User talk:Tkelly911

From TaxAlmanac

Correspondence Audits

You might find discussions where Nancy Shoemake participates; she had many flight attendants and workers at Northwest Airlines audited, all by correspondence. She is a CPA in Burnsville MN, but working with a lawyer friend, took as many as possible to Tax Court and is still in business. I had two flight attendants last year audited in Austin; their returns were done by a non-230 practitioner who claimed he was an expert on their occupation, being a FA himself. I came on the scene when the 90-day letter had been issued. I told the one her case was not worth the fee, and saved the other about $400 on an $1800 assessment. But you do get the feeling that no one is listening.

Nice racket on the part of IRS, isn't it?

Correspondence Audits

You are right, though to be honest, they haven't hit the east coast that hard yet. I do about 500 returns a year and just now saw my first audit letter in over two years, but this an actual physical office audit in Philly where many clients are from. I have yet to see one of my clients receive these audits, and to be fair, the flight attendants I did had a preparer who had no idea what he was doing.....Austin audited 27 of his clients.

One other arrow you have with the 90 Day is to request Recission of the Deficiency Notice.....they will reject this, of course, but I wonder if you could involve the Advocate on this. Another thought is to let Congressmen know what is happening....and what is happening is the refusal to provide the taxpayer basic audit rights.

I am fortunate in that I have a good friend who is a probate lawyer but can practice in Tax Court [he is the one being audited, and to be honest, probably deserves it]. Several times we have petitioned the court and settled in Philadelphia Appeals.....As an EA I can represent the client in Appeals, and usually he calls the Appeals officer and says I am coming in.

Anyway, this whole matter sickens me. You are so right that few understand the documents and end up losing refunds etc.

Death&Taxes 15:02, 21 December 2008 (CST)

audit letter

Tim

See the post, all looked normal.

My direct E mail is matt at mgjcpa dot com (helps reduce spam)

Matt

Thank You

Thank you for your kind words and for coming to my defense. I have re-joined the discussion board.

from Nancy Shoemake

Hi Tim, I would love to speak with you regarding your correspondence audits. I have alot of experience with what you are going through. Please contact me 651-707-3889. I am a CPA in Minnesota that has survived them. Nancy

See my post. Sperry doesn't address this situation at all and I'm not so sure Augustine would apply either but I can't say for certain.

NMexEA 17:51, 17 November 2010 (CST)

new post

Hi Tim,

You suggested I consider waiting to file for equitable relief on an innocent spouse. Has there been any update in the other Circuits since the CA7 upheld the 2yr requirement in Lantz?

A friend of mine (probono work) is classic innocent spouse. The IRS has nabbed $7k in previous MFSeparate refunds (2007 & 2008) (mostly arising from overwitholding & EIC) because of 2004 tax liability + int & penalties arising from MFJ return.

Early in 2010 she got divorced from her imbezzeling spouse (who is in jail till 2015).

I helped her file for equitable relief late 2009 - the IRS sent a letter denying it b/c of 2 yr rule but asked her if she would like to stay the decision. She agreed to the stay until the courts resolved it.

Not wanting to intrude on my time, she filed her own 2009 MFS return and didnt include the 3 kids or try for the EIC (thought she had to give the kids to hubby this yr b/c she took them in 2008,,,mind you-he's been in jail for all of 2009). She calculated a $300 refund and assumed the IRS would take it and apply it to the '04 debt as well. Instead they sent her $700 (maybe the make work pay was included).

I looked over the return and think she has a $9K refund coming. Any idea why they sent her the refund for 2009? Do you think, if I amend for her, they will send her the $9K from 2009? I was thinking about doing an offer in compromise (never done one before) on the 2004 liability (she has nothing-house foreclosed, car doesnt work, bounces from job to job trying to keep up with her children's problems) and if OIC accepted on '04 debt, amend '09 to get her refund free and clear. But then again, maybe they will just send her the refund if we amend the return without doing an OIC. What do you think?

She probably has a large 2010 refund as well (half way through the year I set her up for Advanced EIC). She really needs the $$ bad (car broke, cant pay electric bill, son dropped out of high school, daughter kicked out of middle school, tiny 2bd apt, works at Hardee's etc etc).

