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Tooth be told.

I'm blaming the weather. My clients have been the worst this year. I think it's been too nice out here in western NY and they still think it's summer. They have been slow, and lazy. I think when it's cold out, people around here are more likely to tend to their paperwork. Or maybe I'm just a little more grumbly-mumbly lately......

Sounds like your client is the poster boy for the joke about the farmer who asked his neighbor what he would do if he won the lottery. His answer - "Guess I'd just keep farming 'till I lost it all."

My dentist is also my client! I loaned him the money to buy his practice when he graduated from Dental school. He is fantastic at dentistry, but cannot balance a checkbook. I told him I will handle all the "money" and "taxz" stuff for him and he can handle all my dental work. We have a pact--he does the teeth, I do the books, and no one gets hurt.

I have a great dentist. He and I both know that I paid his son's tuition to go dentistry school. Every time I walk into his office we review the rules. Rule number one - do not hurt Ron! All other rules - refer to rule number one. Ever since I mentioned 1-800-break-a-knee to him there has not ever been an issue. Rule number one has completely been followed. There is a great big red X on the top of my chart - I am not sure why that is there. I have a great dentist!

I had to come back and post a personal experience on this issue from several years ago. I had a long-time client who told me he was looking into a ROBS to convert his existing business to a franchise operation. I told him I wasn't keen on the idea. A few weeks later he called back to tell me he had decided to move forward with the plan and that I'd better bone up on the ROBS arrangements. I spent about a half hour on the franchise web site, plus an equal amount of time reading some hair-raising stories about how these things went south, usually over minor details. So I called him back and told him if he went through with it, he should immediately start looking for a good accountant/tax preparer knowledgeable in this area because I wouldn't be working with him on that plan or business in any manner. I also thanked him for pushing the idea, because it forced me to do some serious research. I had learned enough that if anyone else ever mentioned this to me again, I could immediately tell them what I had just told him.

Tom, I wish you luck. Personally I applaud you for advocating for your client & doing whatever you can to help him, rather than attacking him or rubbing salt in his wounds. Your approach is the mark of a true professional, IMO.

Oh no! Dental trouble...*shudders*. You both have my sympathy. I've had a lot of dental troubles over the years and am a nervous wreck in the chair until I'm numb. The numbing is a big part of my problem because it takes multiple shots and more time for me to get fully numb than the dentist would like. After each appt, I seem to continue to get more numb when I'm on the way home, which means it is still taking effect after he's finished torturing me. Fwiw, if you need a root canal after the permanent crown is in place, that can be done through the crown the same as if it is a regular tooth. At least that is what my dentist told me after my last crown on a tooth that he was kind of worried about. Not exactly the news one wants to hear right after paying a lot of money for a nice new crown. I know you are busy, but if you think there is infection building in there, please don't wait to be seen. That infection can damage adjacent teeth, can travel along the jaw line, or get into the jawbone itself or other tissues. *more shuddering here*

So on the original idea of "hang in there" lucky me. At dinner tonight, I had a back corner come off a tooth. I think it's a ceramic crown that broke. Nothing hurts - thank heavens - but instead of going to the office tomorrow I think I'll be at the dentist....

I have the same relationship with QB as I do with ATX. I love the software and hate the companies that own them. They both exhibit the same disdain for their customer support departments and nickle and dime (and quarter and dollar) you to death. They market the crap out of their products, so you can always get a salesperson, but if you need any help with their products, good luck. Just my humble opinion. Tom Modesto, CA

Jack, sometimes you are too absolute. I feel strongly about this as well, but man, you don't know the circumstances. I do, and I will not share them. The client came to me for representation before the IRS. It is my job, should I choose to accept it (do you like the Mission Impossible reference?), to explore every avenue available to this client who wants and needs to clean up his tax situation. Based on where he is, and what he earns in his business, I don't see him paying off the balance owed before the statute expires. That is one of the things the IRS looks at when considering an offer. If I can get him on a payment plan on the 941 taxes (both trust and employer), there will be nothing left to pay the personal taxes because of the balance being so large on those taxes. That is just the simple math. So I am looking for a light at the end of the tunnel to give to both the IRS and the client so they both can see that someday down the road, this taxpayer will be back on track and paying his taxes regularly and properly. If the client never sees an opportunity for this to go away, they will not have the heart to work toward that goal. If the IRS does not see that keeping this guy in business is the best way for him to pay them back, they will not work with him. They will take what they can and leave his life in shambles. This is my job, to mediate between the two and find a win-win for both that will in the long run get them both to a spot where this is behind them. So yes, he does deserve consideration for an OIC. He may or may not get one, but he is entitled to the opportunity to explore the option. Tom Modesto, CA

I have a smoothed-out rough spot, an appointment for next week, and a strong need for a nap. Which I am going to indulge!

