HV Ken

I used to be from the "penalties and interest are the responsibility of the preparer" camp, but then other prepares have shared that the taxpayer had access to that money for that period of time. So now my position is to take responsibility for any penalties (and not interest). And we also we require that we must be the ones who contact the IRS first, or all bets are off.

New client - was reviewing their 2011 return. Took 53k early distribution from annuity plan to purchase a home. Previous preparer used exception number 9 and put the entire 53k in box 2 (not the 10k maximum). To make matters worse, the IRA box on the 1099-R isn't checked, so even the 10k exclusion doesn't apply. Someone is in for a BIIGGG $5,300 shocker. Hope previous preparer has E+O insurance.

I have wondered this too. We have a client who got married in 2011. She still files with us (MFS) and he files with his preparer. House is in her name and she itemizes. His preparer takes standard, even though he is not entitled to it. We even gave them printouts of the rules. He's opinion is let them come and get me (you can't make this stuff up). This would seem like something a simple computer program could pick up and generate an automated letter. What are people's experiences with this - have you seen anyone get a letter about this scenario?

Thanks for the clarification and confirmation Maribeth!

Maybe he is not out of luck after all! From Pub 536: If you carry back your NOL, you can use either Form 1045 or Form 1040X. You can get your refund faster by using Form 1045, but you have a shorter time to file it. 　 If you do not file Form 1045, you can file Form 1040X to get a refund of tax be-cause of an NOL carryback. File Form 1040X within 3 years after the due date, including ex-tensions, for filing the return for the NOL year. For example, if you are a calendar year tax-payer and filed your 2010 return by the April 15, 2011, due date, you must file a claim for refund of 2007 tax because of an NOL carryback from 2010 by April 15, 2014.

Interesting - that is not what the IRS agent told us. What you are saying is he is out of luck if he did not file the 1045 by 12/31/11.

New client had NOL in 2010 never filed 1045 nor made election to carryforward. We spoke with the IRS today, and the agent said they could file an amended return for 2010, including the 1045, and could take the loss back two years to 2008, even though the year is closed for a normal amended return. We are looking for confirmation that we can really do this and go back to a closed year (2008), even if we file all of this after 4/15/13. Thanks!

I like to cut the cheese!

Thanks Maribeth - that was my gut, but wanted to ensure. We are forming a new relationship with this client and don't want this to blow up! His previous perparer told him there was nothing he could do to lower the K-1, so we explained the SEP and the process and he was ecstatic! Our only confusion was if everything needed to in place and funded prior to submitting the returns to reflect the activity.

Taxpayer placed S-Corp return on extension. Has decided to create a SEP and fund it for 2012 before the 9/15 deadline to lower the K-1 hit on personal return. Would like the S-Corp return updated to reflect the contribution and generate the K-1 showing the anticipated SEP contribution so he can include it on his personal return to file by the 4/15 1040 deadline. Looking to see if this sequence of events works or is a problem. It appears analogous to filing a 1040 return in Feb stating you will make an IRA contribution by 4/15, but really don't know if the rules are different for the S-Corp return. To be clear, here is the sequence: 1) S-Corp return timely placed on extension. 2) Decision to create and fund SEP by the 9/15 S-Corp extended return due date. 3) Finalize and file S-Corp return now showing anticipated contribution and deliver K-1s to shareholders. 4) Shareholders file personal 1040 return by 4/15 with the K-1 that reflects the SEP contribution that has not yet been made. Does this sequence work, or does the S-Corp return need to remain open until the SEP is funded? Hopefully I explained this well enough. Thanks for any insights you can provide on this.

Holy cow. Where has this been all my life? First reaction is amazing!

I discovered, by accident, how to use fee collect and get a paper check. Assuming you are enrolled in Fee Collect, select the option for "FeeCollect Diamond Plus Card". Then e-file as usual. The bank product will get rejected since you did not enroll for the diamond card, but since the e-file already has the bank routing number, the money will go there. The bank will then send you your fees and issue a check to the taxpayer. This is an undocumented feechur!

If we already have them in the system, there is a re-print fee, which we put right on the invoice. If they are still in the queue, no harm - no foul.

Get an excel spreadsheet, save as a csv file, import in a jiffy!

To be honest, I don't know how it works or if it helps. I just figured if they added an easy way to capture the information, sending it to them may help them to improve the product. It's certainly a lot easier than trying to read the Event Viewer to send that crash information along.

That type of info is more useful for the programming staff. It is just capturing what happened when the program crashed. I have been emailing them to customer support.

The Schedule B rollover makes sense since many of those repeat every year. Most people have their money in the bank for more than a year, hold securities for more than a year, etc. Makes for a good checklist. This is not the case for sale of securities.

Still need to follow up on the e-files from 4/15 11:59pm!!!

My wife and I always say "never say always and never". And now your statement has been proven to be untrue. Check your inbox!

I agree, and I would like for it to be automagically added when I add a Schedule D to a return....

When people leave an existing good relationship to go to another preparer who handles a bunch of people from the same location/profession, sometimes it is because this new preparer promises better refunds and is probably padding certain categories, especially on the bottom of the schedule A. I find this is common among the bus drivers and police officers in our area. And it isn't all too surprising that these returns get submitted as self prepared....

You are partly right. This re-write is intended to do just that for the engine - they will only have to maintain two user interfaces - one for ATX and one for Taxwise. It was a well intentioned plan, just very poorly executed. I would have preferred if they moved TaxWise first and ATX second. The new release of TaxWise is going to benefit greatly from the beta release of ATX this year.

So your are CCH and you have been working for a period of time towards this new version of ATX for tax year 2012. For the years this new version has been in development, they have been programming two versions - the old ATX in the field through the end of ty2011 and the new ATX set to debut for ty2012. At the end of tax season 2011, they execute that step in the plan that says stop making changes to the old ATX and do a full court press to get the new ATX out for ty2012. As the deadline approaches, you realize "holy cow, we are not ready." Now what do you do? You have done nothing at all with the old ATX and there is no way to get it ready in time, and the new ATX is also not ready. I don't know what choice they really had but to do what they did and live with the consequences.

Within a few blocks of each other is an amazing family-run Italian restaurant and an Olive Garden. You can walk right in to the family-run restaurant for an amazing meal, or wait at least an hour for an OK meal at Olive Garden. Our society is so easily influenced by advertising. And so it goes with HRB.... (Although I confess the HRB advertising campaign this year has been very good - best I ever remember.)

That may be true, but a message needs to be sent. Especially since management hasn't stepped up and taken ownership, nor communicated clearly. I find that the most disturbing aspect of this.