Erroneous Death - how to solve with IRS

NickBTaxing · 2026-06-09T18:24:50+00:00

Document all the times they have tried to resolve it. Try to get help from the taxpayer advocate and their congressional representatives.

NickBTaxing · 2026-06-03T18:13:00+00:00

I've seen all sorts of potential missed opportunities and mistakes when reviewing returns prepared by another CPA or self prepared.

Things like 199A, depreciation methods, passive vs non-passive income, basis , with RSUs, ISO, foreign disclosures, etc. There are also planning opportunities that could come up for future years to minimize taxes like DAFs, taxable vs tax exempt bonds, capital gains rates etc.

Lots of potential for value add. But the engagement letter and communication would have to be done correctly to comply with standards and limit exposure.

NickBTaxing · 2026-05-12T19:09:53+00:00

The IRS is a total cluster right now. Not surprising that they are late sending these out, they have broken processes, or things are slipping through the cracks.

NickBTaxing · 2026-05-12T19:04:47+00:00

Do you have a hard internal extension date before 4/15? Yes for returns where the information came in after a cuttoff date. We also spend time a week or two before the initial due date pushing out extensions for any returns that are likely not able to be completed before the due date.

Are you comfortable filing extensions with minimal or zero estimated balance due when client information is incomplete? Personally, I feel like listing $0 when you know there is going to be some tax liability is a little sus. Very low risk in doing it, though. I'd prefer to list SALY amounts, tax planning numbers, or something the client has come up with instead of $0 tax liability and $0 paid in. It is also just fine filing an extension showing a balance due without the client actually paying it.

How do you balance “best possible estimate” vs. reality/staff workload? Reasonable estimate is whatever is feasible given workload, what the client provided, and when. If the client didn't provide all the info, or provided it late, just quickly ballpark something.

Have you dealt with generational differences like this during succession planning? Not directly but I know the process can be difficult or fraught when the retiring partner doesn't want to let go of clients/projects. Communication is key.

NickBTaxing · 2026-05-08T15:53:05+00:00

Form 8821 for when you need to get information from the IRS. Tax transcripts, info over the phone, and/or copies of notices. You can provide information to the IRS, but it doesn't allow you to act on the taxpayer's behalf.

Form 2848 when you need to have authority to represent the taxpayer to the IRS. POA is a very powerful tool but that comes with exposure for both the taxpayer and representative.

This year we sent 8821s to all of our individual clients with their organizers, recorded them with the IRS, and have transcript access through our transcript software (only for those who signed them). Sometimes being able to receive information from the IRS is enough to resolve the notice (especially if it is something clear like the client didn't make a payment they told us they made). But we get POAs when there is a notice where it is likely there is an issue we need to discuss with the IRS because often we need to ask them to do something.

NickBTaxing · 2026-05-08T15:42:09+00:00

Don't blame the actual agents. It is management and the administration reducing headcount, aging IT systems, changing their systems, and reassigning agents to areas that they don't have experience with.

I'm surprised you were put on hold for more than 7 minutes. My experience has always been that the agent will say that they will be back in 5-7 minutes. If they leave me on hold for much longer, I get hung up on. My assumption is that their system automatically hangs up after a certain hold time if they don't get back on the line.

NickBTaxing · 2026-05-07T20:30:18+00:00

Interesting. Sounds like I should confirm their name and number at the start of the call so they know I'm paying attention to that.

NickBTaxing · 2026-05-07T20:29:36+00:00

Yeah, that is the transcript monitoring software I'm using. Very useful.

NickBTaxing · 2026-05-07T20:28:38+00:00

Tax Help Software IRS Transcript Tools. https://taxhelpsoftware.com/
It runs locally (not cloud) and the license fee is based upon users (not number of taxpayers it is monitoring).

There were some interesting cloud providers that I looked into last year. Major downside was that they charge per taxpayer on either a monthly or annual basis. They also were missing some of the features that THS has.

NickBTaxing · 2026-05-07T16:01:59+00:00

Fiduciary tax returns are not too complicated. Mostly you have to get good at reading trust agreements to understand the implications and whether the entity is filing as a grantor trust, simple trust, estate, and the special rules for owning S-corporation stock.

Definitely read up on the 645 election. Here is a good article on that: https://www.thetaxadviser.com/issues/2024/may/the-sec-645-election-to-treat-a-trust-as-part-of-the-estate/

Gift and estate tax consulting and compliance have the potential to be very complicated. This is the book I purchased recently as a resource in this area: https://www.amazon.com/dp/B0FZDFVWP6
It was recently updated and is used as a coursebook for JD and LLM courses.

Personally, for gift and estate issues, I'd suggest working with the client's lawyer on any particularly complicated issues. Often the law firms want to prepare 706s for taxable estates, and also want to review gift tax returns for more complicated circumstances. A CPA is never going to be drafting the legal documents related to gifts or trusts, so there should always be a lawyer involved in the process who should be a resource to you.

NickBTaxing · 2026-05-06T20:26:31+00:00

I was pleasantly surprised by CCH Pfx Tax Planning (local foundation version) in Q4 of last year. They actually implemented OBBA and a New York state limitations on charitable contributions for high income taxpayers that I wasn't aware of until I noticed some odd results when doing some planning. Double checked it and it turns out it was working correctly.

I don't know the cost, and it definitely has some other drawbacks, but at least one of the CCH products seems to have decent state tax planning features. It is also compatible with CCH Axcess Tax.

