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Definitely keep the explanation simple. Since gross wages and taxes will be increasing on these returns, I'd simply state something like "amending to properly include fringe benefits and related tax effect."

​I agree with you, and with restaurants that have a fairly high rate of turnover, some of the affected people may no longer be employed there. Amended returns and corrected W-2s is the way to proceed.

I renewed today and it feels good to know that I'm in good hands with Drake!

Thank you!

JMDavis, I thought I remembered it that way too. I want to make sure that I understand this correctly. So the way I understand this is that if the client already claimed 100% of the taxes paid to other states, there is nothing to amend for, correct?

Another article that explains it a little better. Basically, it's the piggyback add-on by the counties that is the problem. http://www.washingtonpost.com/local/md-politics/supreme-court-rules-maryland-income-tax-law-is-unconstitutional/2015/05/18/1e92ee7a-d16f-11e4-ab77-9646eea6a4c7_story.html

I'd like my PTIN fee and renewals refunded too. Did anyone see this class action suit: http://www.forbes.com/sites/kellyphillipserb/2014/09/08/irs-hit-with-class-action-suit-over-tax-preparer-user-fees/

A related article about the ruling. http://www.cecildaily.com/news/local_news/article_f744867d-37f5-52d0-9c74-30a5bc5240a0.html Posted: Wednesday, May 20, 2015 11:11 am By Jane Bellmyer [email protected] ELKTON — Cecil County residents who work in Delaware may be in for a tax refund thanks to a recent U.S. Supreme Court ruling. The nation's highest court voted 5-4 that Maryland was — in effect — double taxing residents of the state for working in another. In "Maryland State Comptroller of the Treasury v. Brian Wynne," the judges opined that there was a breach of the Constitution when the state denied tax breaks to residents who worked out of state between 2006 and 2014. "By mere virtue of our location, we were well aware of the outcome in Cecil County," said Craig Whiteford, budget manager for Cecil County. "We've been predicting an adverse capture." That means the county expected to have to repay some of the money collected through the piggyback tax. It's money collected through the income tax filing process, assessing a percentage of the Maryland taxes due and disbursing it to the county of residence. For Cecil County, that rate is 0.028 percent. "We had assigned some fund balance in anticipation of the impact," Whiteford said. "We were prepared for it." The set aside total was $3.5 million. The court ordered that $1.3 million be returned each year for three years. "We were not too far off," Whiteford said of the nearly $5 million punch. The case centered on a Maryland couple with a medical business from which they filed taxes in 34 states. "They got credit for the taxes paid to other states," Whiteford said. However, there was no such rebate for the piggyback taxes paid to Howard County, the county of residence for the couple, Brian and Karen Wynne. According to the Maryland Comptroller's Office, taxpayers in those affected years need to file an amended return to get any refund. It's estimated as many as 10,000 Cecil County taxpayers earn their income in Delaware, Pennsylvania or New Jersey. While Cecil County was not the hardest hit — that was Montgomery County — those most affected here were individuals. Montgomery County had a higher number of businesses impacted, according to the comptroller's office.

