David1980

Forgetting to report tips doesn't surprise me at all, depending on how the scenario went. I'd imagine a lot of preparers basically take your forms and ask minimal questions. If there aren't allocated tips on the W-2 it probably doesn't even cross their mind to ask. Especially if they choose an occupation in this "audit" that we don't typically associate with tip income.

Has anyone considered a popcorn machine in the office for the customers?

$83 is the per diem rate for lodging for locations without specified rates. Basically, he's giving you the per diem for lodging rates. But they can't use per diem for deducting their lodging expense so it's a meaningless number.

Say the 2013 return had income instead of losses. The NOL offsets the income by using a negative on line 21. In that situation it would be necessary to have the -9,000 on line 21. I would imagine the reason the IRS has you enter it on line 21 regardless is to simplify things. Why have separate instructions depending on whether the losses are needed for any specific year or not? Just enter on line 21 and if they're needed they offset the income and if they're not needed they continue to carry forward.

I'd put it in the same category as paying a personal trainer. There's definitely medical benefits to exercise. There may be medical benefits to the Alexander technique. But that does not turn it into a medical deduction.

8606 line 22.

I like that it's being led by someone from Oregon, a state that has had preparer regulations for a long time. Should help maybe with some of the doom and gloom predictions people always make whenever anyone suggests the government become more involved in regulating preparers. I suspect that the risks to taxpayers from tax return preparers... is going to focus on the taxpayers directly affected as in the ones who utilize the unethical preparers. They should also consider taxpayers as a whole - if unethical preparers preparing fraudulent returns lose the US government $X billion dollars a year that ultimately affects all taxpayers. My tax dollars potentially subsidizing that preparer and their clients even though I did not utilize that preparer.

I wish I could convince everyone to use text or email instead of wanting to talk on the phone. People always seem to have the worst timing when they call me and I end up playing phone tag later. Or they call and expect an immediate answer on something that I have to look up. With text or email I get back to them at my convenience and if I have to look something up for the response I can do that too.

That is where it would be reported, but how much of a loss can you claim on a personal use capital asset? Whatever loss you calculate on the 8949 you would adjust to $0 with adjustment code L.

Yes, occasionally. Very occasionally. My regular driving is in Seattle so to me that road looked wide open. You see the same truck in the right lane right at the start and then again at 50 seconds in - she's driving the same speed as the truck in the lane over. Looks like plenty of space behind it. At 1:08 we can see the road in front of her. She could have sped up or slowed down and easily gotten to the right. My guess is she was intentionally driving the same speed as the truck to the right in order to block the truck that crashes. As for her left turn, she said the guy was tailgating her 3 minutes. 3 minutes at 50 mph takes you about 2.5 miles. Do they really need to be in the left lane 2.5 miles before their left turn? I don't believe for a single second she couldn't have pulled to the right or had any intention of doing so. I'd love to see her pulled over and given a ticket for that. That doesn't excuse what the guy did. They're both idiots and probably neither of them should be on the road.

In Washington it's against the law to sit in the left lane on a multi-lane highway. I believe that's true in most states. It sadly does not get enforced much.

Is this income for a student here on a visa by chance?

Regardless of whether the child provided over 50% of their own support they can't be claimed as a dependent on this one. The support test doesn't even matter for dependency because they fail other tests. Support does matter for the refundable AOC.

Possibly. Can't be dependent of parents because she was not a full time student and makes too much money. They do need to have carried at least one-half the normal full-time workload for his or her course of study. So if at least half time they meet that. Only thing that I can think of that would disqualify them from the refundable part of the AOC is if their earned income is less than one-half of their total support. Which could very well be possible, especially if they're paying expensive school costs using student loans, parent funds, other funds, etc. With a part-time job of $13,000 the total support needs to be under $26,000.

The thing to watch out for is whether the contributions are voluntary. A lot of public employee pensions have mandatory contributions.

Issuing W-2 using his SSN won't work either. What the farmer should have done was obtained an EIN in 2013 if they knew they were going to have employees. At this point I think the only thing you can do is paper file the return for anyone who has a W-2 from that farmer. From W-2 instructions for box b EIN: Do not use a prior owner's EIN. If you do not have an EIN when filing Forms W-2, enter “Applied For” in box b; do not use your SSN.

Federal AGI $50 or federal tax $14. Sounds like your change is more than $14 tax so you'll need a new 8879. Taxpayers must sign a new declaration if the electronic return data on individual income tax returns is changed after taxpayers signed the Declaration of Taxpayer and the amounts differ by more than either $50 to “Total income” or “AGI,” or $14 to “Total tax,” “Federal income tax withheld,” “Refund,” or “Amount you owe.”

But like Jack says, they had a disallowance in the prior year. How can you complete the 8862 without knowing what the disallowance is? And is the taxpayer even entitled to claim EIC? For example, what if boyfriend isn't really the father and was disallowed in a prior year for claiming kids that are not his own. If that's the case adding 8862 is the wrong solution. But without knowing why he was disallowed EIC in a prior year it's impossible to say whether the same is true or not this year.

That pisses me off too. I know the IRS doesn't have the resources to go after criminal charges for all of the fraudulent preparers, but couldn't they at least shut down the PTINs and EFINs? No doubt some will revert to self-prepared filing using Turbotax or whatever, but maybe at least some will realize they've been noticed by the IRS and stop?

That right there was the first mention of amending in this thread. I think everyone realizes the original returns were wrong and caught on audit. I was just answering the question as to why the original return had direct deposit information that didn't belong to the taxpayer.

The only way to have tax prep fees withheld from a refund is by using a bank product. In which case a temporary account is created at whatever bank they are working with for the taxpayer and that bank account is where the direct deposit from the IRS goes. Then the bank product bank takes the prep fees and sends them to the preparer and sends the remainder after fees to the taxpayer. So the direct deposit account information on the return will be the temporary bank account created and used for the bank product.

It could be the right choice even though the tax consequence is terrible. Perhaps without that money they couldn't have purchased a home. Comparing 4% interest rates is meaningless if they can't get a loan that covers 100% of the home price. For some, paying federal income tax + penalty on 35k in order to buy a home that they couldn't otherwise afford is a financial decision they want to make.

Good. The taxpayer at least is getting what they deserve. Not only having to pay back the fraudulent refunds, but no doubt the crooked preparer took a sizeable chunk of the refunds in large preparation fees that they're out too. Maybe now they'll care more about legitimate tax preparation and not the size of the refund.

So they had $7,000 of cash that never made it to the bank. When they calculated their gross income did they include that $7,000 or just the income that was deposited to the bank?

There's always things being challenged. Which is why we have things like protective claims. Ultimately at the time of preparation you have to go one way or the other. If it's in the taxpayer's favor, why would you not follow IRS guidance?