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Long-time client (and family friend) was in an "unfortunate" marriage for several years. Her spouse earned cash (under the table) and had not filed taxes in 5+ years and was not going to start just because he got married...so I have had to file client's returns MFS even though jointly was better because husband did not want his name ona a return and refused to sign a MFJ return. Client finally divorced the guy (unfortunately not final until January 2016). Client demands to file HOH (daughter lives with her) instead of MFS. The problem is that client already told me in several previous conversations that she did not move out until Sept. 2015....so did NOT live apart last 6 months of the year. After reading some IRS literature I sent, client is now telling me to file HOH under assumption that they did NOT live together last 6 months. I told her I could not file that way, as much as I may want to, because I had reasonable belief that it was false. Client cried Client shouted Client is no longer client but I will sleep well knowing I did not file a false return. I figure she'll find another preparer this year...to whom she will know what not to say...and she will probably be back to me next year. This job.....

Integrity. It all comes down to Integrity. You obviously showed you have it JB.

Thank you for saying that. Sometimes you look around and see really sloppy, inept, unethical preparers making a killing, and it gets old and tired. If nothing else, it doesn't take long to screw up a return and they can turn them over in a hurry. And then sometimes all the advice you get is, "Charge more." That is not the solution for me. Of course I want to do well. But above all I want my clients to know I am fair to them and an excellent, professional preparer. I really do. It means so much to me when they send friends to me. What a nice compliment.

I fired a guy yesterday that I hadn't even hired yet. He came in for a quote. Wife had a little nothing crafting "business". He did the little air quotes and eye roll to indicate she is no businessman. Calls about something same afternoon. Drops in two days later to ask if he can deduct moving expenses. He's on disability (and happened to mention he was better now, but not giving it up. Grrrrr.) They moved here from PA. She has no job. Just loses money on crafts. Your move was not work related, you just like it here, correct? "Yeah, pretty much." Then, no, you cannot deduct moving expenses. I'll look up the rules and send them to you. HE FRIKKIN CALLED me the next day to tell me HIS PA PREPARER said I could deduct his moving expenses on Form 3903 and blah, blah, blah. I sent him an email with links to Publication 521, instructions to Form 3903, and two articles. Note at bottom: "I am going to respectfully decline the opportunity to prepare your return, I am well aware of the process used to deduct legitimate moving expenses, and I don't need instructions from your previous preparer about anything."

Back when I first started preparing taxes I had a retired client who waited until the final year to cash in a bunch of stock he acquired through an employee stock option program. It resulted in a total tax due (federal & state) of $120k. He called to ask how it was going. I hemmed and hawed and told him I had figured it six different ways. He replied, "I'm sure you did a good job. How much do I owe?" I again dithered and assured him that I had applied every trick I knew. He again thanked me and asked how much he owed. I finally told him $120,000. He practically screamed, "$120,000!" I again started trying to explain all the work I had done to minimize it, but he just yelled again, "$120,000!!!" Then he said, "How did you do that? I thought it was going to be at least $160,000! How did you manage to get it down to $120,000?" Every once in a while, I love getting to be a hero. I just never thought it would happen when I told someone he owed $120k!

DO NOT TAKE THEM BACK!! EVER!!! I allow no client to dictate to me how to perform my job as a preparer. That is an instant "Hand their original documents back to them and show them the door" firing situation. I do not even offer any explanation. I fired one that way last year. Questioned everything I did in relation to the 6 rental properties he owned. His "bookkeeping" did not even meet the tiniest definition of the word, and all his numbers did not make sense. You did good JB!!

We do. Todays "accounting today" blurb gave an article that the top preparer companies (HRB, Lib, TaxAct, etc.) are racing to the bottom (you know the ad's and the zero cost to file, etc.) just to eventually "lock in" the new clients as their tax situations get more complex. In the mean time, we get to be proactive and fight this with good service, fair pricing (abet "too little" in comparison) -- but eventually we win ---- You always win -- if you do the "right" thing. We may not get SUPER rich, but we eat and feel good about "doing the right" thing. It is all NOT about this earth.

I would never take this client back if she asked you to file a return under false pretenses. She'd likely lie again in future if she saw benefit from it. This dude should have the person in PA prep and sign that return!

I am right with you JB. You have to have some comfort in know you did the right thing. It's not even worth mentioning the consequences you could face had to succumbed to the client's desires. Good Job!!! All I know is that for every client that I have lost for what ever reason, at least two or three takes their place. Go figure. I fired a client last summer that was almost at the top of my PITA list. They opened the door by asking me the tax consequences of selling a building and have the buyer pay them partial cash and the rest with a check to avoid paying capital gains on the sale and if they absolutely had to report it. This opportunity was a blessing to say nope and now you breached our agreement and I can no longer provide you service as I cannot be part of anything that suggests tax fraud. I was told to forget everything I had just heard. Nope no can do, engagement ended. Man am I glad and I have already gained another S-Corp to take their place. So, stand up for what is right, you can't go wrong.