This is very interesting. Here is my un-researched take on this: She brings a home that was very recently purchased into marriage. It has a mortgage, but we don't know if it is most of the value of the home or not. The are married from 1987 until his death in 2009, or 12 years. We are assuming that they treated the home as a community asset, because the post says they used community funds to pay for the mortgage, etc. If you can somehow document the funds that were used to pay the mortgage are substantial enough, and that he did in fact contribute to the community, then yes, the new basis in the property is the FMV of the home on his DOD. Now, if she was independently wealthy, the mortgage was really paid from the interest on her investments she brought into the marriage, and he was nothing more than a glorified "boy toy" for her, it might be a problem. Or, if there is a pre-nup that states that her assets remain hers, you are on dangerous grounds. But if he had a job or income stream that paid a good portion of the community expenses, I think you are there. Can you document that they always had joint checking accounts that were used to pay the mortgage, Taxes and maintenance on the home? Was there a major remodel that was paid for out of community funds? Is there any trust or will that states that the "marriage residence" goes to the survivor if one dies? I think this argument can be won if the facts and circumstance back it up. I would do some more research, but I think you have a strong position if they treated the property as a community asset. Especially since the state is CA, which has a history of assigning community to assets that are not strictly treated as separate assets. With 12 years of marriage I think this is a good position. Don't quote me on this though, I could be very wrong. Tom Modesto, CA

I think these ROBS arrangements are aptly named. Based on the few I've seen, all were land mines I wouldn't go anywhere near. Just one little misstep blows the whole setup, triggering a lump sum withdrawal with full taxation (and penalties if applicable). Plus, the underlying business is often a loser, as if the case here in the OP. I would just change one sentence - instead of "the owner was able to use the funds tax-free", I'd suggest "the owner was able to LOSE the funds tax-free."

I have a client that is owing money with his return and he's actually paying it on time. No he isn't. He may have an extension to file, but ain't no such thing as an extention to pay.

I wish you luck, Tom! In my experience, none of our clients wake up one morning and decide, "Gee, I'd like to go broke owing gazillions of dollars to the IRS," but rather some precipitating factor starts them on a spiral they then can't get out of.

Thanks for all your input. Here is the plan: 1. Start with a payment plan to CA to get them to stop attacking the clients bank account. This will allow the client to keep money in the account to make payments to the IRS. 2. Contact the IRS and get a payment plan on the 941 taxes. Ignore the personal taxes in this conversation if possible. 3. Make a second contact with the IRS on the personal taxes and ask for a 90 day freeze on collections while we get the required documentation together to put in an installment agreement (in my experience, if the TP is working on documentation, they will give some time to get it together). This will get me into next year. 4. After filing the 2017 tax return, send in an OIC instead of the installment agreement. Contact IRS and tell them that the TP cannot pay the personal while the payment plans are in place for CA and 941 taxes. This should buy me about 6 months while we wait for an answer, and then appeal the denial. Hopefully, after 1 year of maneuvering, the client will have his affairs in order, pay off the state with all available extra money, and get an installment plan on the personal taxes that is in line with their ability to pay. Tell me what is wrong with this plan if you like, or wish me luck if you think it has a chance of success. Thanks Tom Modesto, CA

I think it is ridiculous that when you purchase software and it doesn't work you then have to pay someone to "fix" it. If I bought an appliance and it didn't work I would expect it to be fixed or replaced, but that isn't the way it works with software. I understand that sometimes the problem is with my setup and not their product, but I still find it incredibly frustrating.

