Thursday, March 16, 2017


Just wanted to pass along this information from the National Association of Tax Professionals -
Northeast and Mid-Atlantic Granted Extension Relief
The IRS has granted businesses affected by this week’s severe winter storm additional time to request a six-month extension to file their 2016 federal income tax returns. The IRS is providing this relief to victims and tax professionals affected by this week’s storm (known as Winter Storm Stella) that hit portions of the Northeast and Mid-Atlantic.
Business taxpayers who are unable to file their tax return by today’s due date (March 15, 2017) can request an automatic extension by filing Form 7004 on or before March 20, 2017. Form 7004 provides a six-month extension for returns filed by partnerships (Forms 1065 and 1065B) and S corporations (Forms 1120S).
Eligible taxpayers taking advantage of this relief should write “Winter Storm Stella” on their Form 7004 extension request (if filing Form 7004 by paper).”

Saturday, March 11, 2017


The 2017 Tax Filing Season (February 1 through April 18) is now half over!
I have completed and put in the mail 116 sets of returns during the first half of the season.  Given I completed 229 returns before calling it quits on April 17 last year I have done slightly more than half that number already.  And the 2nd half actually has a little more work time (despite losing an hour this Saturday night) – since I will have less days “on the road”.
Although the IRS has announced that actual returns filed are down from last year at this time – that is certainly not the case with me.  I
 have only a handful of “red files” (need more info) and only a handful of returns received in February to complete.  And the “to be done” box is not as full as it usually is at this time.
Cash payments are also slightly up from the same time last year.
So all is going smoothly – and hopefully it will remain smooth and I can end the season with a minimum amount of GD extensions!
Talk to you again on April 1st.

Wednesday, March 1, 2017


One month down – one and a half to go!
I am ahead of last year (in completing returns, but, unfortunately, not in fee collections).  I have completed 90 sets of returns during the first month of the tax season - more than completed the same time last year!  Many of the returns I completed in late March and early April last season have already been done. 
I have either heard from, made arrangements with, or completed the returns of over half of my client mailing list.
The “to be done” box is not as full as it usually is this time of the season.  And I have only 3 “red-files” (need more information).
I have been “behind closed doors” Monday and Tuesday (and, of course, today, as it is Wednesday), with the phone turned off.  It has been wonderful, but I guess I will have to plug the phone back in on Thursday morning.
There have been no problems to deal with, neither with computer and equipment issues, the weather, or actual tax return issues.
Let’s hope the season continues to run smoothly – and I can end the season with minimal GD extensions!
I will check in with you again after March 15th.

Thursday, February 23, 2017


Another break from my tax season hiatus for some important information.
A recent post from Kay Bell, the yellow rose of taxes, at DON’T MESS WITH TAXES reveals something that is no surprise to me - “Most taxpayers get failing tax knowledge grades”.
In discussing a recent survey, Kay tells us -
The Nerd Wallet survey, conducted online by Harris Poll, also found that many Americans lack a basic understanding of federal tax rules.
Actually, it was more blunt.
Failing tax grades: Most taxpayers get failing marks for their tax knowledge.
Out of eight questions about IRS rules for common deductions, retirement and education savings plans, only a quarter of the surveyed taxpayers correctly answered the questions.
Breaking down the failing grades, the NerdWallet poll found that nearly half of taxpayers (46 percent) don’t know into what tax bracket their income falls. Seven percent didn't even know what a tax bracket is.
Another 57 percent, or nearly three in five taxpayers, don’t know what a W-4 is.
And yes, the survey group was more than 1,800 adults across the United States who filed income taxes last year and plan to do so again this year. Obviously, they didn't learn from last year.
The answer to a lack of tax knowledge is NOT tax preparation software or an online filing service!  As I say each and every year –
No software package, or online filing service, is a substitute for knowledge of the Tax Code, and no tax software package, or online filing service, is a substitute for a competent, experienced tax professional!
If you need to find a qualified tax professional you can begin your search at my website FIND A TAX PROFESSIONAL.
OK – back to the 1040s!

