Cathy

Hi KC, I went back to Pub 501 and saw what you took from the chart. However, see the footnote #2 under the "If the person is your......". Footnote #2 refers you to dependency exemption and it also states the situation with separted/divorced parents. That chart is really confusing!!!!!!!!! I also went through the interactive Filing Status tool on IRS.gov and it gave a Single filing status without claiming the child and not having the release of exemption situation. Thanks again, Cathy Jack, I understand completely! Thanks for not just screaming "Cheapskate!!!!!". :spaz:

KC, The following is also from Pub. 501 and discusses Head of Household filing status: Head of Household You may be able to file as head of household if you meet all the following requirements. You are unmarried or “considered unmarried” on the last day of the year. You paid more than half the cost of keeping up a home for the year. A “qualifying person” lived with you in the home for more than half the year (except for temporary absences, such as school). However, if the “qualifying person” is your dependent parent, he or she does not have to live with you. See Special rule for parent, later, under Qualifying Person. If you qualify to file as head of household, your tax rate usually will be lower than the rates for single or married filing separately. You will also receive a higher standard deduction than if you file as single or married filing separately. How to file. If you file as head of household, you can use either Form 1040A or Form 1040. Indicate your choice of this filing status by checking the box on line 4 of either form. Use the Head of a household column of the Tax Table or Section D of the Tax Computation Worksheet to figure your tax. <a name="en_US_2011_publink1000220780">Considered Unmarried To qualify for head of household status, you must be either unmarried or considered unmarried on the last day of the year. You are considered unmarried on the last day of the tax year if you meet all the following tests. You file a separate return (defined earlier under Joint Return After Separate Returns). You paid more than half the cost of keeping up your home for the tax year. Your spouse did not live in your home during the last 6 months of the tax year. Your spouse is considered to live in your home even if he or she is temporarily absent due to special circumstances. See Temporary absences, later. Your home was the main home of your child, stepchild, or foster child for more than half the year. (See Home of qualifying person, later, for rules applying to a child's birth, death, or temporary absence during the year.) You must be able to claim an exemption for the child. However, you meet this test if you cannot claim the exemption only because the noncustodial parent can claim the child using the rules described later in Children of divorced or separated parents or parents who live apart under Qualifying Child or in Support Test for Children of Divorced or Separated Parents or Parents Who Live Apart under Qualifying Relative. The general rules for claiming an exemption for a dependent are explained later under Exemptions for Dependents . Years ago, I was able to amend three years tax returns for a 70 year old client and changed her status from Single to Head of Household as she had a 35 year old daughter living with her. The mother provided the home and all costs associated with it. The daughter made approximately $35,000 per year but and did not contribute to the household bills as she had a very serious medical condition (she wasn't disabled, however) and large medical bills to pay. The mother got hefty refunds for those three years and the next 4 years or so until they changed the rules.....The parent now MUST claim her child as a dependent in order to qualify for HOH (with the exception, of course, for a parent who released the exemption to the other parent....that parent can still claim Head of Household in addition to Child Care and the Earned Income Credit). I called and cancelled last night after I found another error a couple of pages later. The material dealt with 2011 returns, however, the company still had the $3,650 listed for 2011 in regard to the gross income test rather than $3,700. I just received a call from the owner and he told me he has already mailed my "book". It must be neat to have a post office open on Sunday morning! As soon as I get the book back to him, I'll get a refund. Like I sometimes tell my clients: "You get what you pay for!" Take care, Cathy

