Reject - Schedule M

[Lion]

I had a reject due to Schedule M. Young woman, employed full time, no retirement benefits, so I hadn't checked the web site. Sure enough, the IRS thinks she received $250. Now what do I do? Can I re-transmit with the $250 that she never received? (Yes, I know I need a new signed 8879.) Do I have her mail in a paper return? With or without the $250?

She obviously has no hope of receiving $250 from the SSA. So, how can she ever recover the $250 lost from her refund?

By the way, client's minor daughter does receive social security benefits due to the death of her father, client's husband. The 1099-SSA is in the daughter's SS#, not my client's. Is the IRS checking for every SS# on the return, not just the taxpayer and spouse?

[S T]

Similar but Different

Lion, I have a similar situation, slightly different.

Daughter is an appointed "representative" at Social Security for mother who has Alzheimers/Dementia.

Daughter's return was shorted $ 250 as IRS and/or SSA is showing that daughter received the $250 on her account, yet online it doesn't show. Yet when I access Mother's records at IRS - it is showing under the Mother's SSN.

I can not even file a POA on Mom through E-Services (I have to fax it), as they are showing that MOM files a Joint Tax Return. I know for a fact she has not for the last 5 years, as I prepared those returns and her husband passed away at least 5 years ago.

Only thing I can figure is that , somehow the info from SSA to IRS is "messed up" when there is a representative or parent/guardian associated with another account

Also, maybe she received VA Benefits, just had one of those as well and the t/p totally forgot about it. Did you check online at IRS to see what agency they are referring to?

You can correct the return, showing the $ 250, have t/p sign a new 8879, then resubmit through efile.

Sandy

[Lion]

Bummer

Thanks, Sandy. I'm probably going to call her tomorrow morning to explain and email her a new 8879. At least that way she gets her diminished refund in the pipeline, albeit a week later than we were hoping. She's still getting in excess of $1,000 due to residential energy credits. Single mom who can use the refund.

But, what will we do to get the additional $250 refunded to her? She won't get it from the SSA since she doesn't qualify. If IRS computer is wrong now, can't imagine that it'll change later so we can amend.

I guess I'll email her a POA to sign, also. I'll see what I can find out. I think they used the information on the dependent daughter instead of the mother, used both SS#s on the return and one of them received the $250 so the computer says it's the mother instead of the daughter.

Only good part is that the state, which was not sent without federal, is a zero balance due. So, no lost time receiving a refund and no additional interest due with a balance payment for CT.

[S T]

Remedy

Not quite sure on the procedure, I thought there was a prior thread on the issue, but I can't locate it.

I believe, the t/p has to obtain a letter from the Agency (SSA-VA, etc) stating that they did not receive the $ 250, then you file an amended return to claim the $250 that the IRS reduced the refund by.

Maybe someone else on the Board has actually filed a correction and could let us know.

Sandy

[WhiteOleander]

I am working with one client with this situation right now. He and his wife both receive a pension from a state retirement. But, the husband also receives SS. Wife does not. So, when the return was originally filed, the IRS rejected it. They decided to mail it in with the correct refund. The IRS shorted the refund. So we contacted them. The agent said that the computer records they could access said the wife did receive the 250.00. The only way to turn it around is to get a letter from SS stating that she did not receive the 250. So, said letter was sent. Last week client received a letter stating "we're working on it. we'll get back to you". All this started in March. So, they're really flying through all these problems. (sorry for the sarcasm. just tired of congress inacting these laws with no funding to implement them)

[joanmcq]

Crap, I hope I don't have problems. I'm payee for a kid that got the $250. Haven't tried to file my return yet. (goes off grumbling obscenities under breath)

[Lion]

Good Luck

Good luck, Joan. That's exactly the situation with my client.

And, thank you to all who wrote.

I retransmitted return with the Schedule M the way the IRS wants. Told client to wait for refund to arrive, then duke it out with the SSA. We'll amend when we have something on paper from the SSA. I also had her sign a POA when she signed the revised 8879 so I can jump in with the IRS.

The IRS should be paying me instead of dreaming up new fees to charge me!