JohnH

Interesting. Thanks to all of you for the clarification before I ran into one of these. (I think I just heard a bolt of lightning nearby.)

That's still my understanding, but I've been waiting for other comments. If there is no entry on line 1a of the Schedule M, then it's my understanding that the form doesn't apply, there's no need to complete anything else, and the form doesn't even apply. Line 1a first asks if there are wages, and secondly if there's other earned income. No earned income, no schedule M needed. Stated another way, Schedule M establishes the eligiblity for the credit for everyone who receives earned income and provides a mechanism for reducing it if the retiree received the payment, but it doesn't provide any mechanism for receiving an unpaid payment if there's no earned income to begin with. That's a separate matter to be hashed out with the retirement agency.

Carolyn: Is there a particular reason you use both PDF Factory and Primo PDF? I use PDF Factory exclusively, but if Primo PDF offers addtional benefits I's like to know about it. I looked at their web site and I couldn't identify any additional features it offers, unless it's their "drag & drop" conversion feature.

If she had no W-2 earnings or self-employument income, then there's nothing to be done on the final return with respect to the $250 payment. You can't obtain it via the return if she was entitled to it but didn't receive it, and there's no $400 credit to be reduced if there is no earned income.

Maybe, maybe not. I've seen it argued both ways with equally convincing positions. You might want to check out a 1980 case - Green, 74 T.C. 1229. She had a rare blood type and was selling her blood 95 times a year. There wasn't any question about her being in business (she clearly was) - the case revolved around the deductibilty of a special high-protein diet she had to eat. But it might provide some basis to hang your hat on the concept of it being earned income.

I always set up the program to dutifully fill in the info, but in thinking back over the years I can't recall more than a couple of times I've ever had to rely upon the third-party designation to speak with IRS. If a call is necessary, I usually just conference the client in on the call and we handle whatever the issue might be. Anything coming up in the first year can usually be handled with the client involved, and there's little risk in having them participate in the call in this type of situation.

After I gave this some more thought, it's actually a departure from the generally-stated preference we ATX users have for direct forms entry. However, when the number of entries exceeds 5, I often find myself jumping back & forth between forms making sure I kept everything straight. I'm not sure it's much of an improvement when the number of charities is 5 or less, but still the columnar layout does have a nice feel to it for some reason. And if this is an initial step toward a data base with an autofill at some point in the future, that wuold be a very useful improvement. Much nicer than the piece of paper I have taped to my monitor with the address of Goodwill, Salvation Army, Kidney Foundation, etc typed on it. Having several of these selectable data bases for various forms is something I missed when I came over to ATX from Ultra Tax (of course, if I went back to Ultra Tax I'd probably miss that extra $4K -$5K I'd be paying for that feature and a few others)

Not implying that I think you would cheat (or that I would).

Congratulations, and you made it without cheating.

You could have told him that paying for tax prep is a lot like buying oats. For a reasonable price you can provide him good oats. But if price is the only thing he's interested in, then he will have to settle for oats that have already been through the horse.

Has anyone noticed the change to the 8283 input? I started an 8283 today and was surprised to find ATX telling me I was overriding an entry when I began entering the name & address of the charity. After following the bunny and scanning the tabs at the bottom of the sheet, I learned that there's a new tab at the bottom -> "Schedule A and B - Other Property", which expects the Part I info to be entered in spreadsheet layout. It's handy for entering info side-by-side and I guess it will open a new 8283 after 5 entries. Next thing I'd like to see them do is develop a data base similar to the "Payer Manager" which would allow us to choose the charity form a drop-down list and autofill the address info. Maybe that's coming.

LUNCH! I KNEW there was something I overlooked today.

Deb: I like your approach. Every situation has to be decided based on the circumstances. Like Pacun, there are times when I charged the max and then added a PITA fee because I was pretty sure they would be gone once the problem was resolved. But in other situations, giving them a break at the outset creates a loyal client and long-term profitable relationship, along with referrrals. It all boils down to what our intuition tells us about the client and then following those instincts. In any case, it's always a good idea to get progress payments when multiple years are involved.

I think you want to open the Master and just increase the size of a row above the address line, then save the Master & Close it. It takes a little trial and error to get it where it needs to be.

How about relevance? Did he tell you how much the paycheck was for and what his tax rate is? For example, if there's a $1,000 overstatement of earnings with no withholding credit, and his marginal tax rate is 15%, then he's going to save $150 in tax. Subtract your $200 charge for reviewing all the paperwork, writing an explanation, and amending the return, and he's losing money on the deal. If his marginal tax rate is 25%, then at most he's $50 ahead, assuming it flies. As KC said, if it wasn't important enough to pursue the actual cash 3 years ago then the tiny tax consequnces aren't worth the hassle (for you or for him). Sounds like he just wants to get a little revenge by trying to make trouble for the employer.

It's also possible that the unfiled 2005 return may cause them to hold up any refund he might be due for 2006-2009 years. I had someone year before last who got married and the joint return evidently caused the system to search for unfiled returns. The IRS sent a letter saying one of the spouses had a delinquent return and they would not issue the refund until they received the return. It was a closed year for refunds, but the SOL was open for assessment because of the non-filing. As it turned out, not much money was involved for the unfiled return. But there were some very interesting & lively discussions between the two since it was holding up a $3K plus refund.

I don't think anyone who was eligible & didn't receive the $250 payment can get it via their Federal Tax Return unless they had earned income. If they didn't receive the payment and didn't have earned income, that's a matter between them and SocSec Admin (or the other agencies.) I don't plan to even bring it up unless they had earned income AND began receiving benefits in late 2008. For everyone else, I'm assuming they received it. (That is, unless someone points out a flaw in my reasoning here)

So let me see if I understand Prof Campos correctly. "Lets just get on with loading the plane - I'm busy guy and I'm tired of wating in line. Why worry about a couple of hundred people getting blown up by a lunatic every now & then? Get over it - stuff happens."

Can't do it in script this year as we could in the past couple of years (at least I can't find the font)

Are you referring to electronically filed payroll reports or paper-filed? If paper-filed, then it's my understanding that the Paid Preparer is required to sign payroll reports manually.

Also keep in mind that for many retirees, whether or not they received the $250 isn't important. It only matters if they had earned income.

Only the taxpayer can make the call, and they should plan to spend about 30 min on the phone.

There's supposed to be a check box to the right of the word "Void" on Copy A, but the ATX software doesn't print the check box. It has always been that way (at least as long as I've used ATX). Either the check box isn't required or else it's been slipping through the cracks for lots of years. Here's the official form for comparison. http://www.irs.gov/pub/irs-pdf/fw2.pdf

Yes, I understood exactly what you said. My comments related to the practical aspects of handling this issue in the middle of a busy tax season. If they were receiving SS benefits prior to Nov, 2008, then they definitely received benefits Nov 2008 forward, and meet the presumptive test that they were paid the $250. That means I'm entering the $250 on the Schedule M if it's called for. My final comment was an attempt to clarify my point - if they began receiving benefits any time in the 4th quarter of 2008, I'd do a little more digging because it's likely they either fell on one side or the other of the cutoff or else SSA could have made a mistake in spite of their clearly defined rules.

I'm assuming that anyone who was receiving SS benefits before Nov 2008 did receive the $250 payment, so if they worked and are eligible for the MWP credit, I'm reducing it by $250. I'm also providing them a note explaining what I did. If they later get some sort of correction or adjustment from IRS stating that they are eligible for an additonal $250, I can refer them back to the note and explain how SSA made an error because they didn't follow their own guidleines. (I might do a little more digging if the person actually began receiving benefits in the 4th quarter of 2009.)