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>>I want to be sure that if I take this donation that my school system and I are not part of any illegal acts or receive equipment from someone who technically or elsewise doesn't own it.<< I wouldn't worry about that, though you might ask your school attorney. The prospective donor already received professional advice that he can give it to you, whether personally or as an agent of the LLC you don't know or care. And you have no reason to doubt it,. Your receipt would not of course suggest a value, and his tax accounting is elsewise none of your business. So, go for it!

I agree. As long as your school does not put any value on their acknowledgment letter. It is totally irrelavant TO THE SCHOOL what his tax effect [if any] is.

<<<I don't know if I should ask why he is coming back to you, or why he left you. I guess both questions are relevant.>>> Jainen you are perfectly fine in asking this question. I teach Automotive Technology at a local Career & Tech Ed Center. This former client is trying to donate the remaining equipment to my program and is not trying to return to me as a client. His first thoughts were to donate the equipment and take a charitable deduction on his personal return. I am not advising him in anyway as he is not my client and to be quite candid, I withdrew my engagement from him four years ago because he didn't want to comply with the employee vs subcontractor rules set forth by the IRS to which he has later suffered serious penalties for missclassification of employees. There were a few other things that I didn't want any part of as well. I want to be sure that if I take this donation that my school system and I are not part of any illegal acts or receive equipment from someone who technically or elsewise doesn't own it. I was never part of the formation of the LLC so and I am assuming this was single member LLC and if so it very well could have been a disregarded entity. I base my belief here on the fact that he would not answer my questions during the time of our engagement regarding the formation of the entity structure and how his son was involved who partnered with him in operations but not on paper. His son's wages reported on a 1099 were the wages the IRS went after. Just to add, I never have prepared any tax returns for him because of his indecision with the entity structure. If the LLC is taxed as a disregarded entity, the write-offs or loss from the equipment has already been realized by him and therefore he cannot make the donation as a chartiable deductible item. Again, I am not sure. My concern was his accountant has told him he doesn't own the equipment that the LLC did and it has been written off but, he should try to sell it first and if he can't then he should just donate it and cannot receive any charitable deductions for it. I totally agree with the later part but not the selling part. If he sells it, he is selling equipment that he doesn't own and profiting from it. To me, this falls under the same as donating it, how can he donate to my school something he doesn't own. Personally, it doesn't concern me how he does his business/personal taxes and I am not getting into that with him nor as I said am I advising him. Also, because of the previous attempts to thwart the IRS regs as I mentioned, I would not consider re-entering an engagement with hiim. Matter of fact, I think that under the ethics in circular 230, I could suffer greatly for doing so. Not sure but those are my thoguhts. I will reiterate, it is my school and program that I am concerned about. If he doesn't sell this stuff he wants to try to donate it to me in December. At this time, I feel like I should stay as far away from it as possible.

Just a quick note, I've merged the Software Issues forum back into General Chat.