Lion EA

Issue Number: IR-2020-107 Inside This Issue IRS announces Form 1040-X electronic filing options coming this summer; major milestone reached for electronic returns WASHINGTON- The Internal Revenue Service announced today that later this summer taxpayers will for the first time be able to file their Form 1040-X, Amended U.S Individual Income Tax Return, electronically using available tax software products. Making the 1040-X an electronically filed form has been a goal of the IRS for a number of years. It’s also been an ongoing request from the nation’s tax professional community and has been a continuing recommendation from the Internal Revenue Service Advisory Council (IRSAC) and Electronic Tax Administration Advisory Committee (ETAAC). Currently, taxpayers must mail a completed Form 1040-X to the IRS for processing. The new electronic option allows the IRS to receive amended returns faster while minimizing errors normally associated with manually completing the form. “This new process is a major milestone for the IRS, and it follows hard work by people across the agency,” said IRS Commissioner Chuck Rettig. “E-filing has been one of the great success stories of the IRS, and more than 90 percent of taxpayers use it routinely. But the big hurdle that’s been remaining for years is to convert amended returns into this electronic process. Our teams have worked diligently to overcome the unique challenges related to the 1040-X, and we look forward to offering this new service this summer.” About 3 million Forms 1040-X are filed by taxpayers each year. The new electronic filing option will provide the IRS with more complete and accurate data in an easily readable format to enable customer service representatives to answer taxpayers’ questions. Taxpayers can still use the "Where's My Amended Return?" online tool to check the status of their electronically-filed 1040-X. When the electronic filing option becomes available, only tax year 2019 Forms 1040 and 1040-SR returns can be amended electronically. In general, taxpayers will still have the option to submit a paper version of the Form 1040-X and should follow the instructions for preparing and submitting the paper form. Additional enhancements are planned for the future. “Adding amended returns to the electronic family also complements our partnership with the tax software industry, which continues to work with us to provide better ways to help taxpayers,” said Ken Corbin, Commissioner of the IRS Wage and Investment division. If you know someone who might want to subscribe to this mailing list, please forward this message to them so they can subscribe. This message was distributed automatically from the mailing list IRS Newswire. Please Do Not Reply To This Message. Update your subscriptions, modify your password or email address, or stop subscriptions at any time on your Subscriber Preferences Page. You will need to use your email address to log in. If you have questions or problems with the subscription service, please contact subscriberhelp.govdelivery.com. This service is provided to you at no charge by the Internal Revenue Service (IRS).

Do you recommend any transcriptions apps? Are they expensive?

I too am thankful for the new 15 July deadline, because my tax preparation is no where near what it would be by a normal 15 April. I'm still going to have lots of extensions. I love the clients who call to ask if I filed their returns yet when I'm waiting on them to give me the list of information needed that I emailed two weeks ago. No, when you give me your W-2 and NY driver's license and answer the virtual currency question and give me details on the $6,000 you gave to charity and confirm your banking information and..., I'll complete your returns and send them to you for signatures.

Or, the nonclient (friend, church acquaintance, relative of client, etc.) who wants your opinion because they think their tax professional gypped them out of deductions by failing to file Schedule A -- when the standard deduction was much higher than their itemized deductions or the SALT limit lowered their deductions or... My daughter's teenage friends each received $1,200 so now my daughter's mad at me for claiming her. Please amend my return. When will I get my stimulus check? What will be my capital gain rate for 2020? I often let my phone go to voice mail, because I encourage email so I have a savable trail. That meant I'd answer emails fast. Now, I'm letting many wait until I'm done for the night or until the next business morning (even if I'm sitting here on non-business days).

If her parents do not claim the student as a dependent, the student can claim the AOL but NOT the refundable part (also would NOT claim her own exemption when her parents qualify to claim her but do not). If the student qualifies to claim her own exemption (pays more than 50% of her own support, etc.) then she can use all the AOC including the refundable part when she claims her own exemption.

Get copies of prior year trust returns. Ask why they are not using the trust's prior preparer.

If it is a type of grantor trust, the transactions appear on the grantor's income tax return. For most types of trusts, the trust files Form 1041 and the state equivalent. Read the trust document and the IRS letter assigning an EIN, if any. You might need a conference call with your client and the lawyer who set up the trust. I have never worked with a "settlement trust." Don't forget to look at state law, too.

What type of trust? Are you saying she's the owner because it's a grantor trust? Get a copy of the trust document to start.

I was suspicious and wanted to see what you folks knew before I passed it along to my client, in whose biz name it came to my email on his biz site. I would've deleted it at least until, or IF, I received a snail mail. The client I passed it along to will almost certainly delete it.

Thanx, Max.

Thank you, Elrod.

I received an email request on behalf of one of my clients. I haven't seen this before for a business. It's not that elaborate, intrusive business census that I've seen lots of short versions, including for my own SMLLC, and a couple of long versions for clients. Received this morning and due 28 May. Have any of you seen this email? Is it legit? SMALL BUSINESS PULSE SURVEY A MESSAGE FROM THE DIRECTOR, U.S. CENSUS BUREAU: As businesses and our nation collectively adapt to meet unprecedented challenges posed by Coronavirus (COVID-19), the U.S. Census Bureau is committed to producing critical information to measure the impacts to the economy and people of the United States. To better understand the needs of the many small businesses, we are reaching out to take our nation's economic pulse. Your answers can guide decisions made by federal officials and policymakers targeting aid, assessing programs' effectiveness, and facilitating America's economic recovery. This is a short survey with 16 checkbox questions that should take 5 minutes or less to complete. The survey will assess your business' activities in the last week and since the start of the COVID-19 pandemic. Please use the following information to respond to the Small Business Pulse Survey: [then login info]

Yes, The CARES Act just says that when reconciling the EIP on 2020 returns in 2021 that the 2020 EIP credit would be reduced by advance payments, but not below zero.

https://www.irs.gov/coronavirus/economic-impact-payment-information-center FAQ 54 But, I don't know if the IRS will issue new checks after the returned check. Worst case, she gets the EIP credit on her 2020 return filed in 2021.

