Tuesday, February 22, 2022



Clients who have received the IRS CP80 Notice telling them they have an outstanding credit for 2020 but they have not filed their 2020 return ask me, “How can the IRS say I haven’t filed my return when they cashed my check?”

Here is the story as I understand it (fellow tax pros – correct me if I am wrong) -

When you request a refund on a paper return you mail your tax return directly to the IRS.  Millions and millions of unprocessed 2020 paper-filed tax returns are currently sitting in piles in IRS offices.

When you have a balance due and are sending the IRS a check you mail your return and check to a Post Office Box which is maintained as part of a bank “lock box” service.  The bank promptly processes and deposits the check, based on the information provided on the accompanying Form 1040-V payment coupon, and sends the paper tax return to the IRS, where it joins the millions and millions of unprocessed returns in the pile.  The bank also electronically reports to the IRS that you made a payment for 2020.

The IRS system is aware of your payment but has not processed the return that corresponds to that payment - so the payment is not matched to a specific tax liability.  The Service system has a record of your payment but no record of your return.


Friday, February 18, 2022



The damage done to our country and our society by the Trump presidency is incalculable - and ongoing.

I continue to say without fear of contradiction that in our history no one single individual has done more damage to America, American values and American democracy than Trump.

Trump, as President, being openly ignorant and racist gave erroneous legitimacy and credibility to the ignorance and racism of too many Americans.

I love the play, and movie, “Inherit the Wind”.  It is not inconceivable that today, thanks in a large part to Trump, some districts in the south could once again mandate teaching the Biblical interpretation of creation in schools and ban the teaching of evolution and actual science.

I very seriously and sincerely believe that any person who listens to, believes, defends, and supports Trump is either a moron, a racist, has no conscience, or, like Trump himself, all three. 

There is very literally no rational, intelligent or acceptable reason for anyone to listen to, believe, defend and support Trump.

And I also very seriously and sincerely believe that today’s Republican Party is without a doubt the Party of Ignorance and Racism. 

It is vital in 2022 that all intelligent and patriotic Americans vote AGAINST all Republican candidates at all levels – unless the candidate vocally opposes, denounces and disavows Trump, his lies and the current leadership of the Republican Party, state and national, and has consistently done so.


Tuesday, February 15, 2022



* It’s worse than we were told.  Russ Fox explains “That 6 Million Return Backlog? Oops, We Mad a Math Error: It’s Really 24 Million” at TAXABLE TALK.

He also tells us why calling the IRS is not a good idea.  Even in “normal times” I never call the IRS.  1. I want a written record of all dealings with the Service and 2. I have been lied to by the IRS person to whom I spoke when I called decades ago.

And he has some ideas on what the IRS should do.

BTW – Russ, my hair has been prematurely grey for years.

* Some good news from Kay Bell at DON’T MESS WITH TAXES - “IRS suspends issuance of 14 more taxpayer notices” - 

After pressure from members of Congress, the National Taxpayer Advocate, and the Tax Professionals United for Taxpayer Relief Coalition, a group of organizations formed the to help make this third Covid-affected tax season a bit smoother, the Internal Revenue Service has decided to suspend sending of most taxpayer notices.

Kay provides a detailed chart of the suspended notices.

* Michael Cohn tells us the “IRS posts special tax season info page for tax pros and taxpayers” at ACCOUNTING TODAY -

The Internal Revenue Service has set up a dedicated page on its website to provide the latest information about the current tax season and the agency’s efforts to deal with the backlog of millions of previously filed returns.”

Click here to go to the new page.

* Back to Kay Bell, she reminds us “All unemployment benefits are again fully taxable”.

FYI – several states, erroneously, no longer actually mail out the Form 1099-G that reports unemployment income and withholding – you have to go online to the website of the state unemployment department to get it.  That is the case in New Jersey. 

And in most cases even if you had some federal withholding on unemployment benefits it is usually not enough to cover the actual tax cost.

* Once again Kay makes the trifecta with a reminder – “IRS sending 1099-INTs to taxpayers who got interest added to tax refunds”.

