GraceNY

3 hours ago, grandmabee said:

I have a nonresident that has some NY source income.  do they no accept the federal 4868 if getting a refund?

 

 

Nope.  NYS no longer accepts Federal Form 4868. 

2 minutes ago, Edsel said:

Idea seems to be catching on in other states, and I think we have to deal with this as a fact of life.  Alabama has started requiring drivers' license, supposedly to combat identity fraud.  I think the real reason is they want to offset refunds for back child support, unpaid driving violations or anything else owed to the state or subdivisions.  Of course they already have the information, but are requiring it so they don't have research anything or pull it up on their systems.

I think NYS is also looking for so-called "Non-Residents."  Still using NYS Driver's License.  Hmmmm maybe not a non-resident at all.

Was this the first RMD (i.e. turned 70 1/2 during 2016)?  If so they had until 4/1/17 to take the 2016 RMD. If not, the distribution gets reported on 2017 return along with 2017 RMD.  And, I agree with jklcpa and filing 5329.

Grace

Taxpayer retires, sells house and moves from NYS to NC on 5/2/2016.

He was in insurance sales as independent agent.  Gets renewal commissions on insurance policies previously sold while a resident of NYS.  Reported on 1099-MISC. Will continue to get these in NC.  Is this considered income sourced to NY for NYS income tax purposes?  And, if so, they would have to continue to file a non-resident return 2017 + to report these?

Thanks in advance for any feedback.

Grace

Perhaps your client could contribute to an IRA, if eligible, and get out of paying back the APTC.  You don't have to add back the IRA contribution to calculate Modified AGI.  It won't take much of a contribution to get back to say 399% of MAGI.

I've done this a few times and saved the client a lot of money.

Grace

1 hour ago, TaxmannEA said:

I have a client that worked for a company that is based in NY. She performed all of her work in Illinois and Iowa. The employer incorrectly took NY withholding and shows her income as NY state wages. How do we file to recover the tax that was withheld in error? I can't seem to find the magic button to click that makes it all better.  

NYS imposes a personal income tax on a nonresident individual's taxable income that is derived from NY sources (Sec 601(e) NYS Tax Law).

NY provides some guidance on how one can be exempted from paying nonresident  taxes if you meet certain factors.  See TSB-M-06(5)(I) at www.tax.ny.gov.

See also "Huckaby v. NYS Division of Tax Appeals" wherein an individual was liable for taxes on 100% of the wages earned from a NY employer while working from his home in Tennessee. 

Looks like your client may have to file a NYS Non-Resident Return (IT-203) as well as a Resident return for the state she resides in.

Grace

I am reconstructing the partner's basis via an original purchase document and the prior K-1's issued in connection with it.

No Nonrecourse liability listed on prior year K-1's until the 2015 K-1. There is a Nonrecourse liability listed in the amount of $14,694.  Am I correct in adding this amount to the partner's basis?

On the 2016 K-1 there is a Nonrecourse liability listed in the amount of $15,631. If 2015 Non recourse liability gets added to basis, then in 2016, I would just add in $ 937 ($15,631 - $14,694) as the increase in the partner's share of partnership liabilities?

Thanks in advance for the help.

Grace

4 hours ago, Jack from Ohio said:

Until the Congress passes the law change, follow the law as it is written.  Simple.

I'm with Jack on this.  Read an article from NAPT.  And, I'll quote some of the relevant information:

"Section 5000A imposes a penalty on taxpayers who failed to maintain minimum essential coverage for him/herself and his/her spouse and dependents (household).  Section 5000A has not been repealed by the executive order."

"In addition, tax professionals are liable for the understatement of tax under §6694 based on an unreasonable position that is not based on tax law.  An unreasonable position exists if it is not based on substantial authority under Reg. § 1.6662-4(d).  The standard is based on objective analysis of law and application of law to the relevant facts.  Under Reg. §1.6662-4(d)(3), which gives greater weight to the code unless it is overruled by a body with the power to modify the authority relied upon, such as the IRS[Reg. §1.6662-4(d)(3)(ii)]."

"Under Circ. 230, Sec. 10.34, a practitioner may not willfully or recklessly sign a tax return that the practitioner knows contains a position that is not reasonable, as defined in §6694, which the regulations refer to §6662."

"A practitioner who calculates the penalty, but finds out later that the IRS issues further guidance that it will not enforce the penalty, can consider amending the tax return to remove the penalty based on further IRS guidance."

Grace

Talked to a CPA/Partner at a relatively large firm the other day.  She received an email with the subject line being the return of an e-file authorization form.  Suspicious.  CPA did not recognize the name/sender and also the e-file authorizations are not returned to any of the CPAs/Partners.  They go to the dedicated e-file support staff.  She checked with the e-file support staff and sure enough not on their client list.  IT department got involved and determined it was a malicious email.  Also, this same email was sent to all 9 of the other partners.  Scammer probably got their email addresses from the firm's website.

Grace

Never have a credit card issued to you.

Unless, of course, the fraudster retrieves your personal info (name, dob, ssn, etc) and applies for a credit card in your name....