I was going to have my very, very part-time employee help me box up old files when she was due to come just before everything shut down. I'd bought a bunch of bankers boxes. But, even though this was before the stay-at-home suggestions and even though I have a home office so knew how it would be cleaned, before and after, I was uncomfortable having anyone come into my home. And, she was relieved when I postponed her work. (I paid her.) So, I'd been piling current files on top of my file cabinets as I used/referred to the files, because the cabinets were too stuffed and I expected to box up the no longer needed files way back in March. I'm continuing to pile files for current clients on top, in alphabetical order, but tall piles that I'm afraid will slide to the floor and spill their contents! When I get through 2019 returns, I'll box up the old folders to empty out my file cabinets and refile my current clients. Current files are mostly thin folders; although, many long-term clients still have paper I've not scanned. I have two small, matching wooden cabinets (sturdy and attractive, but bought at a good price on Craig's list) and refuse to add more paper than they can hold. I'm looking forward to that shredding truck!

The FAQs say return $1,200. The CARES Act says keep it. I'm telling clients to wait for potential clarification; hold it; don't spend it. Read the recently updated (6 May) FAQ 10 and 54 (11 May) and make up your own mind. We're all just guessing at this point. https://www.irs.gov/coronavirus/economic-impact-payment-information-center

Remember that these are just FAQs and not law. I've been suggesting to people to just wait a bit (don't cash or don't spend) for potential clarification. BofA called my biggest biz client early on to urge him to apply for a PPP loan. This client's biz is NOT touched by COVID-19 at all. He got the money. Forgiveness will be an issue (he'll fuss at me) because it looks like employee-shareholders do NOT get the healthcare and retirement matches added, only for non-shareholder employees. I'm hoping for clarification. And, hoping I do NOT have to be the messenger. One of my clients keeps writing me that she heard/the IRS says that she should get a stimulus check because she's on SS; when will her check come? She's on SS but also gets a NYC teacher's pension and a CT teacher's pension and still taught the first half of 2019, so she made way too much in 2019 (and even more in 2018) to get an EIP. I keep telling her. I copied her on some info from IRS.com, and it was ambiguous about SS recipients getting an EIP direct deposited. (I added a phrase before emailing her the copied text !!) I spend half of each day, sometimes more, communicating to clients, answering questions, and taking webinars. I enjoy the learning but want to prepare tax returns. But, all my clients are long-time clients and families/friends of clients, and I always take care of them to the best of my ability and knowledge. This year is stretching my knowledge far from just tax. And, the questions about unemployment !! I don't even know how to navigate the CT system for a SE or a partner, let alone NY and PA and.... I have no idea when their benefits will start or how much they'll get or whether the $600 will show up at the same time. I really want to return to answering TAX questions and preparing tax returns, but I foresee a bunch of Forgiveness Applications in my future plus more questions I can't answer. Let's start a pool re how many FAQs there will be re the Forgiveness Application. I guess 44.

It seems the interpretation is paid OR incurred. You can count the first paid payroll in your eight-week window, even if the workdays preceded the date your PPP funded, as long as the pay date is after funding. And, you can count workdays preceding your end date, as long as they are paid by the next regularly-scheduled pay date, even if after your end date. At least, that's what they were saying yesterday in a webinar. The webinar I'll attend Friday might give new clarifications!

Tell your client that shareholders who provide services to the S-corporation ARE employees and need to be on payroll.

Do any or all of the partnership operating agreements specify what method to use when a partner joins or leaves that partnership?

Five out of the last six returns I e-filed had the IND-162 message. Not all six. Nothing older than 3 May. All say Form: Code: IND-162 Taxing Authority: Federal Explanation: Thank you for using e-File. Dependent Information: /efile:Return/efile:ReturnHeader/efile:Filer/efile:PrimarySSN Solution: This is an informational alert issued by the IRS.

Me, too. When the postponement was announced, I started getting an extra hour of sleep and not working on Sundays. (Can't sprint long distances.) But, then the calls started coming in for information, advice, financials, and help finding things I didn't prepare, such as their payroll reports. That led to me taking a LOT of webinars to get up to speed on these non-tax credits/loans/etc. And, that information continues to change, be clarified, get reinterpreted, revised, as well as we just don't know yet. I'm not quite where I usually am 15 April. Still a small stack that were in-house when I started taking webinars and answering non-tax questions, questions and education that I would've postponed until after tax season. But, in our current upside-down world, those non-tax issues became more time-sensitive than tax returns. Longer tax season, but thank goodness a later deadline, because I'm not caught up yet.

If it's your own business, you set your own hours, closing date, criteria for accepting clients, etc. Why would it matter to you if a different preparer works until 15 July or 15 October or year-round or only until 15 April or doesn't open up until February each year or takes Fridays off or golfs every morning or anything else? You don't have to do any of those things. Or, you can do bookkeeping or sell insurance or sell securities or paint houses or vacation or babysit the grandkids or read or anything else to earn money &/or enjoy life. Even if you work for someone else, you can negotiate your needs or quit or find a different employer or go out on your own or retire. Keep Calm & Carry On in your own way!

Exactly, a Mnuchin quote and a couple of FAQs are not substantial authority and are likely to change, as we've seen all along. As you say, they're making it up as they go along. Wait. Our widow and widower clients need these payments. Don't rush to return them until we know more.

We don't have substantial authority yet. Tell your client to hold the payment/not spend it all and wait until you have further guidance for him.