Annoying IRS notices.

[DaveO]

I get pretty annoyed when a client gets a CP2000 for a correctly prepared return. I don’t like having to charge a client to address an issue where the IRS clearly didn’t look at the return. I’ve got a couple in now, one where they ignored the PSO deduction for a retired firefighter and another dealing with a correctly reported IRA rollover.

But I got one today that really frosts me. Client was living apart from spouse caring for the couple’s children. They were not separated or divorced, just living apart seeing each other once a month or so. When doing her return we determined he had filed his own return as single. I explained that was not an option since they were married and didn’t qualify to be treated as unmarried. I prepared the 2008 return listing her as MFS. She recently got an extra refund from the IRS and actually walked into the local IRS office and asked for an explanation. She was told by the agent at the counter that they had “corrected” her filing status to be HOH. She protested and said, “No I’m still married”. They told her she could file an amended return if she didn’t like it but they were sticking to their position. So now I look like the dummy to her for not getting the extra refund in the first place. Is there no due diligence requirement for the IRS?

[RitaB]

Well

If they were "living apart" and just "seeing" each other once a month, I think IRS got it right, if your client paid over half the cost of keeping up the home during the year. See TTB 3-14.

However, I don't see how IRS would know whether she qualified as HOH or not, so it makes no sense to me, either, that they would change her filing status. For all they knew, hubby was living in the home for some part of the last six months of the year. For all they knew, someone else paid over half the cost of keeping up the home.

IRS seems a little too kind and gentle to this lady. I agree.

[appelman]

Are they both your clients, or only the husband?

And how did she file originally? If she filed as single with dependents, they might have picked up the HofH. In any case, he still has to file MFS. She can qualify as "unmarried" for HofH, but he can't!

[RitaB]

Wife is Dave's client

Wife is Dave's client, and she filed MFS.

Husband is a DIYer who incorrectly filed as Single.

[Burke]

I get pretty annoyed when a client gets a CP2000 for a correctly prepared return. I don’t like having to charge a client to address an issue where the IRS clearly didn’t look at the return. I’ve got a couple in now, one where they ignored the PSO deduction for a retired firefighter and another dealing with a correctly reported IRA rollover.

I just got one for an IRA rollover as well. My pet peeve, however, is that they send a 10-page letter with several places to sign so that all this has to go back along with the explanation and documentation, and then they give you a little window envelope (which says "make sure our address shows through the window" (which it won't even if the only thing you put in there is that one page because it doesn't line up). They could just dispense with those and save a lot of money, IMO. I have stacks of them in my office.

[RitaB]

I know!

I have a letter here where a client OVERPAID her 941 tax, IRS letter says, "Call us within 30 days to tell us what to do with the overpayment." (Yeah, I know.)

They ALSO send another page that says, "If you're making a payment, be sure the address shows through the enclosed window envelope..."

Bear in mind that this client already is slow on the uptake cause she has overpaid her taxes. So, she comes in in panic mode wondering what she has to pay. I point out that she is due a refund.

She seems skeptical. I want to rip the letter out of her hand and slap her with it, making sure her nose shows through the enclosed window envelope...

[joanmcq]

You don't have to send back the whole CP2000 notice; just page 3 or 5 depending on the type of notice, with the explaination. Or don't send back the notice at all: I include page 1 so they match it up ok, and a letter of explaination. Unless the notice is correct, that is. Then its just page 3 with a check.

[Burke]

She seems skeptical. I want to rip the letter out of her hand and slap her with it, making sure her nose shows through the enclosed window envelope...

I wish I worked in your office. I am laughing so hard I'm cryin.... It must be a riot during tax season.

[RitaB]

Well, you know

Well, you know what I WANT to do, and what I actually do are completely different...

BUT, it sure would be fun if you were here so I could cut my eyes at you when these things happen. You know, then we could be holding back the laughs like when we were kids in church and thought of the funniest things at the worst possible moments.

Ah, good times...

[Y2KEA]

Unsigned 941

Does anyone else who signs as the paid preparer have clients who get these?
Every quarter some but not all of my clients get these saying it was unsigned. I know it was because I have copies of the return with my sig in the paid preparer section of part 5.
Do you suppose it is because I have checked part 4 and the scanner is then looking for a sig in the first part of box 5 and ignores the paid preparer section?

[taxxcpa]

Form 941 notices

Does anyone else who signs as the paid preparer have clients who get these?
Every quarter some but not all of my clients get these saying it was unsigned. I know it was because I have copies of the return with my sig in the paid preparer section of part 5.
Do you suppose it is because I have checked part 4 and the scanner is then looking for a sig in the first part of box 5 and ignores the paid preparer section?

I get these for Form 941s sometimes. For some reason they send them to me instead of the client whose address and signature is on the form. In one such case the IRS said the client was short about $300. One month their tax deposit was short $ 300, but I had notified the client and their bank statement showed where the $ 300 had been drafted and paid before the due date. The client paid it again. Now the IRS will probably count it as a 4th quarter overpayment.

[AJsTax]

Still need signature

Does anyone else who signs as the paid preparer have clients who get these?
Every quarter some but not all of my clients get these saying it was unsigned. I know it was because I have copies of the return with my sig in the paid preparer section of part 5.
Do you suppose it is because I have checked part 4 and the scanner is then looking for a sig in the first part of box 5 and ignores the paid preparer section?

The client signature in part 5 is still required if there is a third party designee , even if there is a paid preparer signature. That does not excuse the client from signing.
The only way you can get away without the client signature in box 5 is if you have a Authorized agent form filed with the IRS to give you permission to file and sign for the client. If you have that box 4 and box 6 are empty and the agent signs in box 5.
that form is 8655 and called Reporting Agent Authorization.

[FEDUKE404]

Interesting IRS assistance, you think?

If they were "living apart" and just "seeing" each other once a month, I think IRS got it right, if your client paid over half the cost of keeping up the home during the year. See TTB 3-14.

However, I don't see how IRS would know whether she qualified as HOH or not, so it makes no sense to me, either, that they would change her filing status. For all they knew, hubby was living in the home for some part of the last six months of the year. For all they knew, someone else paid over half the cost of keeping up the home.

IRS seems a little too kind and gentle to this lady. I agree.

The only reasonable conclusion the IRS could have reached is MFS. Other facts would first have to be presented/on file to support qualifications for a married person to file as HOH.

Of course, getting closer to reality, "seeing each other once a month" is open to all kinds of speculation and related tax issues.

I would predict that, were all the facts to become available, HOH was not met and MFS was in fact correct for both spouses.

FE