David1980

I do not believe that. I think it's because of its abuse, regardless of WHO is getting it. The fact that it's been confirmed by IRS that there is massive EITC being fraudulently claimed for "dependents" in Mexico may seem like it's prejudice, but in truth it's not because it's Mexico, it's because it's FRAUD. And the fact that there is more such fraud in minority neighborhoods is not about prejudice, either. It's because it's abuse of honest, taxpaying citizens.

The refundable education credits are subject to much less fraud, probably because there is more documentation involved before it can be claimed. As for the attitude of preparers to it, at least part of it is because it's one of the few tax credits that is mostly used by folks like us, [most of us anyway] middle income working people.

The education credits are often brought up in any discussion of the identity theft the IRS is dealing with. I would bet a lot of fraud gets passed off as identity theft when the IRS catches up. "It wasn't me!" I'm sure all the refundable credits also are high fraud. Like how TIGTA came down on IRS on ITINs being issued with fraud indicators. I'll bet there are a lot of ITINs getting taxpayers who may not even be here legally a refundable additional child tax credit for dependents that do not exist.

I think all refundable tax credits should be removed. I'm not against helping the less fortunate, I just do not think the income tax return is the proper place nor is the IRS the proper entity to administer the welfare payments.

I linked the MEF business rules in my earlier post (MEF business rules = "rejects").

http://www.irs.gov/Tax-Professionals/e-File-Providers-&-Partners/Tax-Year-2012-Schemas-and-Business-Rules-for-Modernized-e-File-MeF-Forms-1040-1040EZ-1040A-1040-SS-PR-4868-2350-9465-56

It is the TY2012 1040 Family that would be relevant for a 1040 reject, so you would click and download the most recent version (currently 2012.4v2) and in the zip file the reject descriptions are available in both excel and PDF formats. The description for F1040-512 is "Each Dependent's SSN on this return cannot be used on another return as a Primary or Secondary SSN with Line 6a checkbox 'ExemptPrimaryInd' or Line 6b checkbox 'ExemptSpouseInd' checked on that return." which doesn't indicate which dependent. So I think the problem is still, how do you tell which dependent it's rejecting for in ATX?

F1040-512 Each Dependent's SSN on this return cannot be used on another return as a Primary or Secondary SSN with Line 6a checkbox 'ExemptPrimaryInd' or Line 6b checkbox 'ExemptSpouseInd' checked on that return.

http://www.irs.gov/Tax-Professionals/e-File-Providers-&-Partners/Tax-Year-2012-Schemas-and-Business-Rules-for-Modernized-e-File-MeF-Forms-1040-1040EZ-1040A-1040-SS-PR-4868-2350-9465-56

I'm not using ATX, does it not provide the data value it rejected on? The data value would be the SSN for the dependent in question. The reject itself is saying the dependent was claimed as a primary/secondary, as in they filed their own tax return and did not mark that they could be claimed as a dependent.

This year there were a few forms that were not MeF. I seem to recall an IRS listing what those forms were so the software automatically directed them to the legacy system. I believe at the IRS e-file site for software developers there is a chart by year and date showing which forms are MeF etc.

Personally I could care less if it is MeF or Legacy! All I care is that when I submit it on time with a time stamp that is what determines timely submission regardless of when the ACK is generated.

Frankly I have NOT changed anything in my office when we were not MeF and now for e-file submission. Once a day I submit in a batch.

Here's the accepted forms for e-file for 2012. http://www.irs.gov/Tax-Professionals/e-File-Providers-&-Partners/Tax-Year-2012-Accepted-Forms-and-Schedules-for-MeF-Forms

The "contingency supported forms" for legacy are listed at the bottom here (you can tell based on how short the list is, that had the IRS had to use the backup it would have been very interesting...) http://www.irs.gov/uac/e-file-requirements-for-the-2013-Filing-Season

I'm not sure about that, because I still got a DCN and not a submission id. I read on another thread that it's next year.

