Cathy

Our local big box chain...won't name names, however, the local branch of the chain goes by initials...three of them........has a horrible error rate (negatively affecting their clients returns). In fact, the errors were so outlandish years ago, I refused to take any of their clients unless on extension, and I have continued that policy since. I tried sending a few clients back to them to get them to amend the returns, however, the chain tried to charge each taxpayer for correcting THEIR mistake(s). I had a discussion with the manager several years ago in regard to depletion allowance on royalty income. She didn't know what I was talking about and further told me that if her computer doesn't do it automatically, taking a depletion allowance is not something she can or would do on her own. For a couple of more examples: A MFJ couple's return included Social Security income as taxable income. "Not bad, you say?" Not only was the disabled mother's SS income reported (which was correct), but also the SS income received under the children's SS#! Another couple paid income tax on interest "earnings"......from a 1098 Mortgage Interest Statement. The payer was listed as XYZ Mortgage Company....seems like that should have thrown up a red flag! Never mind the amount of mortgage interest reported as income was over 10K! I don't use the "double checking" as a marketing tool, don't have to. I always have more of them than I care to do anyway. I was eating supper the night their new commercial aired. I almost choked on my food!

Christian, I have heard of taxpayers doing it even to the point of BOTH parents claiming HOH if they have more than one child. That is ONLY ONE of the reasons the EIC holds the title of the area of the tax code where the majority of the fraud occurs each year (per IRS employees during seminars). For those taxpayers who have only one (1) child, Social Security numbers can be bought this time of year at Wal-Mart (Wal-Mart itself doesn't sell them, people go through the store on their on asking others if they need a SS #). I can remember where a number could be bought for $50...with inflation, the going rate now in Louisiana has increased to $600 (from what I'm told...I stay out of Wal-Mart this time of year because of those solicitations). Your question as to whether IRS will catch it....probably not. I have seen it happen too many times..over and over and over again. Cathy

Lion, Just be alert to the situation where one or both wants to file HOH or MFS...."but we didn't live together since June of last year through December 31st. We're back together now to see if we can make it work" type of situation. It's amazing what they learn at the beauty/barber shop sometimes! Kind of sounds like what the wife was saying!??

I should have added, 2015 is the year the return is submitted for processing. If yours number already lists 2015, then re-create and resubmit. Louisiana has had a couple of hiccups this year...,once I re-created and e/filed again, they were accepted.

Naveen, Did a quick research. You should have a number assigned to your NY return as you do on the Federal return. Look on NY 8453. There is a long number at the top of the page. The 1st 6 numbers is your e-fin number. The next 4 numbers is the year the return is submitted for processing. In your case, it is a 2013 (or 2014 forgot which) return, BUT the processing year is 2015.

I had two of my divorcing clients come in today. When they first arrived, they both were so tense that I could almost see the daggers shooting out of their eyes when they looked at each other. The more we talked, I could see both of them became more relaxed with each passing minute. Finally, I told them that I needed to keep them both in my office for as long as I could and maybe they might not go through with the divorce. When they both instantly yelled "NO", I knew it was a lost cause. As the mom is the parent who the child will live with the majority of the time, and the court order calls for alternating claiming the child, I explained to them both that the mom will need to sign an 8332 for IRS to recognize the dad's ability to claim the child. At this point I also explained that as far as IRS is concerned, the release by her for the father to claim the child is strictly up to her whether she signs the 8332. I also told them both that if she claimed the child when it was his turn, then there was the issue of the dad being able to take her back to court to charge her with "contempt of court" and she should think twice before she would not follow what was agreed on and ultimately ordered by the court. So for the above reason alone, I'm glad I had both of them for the tax year of 2014. After 2014, if they both come back, they know their returns will be prepared according to IRS rules and regulations. Hopefully, my speech will eliminate one of their "friends" convincing them to disregard claiming their child in alternating years which will eliminate extra work for me....and also less disputes with each other as well.

KC, I agree with your sentiment 1000%. I wonder if they are going to take the same approach with tax professionals this year regarding the new regs for repairs, maintenance, materials, supplies, etc... It appears that what it boils down to with supplies such as in our office, we can't use the items we still have in our supply room at the end of 2014 (and future years) on our tax return as an expense..,,their cost can't be expensed until we actually use them. I pay approximately $300 for my presentation folders each year usually around the middle of February. Sure, I have some left from the year before, however, I buy the same amount each year. So, in the end, the cost I expense each year, except for 2014 will be $300....maybe $275 for 2014. Good grief. This borderlines on insanity! No, it IS insanity! And if I have a "temporary" repair part that I use until the "permanent" repair part comes in, I can't use the expense for the "temporary" repair part that is used on other items as well, until the item that happens to have the "temporary" part is disposed of (trashed). I'm taking these examples from articles I've research. If the authors of those articles are wrong or if I am wrong in comprehending what I read, at least there is a reason for the confusion.....for their mistake, they brush it off. If one of us makes a mistake in sorting out the regs, we are subjecting our clients to very negative consequences. The IRS made a glaring error on the 1095's....the correct totals to use should have been a piece of cake, yet because it's their error.....as you said, they are breaking the law telling taxpayers to forget about filing an amended return if they will owe additional taxes. I'm sure they will be as lenient with tax professionals and the new regs for 2014.......NOT!!!! IRS had a very simple task to perform and they failed.....we have regulations which appear to be written by a 70's group at Woodstock. They should hold themselves to the high standards they hold us to. However, that theory would be logical, and we all know that "logical" was a word that was banned by IRS many years ago. Sorry this was so long, however, it feels so good to get things off your chest! ????

