Lee B

Figure 1: Status of Unprocessed Paper-Filed Original Tax Returns Comparing Weeks Ending April 22, 2022, and April 22, 2023 Filing Season Individual Business Not Specified Total 2022 6,200,000 5,200,000 2,000,000 13,300,000 2023 1,200,000 500,000 900,000 2,600,000 As of June 3, however, the inventory of unprocessed paper-filed original returns had grown to 4.1 million, consisting of about half individual returns and half business returns. Processing of amended tax returns. In contrast to the 80% reduction in the backlog of paper-filed original tax returns, Figure 2 shows that the inventory of amended returns was 3.6 million in April 2022 and 3.4 million in April 2023, a reduction of only six percent between the two periods. Figure 2: Status of Unprocessed Amended Tax Returns Comparing Weeks Ending April 22, 2022, and April 22, 2023 Filing Season Individual Business Total 2022 2,600,000 1,100,000 3,600,000 2023 1,700,000 1,700,000 3,400,000 The IRS has not made notable progress in reducing its paper AM inventories over the past year. The inventory is just six percent lower than at the same time last year. Figure 3: Status of Unprocessed Taxpayer Correspondence and AM Cases Comparing Weeks Ending April 22, 2022, and April 22, 2023 Filing Season Individual Business Not Specified Total 2022 2,200,000 1,000,000 2,100,000 5,300,000 2023 1,900,000 900,000 2,200,000 5,000,000 Basically the IRS is still playing "Whack a Mole"

Unfortunately, it's the messed up reality that we are living in now.

"In early June, sporadic but serious service disruptions plagued Microsoft’s flagship office suite — including the Outlook email and OneDrive file-sharing apps — and cloud computing platform. A shadowy hacktivist group claimed responsibility, saying it flooded the sites with junk traffic in distributed denial-of-service attacks. Initially reticent to name the cause, Microsoft has now disclosed that DDoS attacks by the murky upstart were indeed to blame." "On June 8, the computer security news site BleepingComputer.com reported that cloud-based OneDrive file-hosting was down globally for a time."

Unless you are a cyber security professional, it's impossible to know what is secure anymore. All of the large businesses and government agencies that were hacked this month failed to keep their software updated. They were all using an outdated version of some File Transfer Software called MoveIt which allowed the Russian Hacker Group to access their important data. Even then they should have had multiple layers of encryption. Just because the software you're using hasn't been hacked yet doesn't mean it's secure.

I would have just said that my professional liability insurance carrier won't let me write comfort letters.

"Equifax collects and provides data through the National Consumer Telecom and Utilities Exchange (NCTUE), an exchange of non-credit data including consumer payment history on telecommunications and utility accounts." I am going to implement a credit freeze at Innovis. Not sure of the value of placing a credit freeze at Chex Systems or NCTUE?

I did a little online research. So I understand about doing a credit freeze on Innovis ( the 4th largest credit agency ) and NCTUE. However, why would it be useful to do a credit freeze at Chex Systems which tracks negative details about personal use of checking and savings accounts?

i agree, it would not be deductible unless the funds advanced were used to improve the home, or were used for business or investment purposes . Interest tracing rules still apply.

Wow now the Louisiana DMV has been hacked "A statement on Thursday from the governor of Louisiana, John Bel Edwards, said that his staff believes everyone with a driver’s license, identification card or car registration issued by the state of more than 4.6 million residents probably had their names, addresses and social security numbers exposed to the hackers. Other personal information to which the cyber-attackers apparently had access were Louisianans’ driver’s license numbers, vehicle registration data, handicap placard information, birthdates, heights and eye colors, Edwards’s statement said. The number of records involved is thought to be about 6 million, Louisiana’s homeland security and emergency preparedness director, Casey Tingle, told reporters Friday."

Yes, Drake also has a worksheet for that which I filled out and attached, which the IRS ignored!

In over thirty years I have only had three divorced clients and the previous two divorced clients didn't have any estimated payments, so this is a learning experience for me. Thanks for the feedback everyone.

Are these sales associates his employees? Personally I would consider their wages to be an operating expense.

Unfortunately, they aren't talking to each other. Any communication gets passed through their son:(

Clients divorce finalized in November 2022. Estimated payments for the first 3 quarters of 2022 were paid from a joint account. My client W just received a letter from the IRS billing her for about $12,000. Looking at the details of the letter the IRS credited the husband with 100% of the estimated payments for the first 3 quarters. Any good ideas other than responding in writing to the CP23? Thanks in advance

"This month, a massive hack targeted the Oregon DMV. The Oregon Department of Motor Vehicles confirmed Thursday that an estimated 3.5 million driver's license and identification card files were compromised when the agency was hacked two weeks ago." Wow! I have am going to have to freeze my credit and notify my clients to do the same thing.

"DEAR ANNIE: I’m feeling torn between pursuing my dream and maintaining my financial stability. I have a job as an accountant making six figures, but it’s boring work -- so boring that I dread getting out of bed every morning. The days go by slowly, and I find myself living for the weekend." You don't usually see accounting mentioned in advice columns

The only potential problem would be related to payroll reports which would only arise if payroll taxes weren't getting paid. However I would change to the correct EIN with the filing of the nest Schedule C. In addition the old EIN needs to be closed.

In addition, the taxpayer cannot be eligible to participate in a subsidized health plan maintained by either the taxpayer's employer or the spouse's employer, which would not include Cobra Continuation since it's not subsidized.

"A net positive IRC 481(a) adjustment increases income and is often referred to as a "government-favorable" adjustment. A net negative IRC 481(a) adjustment decreases income and may be referred to as a "taxpayer-favorable" adjustment. When a taxpayer uses the voluntary method change procedures or a regulation provision, it generally takes a net negative IRC 481(a) adjustment into account in the year of change. A taxpayer generally takes a net positive IRC 481(a) adjustment into account over four years (year of change and next three taxable years). See also IRM 4.11.6.6.4.1. When a taxpayer under examination requests consent for a voluntary change under Rev. Proc. 2015-13 or successors, it takes a net positive IRC 481(a) adjustment into account over two years, unless one of the following exceptions applies. See Rev. Proc. 2015-13, § 7.03(3)(b):" The item that was reported in error on the 2021 tax return sounds like a separate issue which would be handled by an amended return.

Form 1120, 1120 S, 1065 or Schedule C

This is a classic case for the filing of a Form 3115 and a 481(a) adjustment. Since the 481 (a) adjustment will be positive, your client can choose to spread the increased income over the next 4 years.

If it was my client I would expense the property taxes in the tax year in which the property taxes were paid via the mortgage closing. One year clients complain that their taxes are too high, the next year they want to show more income.

Your client should be able to call and get this moved, supposedly wait times aren't too long right now. If it was my client I wouldn't call for them.

I would go to the Ohio website and pull up the form and compare it to your clients form. I did notice the instructions say upper case letters only?

Is there anything strange looking in field # 1?