Level 3

Question

Form 8960 incorrectly pulling Schedule C income to line 4a

Forum|Forum|3 years ago
February 5, 2023
7 replies
19 views

I had an e-file rejection, because form 8960 is incorrectly pulling Schedule C income line 4a, and then an adjustment for the entire amount on line 4b. Obviously this is an error. Anyone else having this problem, or does Lacerte have a timeframe for solution?

@kh-response @IntuitEric @IntuitIonN

Lacerte Tax

This topic has been closed for replies.

abctax55

Level 15

@IntuitGabiU

I was just able to replicate this situation in a test return.

Can you please look into the issue? Thanks

HumanKind... Be Both

abctax55

Level 15

For cross reference.....

https://proconnect.intuit.com/community/proseries-tax-discussions/discussion/form-8960-rejection/00/240971

Guess we get to lose out on 20% of filing season as they aren't planning on fixing this until mid-February. Considering how many of my clients are high-income, Schedule C filers I'm not exactly thrilled with Intuit. And for the issue to be in both ProSeries AND Lacerte... hmmm... wonder about Turboh Tax?

HumanKind... Be Both

IRonMaN

Level 15

Mid February is a vague timeline. To some folks, mid February could run from February 2nd to February 27th 😜

Slava Ukraini!

BobKamman

Level 15

How is it an obvious error? It's what the instructions to Form 8960 tell you to do. If it's an error, it's because the IRS e-file acceptance programmers take their returns to Block since they aren't paid to know anything about taxes.

In researching this I came across something that applies to an earlier discussion of whether you could have passive income on a Schedule C. According to the 8960 instructions,

"A passive Schedule C trade or business is any business that you did not materially participate in (for income-producing actions), or any trade that you did not have involvement in on a regular, continuous, and substantial basis (for income-producing actions)."

C

Carrie Houchins-WittAuthor

Level 3

Thank you - this is not a passive activity.

C

caramturner

Level 2

Hi. There was a change in the instructions for this line from 2021 to 2022. Please reveiw the instructions, it is correct to pull the Sch. C income to 4a and then back it out.

abctax55

Level 15

Sooooooo - what's causing the rejections then?

And why would the IRS do that .... never mind, 'cuz they can...

HumanKind... Be Both

F

fvaughan53

Level 3

Yes, I'm having that exact same problem in ProSeries Basic.

J

joantax

Level 3

Lacerte told me today that the reject problem on Form 8960 with Schedule C is with the IRS and don't expect a fix until mid-March!!!!!!! This is unacceptable.

S

scheunemanncpa

Level 5

As much as we like to bash Lacerte for their problems, this one is on the IRS according to the reject I got on one return. The return is correct, but can't be filed until the IRS corrects their efile rules.

J

JohnTheresa

Level 3

Not all my Sch C clients are having the Form 8960 appear. I have not checked any box regarding participation or passive income. One was rejected due to the Form 8960 and one without the form was accepted.

What gives?

abctax55

Level 15

Directly from the IRS website that list known efile issues. It appears the IRS is the problem, not Intuit?

https://www.irs.gov/e-file-providers/known-issues-and-solutions

2/1/2023

Form 8960

Business Rules

Business Rules F8960-019-04 and F8960-003 may cause returns to erroneously reject. These business rules need to be modified to reflect the updates to the Instructions for Form 8960 (Tax Year 2022) regarding the Specific Instructions for Line 4a to include Schedule C (Form 1040) amounts reported on Schedule 1 (Form 1040), line 3 and Form 1041, line 3.

Business Rules F8960-019-04 and F8960-003 will be updated in early PY2023.

Business Rules will be updated sometime in late February to mid-March 2023.

OPEN

HumanKind... Be Both

S

sabatini

Level 3

It appears that the IRS has updated their logic. I had a return with an 8960 rejected last week (due to this issue). I resubmitted today, and it was accepted.

G

Gregkzn

Level 3

That is great news. Did you change anything or just resubmit the return?

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