Cathy

Ok, let me see if I have this right. The FAM product wasn't popular at all so CCH is discontinuing the stand alone version. For the two customers who purchased FAM in the past, they will be rewarded with a discount to the Max program and the rest of us will pay more for Max to get the same FAM that the vast majority of us didn't want to begin with! See ya CCH! I refuse to be "rewarded" once again for being a loyal customer of yours for years!

Just remember that 100% of a taxpayer's social security is taxable if MFS and lived with spouse the entire year. The husband in this case would pay tax on his entire ss. That might eliminate any savings on the wife's penalty for no health insurance and filing separately.

I know exactly what you are saying Lion. I felt the same way when I first learned how to handle a rollover in ATX. However, especially when it's a rollover handled by the taxpayer, there's no other way to enter it. I had one such rollover questioned years ago and once the taxpayer presented proof of the timely rollover, everything with IRS was lovely. IRS was merely checking to make sure the rollover was made in a timely fashion. They never once questioned the way it appeared on the return or a worksheet either fir that matter. I guess you have to look at it another way also. When the manager of the local HRB office told me that unless her program automatically entered the depletion allowance on royalty income, there would be no depletion allowance deducted on a return as she was not going to enter it herself! And further, she was told to NEVER enter anything on her own! Guess that's what separates the men from the boys and the women from the girls!

Dave, One more thing....enter a G in Box 7 rather than the 4 that the 1099-R had. That is to let the program know to handle the distribution as a rollover.

Dave, Leave the 1099-R worksheet as is, then enter the amount rolled over under the taxable amount (on the next line). Were there any taxes withheld? If not, it should be smooth sailing. The receiving trustee should issue directly to IRS, and a copy to your client, Form 5498 (IRA Contribution Information) which should satisfy IRS that the amount was indeed, rolled-over. The worst thing that could happen is that IRS writes and asks for confirmation directly from your client if the paper work should go astray. Just make sure he has in his possession the statement from the new trustee showing the rollover and tell him to be sure to hang on to it "just in case". Take care, Cathy

It appears SS is telling IRS when a taxpayer/dependent is deceased on their system when the cross check of Social Security names and numbers are verified in the E-File acceptance/rejection process. I had a return to reject. A "surviving spouse" with all i's dotted and t's crossed was rejected due to fact that "the social security admin has reported that the number of a deceased taxpayer was used on the return"......well, I guess it was....the return plainly stated the taxpayer was deceased and the spouse was "Filing as Surviving Spouse". I don't think they have stopped all such returns this year, but it's probably going to soon be a thing of the past in being able to e-file any return that involves a deceased taxpayer/spouse/dependent. IRS has been criticized harshly for issuing refunds to taxpayers who were reported by "surviving spouses" that the person had died in a previous year. Just another example of IRS going from one extreme to the other!

Excuse me while I step up on my soap box! Did the state order the surrender of the policy? Or did the nursing home order it? Either way, if so, were accelerated death benefits even considered as they probably would have provided a greater return on the life policy. The fact that the parents are in the nursing home suggests that their health is extremely poor and may qualify for the accelerated benefits. Are the parents' funerals paid for already? The family has the right to use proceeds from a life policy to pay for their funerals. If not, tell your clients to prepay their funerals with the money surrendered under the policy. And if given to the nursing home already, tell the social worker at the home that they were misled by him/her and/or the medicaid office.

I believe the following from IRS Publication 525 will answer your question: Accelerated Death Benefits Certain amounts paid as accelerated death benefits under a life insurance contract or viatical settlement before the insured's death are excluded from income if the insured is terminally or chronically ill. Viatical settlement. This is the sale or assignment of any part of the death benefit under a life insurance contract to a viatical settlement provider. A viatical settlement provider is a person who regularly engages in the business of buying or taking assignment of life insurance contracts on the lives of insured individuals who are terminally or chronically ill and who meets the requirements of section 101(g)(2)( b ) of the Internal Revenue Code. Exclusion for terminal illness. Accelerated death benefits are fully excludable if the insured is a terminally ill individual. This is a person who has been certified by a physician as having an illness or physical condition that can reasonably be expected to result in death within 24 months from the date of the certification. Exclusion for chronic illness. If the insured is a chronically ill individual who is not terminally ill, accelerated death benefits paid on the basis of costs incurred for qualified long-term care services are fully excludable. Accelerated death benefits paid on a per diem or other periodic basis are excludable up to a limit. This limit applies to the total of the accelerated death benefits and any periodic payments received from long-term care insurance contracts. For information on the limit and the definitions of chronically ill individual, qualified long-term care services, and long-term care insurance contracts, see Long-Term Care Insurance Contracts under Sickness and Injury Benefits, earlier. Exception. The exclusion does not apply to any amount paid to a person (other than the insured) who has an insurable interest in the life of the insured because the insured: Is a director, officer, or employee of the person, or Has a financial interest in the person's business. Form 8853. To claim an exclusion for accelerated death benefits made on a per diem or other periodic basis, you must file Form 8853 with your return. You do not have to file Form 8853 to exclude accelerated death benefits paid on the basis of actual expenses incurred.