Article in Forbes 5-18-15: In Landmark Case, Supreme Court Finds Maryland's Tax Scheme Unconstitutional Last May, Dominic Perella, argued that the way that the State of Maryland treated tax credits was wrong, arguing, “Maryland’s approach is unfair to people who make money in more than one state.” As it turns out, the Supreme Court agrees, holding in Comptroller v. Wynne that Maryland’s tax scheme is unconstitutional because it doesn’t offer credit to its residents for taxes paid in other states. This – as it applies both to state and local tax policy – is a big deal. To understand the case, we need to understand the context. How did this case find its way to the Supreme Court? Here are the details: A married couple (the Wynnes) reported taxable net income of approximately $2.7 million to the State of Maryland. More than half of that amount represented a share of earnings in an S corporation with operations in several states. The Wynnes claimed a credit on their Maryland tax returns for taxes paid to 39 other states. The State of Maryland denied the credits and issued a notice of deficiency. The Wynnes appealed. At a hearing, the assessment was affirmed, meaning that the Wynnes were stuck paying the tax. The Wynnes disagreed with the finding and amended their petition, claiming that the tax credit statute, as written, was in violation of the Commerce Clause of the United State Constitution. That claim was rejected. So the Wynnes tried again, arguing this time that the State of Maryland was constitutionally required to extend the credit for taxes paid to other states to the county as well as the state. Their bigger question was whether a state had the unconditional right to tax all income based on residency (they, of course, said no). This time, the Circuit Court agreed with the Wynnes. The State of Maryland appealed and lost with the Court of Appeals finding that the Constitution prohibits “double taxation” of income earned in interstate commerce. That means, the Court found, that a state may not simply tax all the income of its residents no matter where it is earned. As you can imagine, the state of Maryland wasn’t thrilled with this finding. The state warned that this would result in a “significant loss of revenue that will amount to tens of millions of dollars annually.” So the state appealed. Again. Only there was one small problem. After Appellate Court, there’s really nowhere to go – except the Supreme Court. The Supreme Court did not have “original jurisdiction” over this matter so the losing party (in this case, the State of Maryland) had the option of filing a petition to ask the Supreme Court to hear it. That’s what the State of Maryland did and the Supreme Court opted to hear it. That’s referred to as granted certiorari (or, for the cool, hipster kids who like to shorten their Latin, granted cert). The case garnered a lot of attention. That’s because the case isn’t just about the Wynnes. Or Maryland. Even the State of Maryland acknowledged as much in its original petition, noting that the matter “has potential repercussions beyond Maryland.” The question of whether a jurisdiction – not just Maryland – can impose tax on its residents’ entire income even when that income may be subject to taxes elsewhere has nationwide implications. The finding by the Supreme Court was, on its face, simply, “Maryland’s personal income tax scheme violates the dormant Commerce Clause. The Court leaned heavily on the Commerce Clause, found at Art. I, § 8, cl. 3 of the Constitution, which gives Congress the right: "To regulate commerce with foreign nations, and among the several states, and with the Indian tribes;" The Supreme Court noted that “we have consistently held this language to contain a further, negative command, known as the dormant Commerce Clause, prohibiting certain state taxation even when Congress has failed to legislate on the subject.” It sounds like a sleeping giant but what it means is that states may not pass laws that discriminate against or excessively burden interstate commerce. The majority went on to distinguish between “(1) tax schemes that inherently discriminate against interstate commerce without regard to the tax policies of other States, and (2) tax schemes that create disparate incentives to engage in interstate commerce (and sometimes result in double taxation) only as a result of the interaction of two different but nondiscriminatory and internally consistent schemes.” The first, the Court found, is unconstitutional while the second is not. The majority also noted that the discriminatory nature of Maryland’s tax structure “is not simply the result of its interaction with the taxing schemes of other States.” Rather, the court found that Maryland’s tax scheme is “inherently discriminatory and operates as a tariff.” Why does that matter? Remember Chief Justice Roberts’ commentary in the Health Care decision a few years back about a penalty versus a tax? Words matter. And the majority’s finding that the tax scheme is basically a tariff “is fatal because tariffs are “[t]he paradigmatic example of a law discriminating against interstate commerce.” (West Lynn, 512 U. S) The Court, continuing to cite West Lynn, wrote, “tariffs against the products of other States are so patently unconstitutional that our cases reveal not a single attempt by any State to enact one.” As to Maryland’s “but we tax everyone at the same rate so it can’t be discriminatory” argument? The Court wasn’t buying it, saying that “the fact that the tax might have ‘the advantage of appearing nondiscriminatory’ does not save it…” In the end, it all came down to this: “the total tax burden on interstate commerce is higher” under Maryland’s current tax scheme. That double taxation scheme, the Court found, is unconstitutional. Justice Alito delivered the opinion, joined by Chief Justice Roberts, and Justices Kennedy, Breyer and Sotomayor. There were dissents. Lots of dissents. You have to read the dissents. It’s like reading the minority reviews on Amazon.com – generally not going to change your mind but they do offer perspective and they’re often entertaining – as is the case here. Justice Scalia filed a dissenting opinion, which Justice Thomas joined in part. In the dissent, Justice Scalia refers to the notion of the dormant Commerce Clause as “judicial fraud” – but he’s in the minority here. He further reacts to the Court’s claims that the dormant Commerce Clause doctrine “has deep roots” by arguing, “So it does, like many weeds.” Justice Thomas also filed a dissenting opinion, which Justice Scalia joined in part. Justice Thomas likewise didn’t embrace the notion of the Commerce Clause but the majority found his argument “plainly unsound.” And in the most odd bedfellows dissent of all, Justice Ginsberg filed a dissent, joined by Justices Scalia and Kagan. Justice Ginsberg quotes a prior finding from the Court that “It is not a purpose of the Commerce Clause to protect state residents from their own state taxes.” A great deal of the dissents focuses on the “people versus corporations” debate that we’ve seen before… definitely interesting party conversation. The opinion knocks parts of these dissents in a rather feisty manner. You can read the opinion together with the dissenting opinions here (downloads as a pdf).

