We have a client that came to us with a problem. They had done their own taxes for 2014 and 2015.
They were Turbo-Tax users. In 2014 they had made an extraordinary contribution to their church, but because of their use of Turbo-tax, the software defaulted to the Standard Deduction. The Standard Deduction was higher than the allowable amount of the charitable deduction. The only item they had to itemize.
On to FY 2015. The software used the charitable deduction carryforward when they itemized in 2015.
Since they did not itemize in 2014 the IRS disallowed the 2014 carryforward deduction. They also disallowed the 2015 contribution as well. Apparently the IRS is taking a religious stand with this client.
So we corresponded with the IRS proving copies of the donation sheets contemporaneously submitted to the client, to see why they were disallowing the 2015 contribution (and possibly the 2014) and checked to see if it was necessary to amend the 2014 return for the carry forward. They did want the 2014 amended.
So we amended the 2014 return, but because of weak earnings there actually was no change to the tax liability in 2014. SO no interest or penalties were necessary.
We amended the 2015 because our software came up with a better charitable carryforward for the client.
We are still awaiting a response from the IRS.