The biggest flaw in the new program I see is having participants estimate their income rather than using the income from the prior year such as Pell grants are awarded. It's almost impossible to make an accurate estimate especially for self employed individuals which is one group that was advertised would benefit from Obamacare. A work around, of course, is to not accept the premium credit until the end of the tax year, however there are those who couldn't afford insurance at 100% of the premium during the year.

https://m.youtube.com/watch?v=v9YiTIYO-2A#

When a client learned that someone used his identity to file a fraudulent tax return in his name, my client asked the IRS agent for the name of the individual who had used his name and number. My client thought it was more than likely his ex. The agent responded that she was not allowed to divulge that information because of the privacy act....IRS was protecting the crook on the pretence of the privacy act. That's why I'm glad they are "allowing" local law enforcement personnel to help find and arrest those individuals committing fraud. How high they jump when Congress comes down on them! Before they were raked over the coals by Congress, they would not divulge the crooks name and location to law enforcement personnel either. But looking at both sides of an issue, Congress knows that the EIC is one of the most, if not the most fraudulent aspect of the tax code. And all we hear from Congress is their desire to increase the earned income credit...never a word about revamping the system the try to eliminate the fraud.

George, Just make sure the client can document the contribution was made timely and recorded as a contribution for the 2013 tax year. We all know whose problem it will be if the contribution was't made properly. Make a copy of the documentation for your records. No documentation - no deduction. I become mean this time of year.

Heads up on a scam e-mail I just got from "Casey Jordan, Speedy Tax LLC". The subject of the email was as follows: "Catherine, can you takeon a new client in zip _ _ _ _ _?" I wrote the "takeon" above as it appeared on my email. As I live in a small rural area in Louisiana, I know for a fact that there is no "Beth Lee" in my zip code who has contacted "Casey" for some help with her tax return.....there is no "Beth Lee" that lives in my zip code period! Two quick giveways were the facts that (1) his/her email address ended in ".us" and (2) the closing in the "personal" email he wrote to me was "Cheers,".....how stupid can one be? Another fact that blew his/her cover was that he/she stated that unless I contacted him/her by return email, he/she would send an email to the "next preparer on the _ _ _ _ _ (zip code) list"......when I am the ONLY preparer on the list in my zip code! I wish I could get my hands on him/her about right now.....if it is a "he", it wouldn't be a "he" much longer!

Jack took the words out of my mouth...I also agree 100%! If you decide to keep the new client, file an extension for 2014 and make sure you get a good size deposit for the years of 2013 and 2014. I wouldn't give him an exact price for 2013 and 2014....I'd give him a broad range if they insist. Also, make sure you are paid for 2012 before you Do any other work. Charge accordingly for 2013 and 2014 as it sounds like you have the type of clients that will "play dumb" and want you to be responsible for keeping record of every payment they make to IRS which also means reviewing/answering numerous correspondence from IRS. I've paid my dues in the past in the type of situation you have and I wouldn't even think about taking on the type of clients you have with these people. However, if this is your first of this type of client, you might want to pay your dues as experience is the best teacher. Good luck which ever way you decide to go! Take care, Cathy

I've settled the "guessing" and uncertainty for my clients in such things as contributions. Each year I take Post It notes and write various figures on them. I then stick them on my ceiling. At least this way, they have something to go by when they gaze up at the ceiling when asked for various amounts such as contributions! ????

The ONLY reason IRS is being proactive on identity theft is because they got "crawled on the carpet" about sitting back and only going after those who committed identity theft many, many times. Each of the steps they recommend are vitally important if a taxpayer is seeking a quick resolution to their case...and who isn't?