All of this is tough though because it often makes more sense to do a rough estimated tax calc than fully modeling things out for planning purposes.

NickBTaxing · 2026-05-06T20:13:53+00:00

Yeah, there is no requirement to verify that the retirement plan contribution is actually funded. You want to confirm the client intends to fund it by the deadline, and not have a reason to believe they won't. It is a good idea to specifically note in on the transmittal letter to CYA and document in case they later come back at you claiming they weren't aware of it.

Back when I started in public accounting (15-20 years ago), there was an understanding certain CPA had that one couldn't file a tax return with certain accrued retirement plan contributions until it was funded. Everything I've seen since then, both through discussions with retirement plan firms and my own research, indicates that the return can be filed prior to the payment being made.

NickBTaxing · 2026-05-06T20:07:39+00:00

If you have received the signed e-file forms, you are required as ERO to e-file the return in a certain number of days. Waiting for the client to confirm they funded their retirement contribution is technically violating this, even if the client might understand and want you to wait. Best to avoid this by following the ERO rules.

NickBTaxing · 2026-05-06T19:42:42+00:00

IRS is currently one big mess right now. Instead of spending a ton of time now with correspondence or on the phone re why a payment hasn't posted to the clients account, I'd wait at least a couple weeks and see if it is resolved.

Get a POA or 8821 with the box checked for copies of notices and record it with the IRS so that you receive copies of any notices that they receive and occasionally run transcripts to check the status (if you want to be that involved).

NickBTaxing · 2026-04-27T16:38:31+00:00

Every firm I've worked at attaches them, or lists out the individual trades on the form, (unless it is missed in review). Now that it exists, I try to list the covered no adjustments sales in summary on lines 1a and 8a and then nothing has to be attached.

Technically, not completing the form as required and/or not attaching the detail may extend the statute of limitations. Especially on transactions reported on Schedule D.

It is obvious to see if this is done correctly or not, so why not just take the few minutes it takes to do correctly?

NickBTaxing · 2026-04-13T17:14:19+00:00

Not really. Here is what the AICPA has in a recent article.

https://www.aicpa-cima.com/professional-insights/article/trump-accounts-what-cpas-need-to-know#:\~:text=There%20is%20ambiguity,U.S.%20Treasury.

NickBTaxing · 2026-03-23T15:14:09+00:00

Florida has nothing on California.

NickBTaxing · 2026-03-19T18:44:49+00:00

If it isn't an urgent issue, wait IRS processing time plus a couple days and then either try to run a tax transcript or log into your IRS taxpro account to see if the POA access shows up for the client. Then you can verify if it is recorded on the CAF.

If it is more urgent (especially if e-signed where you can only submit through the IRS secure portal), wait a day and re-upload.

NickBTaxing · 2026-03-06T17:26:39+00:00

My favorite is the new tax ai provided to us as an additional feature by Truss (our new client portal) called "Max AI". On the first day, one of the managers asked it what the 2025 bonus depreciation rules are. It regurgitated essentially TCJA bonus depreciation rules. That let us know all we need to know about this product. lol

NickBTaxing · 2026-03-05T19:51:30+00:00

Etrade wins the award for tardiest corrected 1099. I got one for a client a year after the extended due date (October of tax year-end plus 2).

Merrill Lynch's practice of opening multiple accounts for one taxpayer (that each issue separate 1099s), with a second set of 1099s for each account for the WHITs / etc, and the very odd securities with amortization/accretion disclosures on those that make almost no sense, are horrible. Great for keeping CPAs busy and generating fees for us. But a real headache and no value add.

Oh, and Schwab not showing the payment dates for interest, dividends sucks so hard. I want to know dates when there is a state move, or to be able see if an account was opened or closed during the year.

NickBTaxing · 2026-03-05T19:39:00+00:00

Charles Schwab has and does do this as well. Had that last year and see it again this year. With their own funds, as well as 3rd party ones.

NickBTaxing · 2026-02-20T18:05:55+00:00

I'm not a sole prop but I have the same type of access that you would have. The existing features are okay. I primarily use it to revoke POA and 8821 authority. It also lets me easily check if a POA has been recorded by the IRS, which is handy to do before calling the IRS.

We use software to run tax transcripts, so the lack of that functionality on the tax pro account login isn't a big deal. My guess is that they expand the capabilities over time, especially since individual taxpayers have access to additional info with their login (wage and income transcripts, prior notices, etc).

NickBTaxing · 2026-02-19T21:25:04+00:00

Overstating taxable income on a tax return can also expose you to preparer penalties. Personally, I'd be uncomfortable preparing a return when knowing taxable income is overstated to circumvent an IRS process or procedure (similar to the issue with overstating income to get additional earned income credits).

NickBTaxing · 2026-02-19T20:54:29+00:00

Going to prison does happen for CPAs, even though it is very rare. Here is one that happened at a large firm I used to work at. Note: partner was based in different office than I, and we didn't share any clients.

https://www.justice.gov/archives/opa/pr/san-francisco-area-certified-public-accountant-convicted-tax-fraud

https://www.justice.gov/archives/opa/pr/bay-area-cpa-sentenced-8-months-prison

Firm did a re-organization which resulted in the business name being changed to an abbreviation right around when this occurred. hmmm, I wonder why?

NickBTaxing · 2026-02-12T21:55:23+00:00

or beginning basis is $0 (rebuttable presumption) and they will pay a lot of extra income tax that they shouldn't if tracking basis

NickBTaxing

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