Saw a "good deal" for my 15 hours, however, after the first 5 minutes, I think I wasted my money. Here is what is said about claiming Head of Household: Unmarried Head of Household -- To qualify as a head of household, a taxpayer must meet the following four conditions: 1. The taxpayer is (a) unmarried and ( b ) provides a home for a certain other person(s). 2. The taxpayer provided over half the cost of keeping up a home that was the main home for the entire tax year for the taxpayer’s parent(s) whom the taxpayer can claim as a dependent(s). The parent(s) did not have to reside in the taxpayer’s home. 3. The taxpayer paid over half the cost of keeping up a home in which the taxpayer resides and in which one of the following also resided for more than half of the year: a. The taxpayer’s unmarried child, adopted child, grandchild, greatgrandchild, (etc.), or stepchild. It does not matter what age the child was, and the child does not have to qualify as a dependent of the taxpayer. b. The taxpayer’s married child; this child must be a dependent of the taxpayer (under most circumstances). c. The taxpayer’s foster child; this child must be a dependent of the taxpayer. d. Any other relative the taxpayer can claim as a dependent. 4. A married taxpayer who lives apart from his/her spouse can claim head of household status if: a. The taxpayer lived apart from his/her spouse for the last six (6) months of the tax year. b. The taxpayer files a separate tax return from his/her spouse. c. The taxpayer paid over 50% of the cost of maintaining his/her home for the tax year. d. The taxpayer’s home was the main home of the taxpayer’s child, adopted child, stepchild, or foster child for more than half of the tax year, and, the taxpayer claims such a child as a dependent. Someone, please tell me I'm not nuts already before the new season even starts! The part above in red was changed several years ago. Now, in order for a parent to claim head of household with just a child involved, the parent must claim the dependent child unless they sign the wavier for the other parent (IF that is the situation) to claim the child as a dependent. If no other parent is involved, yada yada, the parent MUST claim the child as a dependent in order to claim head of household, right? Thanks, Cathy

I'm so very sorry KC. Know that we are here for you! We all love you and may you feel our love especially over the next coming days, weeks and months. Also know that Don's spirit will be with you. I lost my husband of 40 years, 2 years ago this month. I felt his presence daily until recently when I found out he had not been faithful during our marriage. I kicked him out of the house by yelling and telling him to leave me alone. I don't mean to try to be funny at a time like this...I just want you to know you won't be imagining things. Yes, things will fly out of closed cabinets, solid objects will suddenly fall off of shelves, and they will happen when you need him the most! It will be his way of letting you know you aren't alone. Accept the things that happen and know that's his way of telling you in essence, he's still here for you! May God bless you as you have blessed us so often by being here for us. My thoughts and prayers are with you.

The "sol" doesn't expire until 12-31-13 for 2009 returns, 12-31-14 for 2010 returns and 12-31-15 for 2011 returns so have no fear that my clients will receive their refunds with interest if they are found to be legitimate. I wouldn't change a thing in my research and the many times I communicated with state officials if I had to face another issue as bazaar as this credit. I turn away clients with attitudes such as yours. My clients take pride in the fact that they know their returns are prepared according to the tax codes. I also take pride every time I hear those words from them and the new clients that are referred to me each year. There is much more to this issue that has not been made public as of yet and I'm not at liberty to disclose everything I know at the present time.

Hi Battue, Below is the latest I have from the DOR sent to me by my district's Senator. However, in all honesty, if you were a client of mine, I sincerely would advise you to continue to hold on to your refund. Again, this is the most bazaar issue I've been faced with in my 40 years of tax preparation. The Society of Louisiana CPA's has a meeting with Ms. Smith this Thursday to further discuss the credit issue. My feelings are this: Public funds cannot be given away....period, no ifs ands or buts about it! If the credits are legit, then they MUST be given to all that qualifies. If not, then those issued in error should be recalled. Sorry, but I have an ethical responsibility as a tax preparer. Whichever, good luck! Take care, Cathy Good afternoon. Acting Secretary of Revenue Jane Smith wants every LDR employee to be informed about the status of the Alternative Fuel Tax Credit: ·On June 14, 2012, Governor Bobby Jindal rescinded an LDR emergency rule regarding alternative fuel tax credits (La. R.S. 47:6035). LDR has begun the rule making process to determine the proper scope of this tax credit. ·LDR will honor any refunds already paid. ·We will grant refund requests postmarked on or before June 14, 2012, the date the emergency rule was rescinded. ·We will be able to address questions about future claims after we complete a thorough rule-making process. This information is to be used in response to any constituent inquiry regarding the tax credit. Any inquiry from a reporter or news outlet must be referred directly to the Public Affairs Division: ·Press Secretary Byron Henderson – [email protected]; or ·Public Information Officer Jeff Duhe – [email protected] Thanks, BH Byron Henderson Press Secretary Louisiana Department of Revenue 219-2700 Ext. 2156 [email protected]

