Problem that Turbotax does NOT but should show on Schedule A DOTTED line of line 11 a Qualified Contributions Amount

Following is my experience with 2020 Turbotax Premier on a Macbook:

 

Schedule A line 11 Dotted Line is suppose to have amount that is treated as

"Qualified Contributions" but Turbotax does not put any amount on dotted line

and thus does not flag what part of line 11 entry is to be processed as "limited to 100% AGI"

although in tax preparation the box to treat as limited to 100% was marked when entering

appropriate charitable distributions.

 

Received from IRS that there is error on my 2020 tax return and I owe thousands more.

Problem is that IRS processed my return as if I wanted by cash charitable contributions

which is shown correctly on line 11 was treated by IRS as limited to 60% of AGI although

in turbotax I indicated that it is to be treated as limited to 100% of AGI.    The Turbotax

"charitable Contributions Summary" does properly list those I indicated 100% but that is a

work sheet and work sheet does not get efiled and thus IRS does not know I selected the 100%

and thus treat what on boxed line ll as limited to 60% of AGI.

 

Per IRS-2020-278 says "...individuals who would like to take advantage of the increased individual 

limits must make their election with their form 1040 or Form 1040-SR"

In looking up how to make that election,  on page A-12 "Qualified Contributions" the last paragraph

says "...Indicate the election by also entering the amount of your qualified contributions on the

DOTTTED (my emphasis) line next to the line 11 entry space.

 

Problem is that turbotax does not put on the dotted line of line 11 the amount that is to be treated

as the "Qualified Contribution" which is treated as limited to 100%  of AGI.  Thus, since nothing

indicated on dotted line of line 11, IRS processes line 11 entry space as limited to 60% although

intentions was to have all, in my case, processed as limited to 100%.

 

Note: Above is what I found when got IRS notice the past week and I investigated.

Seems crazy that IRS wanted the "Qualified Contribution" placed on a dotted line rather 

than in its own box.   

 

I expect others who efiled and chose the cash contribution to be limited to 100%

of AGI will hear from IRS assuming their Shedule A line 11 DOTTED line does not 

have on it the portion of boxed 11 that is limited to 100% of AGI.

Deductions & credits

This should be an interesting experience in that does not seem to be appropriate for me to amend return with 1040X since all the numbers on 1040 stays same as submitted but matter of just letting IRS know the amount on Schedule A line 11 box is also correct but did not "flag" by putting amount on DOTTED line of line 11 the amount in line 11 box that is to be treated as "Qualified Distribution" and processed as "limited to 100% of AGI" rather than processed as "limited to 60% of AGI".

 

Any body have experience with this particular situation, please reply in this thread.

Deductions & credits

You don't and should not amend the return to respond to the IRS notice ... the TT program probably has a worksheet for that section of the Sch A that you can use to support your position on the original Sch A.  Sending in a corrected Sch A plus a simple explanation should be all you need to send.

 

I AM BEING AUDITED

If you purchased Audit Defense:

https://ttlc.intuit.com/questions/2924451-i-bought-max-or-audit-defense-and-now-i-m-being-audited

 

AUDIT SUPPORT

 

TurboTax has a special phone number for help with IRS/state tax letters, which will be easier than going through regular Customer Support.   At the page below, click on the blue button that says "Get Help from TurboTax Support".  Then it will ask you what tax year is your letter.  Then it will ask you what the letter concerns. Then it will show you the phone number during posted business hours.

https://support.turbotax.intuit.com/irs-notice/audit-support/

 

Deductions & credits

CORRECTION of explanation in my original post: In regard to what should appear on the DOTTED line 11 but doe not.   It iss the sum of all your charitable deductions with the proper limits applies (See 526 Charitable Deductions instructions of line 57 of Worksheet 2.).  Since Turbotax did not put any number there on dotted, line the IRS can not determine how a person is treating their cash contributions that could be elected to be used as "limited to 60% of AGI" or else "limited to 100% of AGI.  Thus, IRS defaults to assume using "limited to 60% of AGI" even though in tax preparation when cash cotributions entered  the selection to use the 100% limit was selected.

Deductions & credits

Please use the following link to contact Customer Support for further assistance.

https://ttlc.intuit.com/community/using-turbotax/help/what-is-the-turbotax-phone-number/00/25632

Deductions & credits

All resolved with IRS but took a while.

I sent a certified letter to IRS that explained situation that my intentions were

to have my Qualified Contribution treated as limited to 100% Qualified Contribution"

but since I missed putting a number on DOTTED LINE 11 of Schedule A, the IRS treated 

as limited to 60% (Tax payer has choice of how limited 60% or 100% but with no dollar amount

on dotted line the IRS assumes 60%.). At the time I prepared my taxes in Turbotax

the program did not put a number on dotted line even though within program I indicated

treatment as 100% but Turbotax does now .

 

Days went on and I got another  reminder that I owe tax and they have taken my 2021 estimated

taxes paid and I still owe more and I need to pay it by so and so date ore they may seize or levy my income or bank account.

 

I finally was able to reach IRS agency on phone and told they have such a backlog in mailroom that

have not yet processed my letter.  Thus, I explained situation and after a couple transfers and explaining I reached an agent that fully understood my situation.  With permission of supervisor she accepted my

intention that my charitable deductions treated as 100% and my original tax return BOXES were correct

and I owe no additional tax.    The IRS agent indicated I was not alone with the problem as directions

not clear on how dotted line 11 used for indication of how want charitable deduction limited or not.

 

A few weks after the call, I have received an IRS letter that issue resolved and owe no additional tax and the estimated taxes seized has been reapplied back to my 2021 taxes, where they were prior to seizure.

 

 

Deductions & credits

This answer was enormously helpful. To clarify one point, though, TurboTax 2020 Premier desktop version has been changed to address this issue. A notation is, in fact, put on the dotted line of Sch A, line 11. HOWEVER, the number it puts there is not correct, and there are some really screwy things going on with the math as it relates to 100% cash donations. I set up a dummy return to see how the current version works. I entered a fantasy donation of $1,500,000 and the software increased it to $1,935,342 for some reason. There are two forms and a handful of worksheets that address charitable donations up to 100% of AGI and they are not producing accurate and consistent results. This needs to be fixed before we all start filing in 2021.

philchid1
New Member

Deductions & credits

I am having the same issue with 2021 Turbo Tax Home & Business. Does anyone know when this will be fixed?