Then whoever said it on that thread was wrong. Some software is still generating a DCN, the IRS form still has a space for a DCN, doesn't mean the DCN is actually doing anything. The IRS kept some legacy stuff as a "cold backup" this year, an emergency backup plan. They didn't use it. So everyone filed MEF. I suspect the confusion has to do with "2013 filing season" and some software companies that would like people to believe their problems are due to MEF and not their own failings (wonder who I'm talking about there.) The 2013 filing season is now, it is for filing 2012 tax returns. But if questionable software companies can use the confusion to imply the change isn't til next year - if they can make people believe all the other software companies will have to convert to MEF next year they can make you think other software companies will have the same problems they had.

http://www.irs.gov/uac/e-file-requirements-for-the-2013-Filing-Season

http://www.irs.gov/uac/Newsroom/IRS-Kicks-Off-2013-Tax-Season

If you are using the practitioner PIN method you won't get a reject for the taxpayer's DOB, not exactly anyway. If you are claiming EIC without a qualifying child and the IRS records indicate the taxpayer is under 25 or older than 64 you'll get a reject to that effect. Or if trying to file with a 1040EZ and they're too old. Basically anytime the DOB affects something else that something else can get you a reject, but not the DOB itself.

If you are using the self select PIN method, you will get a reject for the DOB not matching.

For dependents, you'll get a reject if the year of birth on Sch EIC doesn't match. That obviously only affects the return when the dependent is shown on Sch EIC, if there is no EIC you won't get a reject for dependent DOB. You could still get related rejects just like you could for the taxpayer, for example if you enter the DOB making the dependent 16 and the IRS has the dependent as 17 you could get a reject for the dependent not qualifying for CTC. So DOB related reject, but not DOB itself.

So if a Church has traditionally witheld ss and medicare taxes from clergy wages just like regular employee, what do they have to do to get the taxes refunded (beyond the 3 year period)? In my case the Church secretary does the payroll because the W2s are always typewritten. What a mess??

Are they ministers with the church or just other employees?

I heard next year all software will have to be 100% MeF. It seems all the software that was 100% MeF this year are the ones with are the problems. I switched to onedesk but they are not 100% MeF so I’m worried about using them next year.

So what is everyone’s plans for next year

I know I won't buy early like I did with TRX.

All tax software was MeF this year.

That is exactly what I thought. Why go through the bother of filing an extension if you have to send an estimated payment along. That is just normal procedure. What is so hard about just giving us (say) a seven day extension of time to file.?

I'd assume getting out of the 5% per month failure to file penalty still makes the extension worth while even if you aren't making a payment/are still getting the 0.5% per month failure to pay penalty.

Some phones have a feature on the phone as well to reject/block calls. On mine, from the call log I just have to use a long-press and then select "Add to reject list".

H & R Block is IMO is a big joke. A big money maker, but a joke. I have seen many of their clients. One told me the guy who did their return was their mailman. And yet they charge higher fees then the top CPA firm in the area. Do you think most of their customers know that people who are doing their tax returns are not really tax professionals? and that most have no formal education in taxes or accounting but are trained to use the company software and pump out returns?

Well, TurboTax / Intuit is trying to help get regular people to know their preparers aren't necessarily tax professionals, with their plumber commercial.

That said, what exactly is a "tax professional"? Most people preparing taxes for money don't have a college degree in accounting. You could say there's the RTRP test, but of course you can't take that right now / it's not required due to the court case. I would guess most people on this very forum got into taxes without formal education. I myself started at HRB after taking their training class. I'm no CPA.

http://blogs.hrblock.com/2013/03/04/what-you-need-to-know-about-form-8863/

In previous years, H&R Block has transmitted a “Y” for Yes and a blank for No for questions 22-26 on Form 8863. The IRS no longer accepts this format leading these returns to be reviewed further, but without delaying the estimated 21-day refund cycle. Once we learned of this change, we worked to comply with the new IRS process and now are transmitting an “N” for a No answer.

