jainen

>>I have added them in a spreadsheet << I recommend the old fashioned error-finding techniques of basic accounting. 1) When the amount you are out of balance is evenly divisible by 9, you have a transposition error. 2) If the difference is 3 or 30 or 300 or 3000 you've made a ten-key error, the result of hitting the key on the wrong row. 3) If you find the exact amount of difference in the list of figures, you've left it out or included it twice or put it in the wrong column. 4) Personally, the mistake I make most often is reversing basis and sales proceeds.

>>If the tax preparer knows the client has none of the required documentation and claims the deduction any how on the return, isn't the preparer preparing a return based on a position that has zero chance of being accepted?<< It would seem so, because with charitable contributions specific documentation is required by law. But it is a new, untested law. There is really no reason to think getting that $100 by cashing a third-party check or using one of those new-fangled sidewalk pin money machines won't count as a "bank record." A strict interpretation would hold that out-of-pocket expenses and mileage, which are considered to be cash donations, are not allowable without a bank record or organization receipt. In my opinion, it is more likely than not that we can continue to use self-made logs and store receipts for a while longer. Besides, the "classic example" in the original post was about non-cash donations. Since the rules are intended to be similar, it is worth noting that a bank record is meaningless and even the organization receipt is not always required and usually would be at least partly self-written.

>>do you have a receipt?<< That is not an accurate report. Newspapers these days are not reliable sources for professional guidance because they like to make things more sensational and controversial than they really are. The more-likely-than-not standard applies to the POSITION, not the documentation of that position. We are still allowed to rely solely on a client's unverified assertions as long as they are not inconsistent or otherwise unreasonable.

>>Total Tax - divided by - AGI<< That's a way to analyze effective tax rate. There's no official definition. Its significance will vary with the taxpayer, so why not ask your client what he is trying to track? For some people, AGI is a useful way to identify total income. Others may have adjustments or losses or non-taxable dividends or partially taxable pensions that skew AGI. Similarly, total tax includes different elements for different taxpayers, considering things like credits, SE tax but not FICA, and even advance EIC. And of course both figures ignore how payments are structured, which might be important to some taxpayer somewhere. What exactly is the relationship between AGI and total tax? For some but not all taxpayers AGI affects deductions. For some but not all taxpayers AGI affects AGI(!) What if AGI is reduced by a carryover from a previous year, or increased by a recapture of a previous deduction? Or what if total tax is increased by AMT one year and reduced by AMT credit the next without reference to AGI? How do you compare payroll taxes on Schedule C, an AGI adjustment, with payroll taxes on Schedule H, a total tax adjustment?

>>Does a new energy saving central air conditioner qualify for a Residential energy credit?<< Possibly but not necessarily. Not all Energy Star units qualify. For a list of exact models that meet the specifications, go to http://www.ceehvacdirectory.org/continue.html and click on air conditioners, then enter "Residential Tier 2" in the CEE Tier box, then click "Search Database." This is a good example of why you need to subscribe to Quickfinder.

>>if we aren't talking about death, we're talking about taxes.<< How can you say that? This thread, for example, is about lubricants.

>>I feel Oregon was wrong and TP did not respond timely.<< Doubtful Liability Relief http://www.oregon.gov/DOR/PERTAX/docs/101-698.pdf (Probably won't work because you are not disputing a tax assessment.)

>>The Oregon State denial letter states that they follow the federal rules however it does not appear this happened.<< You are not reading the letter correctly. When it says, "the child for whom you claimed the EIC is the qualifying child of another person," they are NOT talking about Form 8332, which the absent parent can't use to treat the dependent as a qualifying child. Apparently someone else claimed the child WITHOUT Form 8332, and your client didn't resolve it in time.

>>Caller wants a 10W40<< I recommend the WD40; much easier to use.

>>It will end up costing our children and grandchildren much more<< Not necessarily, because they get to pay it back with much cheaper dollars. On the day of the election that brought the current administration to power, the dollar traded against the euro for 85 cents. Today it's north of $1.55, a loss of more than 80% of it's value. That is to say, your value.

>>Father is allowed dependency<< Does this mean they followed the rules for divorced/separated parents, i.e. form 8332? Are YOU following those rules this year? When two people claim the child without that form, they BOTH get a letter. If you don't respond with an explanation, you lose.

>>IRS is now requiring my client to pay the employment taxes << And when the IRS gets through, they will refer him to the state employment development office, who will audit ALL his workers for all years to assess unemployment insurance with penalty and interest. State income tax too, and don't even THINK about what happens if the leasing company finds out he was paying their client for additional work while still under contract. He needs to have a specialist in employment tax representation review his case immediately.

>>Isn't there an exception for divorced and separated parents?<< California doesn't conform to this part of the code either.

