BulldogTom

Why do you think you will lose the client? You have considered their tax situation and have applied the law as you see it should be applied. If your clients are not satisfied with the results of your analysis (which I think is right on by the way) shouldn't they fire the writers of the law and not the preparer of the return. If they want to blame you for the result they got, you are better off without them. Explain that you cannot make foster child fly on a federal return. It just does not fit the federal definition. But the taxpayer does get to claim the dependency exemption based on qualifying relative. Tom Lodi, CA

I like KC's approach to this. Let the trust or estate take the refund into cash and then distribute it to the beneficiaries. Clean. Tom Lodi, CA

How interesting. How long have you had these clients Margaret? Are they new to you? This is kinda fascinating to me. I don't know what state you are in, so I won't assume that I know anything about your state's laws concerning a child/parent or child/foster parent relationship. It seems to me though that a parent gets custody and the custody is permanent unless changed by the court. And it seems to me that a foster parent gets guardianship and it is a temporary arrangement until changed by the court. Now here comes your client. One is clearly the parent and has custody of the child. That person is granted all the benefits of the tax law related to children by right of birthing the child. No question about that. The other member of the household is trying to also gain those benefits of parenthood for the same child. But this taxpayer wants to go the fosterchild route. If in fact the court has granted the other spouse "joint custody" of the child, then it would seem to me that the child is hers just as any other child who a court has deemed to be a custodial parent. If the court in fact did this, the child is a child of the second taxpayer. But the taxpayer is not saying that, now is she? She is saying that this child is her foster child. HMMMMMMMMMMMMmmmmmmm - something does not add up. I know for sure that if I was in a relationship and I wanted to know the status of my partner's child in relation to me, I would has someone spell it out pretty plain. And I am not talking about a measly $1000 tax credit. If I went to all the trouble to go to court, I would surely understand what rights and responsibilities that I came out of court with. Hmmmmmmmmmm - Just not sure about this one. Tom Lodi, CA

That is the way I understand it. No double dipping. I am certain it works that way for the Solar, Wind and Geothermal credit. Tom Lodi, CA

OK, so now I am confused. So no one paid him anything during the year? It was only SS, Veterans, and RR beneficiaries that got the 250 payment? Is this is what is going on? Then, if you are a retiree and you don't earn enough to qualify for the $400, you can get $250 on your return? But if you make enough, you get the 400, or if your spouse works and makes enough, you get the $800? Holy crap. This should not be this freaking hard. Tom Lodi, CA

I think a single number is a little tough. I used to use ProSeries but I dumped them for ATX. I loved the software, but customer support was non-existent and the price was outrageous. So I would give them a 9 for the software, 2 for support, and 5 for pricing. ATX on the other hand is a good solid product, but support is lacking in the last 2 years (CCH buyout). But for the money, you get a lot of value. So I would rate ATX a 7 for software, a 5 for support, and a 9 for pricing or value. Tom Fresno, CA

Client is retired from CHP. The Sch M says if you are retired from US Govt or state job where your earnings were not subject to SS tax, you should have gotten the 250. But from who? I asked the client if he got the money and I got the typical "I don't know" answer. Then he asked who he should call to find out. I suggested he look at his bank statements. But the question is a good one. Who is supposed to be making the $250 payments to retirees? Anyone know? Tom Fresno, CA

Dang, that global warming is sure cooling things down. Kinda inconvenient for Mr. Gore. Lets see, two years ago it was going to be so hot everything melted, and that was because of global warming. Now, it is snowing record amounts and it is because of global warming. It amazes me how people don't realize that God has designed this planet to fix itself. When it gets too hot, it cools itself off. But the scientist can't believe in God, so they try to act like they are gods. OK - off my soapbox. Sorry KC, you can scold me for my religious posts later. Tom Fresno, CA

Okay - I went back and re-read your post and you did say that, but I did not read it that way at first. You are becoming like Jainen. You are such a wannabee. ;0) Tom Lodi, CA

Pacun - you are partially correct. If the two spouses are eligible to file a joint return and file separately and one spouse itemizes, the other spouse can choose to take the standard deduction, but the amount of the standard deduction amount is zero for the spouse that did not itemize. §63 If one of the spouses qualifies to file as head of household, then the IRS has ruled in a Service Center Advice that the rule above may not apply. Tom Lodi, CA

I had 7 on fee collect that I thought would come in today. Only 4 actually did. the other 3 had EIC. That is the only thing they had in common. Tom Lodi, CA

Thanks all. Such a simple question and it is not addressed in the 1345 handbook. The kid made about 25oo and had 200 in withholding. I just wasn't sure if it would reject as his SSN was on another return. Tom Lodi, CA

I can't find the answer to this anywhere on IRS.gov or in the 1345 handbook. If a dependent is claimed on parents return, but wants to file to get withholding back, can you e-file the dependents return? Will it reject for SS# used on another return? I don't think it will be a problem, but I can't find an answer. anyone know for sure? Tom Lodi, CA

Happy b-day Rita. How can a 29 year old have a teenage daughter? Tom Lodi, CA

I am not aware of any direct payments made by the IRS to any taxpayers releated to the Making Work Pay Credit. Tom Lodi, CA

