It's Already Started

[Edsel]

Yes, the ugly letters from the IRS have already started.  Have three of them already.  The first two don't speak well of the IRS administrative prowess:

1. CP2000 attempting to tax client for 1099-R which was an IRA rollover.  Betcha y'all have a bunch of these.  This one is particularly interesting, since the CP2000 reports the 1099-R and discloses distribution code "G".
2. Collection letter attempting to collect $975 when the assessment has never yet been made.  If an assessment was made, it was never communicated to the taxpayer.  Cannot remedy this without a POA since the collection division does not involve itself with the audit division making the assessment.
3. Have not got to the bottom of the 3rd one yet.  This may be the taxpayer's fault, or possibly mine.

Has anyone found a way to make these IRS people accountable for their bungling?  It won't stop until this happens.

 

[Randall]

A client just got one for 2016.  Says 1099R amount was not reported.  It was reported and IRS letter agrees with amount reported but says an additional amount (of that same amount) was not reported.

 

[Catherine]

Doncha just *love* those!  

Here in MA the state sends out "prove that you had tax withheld on this 1099-R income" letters where they want a copy of the 1099-R showing MA tax withheld.  INCLUDING 1099-R's for Mass Teachers Retirement, where THEY are withholding the tax!  How deeply stupid can they be?!  No, wait, I should NOT say that - they take it as a challenge!

[Evan S. Golar]

New York State has been playing that "prove your SWT" before we issue you your refund - for a few years now.

[jklcpa]

I've had one client so far receive a CP2000 for 2016 that was for unreported 1099R for a 401k distrib with code "1".  In her case the proposed increase to gross income was correct and she agrees with the correction.  One thing that was strange was that the notice proposed an adjustment increasing the PMI deduction on Sch A when her income was increasing so the deduction should have been further limited, not the other way around, but then that increased deduction was NOT factored into the proposed increase in tax.  It was like a memo item, and I could not tie in the amount.

[NECPA in NEBRASKA]

6 hours ago, Catherine said:

Doncha just *love* those!  

Here in MA the state sends out "prove that you had tax withheld on this 1099-R income" letters where they want a copy of the 1099-R showing MA tax withheld.  INCLUDING 1099-R's for Mass Teachers Retirement, where THEY are withholding the tax!  How deeply stupid can they be?!  No, wait, I should NOT say that - they take it as a challenge!

Nebraska does the same thing. It's almost always the only withholding is from their 1099-R for teachers. It's just a good way to drag out paying the refund. 

[Gail in Virginia]

Virginia does the same thing.  I even have one client that I cannot e-file the state return because the amount withheld exceeds their parameters for what is normal.  And the amount withheld is from a Virginia Retirement System pension.  Plus VA changed their account number system a few years (maybe 10?  Time slips on by) ago to more closely match the federal.  Except VRS is still using the old number and has not changed to the new system.  Gotta love bureaucracy.

[Bart]

In Missouri you can get a food pantry credit for donating food.  There is a limit on the amount of the credit each year so if you are not in early enough you don't get the credit since it has all been given away.  I have a client who donates a lot of food to our local food pantry.  Twice now Missouri asked for support for the withholding.  By the time the return got processed Missouri said he was too late for the credit.

[Edsel]

It is indeed ridiculous to hear of so many states requiring proof of state tax withholding, even when the state itself is doing the withholding.  Lazy and unaccountable.

We are spared this misery in TN where there is no such income tax.  So we don't have to deal with state idiots, right?

Wrong.  Just talked to guy at the state, who asked me to file an amended return for a business tax just because the state changed their database.

Rita, let's welcome people to our intelligent state where everyone is smart, lives in fashionable houses, has honest politicians and well-manicured lawns.