Thankfully the IRS has been paying interest on the late refunds of the past two years - which is, of course, taxable income.  The good thing about IRS interest is that it is substantially higher than what any bank or brokerage pays.

* Here is some good advice from Maryann Vognild, CFP at THE STREET – “Dreading Income Tax Season? Try Income Tax Planning Instead” –

Do you feel Uncle Sam looming over you, waiting to cause devastating damage as soon as tax season hits? Well, there are ways to plan for taxes that can reduce your overall, lifetime tax burden... and to get Uncle Sam to stop being so frightening.”

I have been saying for decades – you don’t have to wait for Congress to pass a tax cut bill. You can enact your own personal tax cut with careful tax planning.


Monday, February 14, 2022



Here is what you need to give to your tax preparer.

* Full names, as they appear on the Social Security card, Social Security numbers and dates of birth for you, your spouse, and all dependents, the relationship of all dependents, and whether or not, and how long, they lived with you.

* W-2 forms (all copies) and the final pay-stub for the year for all of your employers.  Make a copy of your W-2s to keep with you.

* All 1099s (for interest, dividends, gross proceeds, pensions, distributions from a Qualified Tuition Program, and other income), 1098s (for mortgage interest, contribution of a motor vehicle to charity, student loan interest, and tuition and fees).

* All K-1s and all attachments and supplements for partnerships, sub-S corporations, estates and trusts from all sources.

* Any 1095-A you receive regarding health insurance premiums and advance premium tax credits for insurance purchased through the government Marketplace.   

* IRS Letter 6475 to report the amount of the 3rd Economic Impact Payment you received in 2021, or the amount of payment received, and IRS Letter 6419 to report any advance Child Tax Credit payments received in 2021.  

* All year-end statements and information you received from brokerage and mutual fund accounts and any AVERAGE COST STATEMENTS received from a mutual fund on the sale of fund shares.

* How much of the principal of any mortgage loans represents “acquisition debt” (money borrowed to buy, build or substantially improve the residence) and how much represents “home equity debt” (money borrowed for any other purpose – such as to pay for college, pay down credit cards, or buy a car).

* A detailed listing of-

1.   unreimbursed medical expenses,

2.   charitable contributions,

3.   rental income and expenses, and/or

4.   self-employment income and expenses.

Your tax pro doesn’t need to see actual bills, receipts, or cancelled checks.  For the most part I just need numbers.  DO NOT give him or her a pile of medical bills and receipts and insurance statements and expect them to sort through them to determine your allowable medical deduction.

Your tax pro also does not need to see proof or acknowledgement of each of your individual cash donations.  They only need a listing of your contributions.  Do, however, provide any receipts, acknowledgments or listings for non-cash contributions –clothes, books, household items, furniture, etc. - to Goodwill, the Salvation Army, or your church.  

Provide specific numbers for deductions you are claiming.  “Claim the maximum” or “Whatever I am allowed” or “Same as last year” is not appropriate.  The maximum is what you actually paid – and you are allowed what you actually paid!  Tell your tax pro “$1,023.50” or “$20.00 per week for 50 weeks” or “4638 miles”.

If any of the situations described on the next pages apply to you, your preparer will need additional information.

IF YOU SOLD STOCK, BONDS, OR MUTUAL FUND SHARES – The date of purchase and cost of the investment sold.  This information may be in the Year-End Consolidated Form 1099 Statement you received from the brokerage firm or mutual fund house.  If cost basis information for all trades is not included on this statement have your broker provide you with a “profit and loss” report for all the year’s trades that reconciles to the Form 1099B for each account.  If you sold an investment you inherited provide the number of shares inherited and the date of death of the person from whom they were inherited.  

IF YOU SOLD REAL ESTATE – The Closing/Settlement Statements for both the purchase and sale of the property, plus the cost of improvements made to the property over the years and any expenses of sale paid separate from the closing.

IF YOU PURCHASED REAL ESTATE – The Closing/Settlement Statement for the purchase of the property.  For rental property provide the separate amounts of “assessed value” for land and improvements from the tax bill.

