Pacun Posted February 16, 2019 Report Share Posted February 16, 2019 DC is sending letters because there is $1, $2, or three dollars difference in favor of the Taxpayer between the tax liability from ATX vs DC's calculation. It is annoying that people are receiving the letter. I thought it was an isolated case but about 50% of the people are getting the letter. Quote Link to comment Share on other sites More sharing options...
Richcpaman Posted February 16, 2019 Report Share Posted February 16, 2019 Is it a rounding issue? What do you think the difference is? Rich Quote Link to comment Share on other sites More sharing options...
Catherine Posted February 17, 2019 Report Share Posted February 17, 2019 8 hours ago, Richcpaman said: What do you think the difference is? All our software rounds. Agency software truncates. Quote Link to comment Share on other sites More sharing options...
Pacun Posted February 18, 2019 Author Report Share Posted February 18, 2019 There are three problems with DC calculations. 1.- DC Software truncates but I have been ignoring cents when entering withholdings for DC, so that my clients don't receive those letters. 2.- The paper table reads: If taxable income is $17000 - $17050, then tax is 580. ATX does exactly that but if the taxable income is $17004, then DC computer says the tax is 578. If the taxable income is $17,015, then DC computer says tax is $579. I have not seen where DC says, you owe $581 or $582, which will be against the tax payer. 3.- DC sends a "Correction Letter", stating... You requested 110 refund but your refund will be 111. When you enter $10.99 as eleven dollars for withholding, then the client gets a "Correction Letter" stating that the tax payer is getting 1 dollar less. I told ATX that maybe DC expects that software companies be granular and NOT follow the paper instructions but rather calculate tax liabilities in increments of $1, versus $3 dollars increments. Error number three is the worst I have seen. People rather receiving one dollar less vs receiving that letter. The first thing that comes to mind for them is that PACUN doesn't know how to prepare taxes. 1 Quote Link to comment Share on other sites More sharing options...
Catherine Posted February 18, 2019 Report Share Posted February 18, 2019 17 hours ago, Pacun said: The first thing that comes to mind for them is that PACUN doesn't know how to prepare taxes. Warn them ahead of time that the DC computers are completely bolluxed up, and waste time and money sending letters about $1 - $3 discrepancies that the computers themselves create out of thin air? Quote Link to comment Share on other sites More sharing options...
Lion EA Posted February 18, 2019 Report Share Posted February 18, 2019 I had a client call me about receiving an IRS letter for $0 owed. He was my first this year. But, not my first ever! He's a banker and figured out that it must have to do with rounding or such. 1 1 Quote Link to comment Share on other sites More sharing options...
Catherine Posted February 19, 2019 Report Share Posted February 19, 2019 I've seen a couple of those in the last few years. The clients always call, and we always laugh about it. Quote Link to comment Share on other sites More sharing options...
Pacun Posted February 19, 2019 Author Report Share Posted February 19, 2019 1 hour ago, Catherine said: I've seen a couple of those in the last few years. The clients always call, and we always laugh about it. It becomes a laughable matter when you see the contents of the letter but most people panic when they see an envelope from the IRS. 2 Quote Link to comment Share on other sites More sharing options...
JohnH Posted February 19, 2019 Report Share Posted February 19, 2019 If I got a bill for $-0- I might be tempted to send them a check for $-0- just to see what happened. Or if the ill is for $1, I'd send them a $1 check AND a dollar bill with a note saying if they want to keep the dollar bill, please send the check back to me. But I wouldn't advise a client to do that... 1 Quote Link to comment Share on other sites More sharing options...
Lion EA Posted February 19, 2019 Report Share Posted February 19, 2019 I had a client who got that $0 bill every month or so, so she DID send them a $0 check. The bills stopped. 1 2 Quote Link to comment Share on other sites More sharing options...
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