lynnjacobs, on 17 June 2012 - 08:37 PM, said: Cathy, do you know if this will also repeal the credit for hybrid vehicles, such as the Toyota Prius hybrid? Thanks, Lynn Hi Lynn, I recently rented a Toyota Prius hybrid and I would think the hybrid would definitely qualify for the credit as it's not designed to run on gasoline alone. The gasoline motor kicks in just to charge up the batteries. It would be senseless to buy a Prius and then run it 100% on gasoline even if it could be done. The Toyota Prius at one time qualified for the Federal credit and I believe it is this type of vehicle, as well as plug-in electric and vehicles such as trucks converted to run on propane and/or natural gas that qualifies for the State credit. The pickup in the Prius is awesome! Without hearing the roaring of a motor running, I found myself going over 100 mph on several occasions! Only flaw with a Prius is that it's very uncomfortable for someone with a bad back. We had to trade the Prius in for an Equinox after we had it for two days. If I remember correctly, we used 10 gallons of gas and that was from Las Vegas to Carson City, Reno, then Lake Tahoe and back (over 1200 miles).

That remains to be seen. On one hand, the State can't give away public funds and this is basically what the DOR did as it stands today. On the other hand, who knows? Wish I could be of more help...just glad my clients aren't faced with your situation, however, it sounds like you didn't spend your refund. I would imagine silence will be your and the others best bet.....just keep the refund in an interest bearing account and sit back and wait. Cathy

See the link below: http://www.wbrz.com/news/revenue-secretary-resigns-after-tax-credit-controversy/ No wonder the Policy Division attorney wouldn't send me the letter she promised me that would state the refunds would not be recalled, etc.... Sorry if this effects some refunds, however, I didn't want my clients to receive the refund only to have to pay it back. Cathy

Erick, The new law is 10% of the purchase price (not including sales taxes or rebates) with a maximum credit of $3,000. The 20% of 10% (or 2%) was part of the old law that was repealed and replaced in 2009 by the new law (R.S. 47:6025). I still can't understand the use of the "20% of 10%" in the old law rather than 2%. I still haven't received the promissed letter from the DOR although I did get another letter from the Governor's office Saturday that kind of sounded like their office would be looking at the situation closer. Still no letter today from DOR....my mail runs late. As the DOR's Policy Division told me I would get my letter my the end of the week, I'll try to find out what's going on. Until I get something in writing, I'm holding off on my amended returns. Take care, Cathy P.S. To clarify, if an E85 vehicle cost $30,000 and the customer received a rebate of $5,000, thus only paying $25,000 for the vehicle, the credit would be $2,500. An amount received from a trade-in does not reduce the tax credit.

Mac, I forwarded my concerns to the Governor's office and they sent me a letter stating they were forwarding them to the Department of Revenue. I told them in my correcpondence that I already had direct contact with the Policy Division in regard to what I and other tax professionals feel is a misinterpretation of the statute. The head of the Policy Division called me this morning and told me she's sending me a letter that states the refunds will not be recalled and the ruling is in effect until the legislature corrects the law. I'll send you a copy of it if you drop me an email at [email protected]. Once I get the official letter and it states what was told to me this morning, I'll start filing amended returns for my clients. She said that the only other way that could change the refunds will be if a case is filed in court and the court rules that the DOR erred in it's interpretation of the law. Even if that happens, she stated that it would not effect those refunds already issued. Cathy P.S. I don't see anyone bringing the case before the courts in this situation. Might as well enjoy the refunds as our taxes will eventually increase because of the misinterpretation! :wall:

