On Feb 3, 11:25*am, "Paul Thomas, CPA" <paulthomascp...[at]bellsouth.netwrote:
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Thank you for the good information.

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"Mark Bole" <makbo[at]pacbell.net> wrote
- quote -




When did the penalty for perjury on your tax return get changed to being
appointed to a Cabinet position in the new administration?






--
Paul Thomas, CPA
Watkinsville, Georgia

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

bernardnewman[at]comcast.net wrote:
- quote -

[...]
- quote -


Because you are stating so under penalty of perjury when you sign your
return.

[...]

Yes, I understand if I get audited
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Correct.

[...]
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Better for the IRS to have the data and not use it, than need it and not
have it.


- quote -

See above. Here's one: you (if married filing joint) can exclude up to
half a million dollars of gain on the sale of your primary residence and
it doesn't show up anywhere on your return, no computer reconciliation.
I'm sure there are other examples.

-Mark Bole

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

Sorry, I admit that I asked this before but it's STILL not clear to me
that there is nothing that I have to file with regard to Form 1099-Q
for withdrawals from a 529 Plan.

This whole thing is new to me. My daughter enrolled in Expensive U
back in August 2008. I paid for both freshmen semesters in 2008,
including room and board. I got a 1099-Q from the Pennsylvania 529
plan that I withdrew money from. The 1099 shows about $50,000
withdrawn. I spent probably $55,000 of qualified expenses so there is
no tax due. My basis was about $25,000 as I've been in the plan for a
long time and it's a "prepaid" type plan that does not spank me for
the equity price crash.

My question is this: It appears from Turbotax that there is no
reconciliation on the actual tax return. Once Turbotax is satisfied
that the qualified costs paid exceed the gain on the withdrawal,
nothing further happens. (Although if I play with it and make the
expenses LESS than the gain on the withdrawal, it does show tax due on
Form 1040).

How does the IRS know that I actually spent more than the potentially
taxable withdrawal amount? If they get a 1099-B, the burden is on me
to show the Schedule D transaction and prove what's due or not due.
Otherwise they assume that the entire 1099-B amount is taxable. If
they get a 1099-MISC, the burden is on me to prove what's self-
employment income, again otherwise they assume the entire amount is
taxable. But it appears if they get a 1099-Q, there is no burden of
proof required on the tax return. Yes, I understand if I get audited
I'll owe taxes and perhaps interest and penalties if I don't report
the income and don't have enough qualified expenses to cover it.

Am I right about this? Is there no further reconciliation
required....does the IRS really assume that the 1099-Q is at least the
amount spent on qualifying expenses and that no tax is due? And the
burden is only on me to show if it is more and tax actually is due?

Seems counter intuitive to every other Form 1099 situation and
certainly not in the IRS interest. Furthermore, why require 529 Plans
to file a 1099 with the IRS at all if the IRS doesn't reconcile
automatically reconcile this like they do with other 1099 situations?
Certainly there are lots of instances where taxes are due from
taxpayers and there is no 1099 for the IRS to check against, yet the
taxpayer is still obligated to pay tax due. Why not eliminate the 1099-
Q if there is no automatic computer matching against the tax return?

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >