Leaderboard

"ChatGPT, the AI chatbot that's taken the world by storm, has already conquered numerous tests–the Wharton MBA exam, the Bar exam, and several AP exams among others. But the talking bot met its match when Accounting Today ran it through the CPA exam as an experiment: ChatGPT failed utterly in all four sections. — The experiment took place at the Arizent office in New York City's financial district on April 13 in collaboration with Surgent CPA Review. We used two laptops, each running a separate ChatGPT 3.5 Pro account (metering on free accounts, or on GPT 4, would have made the experiment impractical). One laptop ran the BEC and FAR section. The other ran the REG and AUD section. When all test sections were completed, its scores were: REG: 39%; AUD: 46%; FAR: 35% BEC: 48% The results indicate ChatGPT did not pass any part of the CPA exam." I wonder how ChatGPT would do on the EA Exam?

"The section of the partnership K-1 delineating partners’ share of debts of the partnership may be subject to modifications with the anticipated release of the 2023 draft version of Schedule 1065 Schedule K-1. A recent article penned by Kristen Parillo and published in Tax Notes Today on May 9, 2023,[1] provides coverage of a session held on May 5, 2023 at the American Bar Association Section of Taxation meeting. During the meeting, Adrienne Mikolashek, the IRS Deputy Associate Chief Counsel for Passthroughs and Special Industries, reportedly highlighted these prospective changes to the Schedule K-1. The 2022 iteration of Schedule K-1, Form 1065, featured three lines that categorized a partner’s share of debts into recourse, qualified non-recourse, and non-recourse. As reported in the article, the IRS plans to subdivide the recourse liability category in 2023, thereby distinctly identifying debt restoration obligations and partner debt guarantees." I fondly remember the words, Tax Simplification

Since prepared tax returns list the address of the firm preparing it, going after out of state tax preparers is low hanging fruit. I always celebrate whenever one of my clients moves out of CA.

Hey, once you figure out how to fake "ethics" you've got it made! Which always makes me chuckle at the hours-of-ethics cpe requirements. Either you're (trying your best to be) honest and moral, or you're lying about being honest and moral.

Always glad to see these cheaters get caught and made an example.

You forgot the "U" in Fubar

The business is the LLC. That didn't change. Part of the year it was taxed as a partnership and part of the year as SP. Nothing was dissolved. The business can continue on with the same bank account. Unless they actually took all the money out of the bank account, BS should show the balance of the account. I would probably show his ending ownership at 0% and hers at 100%, but I don't know that it really matters. 1065 return is a final since one owner no longer allows LLC to be taxed as partnership. Since it's the final 1065 return, K-1's are also final.

Just using common sense, a term like "joint and several responsibility" comes to mind. Separate letters also make it easier for the collector to claim both parties knew (less chance of successfully claiming innocence). IOW, follow the money, the collector wants to preserve best chance of getting paid, and is not sure who has the deepest pockets.

Here is one theory that shows up in an online search: "The IRS sends letters to both to make sure both spouses know about the liability because, on a joint return, each of you is liable for the full amount. If they only send a letter to one spouse, it's possible that spouse would not pay the tax and would also not tell the other spouse about owing the money."

From an article: "Researchers say the artificial intelligence chatbot has trouble understanding math and makes up facts to cover up its mistakes." Hmmm......

Don't be afraid of 3115! Changes in depreciation are automatically granted, so you only have to fill out parts I and II (basically identifying info and reason) and Sch E, where you compute the missed depreciation.

I've seen this for years, and figured it was so each spouse would know about liability - and if one took the other's letter, then they have mail fraud as well as non-payment of taxes for which to go after him/her.

It would make a good politician.

Gives new meaning to the phrase 'new math' !!!

Isn't there a spot on the response form for "agree in part"? What I would do if it was my client is prepare the X to calculate the amount due. Send in the amount you calculated with the response form and an explanation of what you calculated. Don't send in the X as it will cross paths with collections. You may have to wait for the final assessment to appeal if they don't accept your explanation. Get your POA in as soon as you can (make sure you mark the box to be copied on correspondence) and attach the signed copy of it to your response form when you send it in. Others may disagree with this approach, but I think it is quicker than mucking up the works with an X. They are waiting for a response, not an amended return. Tom Longview, TX

I got another reminder from Microsoft on upgrading to Windows 11. I decided to download it and it downloaded seamlessly and later upgraded itself. I don't know how long they will support Windows 11 but it will likely exceed my remaining time as a tax guy. And I now have no need to buy another computer hopefully.

I have seen, on major sites, "news" articles which are clearly not edited or fact checked. I am hearing programmers are using AI as their framework / starting point for code. It is a dilemma for certain, but not new. I remain old (school) and create my own code. I am not above reviewing snippets of code from others for things - which I then follow but not copy/paste. The issue is if whatever is used as the framework contains an unnoticed error, it propagates from something like AI or snippet, as once used by others, it becomes the "norm" rather quickly. None of this is new, we have seen things formerly of mostly trust go away (photo editing). The problem, as I see it, is we now must use (now un)common sense as we cannot automatically believe what we see, read, observe, or are told. As with critical thinking and ethics, we have a severe lack of common sense in society. There are new trusted Uncle Walter sources we can just believe at face value, and with even modest effort, one can find something to back nearly any opinion/side, and claim it is the truth. Times have changed so much, that weeks later, I still struggle to accept I observed great, over the top, service from a used car dealer. Helped someone buy a car from a car rental sales office, and they followed through on every item they stated, even beyond the contract.

The 2210 is for the prior year and the interest rates should be hard coded in. The interest rates that ATX does not update are the late paying ones on the 1040 itself.

FYI Addendum: My IT person took the computer home. He pried it open and removed the battery which had exploded. He took it outside on the concrete, plugged it in and the computer works perfectly. He was shocked that everything survived. I had already ordered a replacement and have gifted the survivor to him. Acer all the way. Sometimes a tragic event has a happy ending.

We really need an IRS site to look up the Name Control in their computers. It's stupid that they make us guess what they have. I had several trusts I couldn't efile for name control rejection for years, and finally the IRS fixed the name in their computers and we were finally able to efile. I kept putting the reason for paper filing as the IRS has an error in the name control database, and I guess someone finally took a look and fixed it.

I've used ATX 2020, 2021, and 2022 with Windows 11--no issues.

I installed Windows 11 a couple of months after it came out and I have had no issues but, I use my computer for business not for cool things. I have never had any problems with ATX not even when people were having a lot of issues.

I had a client yesterday with a balance due notice from 2021. It didn't appear to be first notice since it didn't have the line by line changes section. Rather than wait on hold for hours on the phone, I asked if we could set up an IRS account for her. She agreed and I was able to figure out that 2 of the estimated payments they told me they made for 2021 somehow got posted to 2019 tax year. Of course she then remembered that they received a refund that they didn't know what it was for. LOL! I think I'm going to go the online route rather than phone calls going forward if the client is willing. Much easier!

"As of March 4, 2023, taxpayers made a total of 17 million attempts to contact the IRS by calling the various customer service toll-free phone assistance lines. The IRS reported that 4.4 million calls were answered with automation, and telephone assistors answered 3.5 million calls and provided an 80.6% level of service with a five-minute average speed of answer." Now I understand. They included every automated response as a successfully answered call

It depends on if it is a true partnership or a LLC taxed as a partnership. If it's a true partnership, then everything should be closed out. If a LLC then nothing on the company books changes other than combining the equity section combining the partner accounts to an owner equity account.

I believe each letter shows the total owed. I am looking at a CP22A that says under additional information: "Please note: Only pay the amount due once." I assume that would also be the way it works with the "you didn't make estimated payments like Rita has been hounding you to do" letters as well.

I worked for a regional firm as auditor for a couple of years after college. (After interviewing at Pricewaterhouse, where I felt completely overwhelmed with their better than you attitude.) We had a fairly large company that we audited. They had a parent company with 4 subsidiaries. I learned how money was laundered, how profit sharing was manipulated, and how this company's employees could steal money on the lo from the company and customers, as long as it was "immaterial." My job was just to produce paper with checkmarks that indicated everything was good - or any impairment was immaterial. Their fav word.

15 months is all that he got? That seems light for such blatant, intentional fraud.

If you think a 1040-X may help clarify the situation, you can write on the top of it "DO NOT PROCESS--FOR COMPARISON PURPOSES ONLY"

I agree, filing a 1040X is not the correct response.

It will be interesting to see if Intuit can filter out the creative garbage that our CLIENTS create so we can get useful information from QB..... Tom Longview, TX

I don't understand how they can make it retroactive to 2018? Are your clients going to make PTET payments this year which will then be reflected on on amended 2018 to 2022 S Corp and PTS tax returns followed by amended 2018 thru 2022 personal tax returns. First, you have already passed the date to amend 2018 and 2019 personal tax returns and receive refunds. Second, most commentary on this subject says that in order for this to work the PTET payments are useable on cash basis., not on an accrual basis.

My brother is a workaholic. He works 365 days per week and when he was CEO was monitoring activity on Xmas morning. We always joke that if he "retired" and took a 40 hour per week job it would be part time work.