Hi Battue, The main difference in the two of us is that you are an individual taxpayer and I am a paid tax practitioner and as such I must prepare tax returns for my clients while following Federal and Louisiana tax codes. This site is mainly tax practitioners such as I am, however, you are very welcome to comment as you wish. As a tax practitioner, there are many, many rules and regulations we must follow and preparing accurate returns is a must. The Department of Revenue issued a Declaration of Emergency in regard to the Alternative Fuel Vehicles. The Declaration of Emergency was not very clear as one could interpret it to mean Flex Fuel vehicles qualify for the credit and also that these vehicles do not qualify for the credit. In fact, after reading it several times, I felt the Department had not really taken an official stand on the matter. I then spoke with the head of the Policy Division. The next day, she issued the Bulletins and the first two questions listed in the bulletin were pretty much taken word for word from me. The problem I see (as a paid tax pratictitioner) with the bulletins is the following note found at the bottom of each page of each bulletin: A Revenue Information Bulletin (RIB) is issued under the authority of LAC 61:III.101(D). A RIB is an informal statement of information issued for the public and employees that is general in nature. A RIB does not have the force and effect of law and is not binding on the public or the Department. So, you see Battue, as a tax practitioner, I have the copy of R.S. 47:6035 (the law) that defines "Qualified clean-burning motor vehicle fuel property" as follows: (3) "Qualified clean-burning motor vehicle fuel property" shall mean equipment necessary for a motor vehicle to operate on an alternative fuel and shall not include equipment necessary for operation of a motor vehicle on gasoline or diesel. In other words, when a definition appears in a law, much attention needs to be paid to it. With the word "and" in the above, you take out the first part of the definition and read as "Qualified clean-burning motor vehicle fuel property shall not include equipment necessary for operation of a motor vehicle on gasoline or diesel. Also, Battue, as a tax practitioner, I have a Declaration of Emergency that is not clear as to the interpretation of the law itself, and I also have two bulletins from the Department of Revenue. I might add that the bulletins are the ONLY documents issued from the DOR that directly stated the Flex Fuel vehicles qualify, however, that "A RIB does not have the force and effect of law and is not binding on the public or the Department" appears on the bottom of each page. Therefore, I do not consider the Bulletins as the proof I need in order to be able to file the many amended returns for my clients. I saw the agony you went through when you were told you had to repay the credit and I don't want my clients to have to suffer that same agony. As to my $62,000,000 estimation, there are over 8,000,000 of these vehicles on the road today with over 1,000,000 sold in 2009 alone....so yes, my calculations while are not based on rocket science, however, the fact that "most people never heard of this credit" I feel sure will change in the very near future. Dealerships for one have a way of spreading the word as so does the internet, barber shops, people cashing the debit cards at the banks, etc... Trust me, Battue, I'm not trying to "hurt" you or any other taxpayer. I'm just a tax professional doing my job for my clients. It isn't the best or easiest job by any means, but "somebody's got to do it"! I have a letter ready to send out to my clients IF and WHEN I get confirmation that the credit is legit after considering everything I've discovered in my research. I was shocked when I opened my gas tank flap on my Equinox I bought a couple of weeks ago and found the yellow E85 gas cap. I'd like the credit also....but I want to know that I won't have to pay it back if I get it. Take care, Cathy

Thanks so much! Your check is in the mail! :D

Thanks Mac and Tax2012, Just up to update you a bit, I talked with my rep's office yesterday and he wants to research the situation and wait until next session to close the loophole, if there is one. He's not a first-termer but still young to the office. To get the monkey off my back, I then contacted the Actuary with the Legislative Fiscal Office...the one who actually did the feasibility study and told her she now has the monkey. I also contacted the Governor's office after researching how many Flex Fuel vehicles were sold in the U.S. in 2009 and estimated rather than costing Louisiana a total of $907,000 as was in the study for a 5 year period, it's very possible that the State could be looking at approximately $62,000,000 alone for 2009, and more each year after that as more and more of these vehicles are being sold each year. I think I got their attention. As the Secretary of the Department of Revenue is a political position appointed by the Governor, I feel the Governor's office can quickly find out if it is a misinterpretaton and interact with the Department quicker and better, of course, than I can. My clients who have contacted me are all in the same mindset and are being very patient. So far, none of my clients want to file for the refund if they may have to pay it back at a later date. If the Governor's office advises me that DOR's interpretation is correct and the refunds are legit, then I'll file the amended returns. None of them want to go through what other taxpayers have gone through already with receiving the refunds then getting stern letters from the Collection Department telling them they must repay the refunds with interest. Even though those letters have been recalled, I won't be able to sleep well at night until I know for sure my clients will be able to keep their refunds....neither do my clients want that scenario either. Both offices have advised me they will get back with me as soon as possible. I'll post what I find out. You're right, Tax2012, I have done all I can do. It's time for those two other offices to take over from here. Last night I slept like a baby....finally! Again, thanks to both of you! Your posts meant a lot to me! Take care, Cathy

