to research was constitutes "establishing a HSA prior to incurring medical expenses". My HSA has been established for years and I usually make my contributions for the current year durig tax season. Last year I didn't, however, I just made my 2011 contribution in March of 2012 and I will be able to reimburse myself for my 2011 expenses and then turn around and use the same money to fund my 2012 contribution. The key to your question is whether or not the HSA was properly established in Jan. of 2011. I was under the impression that a deposit to the account had to be made in order to establish one, but I could be wrong. IRS.gov will probably have your answer. Cathy

Found the following at taxpolicycenter.org........the main site (taxpolicycenter.org) has some neat info on the history of the tax code, etc... http://www.taxpolicycenter.org/legislation/upload/legislation_by_act-2-28-11-4.pdf

Does anyone remember what year it was when the EIC and the Health Insurance Credit was combined? I believe it was in the 80's and definitely remember the scenario: There were two separate credits for low incomers. One was the EIC which was far less than it is today and the other was a separate credit that a taxayer could take on his/her return if he/she had paid for health insurance for the tax year of the return. I also remember the reasoning for combining the two credits (the EIC took a huge increase the next year) as it was explained that many more low income taxpayers would then be able to purchase health insurance. Evidently that plan didn't pan out and we are again funding health insurance. Before anyone jumps to conclusions, my family has never been without health insurance and we never qualifed for the EIC because both my husband and I worked more than one job....sometimes 3 jobs each to provide health insurance for our family. Yep, I am perturbed about Obamacare but I am sincerely concerned that our congressmen and Obama for certain don't remember that provisions have already been made for many without health insurance. If the Supreme Court rules against the mandatory health insurance requirement, perhaps congress can force those with the EIC to purchase health insurance with part of their refund...or even better, withhold at least 50% of the EIC and use it to purchase health insurance for those people. Again, what year was it? Thanks! Cathy

If the amount is reported on K-1 on Line 11-A, then it is reported on Line 23 of Schedule A, and it IS subject to the 2%....if that is of any help to you. Cathy

In Louisiana, we have what I am sure other states have as well but ours is called the "Start" program....where you start saving for your childrens' or grandchildrens' college education. One of my newer clients works for the Louisiana State Start Program and she told me of a CPA who opens up a "Start" account for her new clients' kids with a $10.00 deposit to each child's account. The CPA told her the parents really appreciate her doing that and has referred her many, many clients because of it. In fact, she's gained so many clients because of it, she has to now turn away new clients. As I'm not really looking for new clients (actually not accepting new clients this year), I didn't do it, but see that it can be a very powerful way to attract new and long lasting clients. Cathy

Tom, There's no need to update your laptop. Go to "Gotomypc.com" and install their free trial version. Normally the price is $99 per year, however, after my first time in using the program, I was sold and responded to an early purchase email and paid $79 for the year. Very simple to install on laptop or any other computer you have. You will be working directly on your office computer through your laptop, desk pc or any other computer you may want to use. Therefore, there's no need to update your laptop or other pc's as you will be working with your main program that you know is current. You can even have the returns printed out and ready to assemble when you return to your office or you can print them from the location in which you are working. Best invention since apple pie! Instead of working in my office at night to get caught up til 2:00 or 3:00 am by myself, I now am able to work in my home from my desk pc or laptop without the hassle of transferring files back and forth or worrying about using different versions of the program and or forms. My daughter-in-law works with the largest health insurer in the country and their employees use Gotomypc.com when working out of the office or while at home. Cathy P.S. The only thing you must do is to leave your office computer turned on when you leave your office. No need to leave ATX open, as you will be able to do anything from your laptop that you could do at your office computer.....as long as the office computer is left on.

OMG, Tom! I hope you haven't told your wife about "us" !!!!!!!! Love and Kisses, Cathy