Thinking about switching to Taxslayer Pro.. Opinions please!

[spanel]

Good? Bad? Otherwise?

If your in IL, did you have any issues printing anything?


Thanks!

Chris

[dtlee]

Good? Bad? Otherwise?

If your in IL, did you have any issues printing anything?

Thanks!

Chris

A long story that fits under "otherwise" probably....

A couple of years ago I had planned to switch to TaxSlayer Pro from Drake because Drake had (up to then) insisted that there was no need to accurately transmit a 1099-R to the IRS when there was an indirect rollover (non-trustee-to-trustee). Drake insisted it was okay to just change the box 2a taxable amount to whatever you pleased and e-file it that way so that the IRS would see that the 1099-R reported the distribution as only partially taxable and not question the rollover. After six years of arguing with them and using convoluted and error-prone workarounds (I actually lost a client due to an error I made after splitting a return and not redoing the workarounds properly), I decided to move to TaxSlayer Pro due to the rave reviews for their support.

I started testing TaxSlayer Pro and lo and behold, they did the exact same thing, but they could not even recommend a convoluted error-prone workaround to properly transmit a 1099-R when the rollover was done by the client after receiving the funds. They could not understand why I wanted a refund and did not want to switch from Drake for a product that exhibited the exact same problem that was #1 on my list of reasons for leaving.

Drake has since corrected this scenario, but I was told by TaxSlayer that they have been doing it this way for 25 years and had no intention of changing it (Drake had said the same thing but used the number "30" rather than "25"). TaxSlayer Pro might have also fixed this, but I have not retested them.

The test scenario is easy to recreate. The situation is you have a client with a $20,000 distribution which is fully taxable so box 1 and 2a both have $20,000 which is a code 1 (premature) distribution and the client had $5,000 in withholding which they ultimately forget to roll over. Thus you have a $20,000 distribution of which $5,000 will be taxable and $15,000 will be rolled over with $5,000 in withholding.

The problem I was seeing was that the way the software is intended to work, it would result in the 1099-R being transmitted electronically with field 0110 of the 1099-R (the total distribution) equal to 20000 and field 0120 of the 1099-R (the taxable amount from 2a) as 5000. This is incorrect since we as EROs are required to enter significant dollar fields exactly as shown on the document we receive from the issuer and they are to be transmitted to the IRS the same way. Since it is not easy to check what will be efiled in any product, we need to be able to trust our software to transmit these values correctly.

I am not saying that TaxSlayer Pro does not, but both Drake and TaxSlayer Pro did not for the 2009 tax year (and perhaps 25-30 years prior) though Drake has since corrected this error.

I was quite disappointed that I had to stay with Drake. I thought TaxSlayer Pro would have been an okay to use.

[David1980]

I don't think changing the taxable amount is really a problem on the 1099-R. IRS Pub 1345 indicates you must enter the TIN and the address from the form into the software but says nothing of other figures and obviously the recommendation to modify taxable amounts/etc... for rollovers is pretty wide spread among the software companies. Never heard of it causing a problem.

That said, last time I tried TaxSlayer the thing that most stuck with me was how they used multiple levels of menus to modify settings. I don't remember the exact menus, but for example if you wanted to change a rental from active to non-active you would end up going income -> rental -> general info -> active -> N. Requiring you to go through multiple menus for what should to me be just a checkbox on a worksheet/form.

[luke]

doug

doug did you get all your $ BACK from Taxslayer or did they charge a "re-stocking" fee like Drake did to me?

[dtlee]

doug did you get all your $ BACK from Taxslayer or did they charge a "re-stocking" fee like Drake did to me?

It was a deal where I had 30 days to evaluate it and had to change my mind following a very specific procedure within that timeframe or I would not get a full refund. I both faxed and mailed (certified mail) them back the decision so that there could be no question about them receiving it on time even though they told me, "I can give you a few more days to evaluate it if you'd like with the same refund policy."

I had heard of others having problems getting the refund, so I was extremely careful. I had no problems and cannot say there would have been any. They seem like a nice group to do business with.

[geekgirldany]

That said, last time I tried TaxSlayer the thing that most stuck with me was how they used multiple levels of menus to modify settings. I don't remember the exact menus, but for example if you wanted to change a rental from active to non-active you would end up going income -> rental -> general info -> active -> N. Requiring you to go through multiple menus for what should to me be just a checkbox on a worksheet/form.

That is what I found myself. I was trying to decide between TaxSlayer and Drake. TaxSlayer seemed to be cumbersome in that you had to go through multiple menus, answer repetitive questions, etc. When talking to the sales person I pointed this out and how I could force a number in Drake if I had to. They seemed offended and really did not persuade me why I should go with them. So I ended up going with Drake after being with TaxWise for over 14 or so years.

I hope anyone using TaxSlayer does not take what I say the wrong way. But TS was very aggressive in their sales practices even after I did not go with them. I was getting sale calls several times a week for two years. I finally told them to never call me again.

