25% Charitable Contribution Limit - 2021 1120

[jkfmsi]

We just received an IRS letter for miscalculation of charitable deductions on a 2021 Form 1120.  Taxable Income computed on the Contributions Limitation/Carryover Wks line 8 is $113.817. 10% of that is $11,382. 25% of line 8 should be $28,454. ProSeries is getting $25,609 which is 25% of $102,435 ($113,817-11,382).  I'm not sure why it is doing this.  The total contribution listed on line 10c is $36,991 ($11,382+25,609).  The IRS letter shows that the deduction taken should have been $28,454 instead of $36,991 that ProSeries calculated.  I agree with the IRS letter. Has anyone else had this happen?  Did we miss checking a box or something? Any advice would be great so that we can avoid this in the future. Thank you.

[PATAX]

About a week or so ago someone commented on this. Same thing. Try to search on this forum for it and you should be able to find it. Hope this helps.

[Just-Lisa-Now-]

@IntuitGabi  this is the second complaint about this miscalculation of charitable contributions on an 1120.

With no working search function, I'm not digging for the other one, but it was in the last week.

[ihan]

This has been reported to the development team and we are looking into it. We will provide you update once we find out the issue. 

[ihan · Accepted solution]

This unexpected behavior has been addressed in a program update available June 6, 2022.

[sjrcpa]

Translation:

This error has been fixed in the June 6, 2022 update?

[PATAX]

@sjrcpa I hope so. I think this is something that most of us assume that the software is going to correctly compute, even though we should double-check it to make sure. Also if my memory serves me correct, I think this has been around for many years, i.e. it's not something new . If a client receives letter concerning this, then it makes us not look the best. Just my opinion.

[FresnoCPA]

Yes, my client received a similar letter.  Working through Proseries' worksheet it appeared IRS was incorrect.  So of course and contacted IRS (no easy feat these days) and was told where to fax in my worksheet for IRS to address the "processing error".  Then we get a letter saying we should amend the return.  I'm fuming since that would mean amending it what was originally filed.  Anyway, I go back into Proseries to draft the amended return only to see the worksheet numbers changed.  Looking closely at the original worksheet calculations and the current one, the wording on line 9b, adding a comma to the instruction which now changes the value being calculated.  Thanks Proseries for making this change and not bothering to communicate with us.  An alert would have been nice, if nothing else.