>>Slavery Reparation Credit<< There's a lot of misunderstanding about this. Most people think it is for people who were slaves. It actually can only be claimed by people who were slavers and suffered economic damages when their slaves were freed. You must take the credit on an original return filed timely (including extensions) for the year of loss.

>>what hate the bankers has anything to do with your questions<< Nothing. I didn't know the answer, so rather than shutting up I decided to blame the victim for not recognizing that there was a reason the professional money lenders wouldn't deal with his partner.

>>ATX was right after all.<< That's what I was trying to tell you. I have seen a lot of complaints about ATX, and it usually goes back to incorrect data entry or interpretation. No doubt ATX could have an easier interface and better diagnostics and tech support, but taxes are complex and every program has a steep learning curve.

>>This person has General POA<< The IRS insists a general power of attorney can not be used unless it specifically authorizes tax work like Form 2848, but most lawyers disagree. I accept the power of attorney if it appears to be legitimate but caution the family about the IRS objection. In any case, neither Form 2848 nor a general power of attorney is valid if the client is not competent to sign the form herself.

>>a lesson was learned here<< We all hate bankers, but you have to admit they are often right.

>>i have no idea what you are talking about<< We are talking about numbers, SCL, NUMBERS. Although there are other factors in dependency, this thread is only about support. Thank you, joancmq, for demonstrating that flashy automatic calculations hide and distort the way the numbers flow. TaxTools doesn't really allocate "half of the household expenses as support provided by the student." It just says on Line 20 (I trust my older version has the same lines) that the student uses half of the household expenses as part of the total cost of support. Down on Line 20 is where you put in the amount actually paid by the student. TaxTools allows you to separate income that is saved rather than used for support, but you have to scroll or get back to the top and highlight/key new figures, and it doesn't prompt you for loans or previously saved money that is also spent. On paper you can make little lists and notes and subtotals so you don't forget the individual pieces while you try different combinations.

>>no one could figure out why it was wrong<< Another reason this can happen is if the refund includes a fourth quarter estimate in January. Since that payment was not made in 2006 it wasn't deductible, so getting it refunded isn't taxable.

>>it should be the whole amount<< With that high of deductions, they must have high income and correspondingly high sales tax.

>>Don't tell me I have to go back and amend and carryforward and amend and carryforward and amend.......<< There is no reason to tell you something you already know.

>>the guy named Irwin Schiff<< Tax protesters are just one category of non-filer. There are many other reasons, mostly having to do with things other than refund or balance due. And there are a number of reasons for deciding to get straight. Three in particular come up pretty often: INS, district attorney (represented by a probation officer), and Jesus (represented by either a new wife or a 12-step sponsor).

>>he needs some more document to sustantiate some expenses in question<< WHY does he need more time? That's the whole thing. Describe the documents that he will obtain and where they are. Explain why he hasn't succeeded in retrieving them yet (demonstrating a bona fide effort), what he is doing about it now, and what makes him think he'll have any more luck getting them this time. Cover all these points because any one of them could shoot you down. If the documents aren't directly related to the question, or aren't very obviously genuine, or he hasn't exercised ordinary care in managing them -- these are all serious weaknesses in his position. Tell the truth, but it's okay to emphasize certain points. It is much better if some third party or outside event caused the loss of records (he did have them a year ago when he filed the return, right?) But please don't bother with some corny story about the weather. Don't spend more than five minutes and one sheet of paper on this part of the interview. Another important gambit is to move ahead with whatever you already can. Concede or otherwise offer to agree on anything you aren't waiting for documents on. Maybe start with the mileage; it's a lot of work to put that together and she isn't going to believe it anyway. Insist that the return was correct as filed but admit that you can't document it. (The auditor knows that nobody can document mileage, so she fully expects to at least score that point.) Unfortunately, you don't have time to get the client behind this strategy. It will take you a couple of hours to analyze the strong points and prioritize what you are willing to give up. The best you can do might be to just explain that now that a professional is involved you will be able to help the taxpayer understand what is realistic (wink wink) so the auditor knows you are truly close to closing the audit. If you only had a few days more to review the file and this new evidence, please. This has a built-in backup plan. You don't want to say this unless necessary, but the taxpayer has an absolute right to bring in a representative at ANY time. By the way, how much time is your client demanding? I wouldn't try for more than 14 days unless you have a really really great story. I wouldn't be surprised to only get 'til the end of this week. And speaking of time, you have now used up another five minutes of the auditor's valuable schedule, so you have reached the limit. Thank her and leave. Fax her a confirmation late in the afternoon.

>>No more dissolutions, just mark return final!!!!!<< Well, that sounds pretty good, but the discussion in this thread is about not filing any return, final or otherwise.