MAMalody

While I do not disagree with jainen's treatment above, there is something I have used before that normally has worked. I simply send the individual in question, (with the taxpayers written approval) a letter indicating that I have their form 1099 and there seems to be a discrepency with your clients records and it reflects too much income. Before we notified the IRS of this information we just wanted to check with them to see if xxxx's information was correct and should we received a corrected form 1099? If they could let us know within the next 10 days we would appreciate it since we intend to file that tax return on that date. This seems to cover the bases. You have clients written permission communicate with the individual/company in question, you are not telling any untruths because you will be filing that information correctly as you see it, you are simply requesting a corrected from and you have a paper trail. I have had 100% positive response in this regard and normally, I think, they were really errors not an attempt to "cook the books."

I have a similar issue. I downloaded the instructions off the internet on how to do and it looks like about a one hour procedure. Fan cost me $40+. I went ahead and puchased a computer tool set, although, that is probably overkill. I will let you know how it goes if I can find this thread. I am planning on doing it this Friday. If you farm this out, my guess is you are talking around $175 or so.

Well, let's see. (1) Check to make sure he does not have an approved Form 4361. If he does, there is no SE tax on clergy income. That would include cash salary, honorariums and housing/parsonage allowance. (2) If there are excess reimbursements, the excess would be listed on line 7, Form 1040 along with his W-2 income. You are correct in saying that his contributions are not a business expenss but a contribution listed on Schedule A. An exception to this would be if his T/O were a condidtion of employment. I would suggest confirming that the list you were shown were actually reimbursed and not just a list supplied by him showing what he thought his expenses were. (3) Sounds like you may need to have two Forms 2106. One for the clergy employment and one for the sales job. In that case you may be able to handle the reimbursement against those business expenses including his professional mileage.

My take is, tell it like it is and let the chips fall where they may. That is also the IRS take on it. I suspect your engagement letter also indicates that you will give them every benefit they are entitled to and it will be an accurate reflection of their tax picture. I have had a couple of clients over the years that tried to steer the tax return. I essentially tell them only one person can drive; I have a license to drive, but, if they want to, fine, see you later.

Hmmm.

According to IN Pub 1345, page 8 the 2010 IT-40PNR can be e-filed. Am I reading their publication wrong?

I had the same problem and found out that ATX does not support IN NR e-file, even though IN accepts it. You client will need to paper file the IN return.

See if they e-filed last year and look at that return. If all else fails, call the IRS e-file help desk. They have proven to be a benefit in the past.

I didn't think ATX would not support it. Jeez. I will check that out. Thanks.

I have a client that moved from MN to IN. I prepared the federal, MN part year and IN part year rtn. No Problem. When I go to prepare the e-file, ATX will only do federal and MN, it will not list IN as an option. In checking with IN, they do accept part year or NR returns electronically filed. I have reviewed the 8879 for IN and the e-file tab and am unable to find anything in particular that must be checked. It is probably something simply that I am missing, but what is it? How do I get ATX to create the IN efile?

JohnH is correct. The decision to opt out is not revocable. I have never seen this done, however, an argument could be made that the opt out was done on a "misunderstanding of the criteria," that the minister does NOT have a theological objection. Essentially that is what the prior windows to opt back in were for..so there is a precedent for forgiveness. You might try that in a letter. If granted, and the odds are very slim, you could be liable for all back taxes...then there are statute issues...potential fraud issues, questions on why you didn't exercise the 2002 option, etc. The bottom line is, as it stands, they are out. Option: get a part-time job for the next couple of years to earn the remaining 7 credits. Since medicare is more the issue that SS, that could be a good idea. Just some rambling thoughts.

I hate to say this, however, I have two clients that have 1099-As that I need to handle. I am embarrassed to admit that I have never had to handle a live one and other than CPE a couple of years ago only have a "basic" understanding of the proper handling on the tax return. They have not received any 1099-Cs. I am leaning toward putting them on extension to sort this out...the problem could be if there are large amounts being added to income. Of course, they both say that won't be the case. Question: Does not having received a Form 1099-C mean I should not handle it on this years return, but wait for next year when, hopefully, the C will be received? I have the IRS pub, however, is there a source out there that has some good material in this area, either printed material or a web site? Other ideas? Thank you for your consideration of this.

Yes, you are required to use the IRC 107 exemption.

Missionaries for Wycliffe are typically handled just like pastors. My guess is that the W-2 is prepared correctly, they did not have a housing allowance and are subject to the SE tax. If you check the prior year return, you will probably see it treated this way.

Hmmm. I have not had to deal with one of these before. I probably need to look into it more closely, considering the times we are in. This is probably the year that I will get one or the other.

How would you handle it if you received a 1099-C but no 1099-A?

Is there an IRS Publication or other information that deals in this area. I have never had to deal with one and it may be something I should look into, considering the times we are in.

If you really want to treat her, I would be available to serve as a porter/pesonal steward to ensure you receive first class treatment. In fact, I would even bring my wife along and give you double the assurance.

Got the return accepted. Turns out there was a DOB/SSN mismatch on the EIC form. Fixed that and it sailed right through. Thanks for the help folks, I appreciate it.

Still rejected with same code. Hmmm. I guess I will have to try to call tomorrow. Jeez.

I have done the above and now will see what happens. Thanks.

I have an Excel worksheet that I use for clergy. I was able to import it into the program and can place it in any clients return file and the formulas are intact. In Return Manager go to Forms, then Customize Master Forms, then to Customize, then to Add Excel Sheet as Master Form, then find your form, name it and place it. I placed it under federal. When you go to add it to a clients return, you select Federal and Customize and it will be at the bottom of the forms that you can select. Worked for me.

What is EFC41? I am unable to get signed on the ATX for some reason. How do I fix this?

While I agree with the conclusion of chadlonetree, I must admit that I have never seen where a church required in writing any specific amount of contributions and the only denomination that comes close to the required contributions mentioned by chadlonetree has been the AGs. This is just an observation and does not change the answer.

The Mary Kay website and information they dispense for taxes does not agree with what she was told. I have had this situation come up and the only answer is the old stand-bye: While I am not perfect every year I put in xxx hours of professional continueing professional education looking at issues just like you brought up and it appears either you were told wrong or have misunderstood what you were told. I want you to get all the tax benefits you are entitled to and to feel comfortable with any return I would prepare for you. If you would feel more comfortable going to the CPA you mentioned, I will not feel offended and would encourage you to go where you feel most comfortable. (sometimes I might add: If you would not mind, I would like to review the return that is prepared by your CPA to see what I can learn from it to ensure that I am giving all the tax benefits possible to my clients) Works for me.