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Oh boy, this just gets more fun with every post! My client only worked for these folks for two years; 2013 &n 2014. I had used a working assumption that a refund for 2013 could still be filed, even after SOL runs out, because of the DOL's overturning of this particular applecart. I had not even *thought* of issues like gross-up, overtime, etc. We'll wait and see what (if anything) the former employer sends my client between now and fall - and what the IRS might send, as well. In the meantime, keep on posting! I will be making a nice *long* list of "gotcha's" to be on the lookout for. Thanks to all, and over this weekend remember all those who gave their lives for this country.

I will look this up when I go back to work on Tuesday, but I remember that when you give an ownership interest like this to a charity, it creates a situation where the charity has to dispose of it unless it is related to to the charity's purpose, because of the UBTI rules, which my memory tells me affects the deductible basis for your client.?

Oh, this thing is full of fun. There is also the issue of donating a partial interest, and last I heard the genius tax attorney was going to amend the operating agreement to allow a "non voting" class. I'm just a hack, but I think to deduct a partial interest, it has to be an undivided share, meaning that the donee has the same rights as the donor. I sent an email to the geniuses and have asked for an opinion. The client wants to do this RIGHT NOW because he thinks a buyer will be identified on Thursday, and then it's too late. I do the bookkeeping for this partnership for a nice fat monthly fee. That will go away when they sell. So, I'm not even real motivated to keep the client for just his wife's 1120S and their 1040 if it means a lot of knuckle biting next tax season over this. I'm too old and too ornery and too tired to enjoy slogging into weird and murky water like this. Thank you so much for taking a look at this.

I would also take the DOL contact as "information" for your client. It actually infers "rights" as mentioned, OT, min wage, SS deposits, WC, etc. Do keep in mind if the employer continues to exist and cleans up their mess, the "wages" will likely go up, as a gross up is probably the cleanest for the employer to use, which will increase earnings for your client. In the end, the increased wages is probably all you will need to worry about, since if your client had issues with what they earned, needed coverage for an injury, etc,. your client would have forced the issue earlier. Si if needed/desired, do a sample return with the now wages as net, figuring the taxable as grossed up. The employer "covering" the employee SS and Medicare (and any other state required items) increases taxable for your client.

I would wait as well. I had this situation 20 some years ago, and client, (who had good records of payments), received a grossed-up W-2 that included minimal "income tax withholdings". Gross, less all taxes withheld from W-2, equaled payments received.

IMHO, you under charged your client. My very minimum charge would have been $475. Depending on how many other factors were involved in the actual preparation of the returns is the only way I would feel comfortable in telling you if my fee would exceed $475 or not. It's amazing how some people can split hairs in regard to your fees in preparing something as important as their income tax return. And don't let the fact that you are not a CPA discourage you from charging how much your fees should be. I have seen errors on returns prepared by CPA's, their receptionists, and others regardless of what initials they use on their signature line. If said client doesn't return, consider yourself fortunate as he/she is likely to be a thorn in your side every year. Let them go play "winning through intimidation" somewhere other than your office!

Catherine, You are wise to wait this one out. I would think when you said the "Dept. of Labor", you were talking about the Wage and Hour Division of the U.S. Dept. of Labor? My father worked as an investigator for them before his death years ago. I do remember very well the wages and penalties, etc....that the employer would have to pay their employees once they completed their investigation. The fact that the "contractors" were misclassified as such possibly means that the employees are owed back pay for overtime worked at straight time and/or who knows whatever else. I can remember my Dad having to carry a gun on an occasion or two as the final totals owed by some of the employers were astronomical. I was too young at the time to know enough to ask certain questions, but now I assume any correction of wages that will possibly be paid to the employees this year will be reported on their 2017 W-2's. The agency of the US Dept. of Labor still exists with the same purposes as they had when my dad worked as an investigator as I have called them over the years since his death for their direction on several issues involving different clients. Take care.

The 4883c's are legit (unless they're fake). I had a client who just got one. To me, or rather I should say in my client's case at least, it appears to merely be a way to explain the processing of the return taking longer than 21 days and a way also to impress Congress they are on top of fraudulent returns (not).

My 20-year client called this week, gonna sell her rental, adjusted basis about 20,000, for 90,000. Congrats! "I'll just make enough to pay off the heat and air unit I think. Just wanna know if that'll cause me to pay back SS benefits." Ummm. (I seriously had to sit there a minute, thinking, this is your one and only concern right now??) No, you'll get to keep em, but they'll be taxable. And I will be mailing you a pretend return so you can see how much of your heat and air conditioning money you best save up for yer tax bill. Love, Rita, EA (Even After 20 years they think if they say they didn't make anything my job is to tell IRS that.)