[Bonnie]

Gotta defend Tax Slayer as I love the Software. Have used it for 6 years now from the beginning of my home business. It was recommended by a friend who was using it. I have had some issues over the course of the 6 years, but when I call support, they are quick to fix any problem I have ever had. Most of those issues have been with states as I do multiple states for military personel. I do a 990-T which I'm sure there is not a huge market for and when I first started they did not offer this form in the software. I asked for a few years and was told there just wasn't much demand so they had never created this software. I had resigned myself to always doing this return by hand. To my surprise last year, they had added this to the business package. I was much impressed. Felt they did this just for me. I'm sure others may have needed it to, but it impressed me. Support is great, quick to answer when I call which isn't often and always a help to any issue I have. As for the 1099-R issue there is a question that pops up when you are entering info in the 1099-R that asks was any of this rolled over. I would never just change the amount that is on the 1099-R that was issued. I would answer the question and then enter correct amount that was rolled over.

[dtlee]

Gotta defend Tax Slayer as I love the Software. Have used it for 6 years now from the beginning of my home business. It was recommended by a friend who was using it. I have had some issues over the course of the 6 years, but when I call support, they are quick to fix any problem I have ever had. Most of those issues have been with states as I do multiple states for military personel. I do a 990-T which I'm sure there is not a huge market for and when I first started they did not offer this form in the software. I asked for a few years and was told there just wasn't much demand so they had never created this software. I had resigned myself to always doing this return by hand. To my surprise last year, they had added this to the business package. I was much impressed. Felt they did this just for me. I'm sure others may have needed it to, but it impressed me. Support is great, quick to answer when I call which isn't often and always a help to any issue I have. As for the 1099-R issue there is a question that pops up when you are entering info in the 1099-R that asks was any of this rolled over. I would never just change the amount that is on the 1099-R that was issued. I would answer the question and then enter correct amount that was rolled over.

They may have fixed it this year, but when I tested it, answering that question would cause the software to change box 2a. Support confirmed that this was not merely superficial, but carried through to the e-file record as well.

[David1980]

I am not saying that TaxSlayer Pro does not, but both Drake and TaxSlayer Pro did not for the 2009 tax year (and perhaps 25-30 years prior) though Drake has since corrected this error.

The question that always remains in my mind is "was it an error?" I've never found any documentation one way or the other from the IRS on whether or not you can modify 2a. Drake obviously changed their program - but was it due to an error they got around to fixing, or simply customer demand? Drake also puts a signature line on the 8867. Was that to correct an error?

I don't know, this whole line 2a thing. Wish the IRS would simply put something out that specifically stated yes, you can change the value or no, you can't change the value.

[Snaggletooth]

My Experience

My experience with TaxSlayer was positive. I left them 4 years ago for Drake.
Incredible technical support - very fast and responsive.

I do many states. Their software knows Georgia and South Carolina very well, but gets very weak for some of the more remote states in the west and northeast. Especially on "entity" type returns. But it is not expensive software, and you have to measure the cost versus what you need.

Crowning blow came when they wanted to charge an extra $100 to accept a paper check and produce a paid invoice with a CD. Ridiculous. They called and apologized for this stupidity but by that time I had already switched to Drake and was happy.

[Bees Knees]

This is incorrect since we as EROs are required to enter significant dollar fields exactly as shown on the document we receive from the issuer and they are to be transmitted to the IRS the same way.

I disagree.

The issuer of a 1099-R cannot possibly know if the full amount in box 2a is going to be taxable or not. Box 2a is for information purposes only and does not dictate the taxable treatment of the distribution. If the taxpayer does a rollover or partial rollover, box 2a is irrelevant. As long as the word "rollover" appears next to line 15 or 16 of the 1040, IRS is going to ignore the amount in box 2a of the 1099-R.

[dtlee]

The question that always remains in my mind is "was it an error?" I've never found any documentation one way or the other from the IRS on whether or not you can modify 2a. Drake obviously changed their program - but was it due to an error they got around to fixing, or simply customer demand? Drake also puts a signature line on the 8867. Was that to correct an error?

I don't know, this whole line 2a thing. Wish the IRS would simply put something out that specifically stated yes, you can change the value or no, you can't change the value.

Since I was trained by the IRS when e-filing first came out, I have always been confused as to why people who would never change the taxable amount of a W-2 or a W-2g would think it is fine to change the taxable amount of a 1099-R since the IRS taught us to transmit these amounts as they appeared on the actual forms. However, I have learned a few things over the years and will share what I know.

There are situations when some software vendors do not transmit the 1099-R to the IRS. In those situations, it does not matter who the payer is or if any of the amounts match reality because the 1099-R becomes a worksheet. In these situations, it is not really an "error" to tamper with the amount in box 2a (or any other field on the form).

However, some software products always transmit the 1099-R and I believe that all software products transmit the 1099-R when there is withholding on the 1099-R. In these situations, the amounts must match the document received. Most of us do not know the intricacies of our software, so most of us are not aware if this form is transmitted with a particular return or not. Thus, I consider it an error when box 2a does not match what is on the actual form.