What I find the most interesting is that H&R block has been transmitting the answers for questions 22-26 on Form 8863 in previous years.

50.

http://www.irs.gov/pub/irs-utl/TY_2012_Accepted_Forms_and_Schedules_For_Form_1040_%20Series.pdf

If the student is paying for their tuition with student loans at all be sure to include that as support provided by the student, when doing the worksheet.

hehee yeah, or start sending client's sales pitches that intuit will do their taxes for less than your tax preparer. much like quickbooks does to payroll customers. What a way to treat "pro-advisors", recommend their product and have them under-cut you in every point of your business.

But what tax software doesn't have a consumer product? Is there any? I'm ultimately buying software, so it doesn't bother me what other software the company owns just what they're selling me.

EA not required to have finger prints (not sure that's still true?) I'd guess most fraud done with an EFIN is done with a sisters/boyfriends/aunt's name to avoid any finger printing (when the finger printing would turn something up at least). Passing the EA to get an EFIN without finger printing would be a lot of effort to avoid the finger printing.

Also: Florida. Not surprised...

Now this is NOT where a person's email password gets compromised.

That's exactly what I'd be most worried about because as you pointed out it's much more common. Does it matter why their email is compromised?

or they can send you the password in a separate email

The risk would be if either their email or your email is compromised both the email containing the confidential information as well as the email containing the password for the confidential information are there. Where as when the password is given over phone that isn't a risk.

David, how do I go about making it possible to make ATX accept this return without the 8582 form?

That I'm not sure on. Could try what schirallicpa is doing?

I thought it had to completed and submitted if the taxpayer has a passive activity regardless of whether the activity has a profit or loss

There's an exception for rental real estate. If you meet all of the following conditions the form isn't required.

* Rental real estate activities with active participation were your only passive activities.

* You have no prior year unallowed losses from these (or any other passive) activities.

* Your total loss from the rental real estate activities was not more than $25,000 ($12,500 if married filing separately and you lived apart from your spouse all year).

* If you are married filing separately, you lived apart from your spouse all year.

* You have no current or prior year unallowed credits from a passive activitiy.

* Your modified adjusted gross income (see the instructions for line 7, later) was not more than $100,000 (not more than $50,000 if married filing separately and you lived apart from your spouse all year).

* You do not hold any interest in a rental real estate activity as a limited partner or as a beneficiary of an estate or a trust.

So, simply having rental losses with active participation wouldn't be enough to require the 8582 (unless the modified AGI is over 100k).

I know the IRS extended the due date for farmers/fishermen from March 1st to April 15th to avoid an underpayment penalty. Since farmers are often affected by the credit for off-highway business use of fuel that seems like a good indication that they don't (or didn't) expect to have the 4136 ready by March 1st. Probably the form shows approved on the ATX website in that it's passed IRS forms approval. However, you can't e-file until the IRS is ready to take it.

There is no legacy e-filing for tax year 2012 (the IRS has some limited system in place as a fail safe for a MeF system failure, however it's not being used.) ALL tax software is using MeF. Had you posted this 1-year ago, it would have been partially true although I'm not sure which companies were MeF and which weren't last year.

Thanks for the info - guess it should be an e-file reject on the federal as well ??

Might or might not. The IRS did change their instructions a while back to indicate it was no longer valid but they don't reject for everything that isn't valid. So it could be against instructions but still get accepted.

So the California 540 line 12 equals the California wages in box 16 + Arizona wages in box 16? Seems I've seen this before when the W-2 box 16 amounts were more than box 1. IE, $10,000 in box 1, $10,000 for California, $5,000 for Arizona. That sort of thing.

If unable to get a correct W-2 by February 15th I'd consider a 4852. Assuming the taxpayer's got good documentation as to what correct is.