Lion, I have that trouble too, but I know enough of the answers to get through the security questions. I run into this every time after clearing my computer's cache. The question that usually pops up for us is about my husband's address from his first marriage that ended 27+ years ago! At least his ex didn't remarry, so I don't have that complication. It's totally ridiculous that there isn't a time limit on those things.

I had some crowns replace some teeth that had been bonded but were decaying underneath with nothing to put new bonding or fillings on. Now, days/week or so later, my jaw starts aching and is warm. Last time I had a crown, infection got trapped inside and they had to remove temporary and do a root canal. This time, I already have the permanent crowns on. I have five more returns including my own, granddaughter's 2nd birthday party in PA, point person for one-day tax seminar next week and then fly to SF for a week of tax classes. I'm not back until November. And, I need to do laundry, pack, work with speaker/airport transportation/proofread books/etc. for local seminar. A year ago I bought every ibuprofen in the hotel gift shop and spent all day in classes holding a cold water bottle against my face and all night sleeping on a bag of ice. I am not having fun.

The Security Summit is working! Today I got two emails from IRS on this scam, one from Accounting Today, and another from NAEA. The partners in the summit are supposed to share info on new scams with each other and their constituents, and I see that they are in fact doing so. I don't think any of us would fall for this scam anyway since we know that legit emails from IRS never contain links but tell us to go to IRS.gov and log into our accounts. Speaking of which, their new website doesn't have the tax pro link. I used e-services the other day and actually had to google it to get there. Is it hidden somewhere I don't see? Yesterday Equifax admitted that almost 11 million driver license numbers were stolen along with everything else. This is what I've been afraid of. We still don't know exactly what data were taken, on whom. Anyone got a letter from Equifax yet telling you that you were a victim? They said they'd be sending them. When? And what good will they do if three months after they discovered the theft they are still learning what data were breached? With all that non-credit info out there, there is no way IRS will be able to tell the thief from the real taxpayer when those zillions of fake returns get filed. The crooks will be able to answer more of the identity verification questions correctly than we will.

Microsoft had a security update last night. Is that the software that was installed and not ATX? With tax policy being in such limbo in Washington, I'd be surprised if any company has an organizer ready until next spring. Remember a few years ago when Congress was in the habit of passing retroactive tax legislation the week after Christmas? IRS did an amazing job getting the most common things up and running for the start of tax season, but there was one year when education credit forms and AMT weren't ready until March. Not helpful for those who needed to fill out FAFSAs.

I think my problem is I HATE QUICKBOOKS and try to avoid it at all costs.....

It's kinda funny now. After 24 years of this. We do have the same clients. I even had a pair come in yesterday who DIY'd and wanted me to affirm that they understood the problem IRS had with Turbo Tax. Uh, no, you are not even in the same ball park. I pointed out three errors, one of IRS and two of theirs, without taking a breath, and they had no idea what I meant. Wanted to know what I would charge to fix this mess that Turbo Tax made. (That @#$% Turbo Tax). I just smiled and started walking them to the door and said, "Oh you can probably handle it. I'm covered up right now anyway. Take a shot at it and come back if it you really, really feel like you need me. Psssshhh, you got this." They can't handle it. They don't got this. Not in a million years. It was like the Karma bus let me drive for ten minutes there. I figure I'll see them again next week. Which is more convenient for me anyway.

Yes, I realized you are trying to take the least amount possible. I wanted to get the facts on the election (or none) at the start of the discussion. Technically, you and your client now have some problems if you failed to include the election to opt out of the bonus depreciation and you didn't deduct it either. Now your client has phantom depreciation on those assets that he didn't get the benefit of either through current deduction or a larger NOL, and the regular depreciation you did deduct is also incorrect because it was calculated on a basis without reduction for the special allowance. Without the election that bonus depreciation is still "allowed or allowable" even though you didn't report it. If I recall, you are using Drake, and the election is made on an original return and easily generated by the software by checking one box on screen 10. Without that election, the software will calculate the bonus depreciation automatically. The program will allow input to override that calculation by entering a -0- on the bonus depreciation line. If the 2016 return hasn't been filed yet and your client doesn't want the special allowance, it's not too late to include the election.