​ E & O would not cover what Sara mentioned. Read JRS' post a couple of posts up. In fact, theft of records or data might, or might not, now be covered under a practitioner's general liability policy either. Some of the advertisements I've seen lately are selling a separate policy or rider to cover identity theft and data breach issues meaning that purchasing that insurer's basic policy won't cover identity theft and data breaches.

. Thank you, Jerry.

​ I agree that your client is referring to a 1031 exchange, and those have strict rules that must be followed as outlined in the IRS link provided in BHoffman's post.. If he took possession of the cash at sale, that would be a disqualifying event that would trigger gain recognition. Sec 1031 transactions use either a Qualified Intermediary or an Exchange Facilitator that receives the cash at sale, and the individual himself cannot act in this capacity.

ROFL, someone buy Barry some Twinkies please! Fake story but still funny and so are the comments. There are some great stories on that site like this one about the investment banker devoured by vultures: http://worldnewsdailyreport.com/wall-street-banker-devoured-by-vultures-in-arizona-desert/

​ Click the emoticon smiley on the toolbar and you should see 21 emoticons at that point. By clicking on "Categories" at the upper right corner of the popup box, you can then choose "core_emoticon_group_default" that will show all of the emoticons we had with the old version of the forum and still do.

I signed out and came back to this topic, and I couldn't see the line indicating the edit had been made. Either the change you made has worked or your assumption that we continue to see it because we have the additional privilege is correct.

It's a feast worthy of a trip to the cardiac ward.

There's a separate log in name and password for the forum. I'm not sure how quickly that becomes available but I don't remember any significant delay.

Are you talking about the one that you use in the software itself that changes you over from the trial version to the fully functional one? If so, that happens once the accounting dept links up your ERO with the software and switches you over to that version. At that point, then you'll go into the software and change your password to whatever you want. Be aware that any time you change that password in the software, you'll need to update it in each year's software and in each year's CWU so that Drake's server recognizes that you are the real person trying to use their server. You'll also use that updated password if you use the EF online database, and if you allow your browser to remember it, you'll have to change it there also any time you update it to a new password.

KC is correct about having the ability to edit the quote. Eric has made a little tweak so that when quoting someone, the cursor is now automatically positioned below and outside of the quote box so that this won't happen in the future.

​From the IRS page of info about the IP PIN: http://www.irs.gov/Individuals/Get-An-Identity-Protection-PIN You must get an IP PIN to file your current or prior year returns in 2015 if: You received a CP01A Notice with your new IP PIN and you lost it, orYou had an IP PIN in a prior tax year and you didn’t receive a new one this year, orYour e-filed return rejected because your IP PIN was missing or incorrectYou may choose to get an IP PIN if: You filed your federal tax return last year with an address in Florida, Georgia, or the District of Columbia, orYou received a letter or CP01F Notice inviting you to get an IP PIN.Note: Users who choose to get an IP PIN must do so using this online IP PIN system. Plus, more info here on the FAQ page: http://www.irs.gov/Individuals/Frequently-Asked-Questions-about-the-Identity-Protection-Personal-Identification-Number-(IP-PIN)

Once again, thank you, Eric. My cursor now starts out below the box.

​Glad you got it worked out.

If your username was different than ILLMAS, try logging in using "ILLMAS" or you can try logging in using the gmail account associated with that username "ILLMAS" and try resetting the password. If that doesn't work, you'll have to contact Eric to have it reset.

Eric, another change that I've noticed recently is that when someone uses the quote function the cursor remains inside the quote box, above the quoted text, when the person then starts to type a response. I've had to edit 2 posts so far to separate out the poster's text out from the person he was quoting. It was obvious to me since the first one I noticed was someone quoting me. The latest was a post earlier today when Jack quoted Margaret in the topic about not paying for more licenses than are needed. Do you have a setting that can be adjusted so that the cursor appears outside/below the quote box when we use that function?