Sorry...just couldn't resist. When I opened the " E-News for Tax Professionals 2015-10" I saw the title of the E-News as written above in the Topic Title of this post. Needless to say, the body was written in Spanish (?) also. Insanity! Enuf said!

Tired of having Louisiana returns reject due to "State-007": "The IRS Submission ID referenced in the State Submission must be that of an IRS Return" Not all Louisiana returns reject, but more than should reject! After re-creating another State E-File, I transmit again and it's accepted. Also, it's been too long not to hear anything on the other problem we have whereas one cannot add a record to the listing for the credit for income tax paid to another state. I think this is my last year to pay a premium price for software without any support. Ok, I feel all better now!

Priceless! Rita, if you don't mind, I'm going to use those words on a plaque in my office and my house and my game room and my camp and for license plates on my car and on Solana and Mariana (my 2 lazy horses)!

Joan, I had a similar situation last year although not rejected. Client paid $500 on the return for the repayment. He and former wife had split but he agreed to pay the "loan". Here's the kicker: refund delayed but finally issued LESS $250 (in addition to the $500 he already paid with the return). In the written explanation to him of the reduction, IRS told him he forgot his homebuyer's credit repayment on his return. If client is in desperate need if his refund, change the payment to $250 and it should be accepted...then file 1040x to pay the additional $250. Charge accordingly!

Revised Publication 546 (How to Depreciate Property) is hot off the press! I was, originally, relieved to see that IRS revised the publication until I got to a section on page 14 of the publication. Evidently, the new rules and regs are clear as mud to them as well. "Additional guidance. For additional guidance and special procedures for changing your accounting method, automatic change procedures, amending your return, and filing Form 3115, see Revenue Procedure 2015-13 on page 419 of the Internal Revenue Bulletin 2015-5 and Revenue Procedure 2015-14 on page 450 of the Internal Revenue Bulletin 2015-5, available at www.irs.gov/irb/ 2015­5_IRB/index.html. (Note. Revenue Procedure 2011-14 is modified by Revenue Procedure 2014-17 and Revenue Procedure 2014-54. For more information, see Revenue Procedure 2014-17 on page 661 of Internal Revenue Bulletin 2014-12, available at www.irs.gov/irb/ 2014­12_IRB/ar09.html and Revenue Procedure 2014-54 on page 675 of Internal Revenue Bulletin 2014-41, available at http://www.irs.gov/irb/2014­41_IRB/ar14.html.)For a safe harbor method of accounting to treat rotable spare parts as depreciable assets, see Revenue Procedure 2007-48 on page 110 of Internal Revenue Bulletin 2007-29, available at www.irs.gov/irb/2007­29_IRB/ ar13.html."

The following is the link to a video explaining the program above with a taxpayers identity theft and their local law enforcement. It's a complete turn around in policy since Congress called them down for not taking appropriate actions on identity theft! Before Congress chewed them out, a client was told that they (IRS) could not inform local law enforcement neither could they (IRS) tell the taxpayers who stole their identity due to the "privacy issue with the thieves". Another video from IRS tells victims to IMMEDIATELY file a police report, in addition to completing IRS Form 14039 and contacting credit bureaus....not bad ideas!

Yardly, Just saw an IRS video recently....tell the taxpayers to make a police report and ask the police department if they participate in the program to help the IRS in finding the identity thieves ... if the police department does participate in the program, they will have a form for the taxpayers to sign that will enable them to know what's going on with their identity theft.

Check your state's filing requirements carefully. In Louisiana, if the only reason you file a Federal return is to receive a refund of what was paid in (your income is under the Federal minimum filing requirement), then there is a box to check on the Louisiana return to indicate such and no Louisiana taxes are due. As Louisiana is a state that usually doesn't come up with issues such as this on their own, I imagine they copied the idea from another/other state.

More than likely, the return was rejected due to her husband's name and SS# listed on her return. Has the husband filed his return yet? If not, your client's return may be accepted once he files. Or you can go ahead and paper file with an explanation on the form attached explaining why the return was not e-filed. Or, you might try attaching 5405 to her return and try again. Don't have a copy of the 5405 handy, but there might be a way you can indicate your client never received a homebuyer's tax credit.