BrewOne

I just sent notice to all my clients who don't have IP PIN's (and who I thought could navigate the ID.me process) encouraging them to sign up. Was a recent statement from the Taxpayer's Advocate Office that it's taking around 20 months to get a refund if someone else files under your SSN. The IRS has gotten pretty good at catching fraudulent returns, but the actual taxpayer's return still can't be e-filed. I gave my clients a heads up about the calendar nature of the IP PIN's--those who sign up now will get a PIN for 2024 that won't be valid for their 2024 return--now that's not confusing, right?

I avoided collecting DL info except for clients getting a State refund. Like Lee, I would like to limit personal information in my computer, but two (three?) years ago several of my clients' refunds were held up by the IRS for verification, so I started collecting them on anyone getting a refund. It is something of a pain to re-enter every year in ATX, so thanks for the tip. I figure as long as the license is not expired, should be good enough for the IRS.

must be tied to inflation and the way the numbers are rounded off.

For the 2022 tax year, checking in October 2023, I found a 1099-NEC where my client's SSN was being used in California. I also found a very large 1099-K for a client where her organization had mistakenly given her SSN to Square instead of the organization's EIN. Lastly, I found a 5498 for a 74 year old client who had never taken money out of a Traditional IRA. None of these clients had heard from the IRS.

So, this fall (from the Transcript Delivery System), I'll request the 2023 "Record of Account" and "Wage and Income"--looking for zeroes on the Record of Account (negatives are good, that's money owed the taxpayer), and I'll note when the refund was funded or tax paid date. Wage and Income: I don't try to go through all the stock transactions, but make sure that other forms match up. If a 5498 is present, I'll look at the client's age and whether RMD's were present or if they soon will be required. Obviously, I don't do these all at once. takes me awhile--after October 15 is a good time to start.

right. I was hopeful that TAS might have a memo on the notices, but it appears that their website is only providing generic info. But I'll use this as another opportunity to beat the drum to go ahead and procure 8821's from your clients before an apparent need arises. I have them on about 75% of my clients and I know of at least one preparer who requires an 8821 from all his clients. I go through and check all of mine in October to see if there are any surprises waiting for my clients. There are also companies who will monitor all this for you (if you've checked the 3rd party box on the 8821). Roger Nemeth (Bill's son) in Havana, FL has such a business.

you can input the notice number at the Taxpayer's Advocate office, might give you some info if this is a widespread issue. https://www.taxpayeradvocate.irs.gov/notices-from-the-irs/ I thought the resumption of past due notices was for 2022, not 2021.

don't know if anyone else has experienced this, but I had a number of clients in the past two years whose wage withholding dropped and they told me they didn't change anything at work. Not knowing what their payroll department is up to, I usually advise an additional $ amount based on how often they are paid, rather than try to rework a W-4. for retirees who owe, I usually print out a W-4V for them to file with Social Security. Although not ideal (often 12% is too little and 22% is overkill), it is an easy method of getting more withheld. The State of Florida used to have a surprisingly simple W-4P form but that went by the wayside. But sometimes all we can do is point out how much they are paying in interest and that it is currently at 8%. You can lead a horse to water...

Pat Dimmitt over at the NAEA site in February commented that the rules remain in proposed form and therefore sticks with a previous opinion:

for Federal--from IRS tax topic no. 602: Facts and circumstances...

I wonder if dentists and veterinarians have these kind of discussions? They don't hesitate to raise their prices--maybe they don't hear the kind of feedback we get from our clients?

IMO, changing software should only be done as a necessity (i.e. the program being discontinued) unless you are prepared to put in a large amount of work. Drake just looked around and saw what others were charging for what they offered. A robust program is going to be fairly pricey but you'll need it for recreating returns and when you get into the weeds. Less expensive (like OLT) will work great for 85-90% of your clients but...the other 10-15% are probably your best paying clients. I also found when I tried them that they don't reproduce returns from other programs, just creates a basic framework with name, social, etc.

Amen; I hated cleaning up Turbotax returns with a passion. And I inherited one client who only wanted me to review his work in Turbotax for a nominal fee--I did it once (the 1116 was a total mess) and when he came back next year I doubled the price. Thankfully that was the last I saw of him. But funny how proud he was of his work, I think he just wanted me to congratulate him.

if you use the Foreign income worksheet instead of a 1099-R worksheet, should be able to e-file

maybe file 8821's for all those clients and wait until they need representation (and that you want to represent them) for the 2848's? just a suggestion

Florida's Sunshine laws make it easy for us (and crooks), company EIN's are public record. Convenient when I need a daycare tax i.d. number, but I don't what to say when the IRS says we are supposed to protect our EIN's.

When refunds do not match calculated amounts, correspondence will follow. Unfortunately for us, the money arrives before the explanation.

I had a (former) client who I hadn't heard from in 4 years text me at 6:00 pm Friday asking me to do a trust and individual return. This was the normal pattern when they were my clients. I told them I was "pretty much" retired and to call Block Advisors. Just remembered--one summer I sent them a warning they were about to hit the 60 day mark (minimum penalties kick in). They contacted me on day 61.

obviously the income ratio should not be .94--if $5,648 was in Box A, Lines 1 and 16, you'd get the correct result. ah, kathy beat me to it

So, there's nothing wrong with the 1099-R--the custodian has no idea if the taxpayer rolled it over or not. 1099-R Worksheet--enter the data (and code) that is present. In ATX: Box 2a, below "Taxable Amount" there is another line "Rollover amount included in 2a"--that's where you handle it.

I should have said, "If a client wants us to file a zero extension for them"

If a client wants to file a zero extension, tell them to go online at irs.gov and use Direct Pay to pay something before the deadline--counts as filing an extension. If they balk...not a very good client.

just enter the amount that was rolled over at the bottom of the 1099-R worksheet, will show zero taxable on the 1040. Didn't need to be issued if it was institution to institution--but it could be correct if taxpayer moved the money themselves.

The person who set it up made a lot of money. Apparently enough to "incentivize" brokers.