So I hate when this happens. A TP who has mutable sources of income (multiple 1099R,RRB 1099R, RRB 1099, and W-2’S) AND They have less then % withheld from any of them. Now he has a $9720 tax bill. AND I’m STRESSING, I went over everything 5 times to make sure I made no mistake. WHY??? It’s not my tax bill. I’m not the one who refuses to have enough withheld. I need to charge a stress fee on top of my PTA fee.

I agree. Get the postmaster to go with you and knock on their door again. Have him mention all the penalties and jail time associated with messing with and interfering with the delivery of First Class Mail. Then mention the IRS punishment for interfering with other person's tax information. Make him have to change his underwear when you are finished talking to him. Meanwhile, start changing all your mailing information on everything you have to just the PO Box. All accounts and all tax related items. Use only one address, the PO Box and sorting machines will not confuse them. In addition, if you use Zip+4 for your PO Box, the sorting machines will ignore the written addresses.

Not as bad as client refinancing home(now) and says just put some # on a K-1. Fix it later. Goodbye client.

JB - you did the right thing! Once you cross that line it is a very slippery slope beyond. Stay very far back away from that edge.

You could call him and tell him you have good news and bad news: 1) The bad news is he owes IRS $ 9,720 2) The good news is he only owe you $ 972 for all the double-checking.

I won't login on behalf of clients. They have to login and retrieve the documents. Or have the broker send me directly.

I agree. I wouldn't expect a 1099 to be produced. IMO the Church would consider it a gift to the tenant.

I have one client that does this and it drives me nuts. He was 100% positive he had a 1099 coming because of all his dividends. I told him they were all in IRA accounts and he argued with me until he logged in and verified. Just not comfortable with it - send me the .pdf.

Didn't even think about this. Apple computers rarely have CDs. We have multiple mini-computers in the office that don't have CD drives. I use one at home as a Plex server. CDs will be like those 3.5" floppies in a few years.

IMO if you report it on the daughters return you will likely hear from the IRS, they aren't going to throw a fit about it when you explain the problem. The kicker is the tax withholding but IMO they'll accept the explanation. Getting a corrected 1099 is going to take FOREVER.

The church was under no legal authority to pay the rent, perhaps the landlord considered it a gift. Honestly, if you go ahead and file you better have written permission from your client to do so, I would hate for the tenant to get evicted and then blame you. If its not a "business expense" to the church are they even obligated to issue a 1099? [I have no idea but should be considered]

Just once when a client says 'just put down something for now & we'll fix it later' I want to say, 'Okay, for now I'll put down a million dollars and we'll fix it later.' I have a feeling there would be no need to fire that client.

I don't understand why you would tell them what they would have gotten by lying. Or getting in their time machine and kicking the guy out earlier. And do you actually take time to figure it? Why even go there? I'm not trying to pick a fight here, I just don't see that any good that can come out of informing clients about what might have been if their filing status were different. For future reference with the next guy? Or next preparer?

Had one a couple years ago myself - asked questions about major rental property repairs and his response was "I don't see why you need to know that." Boy did HE get fired in a hurry! (Duh; I ask so I can up-charge your bill because I have nothing ELSE to do with my time. Why else?)

Terry, it's not just the one client, it's ALL your personal mail. They don't know whether anything they kept was tax stuff or not, so why not at least scare them a little? And for all they know, that certified mail might have been extremely time sensitive, which is one of the usual reasons for using certified mail. It's worth a try.

"2) The good news is he only owe you $ 972 for all the double-checking"

I feel so much better. You don't know how many times I have thought there was a Keebler Elf or some $%^& in my computer changing the letters and laughing at me. Somewhere in there having a party with half my socks that the dryer ate and 14 Tupperware lids.

No...Chaz, the guy who stands on the corner by Woody's Market and drinks warm Corona...despite his many quirks, always files his taxes and never married. He says he is married to his bottle.

Years ago I had a client give this to me: "A Tax Shelter Complete with Loophole"

Paper (22 lb) copy. Nice folder. Discuss until client is satisfied with explanation or gives up on understanding. Hard to tell. I am very patient and know you explain thoroughly when people ask questions. And try to use words they understand. I think some figure out that they will never figure it out, but if she is willing to try this hard, I'm going with whatever she says. Always tell them to call if you think of something else to ask. No problem. Many, perhaps most, don't want to know anything, just tell where me to sign.

Client is telling me his insurance agent says the LTC premiums can be deducted on the Corp return. My understanding is that LTC is treated like other health insurance. Under the old rules, added as compensation to W2 and deducted on 1040 p1 to the extent LTC premiums allowed. With the new ACA rules, S Corp has other employees and the plan doesn't comply with ACA, then the premiums cannot be deducted by Corp, shareholder deducts on Sch A similar to the other health insurance premiums. Is there something I'm missing. Just wanted to run this by the forum before I go back to client.

Definitely should add a PITA fee, but not too bad if she's old, and at least she is trying.