When I contacted the IRS about this, I was treated with very little respect because most of the representatives I spoke with did not believe anyone would ask if we could change the taxable amount of the 1099-R (any more than we would ask the same question about a W-2). They would respond with things like, "Why do you need it in writing?" "Look at publication 1346." (where it does not say that the amount must be the correct amount, just like it doesn't say that wages must be the correct amount on a W-2) "Why do you think we ask you to type it in?" "Why would you think we want an amount that isn't on the form?" and other wonderful responses. I turned to our IRS Liaison to ask and he at first did not understand the need asking why I did not need it for the other source documents. I had to explain that "Everyone knows we can't falsify a W-2, but some people believe we can put any amount we want on a 1099-R."

I finally got this response from an IRS representative in the electronic filing section of the IRS:

Return preparers are required to enter information return data from Forms 1099, W-2, W-2G, and 1098C exactly as they were reported to the taxpayer – this is so we have a mirror image of exactly what is reported to the taxpayer.

Pub 1346 page 194 of Part 2 (1371 page document divided into 3 parts) states the entry for field 0120 is the taxable amount listed on Form1099-R Box 2a – the form reference number. The publication is found at: http://www.irs.gov/pub/irs-pdf/p1346.pdf

The entry on Form 1040 line 15b reflects the taxable amount of an IRA distribution but is NOT necessarily the amount listed in 1099-R Box 2a . Pub 1346 pages 25-26 (Part 2) show 5 additional field entries to identify specific scenarios regarding IRA distributions and the line 15b entries, such as;

Field Number and identification:

Field 0475 – Total IRA distributions received (for Form 1040 line 15a)

Field 0477 – IRA distribution literal; enter “ROLLOVER” or leave blank if no rollover

Field 0479 – IRA Distributions; Form 8606 / Recharacterizations / explanations

Field 0480 – Taxable IRA amount

Field 0482 – Qualified Charitable Distributions (QCD)

Field 0483 – Qualified HAS Funding Distributions



The scenario your practitioner references would require the following entries:

Field 0475 – Amount from 1099-R box 1

Field 0110 – Gross distribution listed on 1099-R Box 1

Field 0120 – Taxable amount of distribution listed on 1099-R Box 2a (exactly as shown on the 1099-R),

Field 0477 – “ROLLOVER”

Field 0480 – The taxable amount of the IRA distribution to be listed on 1040 line 15b



This would be in addition to the other entries for the 1099R, 1040, etc.

Thank you,


[NAME DELETED}
IRS SB/SE CLD

I have deleted the name of the representative, but I think the message is very clear. Please note that the respondent went further to explain that the 1040 line b amount does not need to match the 1099-R box 2a amount.

Sorry, but this is all I have.

[dtlee]

I disagree.

The issuer of a 1099-R cannot possibly know if the full amount in box 2a is going to be taxable or not. Box 2a is for information purposes only and does not dictate the taxable treatment of the distribution. If the taxpayer does a rollover or partial rollover, box 2a is irrelevant. As long as the word "rollover" appears next to line 15 or 16 of the 1040, IRS is going to ignore the amount in box 2a of the 1099-R.

I tend to agree that this becomes a moot point when reported correctly as a rollover. One thing Drake was doing was not putting "ROLLOVER" on the 1040 (except under poorly documented circumstances). A lot of their customers were reporting notices from the IRS questioning the rollovers they reported and it was unclear whether it was from the matching program or because the word "ROLLOVER" was missing.

My point is that Box 2a is the starting point and line 15b or 16b is the result of a calculation or other activity. The IRS wants the starting point reported correctly.

This is comparable to the concept of netting with Gambling winnings. The net amount of winnings may not be equal (actually would more likely not be equal) to the amount reported on any particular W-2G, but most of us are careful to report what was on the actual forms received.

[Bees Knees]

My point is that Box 2a is the starting point and line 15b or 16b is the result of a calculation or other activity. The IRS wants the starting point reported correctly.

I would agree IF Box 2a was reported to IRS. It is not. There is no line on the 1040 for Box 2a. It suggests what might be reported on lines 15b or 16b, but there are several scenarios that can cause lines 15b or 16b to be different. If the taxpayer has a basis in the distribution and the issuer of the 1099-R does not know that, Box 2a will be different than the amount reported on lines 15b or 16b.

The point is, Box 2a does not get transmitted to IRS because there is no entry on the 1040 to reconcile Box 2a with lines 15b or 16b. If you look at an IRS transcript of a 1040, you will not find a data entry for Box 2a.

[dtlee]

I would agree IF Box 2a was reported to IRS. It is not. There is no line on the 1040 for Box 2a. It suggests what might be reported on lines 15b or 16b, but there are several scenarios that can cause lines 15b or 16b to be different. If the taxpayer has a basis in the distribution and the issuer of the 1099-R does not know that, Box 2a will be different than the amount reported on lines 15b or 16b.

The point is, Box 2a does not get transmitted to IRS because there is no entry on the 1040 to reconcile Box 2a with lines 15b or 16b. If you look at an IRS transcript of a 1040, you will not find a data entry for Box 2a.

Box 2a is transmitted in the e-file record to the IRS. That has been true since the first returns were e-filed and is still true today.