I was wondering, how would you suggest I consider handling her situation? Is there some other option she should pursue? I would appreciate any guidance you could give me here.

THanks Karen User:FloridaCPA, 01:29, 9 January 2011

************

Karen,

What was the nature and date of the collection action which started the two year clock on 6015 claims running? All you mentioned were offsets for 2007 and 2008, which would have occurred in 2008 and 2009, respectively, and would have been within two years of a innocent spouse filing in late 2009. I have not seen any decisions forthcoming from other circuits yet. It is a major issue and such a decision should receive a great deal of press. Tim 23:34, 10 January 2011 (UTC)

*****

Hi Tim,

Thanks for responding. I am not aware of any specific "collection action" that has been taken (and neither is she b/c her husband took care of everything)..but I would imagine the standard collection notices went out from the IRS some time in 2005. Would that not have been enough to start the clock? She didnt even know about the problem until we tried to get her taxes caught up by filing '06 & '07 (only to find out she needed to file '05 too). '05 & later were MFS.

Thanks again, I'm at a loss as to what her next step should be. I also dont think I'm using this discussion pg correctly. I couldnt figure out how to reply to you from my page and your discussion tab is limited to "users" (?).

FloridaCPA 18:06, 11 January 2011 (UTC)KarenFloridaCPA 18:06, 11 January 2011 (UTC)

I saw that and wondered!

Thanks for letting me know.

That happens to people who post with more than one ID - they log out of one and later on when they think they're logged in with another, the first one comes back to life somehow (the servers have a long memory, apparently, and logging out without actually quitting the browser isn't all that effective). But until now, I hadn't actually heard of such a crossover from two truly independent user names. I'll alert Tim Doyle to it over the weekend, as it might help him track down some strange spoofing we've been experiencing lately.

Trillium 04:25, 3 June 2011 (UTC)

TKelly911 thanks for your response. One follow-up, assuming you are a return preparer, as I am, would you bother to disclose the payments at all on the client's 1040? In other words, attach a schedule reflecting the gross receipt of damages with a corresponding deduction for the 104(a)(2) exclusion, thus netting to "0"; or in the alternative, simply not report the matter at all on the 1040? The attorney told me the Form 1099 MISC is coming to him and not my client. Thanks again.

Sorry Tim I forgot to sign that last message. CPAinOH 16:25, 3 June 2011 (UTC)

Thanks Tim. I tend to agree, the statement netting the taxable settlement to "0" does no harm and could be helpful. Especially so since my client is deathly afraid of the press somehow labeling him as a "tax cheat". How he got the idea anything to do with this matter would be exposed to the press is beyond me. CPAinOH 19:05, 3 June 2011 (UTC)

Nice profile!!!

Kevinh5

Not your post...

With regard to the discussion that was started under your name today:

Intuit thought this had been fixed - but for a period of time recently, one of the things that the engineers had done to speed up the website had a side effect of labelling some tiny percentage of the posts with the wrong user name because of the way events were being cached. I've sent an e-mail to Tim Doyle so that he knows it is still happening, as the most recent maintenance upgrade was specifically intended to stop this from happening.

When this originally started happening we thought it might be a form of spoofing, as in someone getting into the TA underpinnings and making posts or edits with other people's IDs. However, Intuit was able to quickly rule that out. The incorrect name that shows up on the post is generally someone who was posting right at the time that the "correct" name started posting, and behind the scenes the engineers could see how the lines were getting crossed (that's my layman's understanding of what was going on; if any of the engineers are reading this they're probably laughing, but perhaps in that case they can explain it for you in better terms!).

The question in the OP that's under your name may not even be a tax pro, and if somebody doesn't step up and claim it pretty quickly, I believe I'll take it down or move it over to the consumer questions forum until a real owner comes forward. In doing that, I'll try to get your name out of the OP and just leave the question to stand alone.

Trillium 22:18, 30 September 2011 (UTC)

Am I right about that?

Is my understanding about small firm tax practice correct? That it's usually estate work and IRS representation? That's how it seems around here but I don't know whether that's a universal truth.