Monday, February 20, 2017


I have decided to interrupt my tax season blogging hiatus to discuss a recent tax development.
Perhaps the most controversial component of the Affordable Care Act (aka “Obamacare”), and the component I oppose the most (along with “age-weighted” premium calculation) is the Shared Responsibility Penalty.
The individual shared responsibility provision of Obamacare requires that each taxpayer, and each member of a taxpayer’s household, either have “minimal essential” health insurance coverage for the entire year or qualify for a health coverage exemption.  If you do have appropriate coverage or qualify for an exemption you are subject to the Code Sec. 5000A Shared Responsibility Payment, aka the penalty for not being insured.
The collection of the Shared Responsibility Penalty is not subject to criminal or civil penalties under the TaxCode, and interest does not accrue for failure to pay such assessments in a timely manner. The only way the IRS can collect an unpaid penalty is by offsetting a current or future refund.
On January 20, 2017, the idiot in the White House signed his first executive order directing the Secretary of Health and Human Services and other department and agency heads to exercise all available authority and discretion to “waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the Act that would impose a fiscal burden on any State or a cost, fee, tax, penalty, or regulatory burden on individuals, families, healthcare providers, health insurers, patients, recipients of healthcare services, purchasers of health insurance, or makers of medical devices, products, or medications.”
A major manifestation of Trump’s mental disorder is the fact that be believes he can do no wrong.  I, and many others, believe he can do no right.  However, in this specific situation only, his action with this executive proclamation has had a good outcome.
Earlier this year, the IRS was originally rejecting returns during processing when the taxpayer didn’t provide information related to health coverage – i.e. they were “silent” and did not check the box to indicate that they had “full-year coverage”, did not identify an exemption, and did not calculate and include the penalty. However, based on idiot Trump’s executive order, the IRS reversed that position and is now accepting both electronically filed and paper filed returns that are “silent” as to health care coverage.  If you submit a return that is “silent” regarding coverage and requests a refund the return will be timely processed and the refund issued.
The IRS does say “taxpayers may receive follow-up questions and correspondence at a future date, after the filing process is completed”, so, depending on how thing play out in Congress, taxpayers who are “silent” about health coverage on their 1040 or 1040A may receive a notice from the IRS after the tax filing season.
The Republican Party, which now controls Congress, and the idiot in the White House have vowed to promptly repeal Obamacare, and eventually replace its appropriate components with new health care legislation.  At the very least they will repeal many of the components of the ACA, including the Shared Responsibility Penalty.
I strongly opposes the “self-assessment” of IRS penalties like the underpayment of estimated tax or shared responsibility penalties. I especially oppose requiring a taxpayer to pay someone to assess them a penalty.
I will never, under any circumstance, prepare a Form 2210 to calculate a penalty for underpayment of estimated tax as part of the filing of any tax return. If the IRS wants to charge the taxpayer an underpayment penalty that is their right. I have no problem charging a taxpayer a fee to assist in reducing, removing, or abating an IRS assessed penalty – because the client is getting real value for the fee paid in that situation.
I feel the same way about the Shared Responsibility Penalty, especially since the IRS announcement that remaining “silent” about health coverage will not delay the processing of the tax return or the issuance of a requested refund.
At this point, with the repeal of either the entire Affordable Care Act or at least the shared responsibility penalty eminent, and the fact that the IRS does not have the authority to collect any assessed penalty other than by offsetting future refunds, I feel the best course of action for a taxpayer, or a tax preparer, is to remain “silent” about health coverage when the taxpayer would be subject to this penalty, and not include a penalty assessment as part of the tax filing.

Thursday, February 16, 2017


The IRS recently issued a news release debunking 5 refund tax myths.  Most important – in my opinion – is this one -
Myth 2: Calling the IRS or My Tax Professional Will Provide a Better Refund Date
There are lots of good reasons to use a tax professional {certainly the truth – rdf}. It is a myth, however, that bugging your tax preparer, or the IRS itself, will get refunds to taxpayers more quickly.
In reality, says the IRS, the best way to check the status of a refund is online at's "Where’s My Refund?" tool. Or taxpayers can use their digital device to check via the IRS2Go mobile app.
The IRS updates the status of refunds once a day, usually overnight. Checking either status option more than once a day will not produce new information.
And no, trying to connect with a real person at the IRS will not get you any additional info. Only call for added help if the refund status tool or app instructs you to do so.”
So if your federal, or state, refund has not arrived as promptly as you think it should have DON’T CALL YOUR TAX PREPARER!

Wednesday, February 15, 2017


February is half over – so just two months left.
I have completed 35 sets of returns during the first two weeks of the season.  And I have either done, received, or made arrangements with about 31% of my client list so far. 
I am ahead of last year at this time – I had done 28 sets and heard from 26% of the herd by 2/14/16.  A good sign.
No issues yet this season – processing, computer, or weather.
As is usually the case, for the first two weeks I have been completing returns as they are received, with at most a one day turn-around.  Now the floodgates will open, and turn-around time will gradually increase until it becomes about two-weeks.
Now – back to the 1040s!