Clients just left, but they are typical of my client base. Dual income, middle class, sch. A filers. Income within $300 of last year. Itemized deductions within $500. Withholding 3K less. Refund, 1900 less. Client - I can't understand why when we made the same amount we are getting a smaller refund? My answer - you got it in your check during the year. Client - but we didn't change anything My answer - the government did Client - Why? My answer - I don't know. Client - and why do I have to pay the State? My answer - Because your children were worth $309 in exemptions last year and only $98 this year. That is a $422 tax increase from last year. And there was a tax rate increase as well. Client - then why didn't they take more withholding? My answer - I don't know Client - why do I have to pay a penalty to the state? My answer - because you need to pay enough from your withholding to cover your taxes. Client - but they do the withholding. I didn't change anything. Why do I have to pay a penalty? My answer - I don't know. This is the same conversation time after time this year. It is getting old, or maybe I am just getting old. Tom Lodi, CA

OK - called into the IRS office in Fresno. Looking to make sure the IRS has the information that I sent regarding a client. After finding out that my POA was not on file (sent to Ogden UT on 2/1/10), I faxed over my original. Tax examiner was very polite and we took about 10 minutes to establish that I had standing to talk to her. No problem so far. Then I ask if they have recieved my correspondence. Her response - our correspondence program has been down since the 4th and will not be back up until Thursday the 11th. She then went on to add that the administrative staff is still waiting to get caught up on December correspondence. OK - I knew the IRS was backed up. So they are really backed up. Then we start talking about my client and the information that I sent. After explaining what I sent over in my letter and the back up documentation that was with it, I swear this is what she said. "Sir, I have a disablity that makes it hard to understand what people are telling me. Could you repeat that please?" I couldn't make this one up. I had the phone on speaker in the office and my wife nearly lost it when she heard this. I don't mean to be insensitive to those with disablities, but there are jobs you should not be doing if you cannot understand what people are saying to you, and one of them is working as a tax examiner at the IRS taking taxpayer phone calls. Tom Lodi, CA

Deb, That is what I thought, but I am looking for something in an authoritative source to confirm. I did a return this weekend and I never gave it a second thought when the software excluded the first 2400. A couple hours later, I started second guessing it. Not finding anything in print other than the standard rule for unemployment. Tom Lodi, CA

I know that CA PFL is taxable. It comes on a 1099G and the amount is in box 1 - unemployment benefits. Is CA PFL treated the same as unemployment benefits and the first 2400 is exempt from tax? If not - how do we get it to show up on the return. The software treats it like unemployment because the 1099 shows it in box 1. Can any of you point me to a source for authority on this? I am kinda brain dead today (went skiing with my boys yesterday and can hardly walk this morning). tom Lodi, CA

Good work "DUDE". It is really unfortunate that all of the IRS is not as helpful as the TA office. They should be. We are all in this to get the returns right. I know - the examination division needs to be (well - I can't say that word on this site) sometimes, but in general, there is no reason the rest of the IRS can't be as helpful. Tom Lodi, CA

Don't you know you are not allowed to have birthdays during tax season. So unprofessional. Happy Birthday my Friend Tom Lodi, CA

Found it. Code section 7701((1)(A)(i) of the Internal Revenue Code provides that an alien who is a Lawful Permanent Resident of the United States at any time during a taxable year shall be considered to be a resident alien for the entire tax year. Sweet. Tom Lodi, CA

Client is married. Spouse is a Resident Alien. Spouse did not have green card until late in 2008. Purchased home in 2009 and ammended 2008 return to claim homebuyer credit. On the 2008 return, the spouse used his ITIN number. He received his SS number in 2009. IRS has disallowed credit on 2008 1040X claiming spouse is not qualified unless he can prove he is a resident alien. I am now representing the clients in their appeal. I am looking at the code and it does not address how long during the year the spouse must be a resident alien. He was definately a resident alien at the time of the purchase in 2009 and the home was purchased in both spouses names as joint tennants. There are two ways that I see to approach this, but the code is not clear as to the timing of determining resident alien status. The code says the credit is disallowed for an person who is a non-resident alien for the tax year. I don't know if that means at any point in the tax year, or if status is measured at the end of the tax year (like marital status). If it is measured at the end of the taxable year, then the fact that he has a green card at the end of the year should be all that is needed to prove status for the appeal. If the taxpayer has to have had his green card for the entire year, we can meet the substantial presence test for 2008, but is much more difficult to document. ANOTHER POSSIBILITY I don't see where the election to claim the credit is irrevocable. Is it possible to revoke the election to amend the 2008 return and claim the credit on the 2009 timely filed return? I am just going through possible scenarios as to how to represent this client and would like some of your feedback. There is very little guidance on this credit in my research materials. Thanks for your help. Tom Lodi, CA

I think there used to be a way to split a return automatically. Am I just losing it? I know there is the MFJ v MFS comparison sheet, but is there something that will automatically create two MFS returns? Thanks in advance. Tom

Please say it isn't so. I don't want to explain to these customers next week why the bank that won't give them a Ral also screwed them out of another $11. Have you called customer service? Did anyone else get fee collect disbursements this week? Tom Lodi, CA