I have a feeling that your client's refund would have been kept by IRS because of the default on the student loan. The bank may consider it a discharged debt, however, the government who was the guarantor probably wants to recover the money they had to pay to the bank. His default on his student loan will more than likely haunt him for years. Edited to add: If IRS would have overlooked keeping his refund this year, that's not to say they would start confiscating it next year.

Terry, Don't forget to tell her that even if she agreed to let the husband claim the child by completing Form 8332, she is still eligible to file HOH which normally gives her a better tax liability. In fact, I would consider it my responsibility to not prepare her return using the filing status of Single, as HOH for the ex (which he is not eligible for) would more than likely produce a fraudulent tax liability for him. I wouldn't prepare the return any other way for her as I would consider it an "aid and abetting" situation to create a false tax liability for her ex. Her fear of the husband wouldn't relieve me of my responsibility to file an accurate return. I'd prepare the return properly (claiming HOH and claiming her child) then duplicate it and change her filing status to Single (without her child) to show her the difference it would make in filing a false return and an accurate return. The difference in her refunds should help her to get over her fear of her husband. Once you explain the situation to her, she might find that she would fear the IRS more than the husband and want to file her return accurately. Just food for thought......

Wish I could help, but after I reviewed the instructions for Form 8960, I wanted to throw up!

Good article on the new regs by the Journal of Accountancy: http://journalofaccountancy.com/issues/2014/may/20149424.html

This is from memory as I don't have my software installed on my laptop and my "Go To My PC" isn't accessible as my office computer is off. I was really disgusted when I saw Wal-Mart's name on the E-File Info sheet in my ATX software. Wal-Mart is competing with ATX's clients and we all have paid them well for their product. "We'll prepare your return and give you a $50 gift card instantly" per tv ads and billboards outside Wal-Mart. And ATX expects us to even suggest to our clients that they receive their refund on a Wal-Mart card (by memory again)!!??!! CCH needs marketing personnel with some common sense desperately!

Just researching tonight trying to get a handle on the new rules and regs. for repairs, improvements, etc.... David, Was the paving of the parking lot the first time it had been paved? Or was the parking lot already paved and what was done was an overlay of the existing pavement? I'm under the impression that paving a parking lot for the first time is an improvement to real property (land), and therefore, must be capitalized, and it's not eligible for the Sect. 179 expense deduction. See the following from Publication 946 in regard to Section 179 property: What Property Does Not Qualify? Certain property does not qualify for the section 179 deduction. This includes the following. Land and Improvements Land and land improvements do not qualify as section 179 property. Land improvements include swimming pools, paved parking areas, wharves, docks, bridges, and fences. KC, My line of thinking is that the cost of paving the parking lot, especially if it is the first time that area was paved, is not eligible to be expensed and must be capitalized as it's not eligible for Sect. 179 expense. Plus, the cost ($22,000) of the parking lot paving is over the safe harbor amount of $5,000 for a repair if it is a repair rather than first time paving of the parking lot. What am I missing? Thanks

JB, I'm sure you've probably already have questioned the client as to why the student loan was cancelled. I have had in the past at least one student loan cancelled that wasn't taxable. So it isn't an automatic issue.

This kind of reminds me of my 1st year with ATX. I posted to the forum that I was surprised the software didn't have a particular feature (forgot exactly what feature), and I might add, I remember it being a major feature that my DOS program (AMTAX) had. Anyway, from the responses to my post, one would have thought I was an idiot! The following year, ATX did have this particular feature and the welcoming comments about the "new feature" were abundant. The negative comments I got that year makes me hesitant to suggest that the figure we enter on the W-2 for FICA taxes (if necessary) would also populate to the Medicare taxes box. Listen....I can almost hear the comments. ;)

Client called me today in reference to above topic, then e-mailed me the letter he received. It stated that approximately 800k notices has 2015 figures on the forms rather than 2014 figures. The letter went on to advise the taxpayer to delay filing his/her return as corrected 1095-A's will be issued shortly. .........just in case you haven't heard