My brother was a CPA and went to work for a company he audited. He was treasurer and moved up to being CEO. Now he's the CFO of a large company. He refused to be a partner of his CPA firm because of the Arthur Andersen meltdown and financial meltdown it caused the partners. He also didn't want the stress of having to bring in clients.

From what I've been told it's a three fold problem: it's the extra hours of college that are required. 150 hours versus 120 means you need a 5th year or you are getting your masters. My nephew considered it but that extra year was a deal breaker so he chose the Finance degree. Now he negotiates contracts. The other issue is the extra hours of work a CPA is required to do. His job is 40 hours per week except for 2 weeks at the end of the year when companies get desperate to finalize deals. His CPA friends are working 50-60 hours per week for the same money year round. When you are 20 years old, who wants to commit to that for the next 40 years? The public auditing requirement is perceived as overly burdensome and boring. The perception is that nobody wants to do the job and that's why it's required as a condition. They get low cost labor nobody wants to do.

Here's the full article: https://www.ft.com/content/e8dc2264-6b8d-4ed5-8bbd-e4a67e7d1e46 "The pipeline of new candidates has thinned because university accounting courses have become less popular in the US. Graduates’ starting salaries can also be at least one-fifth higher in finance or technology, and those careers may not require such an expensive professional qualification. “With the length of time it takes to become a partner, the length of time it takes to achieve financial success, the financial model of CPA firms is archaic,” said Alan Whitman, who ran the accounting firm Baker Tilly for seven years until March." Add in the extra year of college needed, long hours and gruntwork for newbies at large firms, perception of boring, etc.

Age 59 1/2 is 6 months after the taxpayer attains age 59. It was covered in this topic a few years ago. From the top of that topic, scroll down to see my first answer that has a link too.

Online POAs don't jump the queue, it still will take weeks to be processed.

I do a handful of nonprofits, some are charities. Of course, this year the NYS Annual Filing CHAR500 is to be filed thru the online system. Sounds simple enough. My first go around with this is still in limbo because the signatures are sent to officers via docusign, and in this case the 70-something year old officer got totally confused with docusign and we can't seem to get her straightened out. The second one to set up had not set up their online account yet - cause like most NPs they have no clue. So we went to set it up and the program said that the status had been cancelled. I know for a fact that they have filed every year and they should be good. Did a look-up in the system. Turns out that the 6-digit NY registration number that they have used for the last several years is assigned to another organization. I have records back to 2014 and we have done this return for longer than that. Nobody in NYS has ever noticed. SNAFU

We have "value added" that many of the Blocks/Jackson Hewitts do not. Their numbers will continue to drop if they are relying on simple returns (usually with EITC); whereas those who need 1041's, 1065's, 1120's, 706's, Schedule C, Schedule E, Schedule F (and some Schedule D's) will continue to use tax professionals. Also representation. I try and identify value added on any return I prepare--if they would have the same result elsewhere, I might mention Tax-Aide or some free program--if they still want me to prepare their return, that's okay too.

Just out of curiosity, I used it for some basic tax research and it did a good job. I was using the free version and the next time I tried to use it, the site was too busy and I couldn't get on.

I totally agree!

1a. TEST your backup to prove it has all the information you intend, and to prove you can successfully restore. If you do not prove you can properly restore, then backing up is likely a waste of time. ESPECIALLY if you are not self managing your backup (selecting files and folders manually). Backup assistants usually default to saving certain folders, which may or may not contain all the information you want to backup. If I had a $20 (inflation) for every customer who thought they had a solid backup, or had received something useful from their computer tech...

This article refers to problems that certain users have. https://www.techradar.com/news/windows-11-is-so-broken-that-even-microsoft-cant-fix-it

Hate H&W partnerships. Just sayin.....

https://go.spidell.com/e/837113/ellpublishing-SCM-05-14-23-mp3/5v69lx/1493174511?h=Uz1dPLaqv038i0ytdEaOrGEVqizKc5zWaPMIrY6Ucy4 Not sure if I did this link correctly. Towards the end of this 5 minute audio, an accountant was held to owe penalties for failure to know the CA requirements. FTB is looking at the 1099s from clients to their Sole Proprietor accountants in other states to see if they are filing NR returns. Tom Longview, TX

Treasury requires you to file past six years to get back into compliance--I believe if they do not have a current issue with overseas accounts, then statute of limitation (5 years) applies? [not a lawyer]

Assuming both spouses live under the same roof, if one doesn't want to pay they'll "misplace" their spouses letter as well.

* Can't. I always proofread ten minutes after I hit sned.

They still can find a payment from a spouse with a flashlight and both hands.