8880 Credit

[dmj4]

I had a new client in and they say they are "sure" they have never drawn anything out of a retirement plan. Of course, they have no copies of past returns.

Have any of you had letters from the IRS when you file the retirement savings credit and they really did draw money from an IRA or pension plan in the three prior years?

Thanks!

[Bird Legs]

Form 8880

What you can do is get a POA from the clients and then contact the IRS to see
what is in their tax returns.

[ChEAr$]

what to do?

Or better yet, deMAND their previous three years tax returns.

Maybe you have already explained how they may not qualify because of that,
and they think to themselves, well, I'll just say I didn't.

[taxmandan]

I'm with Bird Legs, get a signed 8821 and call PHL and they can tell you if there are any 1099R in the past three years transcripts. Reagan said it best: "Trust, but verify."

[veritas]

I'm with Bird Legs, get a signed 8821 and call PHL and they can tell you if there are any 1099R in the past three years transcripts. Reagan said it best: "Trust, but verify."

Actually Reagan loved to say "Doveryay, no proveryay", which drove Gorbachev nuts.

[ecb34691]

actually you can have a 1099R and still receive the credit. If the pension is from a qualified plan, it is not considered a distribution for the credit. For example, people with a 1099CSR (federal retiree) is a qualified plan. Ferderal employess received no tax break for their retirement contribution.