Cathy

Thanks again, Tom and also good luck to the Bulldogs! We kickoff tomorrow night....we're holding our breath for the season....don't like going into it rated so high...only one way down! :o

Thanks for the confirmation, Mike!

P.S. Sorry about the "dogging" you pun! ;)

Thank so much Tom. I completely understand the tilt. The situation involved an ex and property settlement payments. Taxpayers genuinely didn't realize they were receiving interest each year on the property settlement payments until recently settling the whole issue and receiving a compromise settlement. I verified with legal docs and taxpayer's attorney that indeed, part of the payments each year was interest. The ex recently (as in 2007) issued 1099 INT's for 2002, 2003, 2004, 2005 and 2006. We were covered for 2006 as we knew of the interest portion when the 2006 was prepared. I filed 1040X's for 2002, 2003, 2004, and 2005. The 2003, by the way, was originally timely filed. The 1040X's were sent in different envelopes, so possibly a different processor for the 2003 would see things differently. This is the 1st time seeing something like this in over 30 years, so possibly it will help someone else! Again, thanks so much Tom....I might not dog you so much this year when LSU plays the Bulldogs...haven't seen the schedule yet but assume we are still playing them.

Thanks for your reply Tom. We also filed a 1040X for 2003 in August of 2007. We haven't heard anything on that one yet. It also included a payment of taxes. We might also receive a letter on the 2003 return or am I not correct in thinking that IRS is following the same 3 year statue as applying to refunds? :blink:

Karen, Your post was the first time I heard the info....thank you...just been out of pocket for a couple of months. Finding info on the new 2007 (only) PMI deduction was like looking for a needle in a hay stack on IRS's website. What I finally found was "For the definitions of home acquisition debt and qualified home, see Pub 936..." There was a link to Pub 936 and of course, it was the 2006 Pub 936. I guess they are saying (at least for now) is that the same definitions apply for "home acquisition debt" and "qualified home" for the 2007 PMI as was the definitions for 2006 in Pub. 936. I also found "The amount you can deduct is reduced by 10% (.10) for every $1,000 ($500 if your filing status is married filing separately) by which your adjusted gross income exceeds $100,000 ($50,000 if your filing status is married filing separately)." I assume the above to mean a married filing jointly couple making $110,000 or over would NOT be entitled to the PMI deduction at all, and of course would be pro-rated if the same couple made between $101,000 and $110,000. Someone correct me if I'm wrong, please!

Client received a letter from IRS after filing a 1040X in August of 2007 that increased the income tax liability for the year of 2002. The IRS letter states: "The IRS has a legal period in which to charge and collect additional tax on your Form 1040. This legal period has expired for the tax period shown above." The client had paid the additional tax due with the 1040X. The letter goes on to say that the taxpayer "must file a claim within two years from the date you paid the tax" in order to claim a refund for these taxes. I'm completely baffled as I have never seen this before! I know IRS can only make rules and regulations to enforce the IRS Code. It appears to me that possibly a recent "rule" change has been made. Am I going crazy? What say you?

Monkeyman, Lighten up! You took Lion's statement out of context. I sincerely appreciate your feelings as a current employee of ATX, right?...however, I can certainly see Lion's comparison of the old ATX board and his frustration with his current situation on yet another board. As you know, this is a user funded board so prepare yourself for frustrations. Thanks, Cathy

Positively! :D

Just a little heads up if your client receives a CP2000 notice for the 2005 tax year that completely disregarded the hurricane benefits such as: 10% penalty elimination for a qualified distribution, the additional child tax credit based on the 2004 income and the earned income credit based on the 2004 earned income....I called the number on the CP2000 letter and the agent told me that the computer did not recognize the hurricane benefits and I was told to send a hard copy of the return. I have called the e-file office in New Orleans and they are cooperating in trying to straighten out the situation. Hopefully, I will only be the lucky preparer to see these letters, but if you do have one....just wanted you to know you're not alone! (I had originally e-filed the return and ALL appropriate forms were sent in the e-file.)