Certainly she needs to contact Vanguard, both for the future and hopefully to get a corrected 1099-R for this year. I'd advise trying, as we all know that the IRS seldom actually reads explanations.

Any computing device without an optical drive is a toy and not a computer.

You adjust the BASIS, not the income received. Same net result, but does not distort the actual flow of money.

I agree. And I never coach clients. I try to get the truth out of them, then prepare an accurate return. When a client tells me the child stay 50/50 with the divorced parents, I figure kid was at Granny's an odd number of nights and take them at their word. I don't tell them it would be best if kid was with you 183 nights, wink, wink.

he is not self employed because there isn't any self-employment tax paid on S corp income distributions.

Adding to my answer above, the way this worked out, the total value of the gift to the daughter appears to be $154K. It is the gift of equity of $41k shown on the settlement sheet plus the difference between the appraised value of $318K and the $205K selling price. The proof is the gift is the $318K appraised value minus the 164K for the portion of the house reported on the settlement sheet shown as being purchased from the parents (205-41). (318-164 = 154). You have to attach the appraisal to the Forms 709 so there's not much you are going to be able to include with those filings justify a reduction in the value down to the figure used as the selling price. On a percentage basis, the daughter purchased 51.57% of the home and was gifted a total of 48.43% of it.

If the spouse really did leave, for more than half the year, then the exception is basically very fair, when one parent is left with caring for the child alone. And it's up to the client to be honest about it.

What he is trying to do is avoid the SE tax on the work he did, delay paying any tax on it in the year earned, and now report it at the capital gain rate. Knowing that. I don't see any way you can prepare the return that way.

I have used the one Rita indicated for several years. In my area there may be even an overstated price. But when renting to relatives I always ask what would you rent it to me for. Than why is your rent this low? I have a landlord who has not raised his rents in 5 years because as he says. They are always on time, don't complain and even fix stuff. To them it is their home. Take care of it.

My office manager discards all letters and adds them back every single time, and even the I still have to edit the letters. I swear the damn things change all on their own!

I'd handle it by telling him to take his business somewhere else.

Won't necessarily help, Jack. You are presupposing that the mailman can read, AND takes the time to do that. Back in Worcester, we had one mailman who could read and another who could not. We had a central mailbox setup for the street, and it's a good thing we all knew each other because stuff got stuffed any which way. Currently, I get mail regularly for the same house NUMBER for any of three other STREETS, none of which have anything in common with my street name, and none of which have anything in common with any NAMES; many of which items DO have zip+4 codes. It's rushing at the sorting IN the local office onto trucks, and lack of attention at delivery. Zip+4 won't cure that operator error. PO Box is the cure. I still like the idea of scaring the bozos who won't play nice - but then I have this unpopular, cockamamie idea about individual civic responsibility.

Actually, it was via e-mail. And it happens that it is from one of my oldest and dearest friends. Still, the temptation was there

That was a great reference Mike. Your expertise in Clergy Tax a is great Blessing to this board! Per Rev. Rul. 64-326 : A day or two before concluding his services, B meets with authorized officers of the host church to determine the amount of compensation he will receive. It is customarily agreed at that time that a portion of B's remuneration will be designated as a `rental allowance.'

Where I would tell them that we are asking the IRS to investigate them for the possibility of tax fraud, identity theft, and fraudulent return filings, since they are purposefully keeping papers that were supposed to be delivered to a *known* tax accountant's office. After they change their pants, they would get much more cooperative!

Ask Catherine to pay the guy a visit. Or call my other business - 1-800-BreakAKnee. Sometimes all it takes is the threat of brute force to get people to cooperate.

Since I instituted a $30 paid-in-advance fee for printing out and mailing a new return copy, the incidence of clients who cannot find their copies has plummeted to zero. I do gets calls or emails -- when I explain the fee (and note my handy-dandy "pay my fee" button on my web site), the "I'll take another look and get back to you" crowd somehow never has to get back to me.

I guess I did not mention in a previous post: We do print the return on decent paper - the printer / copier like this a lot better as well. We put the client copy in a nice folder and envelope that we get from Greatland. We use two different folders. If the work papers are too voluminous, then we use a folder with no back pocket and put the work papers in a separate envelope. For those with fewer work papers, we just put those in the pocket at the back of the folder. It is a very nice and professional presentation. The folder is not oversized and will fit nicely in the client's letter size file cabinet.

You are entering the W-2 as it is, correct? On the 1040 please use the name and number as it appears on the ITIN letter from the IRS. Keep in mind that depending on how the IRS interpreted the name, you could have this variation. It is common for us to have two last names. So with that in mind. Joseph Diaz Balart consists of one first name and two last names. BUT if the person issuing the ITIN used Joseph Diaz as first names, you will get an error if you efile 1040 with the correct last names Diaz Balart. When the IRS makes that mistake, you have to file as Joseph D Balart. Please note that D becomes the middle initial for middle nameless person. You can also file as Joseph Balart without middle initial and you should be OK.