Paper 2020 return

[RWG1950]

Customer's had paper filed their 2020 return (due to 2 MSA's on same return) in about mid-March.
The IRS "where's my refund" tool will not acknowledge anything about this return.
Is this happening with others ?
Thanks for replies

[ATSMAN]

Yes, I had a client paper file because his ex claimed a child that she was not supposed to. It has been over 4 weeks and it is still not showing up on that tool. I told him it will be a long time probably 10 weeks before it even shows up on that tool.

[spanel]

Since they are still processing 2019 paper returns at this point... good luck!! It will probably be at least 6 months.. maybe more.

Chris

[Lion]

29 million unprocessed tax returns.

[Rapid Robert]

In hindsight, it might have been better to efile the return with the one extra form omitted, then file an amendment with the second MSA form. Especially if the full tax liability was paid on time (which it was, if there is a refund).

Maybe there is an ethical issue with signing such a known incomplete return, but on the other hand, if this approach gets to the optimal result for the taxpayer without over-burdening the IRS and without missing any payment deadlines, would it be unethical not to mention it to the taxpayer?

[Snaggletooth]

I think there is indeed an ethical issue. The ever-growing scope of the 8867 was the creation of the IRS, not the tax preparation industry. Presumably this was to place burden of auditable facts upon the tax preparer so they wouldn't have to get out an do a few audits themselves.

I have had paper returns because I could not in good conscience answer all the tie-breaking questions on the 8867 in such a way that the electronic version can sail through uncontested. Earlier this week I had a couple going through a divorce, and against all advice, the husband rushed out and filled out his own tax return. So how do I know the wife qualifies for any of her four children?

I asked my congressman to look into why the IRS is not auditing more EIC claims. The response was they don't really care whether cheaters get caught so much as they care for redistribution of wealth. Like so many issues, it is a macro-economic thing. But the IRS creates the 8867 so that we can be the only line of defense.

Each year, more and more situations are encompassed by the 8867. I don't think we've seen the end of it - they can eventually expand it to cover medical expenses, charity, etc. Maybe even the deductibility of toilet paper. So don't cram this 8867 down our throat and then whine about paper returns because situations cannot rubber-stamp into the electronic filing process.

[ATSMAN]

I asked my congressman to look into why the IRS is not auditing more EIC claims. The response was they don't really care whether cheaters get caught so much as they care for redistribution of wealth. Like so many issues, it is a macro-economic thing. But the IRS creates the 8867 so that we can be the only line of defense.

I really don't think that is the reason. I think it has to do with resource management, given IRS budget has been cut a lot is the last few years. They have to target their investigation and enforcement to where it will yield the big penalties and interest.

[TAXNJ]

I really don't think that is the reason. I think it has to do with resource management, given IRS budget has been cut a lot is the last few years. They have to target their investigation and enforcement to where it will yield the big penalties and interest.

You might want to look at the Treasury Inspector Cases.

[Rapid Robert]

I think there is indeed an ethical issue. The ever-growing scope of the 8867 was the creation of the IRS, not the tax preparation industry.

I don't understand why you think Form 8867 has anything to do with this topic.

My understanding was that the OP was referring to two Forms 8853 (Archer MSAs and Long-Term Care Insurance Contracts) in the same return, either one taxpayer with two accounts, or married taxpayers each with their own.

I'm not quite sure why efiling was not allowed, maybe it is only certain vendors who don't support it. I tried to re-create the situation in my software, and it follows the instructions: one master Form 8853 along with two "statement" versions of the form, one for each spouse. It does not generate an efile diagnostic.

Back to my suggestion, if your software does not support it, and given the known IRS backlog at present, I would not have an ethical problem with efiling the return containing only one Form 8853 (to allow efiling), and then paper filing an amendment later, as long as the full amount of tax liability was paid by the due date.

[Snaggletooth]

[QUOTE=Rapid Robert;n306447]
I don't understand why you think Form 8867 has anything to do with this topic.

Good grief, RR, the topic is 2020 Paper Returns and I haven't had a single paper return in two years that hasn't resulted from Form 8867.

You apparently believe I changed the topic from the original post and 8853 (form 8853 was never mentioned in the OP). Strange you should believe that, because you are the Crown Prince of changing topics. Please continue, however, because you are very well educated on tax issues.

[Rapid Robert]

You apparently believe I changed the topic from the original post and 8853 (form 8853 was never mentioned in the OP).

You did change the topic, or at least brought up a tangential one (but not really). The original question had to do with limitations of the IRS efile system, as to whether or not it could accept more than one Form 8853. Your comment had to do with you not wanting or not being able to fill out Form 8867 correctly, which is not related to any efile system limitations. A correctly filled Form 8867 can be efiled as part of an efiled return, in fact up to four copies of Form 8867 can be efiled in a single return.

"paper filed their 2020 return (due to 2 MSA's on same return)"

Apparently you are not aware that MSAs are reported on Form 8853. Form 8867 has nothing to do with it.

[Rapid Robert]

I have had paper returns because I could not in good conscience answer all the tie-breaking questions on the 8867 in such a way that the electronic version can sail through uncontested.

As long as you brought up a tangential topic, it is important to note that there are not two different ways of filling out Form 8867 depending on whether the return is efiled or not.

"the husband rushed out and filled out his own tax return. So how do I know the wife qualifies for any of her four children?"

By following the rules for determining who is a dependent for tax purposes. All the questions on the form are primarily Yes/No questions, such as:

"Did you explain to the taxpayer the rules about claiming the EIC when a child is the qualifying child of more than one person (tiebreaker rules)?"

If you can't answer a question "Yes", then you should answer it "No" (or N/A for those few questions where applicable).

You don't have to independently "know" who can actually claim the dependents, only document that you performed reasonable due diligence on the information provided by the taxpayer. So for example, if the taxpayer tells you their AGI is higher than their spouse's, and it seems reasonable, you can answer "Yes" to the due diligence questons related to that..

[ATSMAN]

You might want to look at the Treasury Inspector Cases.

Can you provide a cite or example please.

[TAXNJ]

Can you provide a cite or example please.

Yes, https://www.justice.gov/news?sort=ti...pr_date%3A2021