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CuriousWhale
Level 3

UCE credit question

So I filed back in February before the credit. On the other income line I had a $2000 small hobby income 1099 on line 8. Now that the $10k UCE credit has amended on my return I now show a ($8k) on line 8. Will this present a problem for the IRS AUR computer program where it will read a credit on line 8 and issue me a CP2000 for not reporting my 1099

10 Replies
Critter-3
Level 15

UCE credit question

The correct way the unemployment on the return  is to have it show on the  sch 1 line 7 (full amount received) and the exclusion on the sch 1 line 8 (up to the amount on line 7 or the max allowed).    No CP2000 will be issued because you DID report all your income.  The exclusion is a totally separate matter. 

 

The netting of the hobby income against the exclusion is just math.  See the statement showing them both being reported.  

CuriousWhale
Level 3

UCE credit question

My unemployment on Line 7 was 20k

 

my line 8 now has a credit of 10k and hobby income of 2k for a (8k total )

 

I guess my concern was that the computer programs wouldn’t have the logic when looking to see my 1099 and would read line 8 as a credit

Critter-3
Level 15

UCE credit question

That is correct ...line 8 should correctly show the +2000 and the -10000 for a net line entry of -8000.  This is how that line works.   There could be 10 entries on that line and the net total is on Sch 1 line 8 ... this is SOP.

 

They get the information from the filed return same as you have on the PDF you have in your hands  and if both items are not individually listed on the sch 1 line 8 then the "overflow statement" is also sent ... do don't worry, they have everything the need to process the return.  

CuriousWhale
Level 3

UCE credit question

Ah I always thought the program just read the number box on the right. Do you happen to know if the automated notices are actually reviewed by a human before being issued?

Critter-3
Level 15

UCE credit question

The CP2000 are computer generated  automatically ... no human interaction is needed for this notice to be sent.

 

And the actual return forms that you look at   is not what is  sent to the IRS ... just the info on the lines of the returns are transmitted which would include any totaling statements if needed.   Look at a return transcript to see what is actually sent ... just form/line amounts ... basically a short hand version is sent.   If a human needs to look at it then it can be translated into  a tax form  version.  

CuriousWhale
Level 3

UCE credit question

I really appreciate your information. I am in no way questioning your knowledge . I am trying to learn. If all they see is (8k) other income on the return transcript how would they then know I reported it? Again I appreciate your informative responses

Critter-3
Level 15

UCE credit question

Honey ... they do not just "see" the $-8000  ... they get all the info on that line ... the +2000 & -10000 netting out at  -8000.  Why do you think they do not get the entire picture when you efile or mail in a return ?    

 

I have 30 years in the business  & have taught income tax prep classes so I do know what I am talking about.  Please stop worrying about nothing. 

CuriousWhale
Level 3

UCE credit question

Haha I’m a person with chronic anxiety so I overthink everything! I do appreciate your detailed responses

CuriousWhale
Level 3

UCE credit question

Critter- May I PM you a personal Question I would like to gather your advice on?

fanfare
Level 15

UCE credit question

I just spoke to an IRS human today on the amendment extension (wait time 52 minutes).

She said the IRS adjustment for UCE (for a single person) is done by computers that look only at the Schedule 1 line 7 (old style)

and convert it to new style. (minus 10,200 or UC whichever is less).

The refund my niece got is consistent with this even though an amendment is still pending.

 

If you have other issues on your return that need correction, you can amend or wait for an IRS audit that may or may not ever happen.

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