IF YOU RECEIVED DISTRIBUTIONS FROM AN IRA – The year-end statements for all IRA accounts and if you rolled-over into another IRA account any of the distribution.

IF YOU RECEIVED DISTRIBUTIONS FROM A PENSION PLAN – Did you rolled-over the distribution to an IRA or you “took the money and ran”.

IF YOU ARE PAYING OR RECEIVING ALIMONY – The date of the divorce agreement, the Social Security number of your ex-spouse, the amount of alimony paid or received for the year, and any other required payments, such as health insurance premiums, real estate expenses, that you are made on behalf of your ex-spouse.


IF YOU REFINANCED A MORTGAGE – The Closing/Settlement Statement for the refinance, the term of the new loan, and what you did with any cash you received from the new loan. 

IF YOU DONATED A CAR TO CHARITY – All the paperwork you received from the charity, especially the Form 1098-C, plus the original cost and date of purchase of the car.

IF YOU HAVE GAMBLING WINNINGS – All W2-Gs, details of all your gambling losses (slots, tables, raffles, lottery, racetrack, etc.), and any gambling log you kept. 

IF YOU HAVE DEPENDENTS IN COLLEGE – All Form 1098-Ts received and all the “Bursar’s Reports” for the year that show tuition and other payments.  You may be able to print-out a financial report from the college’s website.  Also, what was spent on course-related books, supplies, and equipment.  If you have taken a distribution from a Section 529 Qualified Tuition Program provide the cost of room and board or if the student lived at home.

IF YOU PAID FOR CHILD CARE, WHETHER DIRECTLY OR THROUGH A FLEXIBLE SPENDING ACCOUNT – The name, address, Social Security or Employer Identification number, and amount paid for all child-care providers listed by chikd.  You may be able to get statements from the provider(s).   

Additional information may be needed for the state return.

Don’t give your preparer your “stuff” in installments.  Wait until you receive all the necessary forms and information

If this is the first year with a new tax preparer give him or her copies of your 2020, 2019, and 2018 federal and state returns.


Thursday, February 10, 2022


Many tax professionals will send their clients a letter in January telling them what is new for the current year returns and specifically listing what forms, statements or information that the client needs to give to the tax pro – as I did each year before retiring.

Read this letter completely and carefully and give your tax professional everything he asks for.

That’s it.


Wednesday, February 9, 2022



For now, there is no regular schedule for the BUZZ.  I will post when I accumulate enough items.

* Professor Annette Nellen is asking for help in “Dealing with 1099 Errors - Input Desired” at 21st CENTURY TAXATION -

I'm working on a paper for a longstanding activity of the Tax Section of the California Lawyers Association to propose that the IRS create a new form to allow taxpayers to reconcile erroneous reporting forms. . . Any examples you'd like to share with me to support the need for a tax form for reconciling information reports to avoid or hopefully at least lessen the number of notices issued by the IRS asking why the form wasn't fully reported.”

* BLOOMBERG TAX provides a 2-part update on the various highly-taxed states’ attempts to help their residents legally evade federal income taxes in “SALT Cap Workaround: Pass-Through Entity Tax Update Part I and Part II”.   

* Kay Bell lists “3 medical tax breaks prompted by COVID-19” at DON’T MESS WITH TAXES.

NJ taxpayers – while you may not be able to get a federal deduction for medical expenses you may get a deduction on the NJ-1040.  And remember, whatever is deductible as a medical expense on the federal return is deductible as a medical expense on the NJ return.

* Michael Cohn gives us an update on the IRS attempts to fix its current total FU-ness in “IRS works to overcome processing backlog, automated notice problems” at ACCOUNTING TODAY.  


Let's be honest - anybody who thinks January 6th was "legitimate political discourse" is a fucking moron.


Monday, February 7, 2022


More proof that the IRS is totally FU-ed.