CLARIFICATION OF MY ORIGINAL POST: My fingers were faster than my brain.....forgot about the following instructions for Form 8863 (page 6), regarding Part 1, Refundable American Opportunity Credit. "Line 7 If you were under age 24 at the end of 2014 and the conditions listed below apply to you, you cannot claim any part of the American opportunity credit as a refundable credit on your tax return. Instead, you can claim your allowed credit, figured in Part II, only as a nonrefundable credit to reduce your tax. You do not qualify for a refundable American opportunity credit if 1 (a, b, or c), 2, and 3 below apply to you. 1. You were: a. Under age 18 at the end of 2014, or b. Age 18 at the end of 2014 and your earned income (defined later) was less than one-half of your support (defined later), or c. Over age 18 and under age 24 at the end of 2014 and a full-time student (defined later) and your earned income (defined later) was less than one-half of your support (defined later). 2. At least one of your parents was alive at the end of 2014. 3. You are not filing a joint return for 2014. I'm "assuming", and we all know what that means, that HRB claiming the refundable portion of the AOC for the student was inappropriate. (Ken's original post stated that HRB took the exemption on the students return as well as the "college" credit. I had a similar situation last year and discovered the stipulation above in the instructions, and I was able to prove to the student why he shouldn't file on his on....His refund would have been the same, whether he claimed the AOC or not! His income was in line with Ken's student's situation. My student got 100% of his withholding refunded without claiming himself....and his exemption and the AOC were used on the parents' return. If the above applies to Ken's student and HRB claimed the refundable AOC for the student in error, then HRB needs to amend the student's return at no charge. Cathy

Yardley, Good point! I've been wondering why also. Entering the decimal and cents is a way I make sure I enter all figures correctly. I compare my software total to the sheet I use to manually enter totals that I've rounded and then add them using a calculator. If the total on the software and the total from the calculator don't agree, I have an ESP! True story: Years ago (I'm telling my age here) a state auditor was at one of our local colleges reviewing their books. The auditor kept seeing "ESP" in various lines on the ledger sheets. After he scratch his head for a good while, he turned to the employee who kept the ledger and asked what the "ESP" meant. He was almost reluctant to ask as he thought the employee may know something that he should have known until the employee replied to his question: "Oh, that be an Error Some Place"! TRUE STORY!!!!!!

Can you attach a pdf copy of the docs to the return when it's e-filed?? If you would get a CP2000 letter still, just refer them to the docs originally attached with the return??

That's why I used to do student children of my clients at no charge.......that got old, so now it's usually $50 to $75, depending how bad the parents return would be affected by the student/HRB filing it...

So THAT is what the guy on the commercial is talking about....."We'll get you the biggest refund back, guaranteed!" The taxpayers with sense won't go to them, however, their child who is college student will! I' always concerned about losing tax dollars needlessly...the parents would more than likely receive 100% benefit of the credit.....the student more than likely 40%..... Yep, The guy is right! The student got the largest refund at their place, (even though he probably wasn't entitled to it)!

Tabby, When you have multiple distributions from the same payer and such as your client's case, 2 are coded 1 and the other is coded 2, I have seen the following occurring in the same year: A distribution(s) taken before the age of 59 1/2 receives the code of 1, then a later distribution that year (after the taxpayer turns 59 1/2), the code is 2, because an exception applies to the withdrawal. You might want to check your client's date of birth and see if it fits. Also, it sounds like your client sees it as a "loan" from his retirement account...when in actuality, it's a withdrawal, plain and simple. Cathy

Terry, Do yourself and your other clients a favor and put up a no smoking sign outside your office (or thank you for not smoking). Evidently, there were only 2 tax offices in the country that a taxpayer could smoke.....mine, as I smoked like a train until January, and yours.....be glad you don't smoke. Just tell him that you had another client to come in after he left and his smoke residue caused your other client to have an asthma attack, and you can't be responsible nor do you want one of your clients to get sick just because he/she came into your office at the wrong time.....behind a smoker! It can happen....just one of the many reasons I quit.

And the EIC may again take another huge increase as happened in the 80's when Congress decided to subsidize health insurance for low income taxpayers through the EIC rather than the Health Insurance Tax Credit that was given after the fact if the taxpayer had insurance during the preceding tax year. This is one of the ideas being considered by Congress to replace Obamacare. Yep, history does repeat itself!

Dan, I don't blame you for being concerned that your client's Federal return didn't show as accepted for so long! It would be a different situation with a state return, but I still would check on the status if it wasn't accepted within a reasonable time frame. Our follow up in a situation like you had is the reason we are paid to prepare a client's rteturn....and as Federal returns are usually (100% of the time in my case) accepted or rejected within hours, I definitely would at least have contacted the E-File help desk to make sure the return didn't hang in limbo because of possibly a freaky glitch somewhere. Referrals are our best advertisement and they are free.....and they occur if your clients' returns are treated as your own. Just a little "food for thought". Cathy