A Lesson in Applying All the New Laws Enacted During the Pandemic
A Lesson in Applying All the New Laws Enacted During the Pandemic In working on our upcoming Fall Tax School program, I recently found myself in a position we hope…
September 20th, 2021
I’ll start out today with apologies to Billy Preston.
Be patient while I explain why Billy Preston is my guest artist for this week’s blog.
Let’s begin by understanding some terms relating to recovery rebates which are floating around:
“Will you go ‘round in circles? Will you fly high like a bird up in the sky?”
The Plus-Up payments will be a problem for next Spring, so for the time being let’s concentrate on the 2020 returns still on extension which are getting closer in your rearview mirror as October 15 quickly approaches.
We have noticed many postings on our Facebook page noting that the IRS has been changing recovery rebates due taxpayers (the reconciliation on the tax return) by indicating the amount of EIP payments received (the advance rebates if you will) were either wrong or the 2020 tax return reconciliation is wrong. This circumstance is causing angst among taxpayers as well as tax professionals, not to mention the errors are delaying taxpayer refunds even longer.
While we have a few weeks to go, what can you do to make the submission of those extended returns more accurate and quickly processed?
My understanding is it might take 5-7 business days to get fully up and running online so time is of the essence.
Nothing from nothing leaves nothing…you gotta put down something if you want to be in the mo-nee…
My apologies to Billy Preston for taking liberty with his lyrics. There’s an interesting factoid regarding the IRS correcting our reconciliation of the recovery rebates. They will alter the calculations if an entry has been made but if a taxpayer has left the recovery rebate area blank, the IRS will not calculate a recovery rebate for the taxpayer(s). I understand that this makes no sense. For almost everyone reading I’m certain you use software, and I don’t know of any way to make my software leave the recovery rebate screens blank, but you could have a new client contact you after perhaps submitting a paper filed return so now you know why a recovery rebate may not have been calculated for this taxpayer. By the way, I believe entering $0 as the amount of EIP payments received in your software is an entry which the IRS will recalculate. Apparently entering $0 is not the same as leaving the recovery rebate line blank.
Hopefully Billy’s catchy tunes will provide some earworms to get you through the next month. Here’s another little factoid about Billy which has nothing to do with taxes. He was often referred to as the fifth Beatle since he played keyboards on Let It Be, The White Album, and Abbey Road. So in honor of his accomplishments, your clients and I ask you….Don’t Let Me Down.
The Beatles – Don’t Let Me Down – Bing video
Stay thirsty for knowledge my friends….
By Tom O’Saben, EA
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