|
Posted by A.G. Kalman on February 27, 2007, 3:55 pm
Please log in for more thread options
Bruce E. Cobern wrote:
>> There are two parts in the equation. One is too have a
>> qualifying individual and the other is to incur an
>> employment related expense for that individual.
> But there is NOTHING in the code that says that expenses
> must be incurred for EACH qualifying individual. The
> definition of a QI is in Sec. 21(b)(1) and says:
>
> "(1) Qualifying individual
> The term "qualifying individual" means7
> (A) a dependent of the taxpayer (as defined in section 152
> (a)(1)) who has not attained age 13,"
>
> (other possible definitions omitted as not relevant)
>
> Note that there is nothing here that specifies that any
> expenses need be incurred for the individual. So, as long
> as there are at least two dependent children under 13, the
> TP has two or more QI's.
>
> The limit definition is in Sec. 21(c) and reads:
>
> "(c) Dollar limit on amount creditable
> The amount of the employment-related expenses incurred
> during any taxable year which may be taken into account
> under subsection (a) shall not exceed:
> (1) $3,000 if there is 1 qualifying individual with respect
> to the taxpayer for such taxable year, or
> (2) $6,000 if there are 2 or more qualifying individuals
> with respect to the taxpayer for such taxable year."
>
> Note, again, that this limit definition has NO reference to
> whether expenses were incurred for each individual, only
> that there BE 2 or more qualifying individuals with respect
> to the taxpayer.
>
> I know what the instructions for the 2441 say, and how the
> software companies are interpreting this (I'm sure because
> that is how the IRS instructions read), but I don't think
> the section is ambiguous at all, and I don't believe that
> you need incur expenses FOR two or more children to use the
> $6,000 limit, only that you HAVE two QI's and incure at
> least $6,000 of employment related expenses.
>
> I was just wondering whether the statute had changed to
> support the IRS position, but, apparently it has not. So, I
> still hold that my position above is the one that actually
> reflects the law, and that taxpayers should not be slaves to
> their software and should override it when they believe, as
> I do in this case, that the software does not properly
> represent the law. (After all, we all know that the
> instructions are not authoritative.)
Please let us know what happens when you file a tax return
that has an expense for one child in excess of $3000 and you
don't have a second child with any expense and you try to
use the whole amount for the credit.
--
Alan
http://taxtopics.net
<< ======================================================= >>
<< 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 (2006) - All rights reserved. >>
<< ======================================================= >>
| 
Yahoo! 
Google 
Windows Live 
del.icio.us 
digg 
Netscape 
XML Sitemap