Missed RMDs for inherited IRA

[jainen]

>>Since Kea is not an EA or CPA, she can't rep the client in appeals.<<

That just means the client must be present in an office interview. (It also means no more phone calls, but in my opinion phone calls have already caused too much damage.) Since this case is only a question of facts, documents submitted by mail should be all that's needed IF the documents are well-presented as I described. Which so far they are not.

>>I've had good luck with audit recon for clients who've ignored CP notices all the way to the 'we are going to levy certain assets' point.<<

Certainly if that's all you have to work with, you need to play one IRS team against another in your client's interest. At least your experience shows once again that the IRS tries very hard to be fair. But "good luck" is the right choice of words here.

[Guest Taxed]

In the 90s I used to work part time during the season at a Tax Prep shop, where the owner was not a EA or CPA. But he used to routinely go WITH the client that he prepared the return to the local IRS office for examinations and may be even for appeals (not sure).

If you prepare a return and the taxpayer checks that line below 77 on 1040, and signs a POA, can you go to the examinations and appeals WITH the taxpayer.

[jklcpa]

If you prepare a return and the taxpayer checks that line below 77 on 1040, and signs a POA, can you go to the examinations and appeals WITH the taxpayer.

The third party designee checkbox is only valid for one year.

[Guest Taxed]

Good point, forgot about that!

[joanmcq]

I've actually used the checkbox a few times this year on calls regarding the current year return, AND THE IRS TALKED TO ME!!

I couldn't believe it worked.

[Guest Taxed]

All the returns that I prepare has that third party designee checked with a pin# for 1040. Unfortunately my state does not have that so i have to get a POA to deal with them.

[jklcpa]

I've actually used the checkbox a few times this year on calls regarding the current year return, AND THE IRS TALKED TO ME!!

I couldn't believe it worked.

I know, I had occasion to do this too, but I made the comment about the third party designee expiring because Taxed made mention of it being useful in an examination. This is the case with the returns being discussed in this thread, that they are more than a year past that date. By the time the notices come out, there is either a very short window where this checkbox would be helpful, or it is already beyond the one year.

[joanmcq]

Yes, mine were not for CP2000s or anything. I was just surprised when saying I had the checkbox (which I always check 'yes') and the agent respected it. Usually I'm dealing with way old years, but this year I have one client whose refund was delayed because it went through ID verify, and she still doesn't have it, even though she went through the verification process in mid-May.

[Kea]

I, too, have had success with the checkbox. I didn't even try it this time since it was over a year. But there was a 3rd party designation on the CP 2000. They seemed happy with it.

[Kea]

Client received LTR 4314C stating that they will respond in 60 days to the "correspondence received July 30, 2013." This would be the 1040X sent with the CP2000 notice. It does not mention the CP2000 or the Letter of Deficiency.

Our response and the letter of deficiency crossed paths in the mail.

Their letter says that no action needs to be taken at this time. Is that true? Do I need to call to make sure they know the CP2000 response and the letter of deficiency are related? I'm still concerned about the October 29 tax court deadline. (FWIW, I really DON'T want to go to tax court!)

[joanmcq]

Well, unless you are an attorney or passed the tax court exam, you can't go to tax court. The letter you got just indicates they got your correspondence. I'm sure the NOD is the result of the CP2000 not being answered timely.

[Kea]

Correct on all counts. And so we wait.

[Kea]

Update:

Client received CP2000 yesterday for $4 interest owed! (It was dated 9/30/13 - that was close.) This relates to the 1040X that was sent in July (with the CP2000).

The AUR control number is different from the earlier CP2000 - not sure if that means anything or not.

Does this mean they actually matched everything up, and the Notice of Deficiancy is now moot? It's not like I can call IRS and ask.

Thanks to all who helped on this process. I really hope this means this issue is complete!

[Guest Taxed]

Look at the tax year referenced. If it is the same then I think you are on your way to get this resolved. Did the new CP2000 have that calculation page that calculates the tax liability and interest. Check that too.

This year I had a taxpayer forget to give me a few 1099-Div (total of $2800). Once we got the CP2000 we agreed with IRS but he sent in only the tax amount that I had calculated (no interest). Got another CP2000 with the few bucks for interest only. He promptly wrote a check (early sept) No new correspondence yet.

[Kea]

It's all for 2011. This one only references a tax liability of $105 and tax paid is same. The $4 is for interest and there are no penalties. It does not reference the previous amount from the 1st CP2000 or the notice of deficiency.

[joanmcq]

It's not going to reference the earlier one, and the AUR number will be different. Apparently they have read your correspondence, and the only open issue is now whatever other issues might have been on the CP2000 that didn't go away with the 1099-R issue. Are you saying the bill is now $4? Or there is additional tax due of $105 & interest of $4?

[Kea]

The $105 was paid with the 1040X (for the RMD shown on the corrected 1099R submitted in July). So now they are billing the interest -- $4 for paying 16 months late.

There were no other issues on the original CP2000.

[Guest Taxed]

Kea I think you have it. Success after all the hard work. In my situation when I saw the final bill for the piddly little interest I knew that we are close to home.

This brings up another question that I don't have an answer. Does IRS ever review these closed CP2000 and reopen if they find they missed something important??

[Kea]

I must admit I was pretty ecstatic when I heard my client just had a bill for $4. But I just wanted to make sure this really meant what I thought it meant.

Just looking for confirmation that it really is over!

Thanks.

[jklcpa]

I think you've succeeded too.

[Kea]

Yippee!

[joanmcq]

Yup, good work!

The CP2000 includes any of the items that were reported to the IRS, but not on the tax return (or in the case of mortgage interest, a deduction shown but no 1098 received). Fixing the CP2000 issue doesn't mean the return wont be selected for a full audit of say a Sch. C, but all of the AUR items should have been fixed and no more notices will be issued.

[Kea]

Sounds great. I just wanted to make sure anything they considered unresolved from a prior CP2000 would have been included on this one. Or if the 1040X could have opened a new one. Basically I'm making sure the left hand knows what the right hand is doing. Just mild paranoia.

Thanks to all for helping me breathe easier!