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How do I create a statement in Proconnect Tax online?  I want to add a statement (not as official as an 8275) but just a statement to explain to the IRS why my client is still not profitable.  I know to go the the "Notes" Screen in Lacerte, but I can't find the location in Proconnect Online.

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0 Cheers
Level 15
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Why waste your time and energy ------------------ nobody at the IRS is ever going to read it --------------- especially this year.

ACME Taxes, Tatoos, Tires and Tomatoes (I had to get rid of the turtles - they kept running away)
Level 15
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Generally, you wouldn't want to disclosure more than what is mandated for the return, form, or schedule.  Including a statement to disclose unnecessary information not only wastes time as no one at the IRS will read it, what is disclosed on that statement could give the IRS additional ammo in case of an examination or audit.

For the determination of whether an activity is engaged in for profit, you would generally rely on the facts and circumstances tests under §1.183-2.  Although the taxpayer may elect to postpone the presumption of 3/5 year rule using F.5213, that's not a common approach, AFAIK.

If you have substantial authority, why should you need to disclose?  If you have a reasonable basis, the disclosure should be made on F.8275 pursuant to §6662 and the regulations thereunder.  Explanations such as what you proposed may not negate your client's and your exposure to penalties.

PTO does not have the functionality to create custom statements.  You will need to create it using some other software and attach it as a PDF to the return.

Still an AllStar

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