I have a client who is a detective in one of my local precincts who has arrested a number of fraudsters carrying dozens and some times 100's of credit cards on their person.  Going from store to store buying stuff and gift cards.  One was a jewelry purchase at close to $10k.  So I asked him how these people were getting away with this.  Hackers get into computer systems at any number of places (banks, super markets, department stores, etc).  They steal the credit card number.  Those numbers are then offered on the black market.  Fraudsters buy the list of credit card numbers.  They, or they pay someone to, emboss a blank credit card ( I guess there are either blank cards to purchase or someone is manufacturing them) with the fraudulently obtained credit card number and their own name or a fictitious name.  They either use their own identification (i.e. drivers license) or have more fraudsters make up fraudulent identification items for them.  So when they go to a place of business even if the clerk asks for id, it's mute.  It's going to match.  If the transaction doesn't go through they just keep whipping out cards until one works.  The suspicious and smart clerks have called the police.  The last crew arrested had receipts for a motel nearby.  Police got warrants and not only obtained 100's of credit cards but also the embosser.

Now, on another note, you have to be very careful when you use your credit card.  It doesn't matter about letting it out of your sight.  There's been a ring up and down the east coast recently who put skimmers in bank ATMs.  One slick fraudster also installed a tiny camera to capture the pin numbers being put in.  I don't know if this person has been caught yet but they have accessed quite few ATMs and have taken thousands of dollars from unsuspecting bank customers.  Even if you buy gas and use your card at the pump.  Look where you insert that card to make sure it doesn't look suspicious (i.e. skimmer).  We even had one incident at a local do-it-yourself car wash wherein a skimmer was installed where the credit card is inserted.

My client has spent countless hours on the job requesting credit card statements from the victims in order to determine any commonality among them (i.e. shopped at XYZ store) just prior to fraudulent purchases on their cards.  What a blow to law enforcement in terms of man hours working on this when they could be out solving more pressing crimes.

Ah, the stories he tells me.  Fascinating, how these folks get away with so much.  And, then there are other stories about welfare fraud, etc. etc. etc.  Terrible stuff going on out there....

Posted this on another forum to no avail.

In my haste to timely file a 2012 1040X, I left out 1 of the three key documents I was using to support the claim for refund.  Does anyone know..

(1) how to handle this? Call Service Center where it was sent to?  Practitioner Priority line? Many years ago, I followed advice to get the "document locator number" that was assigned to the case and then sent in missing item  referencing this document number.

(2)  Does the fact that the document was inadvertently left out kill the claim for refund on 2012 1040X?  In other words, no opportunity to send in missing item.  "Claim was not complete, therefore, we loose."? 

BTW it was a Form 1098 supporting mortgage interest and mortgage insurance premiums deducted on Schedule A that was left out.  Amended Schedule A along with copies of Mortgage and Note documents supporting the fact that the taxpayer was personally liable on the mortgage went in.

Yeah, these forms are useless.  My understanding is that institutions are now going to have to report in box 1 (payments).  I still don't think that's going to resolve much.  We'll still have the tuition billed in December and Scholarships, etc. appearing on the January statement.  Still a mismatch that will have to be reconciled.

54 minutes ago, jklcpa said:

If he can reduce his MAGI to below the 400% level, the amount of APTC to be paid back has a cap.

I'd also be one to encourage him to do an IRA or HSA if possible.

Yeah, that cap makes for some interesting outcomes.  Had one taxpayer this year where she had COD from credit card and it put her in the 200 -300% of FPL level and APTC she received was based on the 100% of the FPL.  Moved money from non-qualified mutual fund to an IRA.  Between that and the "Saver's Credit"  it resulted in a great outcome.

Also, picked this up from another forum wherein poster poses the following.  {Note I am in no way recommending this, nor would I engage in this).  Taxpayer gives erroneous income amount to Market Place.  Get's APTC (and don't forget subsidies in the form of lower co-pays and deductibles).  Then when TP reconciles APTC on tax return has to pay only some of it back due to the fact that it's capped.  In other words, they not only enjoyed a much lower premium, but the subsidy as well as, which they don't have to repay,and the APTC pay back is capped.  Hmmmm....how long before the fraudster's figure this one out.

1 hour ago, Lion EA said:

Any wiggle room on 1098E if mom had to cosign?

You summed up nicely what I was trying to put together from lots of info.  Thank you, Grace, and everyone who's helped, today and all season, all year long.

If , as I suspect, the scholarship was retained by URI to cover tuition, then I make it zero out on mom's (daughter's?) return?  If excess scholarship, just report on daughter's return, deduct her smallish 2015 expenses against it, and excess to line 7, right?

(Waiting for mom to call back.  Thought we were so good with transaction report from URI, but no!)

"Any wiggle rom on 1098E if mom cosigned?"  Not likely, still goes back to name and SSN on 1098E and who actually paid it.  And, don't forget about the document matching folks.  1098E under one SSN and deducted under a different SSN.

