FLASH! Katrina Rejections

[Snaggletooth]

Just heard from my software company about IRS rejecting certain E-files
which contain Katrina tax breaks. (E-file season opened Friday, Jan 13)

The tax breaks can appear on numerous forms, as there were numerous
types of tax breaks passed for Katrina victims and contributors.

RCS (TaxSlayer) software is recommending filing paper returns for those
taxpayers affected, as the IRS will not be able to accommodate these
items until February1, and advising some of them will not even be ready
until March 1.

Just thought I would pass this on...

Regards, Ron J.

[Safire]

the list

Yeah I saw the list, even form 8863 is on the list. Doesn't even matter if the taxpayer used a Katrina related item, you cannot file any of the forms on the list until at least 2/1

Here is a link to the list.

http://www.irs.gov/efile/article/0,,id=152528,00.html

[dtlee]

Thanks Ron,

Just to complete this, I received this information the other day from a friend who got it from the IRS. I believe it was from January 4. Not sure how much progress the IRS has made on this:

The following disaster related and general tax forms will not be accepted
electronically for Individual e-filed returns until approximately February
1, 2006, and in some cases, March 1, 2006. Additional updates will be
provided when the necessary form changes are completed.

Disaster Related Forms:
Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness;
Form 8606, Nondeductible IRAs;
Form 8863, Education Credits;
Form 8915, Qualified Hurricane Retirement Plan Distributions and Repayments;
Form 3468, Investment Credit;
Form 3800, General Business Credit;
Form 5884 A, Hurricane Katrina Employee Retention Credit;

General Tax Forms:
Form 8379, Injured Spouse Allocation;
Form 8611, Recapture of Low Income Housing Credit;
Form 8864, Biodiesel and Renewable Diesel Fuels Credit;
Form 8896, Low Sulfur Diesel Fuel Production Credit;
Form 8271, Investor Reporting of Tax Shelter Registration Number;
Form 8886, Reportable Transaction Disclosure Statement;

[Koss]

Reportable Transaction?

I always wondered about this form...

Isn't this form used to comply with a law requiring disclosure of a transaction that was performed primarily for the purpose of avoiding tax?

It sounds like a bad joke... Form 8886: Red Flag Transaction Report.

So I am attaching to my tax return a document that notifies the IRS that I engaged in a transaction for the sole purpose of avoiding tax. Which implies that the transaction is a sham, and that I really owe the tax after all.

If my intent is to comply with the law, I wouldn't have engaged in the transaction in the first place. The idea that someone would report such a transaction is preposterous.

I'm already flagged as a fringe theorist for suggesting that someone with no income at all is "not a taxpayer." No, I am not quoting Irwin Schiff. He's a nut case; I just have too much time on my hands.

Having adequately separated myself from the tax protestors who somehow think the entire Internal Revenue Code is unconstitutional...

Isn't the "reportable transaction disclosure form" essentially a disclosure that you broke the law? Wouldn't that violate the Fifth Amendment? (Self-incrimination?)

Burton M. Koss
koss@usakoss.net

https://www.usakoss.net