Don't worry about calling 911! My son's a fireman and they'd much rather a family member call them than injure themselves trying to do it alone. Next thing, KC, is for you to take care of yourself so you can take care of your husband. It's very, very important for a caregiver to arrange time (on a continual basis) to take care of yourself...be it a 24 hour break or whatever time you can arrange....your batteries have to be recharged which in turn will benefit both of you! Please know that you and your husband will be in my thoughts and prayers. Take care (usually say this...but I really mean for you to "take care of YOURSELF), Cathy

Lynn, The original interpretation of the date vehicles can be purchased to qualify for the credit really has me concerned about the interpretation that the Flex Fuel vhicles even qualify for the credit. Thursday, I dropped off copies of all correspondence, laws, bulletins, etc.. to my local representative's office. I asked his office to get another legal opinion from the legislature's legal department. I have to be 1000% sure these refunds aren't going to be recalled before I file amended returns for my clients. The feasibility study for Act 469 estimated a total of 302 vehicles would receive the credit over a 5 year period which is aproximately 60 vehicles per year. I have at least 60 amended returns to file myself if the E85 vehicles qualify. I will have to make a scene at the DOR if my clients are told later to repay the credit, and I just want to avoid a scene if at all possible. In my younger days I would have gone for it before another legal confirmation. :wacko:

Battue, Congratulations! :)

FANTASTIC! Your son found the best way to get "high"! Congratulations to the BOTH of you! ;)

Battue, If you have an easy access to a printer, print out the bulletin, then highlight the area that pertains to your situation and attach a copy of the bulletin to your collection letter, then write the following on the front of the collection letter: In accordance with the attached copy of Revenue Information Bulletin No. 12-205, please credit my account accordingly. I was told by your office on May 3, 2012, that this could not be done. Please discuss this matter with the Secretary of the Department of Revenue, Cynthia Bridges, who signed this bulletin. I expect a prompt reply from your office indicating a -0- balance. Thank you. (and then sign your name) Send the above Certified Mail, Return Receipt Requested. Ok...I got that off my chest......or you could give it a couple of days for word to get to the Collection Department and call again next week. It was late yesterday afternoon (5:30 pm...after hours) that the head attorney with the Policy Division called me and in our conversation she told me that she hoped to have a bulletin issued with questions and answers in a couple of weeks. Evidently, she continued to work last night after we got off the phone and got the bulletin written up, signed and posted before everyone at the DOR was informed about it. Whichever way you handle it, let me know if you can't get it resolved, and I'll be glad to let the Policy Division head attorney know what's going on! She messed up when she gave me her name! :spaz:

The purchase date of the vehicles will be changed. See the reply to my inquiry below. Dear Cathy, Thank you for your inquiry below. The RIB and the statute was reviewed and it was found that the July 9, 2009 date in the RIB was incorrect. In short, the credit can be taken on a qualified flex fuel vehicle that was purchased by the taxpayer on and after January 1, 2009. A new RIB which corrects the date has been prepared and sent to LDR’s IT division to be posted to our website. Hopefully, the new RIB will be posted no later than tomorrow by noon. Thank you so much for your patience and the information below. Thanks, Policy Services Division

I've just made copies of many items relating to the credit and am on my way to drop them off at my local Representative's office. I'm just really concerned now about the intrepretation of the law itself after I discovered the purchase date of the vehicles was misinterpreted. Possibly we can get another legal opinion from the legislative legal department in regard to the E85 vehicles. I just hate the thought of my clients receiving the $3,000 refunds and having to pay them back eventually. I'm just bull headed enough to fight to the bitter end if I am convinced that this credit is legit and then the state asks for it back. I'm just not 100% convinced as of yet. Unfortunately, I'm a capricorn and am a stickler for details. Why wasn't I born in the spring time? My life would be so much easier! Take care everyone and again, I will post what I find out. Cathy

OK guys, we have a new bulletin: http://www.rev.state.la.us/forms/lawspolicies/RIB%2012-025.pdf I've emailed the department again as the effective date of purchase of these vehicles as printed in the bulletin doesn't agree with the actual act that was passed by the legislature. The act stated vehicles purchased on or after January 1, 2009.....the bulletin has July 9, 2009....big difference for some taxpayers. I'll post what I find out.

