Has anyone here had success with getting Form 2848 approved when the person with dementia CAN'T sign the form anymore? My mother's dementia has progressed to the point where she doesn't understand what she's signing. I have legal guardianship through the courts but the IRS keeps rejecting the form.

Thanks everyone for sharing your experiences! I just went through this exact same situation with my elderly father and wanted to add a few tips that might help others: 1. When you resubmit the corrected Form 2848, include a cover letter explaining that you're resubmitting based on their feedback. This helps the IRS processor understand why you're sending it again. 2. Make copies of EVERYTHING before you mail it. The IRS processing times are unpredictable right now, and having copies helps if you need to follow up. 3. Consider sending it certified mail so you have proof of delivery. It adds a few dollars but gives you peace of mind. The "licensing jurisdiction" column issue trips up so many families - I wish the IRS would just relabel that column to "relationship/jurisdiction" to make it clearer. Once I put "son" in that field and left the license number blank, it was approved within 3 weeks. Good luck getting this resolved for your cousin's mom! Having the POA in place makes handling her tax matters so much easier.

According to Internal Revenue Manual 5.19.17.2, "The offset of refunds to pay tax liabilities is not prohibited while a taxpayer is in CNC status." I went through this myself. I was placed in CNC status in 2022, filed my return in February 2023, and my entire $2,800 refund was applied to my outstanding tax debt. The IRS considers refund offsets as passive collection actions that are separate from the active collection actions prohibited by CNC status. I understand how frustrating this can be when you're already in financial hardship.

I'm currently going through this exact situation and can confirm what others have said - CNC status won't protect your refund from offset. I was placed in CNC status in September 2023 due to unemployment, but when I filed my 2022 return last April, they still took my entire $1,847 refund. The frustrating part is that the CNC determination letter specifically states they won't pursue collection activities, but apparently refund offsets don't count as "active" collections. I called the Taxpayer Advocate Service to see if there were any options, and they explained that the offset happens automatically through the Treasury Offset Program before the IRS even processes your return. My advice would be to adjust your withholdings going forward so you owe a small amount instead of getting a refund - that way there's nothing for them to take.

3 Has anyone used TaxAct with Notice 2014-7 income? I'm trying to figure out how to enter this correctly and the software keeps trying to tax me on it, even though box 1 of my W-2 shows $0. Help please!

I'm also dealing with Notice 2014-7 income as a caregiver and wanted to share what I learned after doing some research. The key thing to understand is that this notice specifically applies to difficulty-of-care payments made under Medicaid home and community-based services waivers. Since your W-2 shows $0 in Box 1 and the amount in Box 14 with the 2014-7 notation, your employer has correctly classified this as excludable income. You absolutely should still file a tax return and include this W-2, but the income won't be subject to federal income tax or self-employment tax. One important detail I discovered: make sure you're actually eligible for this exclusion. The care recipient must qualify for institutional care (like a nursing home) and you must be providing care in a home setting. Also, there are limits on how much can be excluded - it can't exceed the difficulty-of-care payment amount determined by the state. I'd recommend keeping detailed records of your caregiving activities and the recipient's medical condition documentation, just in case the IRS ever questions the exclusion.

I've been a tax preparer for 7 years and I always tell my clients that Form 8615 is confusing even for professionals! Your new preparer is correct. A common mistake is thinking that just because you're a student under 24 with unearned income, you automatically need Form 8615. That's not the case. The key is whether you CAN be claimed as a dependent. Since your unemployment benefits provide more than half your support, you CANNOT be claimed as a dependent. Therefore, Form 8615 is not required. Your new preparer is doing the right thing!

Thank you everyone for the detailed explanations! This makes so much more sense now. I was getting confused because the Form 8615 instructions focus on the age/student/income tests, but I didn't realize the dependency eligibility was the overriding factor. Just to confirm my understanding: Since my unemployment benefits are more than half my support, I cannot be claimed as a dependent by anyone. Because I cannot be claimed as a dependent, Form 8615 doesn't apply to me at all, regardless of my age, student status, or type of income. My new preparer was right, and I apologize for doubting them! I guess my previous preparer was either being overly cautious or misunderstood the rules. This has been a huge learning experience - tax rules are way more nuanced than I thought. Thanks again for helping me sort this out before I filed!

Has anyone dealt with a situation where you provided different benefits to different employees? We have some staff getting dental and some getting Aflac and I'm worried about discrimination testing.

Based on the discussion here, it sounds like you'll need to include that $120 in the employee's taxable wages. Since your company covered what would normally be the employee's responsibility for Aflac premiums without expecting repayment, the IRS treats this as additional compensation. For S-Corps, this is pretty straightforward - add it to their wages in the pay period when you covered the costs, and make sure it's included on their W-2 at year-end. You'll also need to withhold the appropriate payroll taxes on this amount. One thing to double-check is whether your Aflac deductions are currently set up as pre-tax or after-tax, as someone mentioned above. You can see this by looking at how the deduction appears on your payroll - if it reduces taxable income, it's pre-tax; if it doesn't, it's after-tax. This affects exactly how you handle the tax reporting, but either way, covering the employee's portion makes it taxable income to them. Document everything well since it was related to medical leave - you want a clear paper trail showing this was a one-time accommodation during their ankle injury recovery, not an ongoing benefit that could create precedent issues with other employees.