If the scholarship was retained by URI to cover tuition and fees, then it would not be subject to taxation on daughter's return.  If excess scholarship, report on daughter's return, line 7 with notation "SCH" next to it.  Depending on the dollar amount, she might not be taxed at all as her standard deduction could wipe it out on the federal (not sure about your state. .NY has a low threshold of $3,000).  No personal exemption if claimed on mom's return.  Still have to consider Kiddie Tax, if applicable, on mom's return.

Not sure what education-related deductions/credits you are considering.  Tuition and Fees deduction is similar to Student Loan interest.  Who paid is the one who claims.  And, only qualified tuition and fees are included.  No books, etc.  AOC has some rules about age and dependency.  LLC is a possibility.  However, if standard deduction wipes out taxable income, then credits are useless.

54 minutes ago, Lion EA said:

Does he qualify to make a deductible IRA contribution to lower his AGI?  Or, HSA or....?

Yeah, Lion is right, only option is to try and lower AGI.

Had similar situation this year.  Deductible IRA saved the taxpayer big $'s.  One client did not have the money to contribute, but had some monies in a non qualified mutual fund.  Called the co and had them transfer 6,500 to their IRA mutual fund as a 2015 IRA contribution.  

Your situation may be different depending on earned income, AGI, and affiliation with a retirement plan, but it's worth a look.

1098E in daughter's name/SSN and daughter paid.  Daughter is dependent of Mom.  Deduction is lost.  Unlike college Ed credits,  student loan interest is only deductible by the person who paid it and who's name and SSN appears on 1098E.  Must be one and the same.

I just had a similar situation wherein 2015 1098T only shows scholarship.  Qualified tuition and fees were billed in December 2015 and scholarship was applied in January 2016.  Fortunately , in my case, the payments made in December did not fully cover the entire cost of the qualified tuition and fees so the scholarship applied in January 2016 is not taxable.

Kiddie Tax applies to unearned income.  Scholarships are considered unearned income for purposes of Kiddie Tax (see F-8615 instructions).

Student Loan Interest:  in order to take student loan interest deduction, the 1098E must be in the name and SSN of the person who paid it.

"The IRS already gets most employer and bank info on taxpayer's obligations - such as W-2s and interest earned - so all they would have to do is calculate what they owe for them"

If I am not mistaken, the IRS does not have all the info in the beginning of February, they don't get that until close to summer.  So you think all these folks are going to wait until sometime in the summer to get their refunds?

Also note, she says "calculate what they owe."  What they owe?

It's well known that they IRS is under staffed and under funded, why would you give this agency any more work to do?  Also, you can call the service center with the same question several times and get at least a couple of different answers. Do you really want these folks filling out your returns?

Lastly,  the article states that in regards to the IRS's current free file program it was estimated that only 3% actually used it in 2012.  So let's waste more taxpayer money on another wasteful program...

This women is dangerous. Could comment on other things she's done and/or proposed, but too many returns to get done this morning.

http://thinkprogress.org/economy/2016/04/13/3768924/warren-sanders-tax-returns/

How about the envelopes that have instructions on them as to how to open them. "Tear off the right and left side tabs, slide your finger under the...."  Oh for god sakes, it shouldn't be that complicated to open an envelope!  Of course if the client gets one of these, they don't follow the directions and the tax document comes in in all sorts of pieces.

3 hours ago, Lion EA said:

Once in a while I get a stray code or a tiny character like an ' hanging out in a field that I think is blank.  Try deleting, or does ATX still have a Restore Field button, or backspacing, or whatever to see if that clears the lines that are supposed to be blank.

Right Click mouse on box you want to restore.  "Restore Field" should show as an option.

I agree with others.  Sounds like Medicaid planning.

Thread cautiously.  You certainly don't want to be inadvertently aiding and abetting in anything that could be construed as Medicaid fraud.

First time in the 10 years I've been doing taxes.  Sure, I have had dreams (and occasionally nightmares), but never this.

Walking around the house in the middle of the night asking everyone about whether or not I checked the box on the 1040. " Did I check the box?"  "I better take a look 'cuz I don't know if I checked the box on the 1040."  "Do you know if I checked the box on the 1040?"

I am undoubtedly referring to the health insurance box.  The next day, I had no recollection of this incident.

Thank you both.  I'm just exhausted and under so much stress (as I am sure others are) and can't seem to think through this stuff)  I understand what you are saying  and am awaiting details from client so I can move on.

1 hour ago, Terry D said:

First, you need to find out how much the scholarship paid and how much the tax payer paid so you know what you are dealing with. What are the reasons the daughter cannot be claimed as a dependent? Did she provide more than half of her support? Did she change residence? Before she graduated, was she enrolled as a student at least half time? Was the daughter under 24 at the end of the year?

 

Total "qualified" tuition and fees for the Spring Semester were$19,650.  Taxpayer paid via a parent loan 9,950 balance paid by Scholarship.

Although the daughter was only 22 in 2015, she stayed, and is currently living, in the state where she graduated from college and earned about $35K in wages.

Box on 1098-T is marked "at least halftime."

1 hour ago, GraceNY said:

2015 1098-T issued showing $27,000 in Scholarship Box.

 

Oops should have been $9,700 in Scholarship Box not $27K