Just wanted to add the following copy of my email correspondence I received yesterday from the Policy Services Division after I clicked on the link to ask questions about the Declaration of Emergency as stated in their email informing subscribers about the Declaration. The webmaster forwarded my letter to the Policy Services Division which is the legal department with DOR. Their response to my question is first and then my email to them is below their response. I woke up this morning again with a sick feeling about this situation. I'll drop off the info with my local representative before I file any amended returns and hopefully get a legal opinion from the legislative division. I honestly still don't agree with the DOR's opinion and would hate to see my clients spend the refund and have to pay it back eventually. I just want to double check...so my conscious will be clear when I file the amendments. Dear Cathy, The statute does not preclude or prohibit flex fuel vehicles from qualifying for the credit. Further, the rule creates a rebuttable presumption that if a flex fuel vehicle is listed on the website of the Department of Energy, then the vehicle is one that meets the standards set forth in the statute and thereby qualifies it for the credit. Thanks, Policy Services Division -----Original Message----- From: Website Technical Questions Sent: Wednesday, May 02, 2012 7:41 AM To: Louisiana Tax Policy Subject: FW: Meaning of Emergency Ruling -----Original Message----- From: Cathy [mailto:[email protected]] Sent: Wednesday, May 02, 2012 12:24 AM To: Website Technical Questions Subject: Meaning of Emergency Ruling As.a tax practitioner of 39 years, I am even more confused with the Emergency Ruling in regard to the Alternative Fuel Tax Credit. There are many more practitioners in Louisiana like me. In Part I, paragraph B, the following appears: "The credit is also available when a taxpayer purchases a vehicle that its original and only use is to operate on an alternative fuel." I understand this sentence to mean that Flex Fuel Vehicles don't qualify for the credit. However, the following phrase is used when describing the list of Alternative Fuel Vehicles by the Department of Energy"........"rebuttable presumption". I, along with many others need a straight forward reply to our question. Do E85 Flex Fuel Vehicles qualify for the credit? Thanks! Cathy Dauthier

Battue, Congratulations! You can now tell the Collections Department where to put their "tax due notice". Take care, Cathy Lynn, To see if your vehicle in question is eligible for the credit google search the following: Model Year (fill in the blank): Alternative Fuel Vehicles and Advanced Technology Vehicles After you search as above, open the file from the Department of Energy. If the vehicle is included on their list for the particular year in question, then the vehicle qualifies for the credit. I can be reached at my Office and Home (225) 627-5140 or my cell at (225) 718-1308 unless I have passed away due to the stress of this mess! :spaz:

LATEST UPDATE AS OF 6:00 PM 5/2/12....YOU'RE NOT GOING TO BELIEVE THIS BUT IT'S THE TRUTH, AND NO, I AM NOT CERTIFIABLE CRAZY...ALMOST BUT NOT YET! Ok folks, It is now official as official can get. I just received a phone call from the head of the legal department with the Louisiana Department of Revenue. E85 Flex Fuel vehicles definitely qualify for the credit. File those amended returns! The legal department was in between a rock and a hard place as the intent of the original bill was not what was passed by the legislature, however, I have personally seen on other occasions where legislators purposely change a law by adding or deleting a word which in turn changes the original intent of the law...in other words, the actual law that was voted on by the legislature ended up not being what the original author had intended. The legal department from what I was told normally takes 90 days to formulate a Declaration of Emergency, however, in this case where there were so many calls and questions, the rush to issue the Declaration "probably" included misinformation such as the second sentence in Part I, Paragraph B. I for one have been rather harsh in regard to the department's actions/inactions on this particular credit. In retrospect, and especially since I have witnessed "slip it in at the last minute and no one will notice" mentality of some of the legislators, no wonder the situation has been a fiasco and a nightmare for tax practitioners. In this instance, I fault the legislators rather than the department. It's time to stop the games and get to work. It remains to be seen how much this will cost the State of Louisiana, but hopefully it will be a good lesson to be learned for the legislators. I now have to get busy sending out letters to my clients. Ya'll have a wonderful time enjoying the $3,000 refunds. Maybe we can all meet up at Disney World, courtesy of the Louisiana Legislature to celebrate!