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  1. Hi Katherine: Just to be clear on what you are saying. I assume you are pointing out that the ONLY exceptions to the 10% penalty for a taxpayer who is under 59 would be either 1) disability as defined; or 2) a qualifying SEPP. Any other use would be subject to the 10% penalty. Right?
  2. This thread brings back fond memories of a client from the early 1980's. He was partially disabled, but a very proud, independent type. He owned a large truck from his working days and to earn a little extra money he would haul livestock to market for local farmers. Never earned very much profit but he wanted to "pay his fair share" because he was receiving a small disability payment. I admired his integrity. Each year he brought me his records - a calendar kept in his truck for writing down his mileage and hauling fees. Needless to say, after a year of being carried in the cab as he loaded, hauled, and unloaded animals, the calendar was something that needed to be handled "with care". Especially since it might have occasionally fallen on the floor. (Don't ask me how I know that)
  3. Thanks to both of you for the replies. Guess I'm just trying to "torture the text" to get a desired outcome.. This helps me to go ahead and wrap this one up. I appreciate the confirmation.
  4. Still researching this, but I'm unable to find anything that definitely says "yes", therefore I'm leaning toward "no" as I have been since the outset. I had the client pay the full amount of the penalty tax with their extension, explaining that we could claim a refund of the education-related portion of the penalty if we found that it was excludable. But looks like I'm not going to be able to deliver good news on this.
  5. Client is under 59-1/2 and cashed in a whole life policy. Insurer said it's a Modified Endowment Contract and issued a 1099-R with Code 1. Early withdrawal penalty tax applies. Taxpayer also paid education expenses for their dependent child. The penalty exception would apply for the amount of education expense paid if this were an IRA, but I'm uncertain whether this exception works with the MEC withdrawal. Can anyone offer any guidance on this?
  6. I tell clients to drop off their info or mail it to me and I'll get back to them if I need anything else. But years ago when I would have a sit-down with them to go over everything in my office, I always enjoyed stuffing the boilerplate and the mailing envelopes into the shredder as we were talking. Sometimes, while that thing was grinding away, the expression on their faces would be priceless.
  7. I found the 2802C to be the most humorous. After all, how can they know there's a withholding problem if they haven't processed a return? Seems to me the only time this notice would go out is after a return has been processed and the under withholding is known, so why suspend it?
  8. Another interesting twist to this issue of 2020 returns still being processed. Within the past 3 days, 2 clients who filed by paper have given me CP80 letters from IRS. Each letter cites a payment that was made for 2020 (balance due on the return and a check processed), but no return filed. The letter warns of potentially losing the credit and has an instruction to send a newly-signed copy of the return to Kansas City. So naturally that scares the client and they want to do something. It's clear to me that the ACS system is working fine, but nobody has bothered to interrupt the process in light of the fact that IRS is still sitting on millions of unprocessed returns. While they tell us to be patient and not file another return, the boiler plate on the CP80 gives exactly opposite instructions. I know IRS has a huge task on their hands, but they're creating another level of confusion by allowing the automated process to grind away without regard for the realities.
  9. Congratulations to Andrew, and also to you.
  10. Looks like an invitation to send paper W3/W2 Copy A via Certified Mail with Return Receipt. If SSA wants to complicate things, let them be responsible for working it out.
  11. I would not send back. I would tell the client that IRS also makes mistakes, and Congress handed them an impossible task with the restrictions and exceptions on the stimulus payments. And it may take IRS months or even years to sort this all out. So they should be prepared to repay the “excess” payment, with interest, at some unknown point in the future. if that happens, they have been forewarned. If it doesn’t happen, then they won’t remember.
  12. Sorry, I wasn’t clear about that. It was Max W who posed the question. I was making a loose connection between the two having the same name.
  13. My high school football coach was a survivor of the Bataan Death March. Ironically, his name was Max Beam. Coach Beam didn’t have any patience with slackers, and he always said we were too soft & had no idea what hardship was. Wonder what he’d say about today’s generation?
  14. Old accountants never retire. They just become unbalanced.
  15. I did not know, but I'm sure Drake will know when they send out 2021 s/w.
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