Taxpayers had an overpayment of $782 on their 2020 Form 1040-SR.  They requested, on Line 36, that $375 be applied to 2021 estimated taxes as the first quarter payment.  The net refund requested on Line 35e was $407.  The return was filed in March 2021.

The taxpayers received a refund check from the IRS in July for $787.87 - $782.00 plus $5,87 interest.  They also received CP30A notice from “Sam” stating that “We’ve reduced your penalty for failing to pay estimated taxes” as an explanation why the refund was $782 and not $407.

What penalty for failing to pay estimated taxes?  I NEVER calculate a penalty for underpayment of estimated taxes on ANY federal or state tax return I prepare – and I NEVER include a Form 2210 with the return.  It is my opinion that if the IRS wants to assess a penalty let them do so – and I will deal with it only if they do.  I did not make any entry on Line 38 of the 2020 Form 1040-SR.

This CP30A was informational only and did not request or require any action by the taxpayer.  However, it has become crystal clear that every single notice issued by the IRS nowadays is erroneous.  While you should not ignore an IRS notice (except the one telling you your 2020 return was not received and you should file or refile it) – you should never assume that it is correct or that it contains any actual facts.  Or that you should do as it instructs. 

I continue to wonder if the IRS will ever fully recover from its 2020 shutdown.


Wednesday, February 2, 2022


I very seriously and sincerely believe –

* Donald T Rump is a totally worthless piece of garbage, completely devoid of intelligence and humanity, who does not possess a single redeeming positive human value or quality.  He has never performed a single totally unselfish act in his entire adult life.  Trump is the textbook example of a narcissist and a sociopath.

* In the history of our country no one single individual has done more damage to America, the American people, American values, and American democracy than Trump.

* Any person who actually listens to and believes Trump is a complete moron and any person who defends and supports Trump is either a moron, a racist, has no conscience, or, like Trump himself, all 3. 

* Support of Trump is a clear display of ignorance and poor judgement.  I would never knowingly hire or patronize a business owned by a Trump supporter.

* The biggest threat to the future of America and American democracy today is not Russia or China or ISIS – it is Trump and the Trump-embracing Republican Party.  Today’s Republican Party has abandoned all integrity, honor and credibility, and true conservative and traditional Republican policies and values, to court and pander to Trump’s core cult of ignorant racists.

* It is vital that intelligent and patriotic Americans vote against all Republican candidates at all levels in 2022 who do not vocally and aggressively oppose, denounce and disavow Trump, his lies and the national leadership of today’s Republican Party.  Only vote for Democratic, Libertarian, Green Party, or consistently anti-Trump Republican candidates.


Tuesday, February 1, 2022


 And now – what you have been waiting a year for – 


On the first day of tax season my client gave to me a Letter 6475 to report the Economic Stimulus Payment (with incorrect information).

On the second day of tax season my client gave to me 2 year-end brokerage statements.

On the third day of tax season my client gave to me 3 mortgage statements (without, of course, any analysis of how much of the mortgage interest reported represents interest on acquisition debt).

On the fourth day of tax season my client gave to me 4 W-2s.

On the fifth day of tax season my client gave to me 5 Salvation Army receipts.

On the sixth day of tax season my client gave to me 6 1099-DIVs.

On the seventh day of tax season my client gave to me 7 cancelled checks.

On the eighth day of tax season my client gave to me 8 useless items.

On the ninth day of tax season my client gave to me 9 medical bills.

On the tenth day of tax season my client gave to me 10 stock sale confirms.

On the eleventh day of tax season my client gave to me 11 employee business expenses (despite being no longer deductible).

On the twelfth day of tax season my client got from me a finished tax return, 11 employee business expenses, 10 stock sale confirms, 9 medical bills, 8 useless items, 7 cancelled checks, 6 1099-DIVs, 5 Salvation Army receipts, 4 W-2s, 3 mortgage statements, 2 year-end brokerage reports, and a Letter 6475 to report the Economic Stimulus Payment (with incorrect information).

And, of course, on the thirteenth day of tax season my client gave to me a corrected Consolidated 1099 from Wells Fargo Advisors!