WWED

[BobKamman]

What Would Elon Do?

(Since he's the guy who helped fire 22% of IRS staff.)

Clients received a Letter 12C from IRS in Austin, telling them:

"Form 8962 is incomplete or missing from your return.  Complete the form with information that supports $67.00 on line 1 of Schedule 3.  Also attach all supporting forms or schedules, as required."

There is indeed an entry of $67 on Line 1 of Schedule 3, which is for Foreign Tax Credit.  There is no Form 1116 attached because the amount is less than $600.

Any net premium tax credit from Form 8962 would be reported on Line 9 of Schedule 3.  These clients have been on Medicare for many years, and their adult children are grown and gone. (I realize that identity theft is always a possibility, but then what's with the $67 issue?)

They're expecting a refund of $900.  IRS suggest uploading an answer at irs.gov/Connect (but they don't have an account) or faxing a response -- I threw out my fax machine when I moved to a new office because I only used it three or four times a year.  I have an eFax account, maybe I'll refresh my memory on how to use it to send, rather than receive a fax. Clients will be happy now that they are earning 7% interest.  

Elon's SpaceX development and manufacturing facilities are located near IRS in Austin.  They often have failures to launch, also.    

[Just-Lisa-Now-]

sounds like an easy one to respond to.

[sjrcpa]

But it's ridiculous for$67.

[sjrcpa]

@BobKamman As I recall all of your clients' tax returns are paper filed.

One of the hazards of paper filing is the IRS person entering the return in the system makes an error.

[BobKamman]

@sjrcpa Yes, and I warn all my clients that can be a consequence of putting up with me.  No matter what I do, they keep coming back.  Earlier this week I was talking to a widow, whose husband (six months older than I, our SSN's shared the same first five digits) died in April.  She told me that she'll come to my funeral and demand that I get up and help with her tax return.  

But what, exactly, should I tell my clients?  "I will put a number on Line 1 of Schedule 3, and IRS might send you a notice claiming that they see the number on Line 1 of Schedule 3, and it requires a Form 8962, which only involves an entry on Line 9"?  Every year, since IRS stopped keypunching all data twice, I deal with one or two transcription errors.  Usually it involves overlooking a box that is checked, or reading a number on the wrong line.  But that doesn't seem to have happened here.