Your client would definitely need to file a non-resident return as Louisiana taxes ALL gaming winnings within the state, Indian casino or not. And please do so quickly as our state legislators are having fun at the capitol giving $$ to their pet projects!

22

Did William share with you what's going on at ATX?

All of the pieces of the puzzle are beginning to fit together now. Talk about a PITA in 2007! For those claiming actual expenses, the taxpayer was to have figured and added the interest. From what I remember watching a Tax Talk video several months ago, IRS people said the standard credit was based on studies, blah, blah, blah and included interest. So in other words, in jklcpa's case, she has "imputed interest" that will have to be reported in 2007 as well as interest will have to be reported for each and every taxpayer who took the standard credit...what a bummer! Cathy

D, If you go to IRS.gov, you'll see a link for the "storm relief"....in the interim, I did find this for you: We decided not to list specific states because of the widespread nature of the storm and transportation issues that could affect people located outside the Northeastern corridor. You will need to contact your respective state tax agency regarding any filing deadline issues pertaining to your state tax return.

Before we all go on our cruises (even if it will be in my aluminum boat with cane poles) I just wanted to thank erc again for the site. Don't mean to brag about our new home, but it's the best forum website I have ever seen as the features are incredible. My current delima: I haven't the foggiest idea what a site like this costs to run. I definitely am making a donation and need some ideas....erc?..anyone?? Thanks, Cathy P.S. erc, you have a standing invitation for a ribeye dinner for your family if you are ever in bayou land.

I agree totally......also the 1040V would go to a different address than the return, yeah, right! :lol:

The form to file with the return would be the 4137. Make a notation on the top of the 4137 that it is being filed to pay the social security taxes on wages incorrectly reported to the taxpayer on a 1099. The substitute W-2 form is not required, nor should be filed with the return. Also, a completed SS-8 needs to be sent for IRS to properly determine employee status. Also, taxpayer will be opening a can of worms, so to speak which if he is still employed with the same employer, needs to be taken into consideration. Cathy

Oh Tommmmmm, Does 38-6 ring a bell? (Ok..I agree...my tiger looks sick, but will have to do for the time being!)

Marge, Extension isn't necessary when refunds are due...but I usually go ahead and do one just in case client later suddenly remembers he sold his lower 40 acres!

Okay, Tom...this is war. Note to self: find tiger pic after Tuesday!

My head is spinning also, so I will not respond directly but post something from irs.gov that hopefully will help you! Can COD income ever be excluded from my gross income? You may be able to exclude all or part of the cancelled debt income if all or part of the debt was discharged in bankruptcy, if you were insolvent immediately before the transfer, or if the debt is a qualified farm debt or qualified real property indebtedness. Refer to Publication 908 (PDF),Bankruptcy Tax Guide.

It did....thanks, I needed that! :)

After complimenting my office and the work I had done on a new client's tax return today, while reaching for my receipt book, he said he bet I was going to surely miss tax season next week because of the "pocket change" I won't have coming in. I then wrote the receipt for 600 quarters. He said he'd see me next year. I should have charged him 1000 quarters. My husband said I'm just too cranky right now.....cranky, who me? My next new client came in and said he had 5 years of receipts and expenses (in boxes, many boxes) in his suv that he wanted to bring in so I could prepare taxes from 2002 thru 2006. I told him that I had already paid my dues and not to dare bring the boxes in my office. He left with strict instructions on how to organize and total his income and expenses and return to my office at a later date with an accounting in categories in a nice little package for each year. I asked him if he wife works...yes, 2 hours each day but hates the bookkeeping. I told him I hate it worse than she does and once they would find out my bookkeeping fee to straighten out this mess, I bet they might not matter that much in doing the work themselves. Will see how well this mess gets organized and go with a 50% retainer before starting the returns if I do them at at .

erc, I didn't know KC's outstanding character so well, I might think that she blocked out your answer above....are you sure you want her to be a moderator? :P