CP 2000 Alert

[Kram BergGold]

I use Pro Series

Just to check. I use Pro Series.

[DaveO]

Just got a CP2000 for a 2010 return exact same issue as the OP described. We use Drake. Will be meeting with the regional Taxpayer Advocate next month and intend to take this and some other cases to them and push for the opening of a systemic advocacy case.

[Lion]

I had one during April for a couple of nervous taxpayers who wouldn't wait to 18 April to respond. The IRS letter very clearly noted Code G. ProSystem fx reported it appropriately (I even checked with CCH to see what exactly was transmitted).

I called the IRS and was told that the law changed in 2010 and Code G means taxable!

A supervisor would not be available for 72 hours. The IRS insisted upon seeing Form 5498 from the sending broker. We had it from the receiving broker. The sending broker does not issue Form 5498, per three brokers we spoke with. The sending broker did email me a report that had all the info the IRS agent was requesting to prove the Form 1099-R with a Code G was actually a direct rollover. (Very lucky they were so cooperative re a 2010 transfer for someone who's no longer their client.)

Taxpayers would not leave my office until all the telephone calls, emails, faxing, etc., was completed. They even wanted to wait until I spoke with an IRS supervisor. I think they were here for two or more hours. And, they drive in from a distant town, but I couldn't convince them we could handle this over the telephone, etc. Very time-consuming.

I was hoping it was a computer hiccup and a stupid employee. Now, I'm scared as I have our return on extension with husband directly rolling over several retirement accounts when he retired during 2011 -- all coded G, of course.

[FEDUKE404]

IRS lost in space

...
I called the IRS and was told that the law changed in 2010 and Code G means taxable!

A supervisor would not be available for 72 hours. ...

I wonder whether that IRS employer had the ability to review page 13 here:

http://www.irs.gov/pub/irs-prior/i1099r--2010.pdf

If they are that inept, I better start composing a form letter to/for my clients with similar tax scenarios!

FE

[BP.]

Taxpayers would not leave my office until all the telephone calls, emails, faxing, etc., was completed. They even wanted to wait until I spoke with an IRS supervisor. I think they were here for two or more hours.

Are you billing time on this one, Rita? These incorrect tax notices are proliferating, and from state and local authorities, too. And they are becoming more time consuming to prepare responses to.

[Lion]

I did read him the instructions, the notes on the back of Form 1099-R, some cites I pulled up quickly via IntelliConnect, and a few other items. I think one of the brokers gave me a cite to use, also. Very frustrating.

My billing method is to build into my prices an appropriate amount to cover some of these things, knowing my continuing clients well enough to price them pretty well for my satisfaction. This couple is pretty nervous, so makes a lot of telephone calls to me, and that was taken into account in the price I just charged them a month or so earlier. This April visit that could've waited (notice gave a May response deadline) will cause their 2012 tax prep price to increase, though, probably a line item for additional tax compliance or something.

FE, please share if you create a form letter. This looks like it's widespread.

My clients' letter was re 2010. If anyone gets one for 2011, please post.

[KathMorgan]

IRS computers!

I have a good friend who works in the audit division of the IRS and apparentely it is all the fault of the "New and improved" Automated Under-reporting System". I've been dealing with this AUR thing since it was rolled out early last year. It is all run by computers and no real person ever looks at the letters generated.
Even once a response is sent in and a "real" auditor gets involved and pulls the file to the audit in progress side of the house, the AUR computer just keeps spitting out letters up to and including Intent to levy notices. It is driving the actual people who work in the division to distraction. They can't get it to stop.
No excuse on the part of the larger IRS as a whole, but the individual auditors are just as fed up with the program as the taxpayers. If the IRS is going all automated they should at least hire some compotent systems managers that actually respond to glitches.

Kathy

[dkss]

Today, I had a client bring in a CP2000 notice for the same rollover look-over issue by the IRS. Last year, I also had some weird CP2000 notices that should never have happened with the "faster, more efficient, more accurate" efiling - the info was there all along they just disregarded it!

Just to check - my software is CrossLink.

[taxea]

Widow brought in letter dated 4/30 on 4/24. They did not give her credit for 2011 estimated tax payments. She wrote her SSN on the memo lines of the checks. Granted, he died 2/2011 so it's a joint return, but c'mon. If they can do time travel, surely they know about memo lines and spouse SSN.

She should have written the primary ssn on the estimated check. The IRS computer will credit the money to her SSN but it won't check the tax return for a match. They need to do some adjusting to their comparasion ability with their computer. The money is probably sitting in an account with her SSN. Remember computers don't reason they do what they are programmed to do. If the programmer doesn't consider these options and write them into the program then the program doesn't look for them.

I fear we are in for several letters/notices as they move toward "real-time" returns. I just hate that it looks to the client like the preparer made the error. I agree that something should be done for the aggrevation and wasted time this causes as well as the additional cost to the client.

The only thing I can think of is that, we as preparers should voice our complaints, loud and clear, to the OPR every time this occurs.