I have a great dentist too - bad part is he just retired. The folks that took over - well, I've seen a couple of hygienists so far - who have all been absolutely terrific. So this will be the first "dentist" visit. I hate the numbing; the epinephrine (or whatever) they put in the lidocaine to make it last longer sets of panic attacks - SO not fun. First time that happened, over a decade ago, I just about crushed the assistant's hand. It's not *quite* as bad if you know to expect it and just ride it out. Worst of it right now is my tongue is super-sore from rubbing against the rough edge all night. And trying, in my sleep, to hold my jaw so my tongue didn't hurt set off a vicious tension headache. I just e-filed one return. Am waiting for 8879's on two more, and *one* last bleeping piece of info from the last client who has any hope of being done by the deadline (there are four or five I won't even see until November). Need to email a tax consult client who was scheduled for 4:30PM today - even if I'm back from the dentist by then, I won't want to talk. And I'm canceling tonight's meeting, too, again 'cuz I can't talk. Hang in there, my friends! It seems to me that dentists are a bit like tax accountants - we see people who are unhappy and in pain, help them as best we can, and end up learning more about them than maybe we're comfortable with. But once they like us, they really, really, *really* don't want to switch!

assuming you checked the statutes and he is still in time frame to make payment. I'm kinda new in representation work. But I can give you a great reference to a guy in Buffalo NY who really knows his stuff: Lawrence Lawler. Address: 2250 Wehrle Dr, Williamsville, NY 14221 Phone: (716) 631-5111

I'm looking to reduce his depreciation, so "no" to bonus depreciation. To be honest, I have not been using the election to bail out of the special depreciation and don't know anyone around here who goes to the trouble. I'm aware that bonus depreciation is the default, but fill out the 4562, page 2, and ignore the statement. His farm never shows a profit, but there are some years when the combined Sch F and 4797 income nets out to a profit. It's hard to paint a picture where this is a hobby, considering he doesn't have any other job. It is virtually impossible to sell $100,000 worth of farm production a year and have time for anything else. I have several farmers who rarely show a profit, but virtually every single one of them has to pay horrific taxes when property is sold, as well as depreciation recapture on their equipment. Most farmers are poor business managers, spending $$ on equipment that is rarely used because they don't wanna borrow from their neighbors. They also spend big money on items such as fertilizer that cannot economically be supported. Stupid doesn't mean they don't have a profit motive. Land values around here escalate 5-10%, and the increase alone in any given year is usually more than a farm loss. It is not unusual in this part of the country to find millionaires playing checkers on the public square with only one tooth in their head. Thanks for your response...the threat of hobby loss for farmers is a good discussion. I do have several "part-time" farmers where this is an issue. Farming is so labor-intensive, any appreciable revenue requires more than casual time.

I think this page from the IRS site on the topic might have your answer. The third paragraph under the heading of "Electronic Funds Withdraw" says this: I'm interpreting "due date" in that portion in bold to mean "4/15" so that, unlike when filing before 4/15 where the debit payment can be scheduled for a future date, when filing after 4/15 the payment date must be the same as date that the ERO transmits. I'd try transmitting again tomorrow with that as the payment date too.

Interesting. I really don't remember ever having the organizers in October from any software. Printing them while in the returns is a good idea, and I agree that this seems too early for clients to have them.

I downloaded an update a week or more ago which included the organizer. As I've been completing my extended returns I've also printed the organizers, though it might be a mistake to hand them to the client this early. Last year I didn't get the organizers out to clients until late January - in retrospect that was too late. Too early - too late - something in between.

I have a "retread" client couple (I prepared returns for them for 8 years. I did their 2016 return) that chose in 2015 to allow her daughter to do their return. They received a notice from the School District Tax department. They called asking for my help with 2015. I suggested that they go back to the person that prepared the return. (I can fix the problem with a simple letter) I told them I could help them fix the problem, but there would be a charge for my work. I have not heard a word from them since. The daughter has no clue how to fix it. Seems that the Struggle Bus has more passengers.

In all the years I have dealt with ATX (going back to the early 90s,) I have not experienced any of the difficulties with ATX tech support that some seem to have. Maybe they just like me more.

Eh, I will charge what I charge, they'll just like it better after a few days on the Struggle Bus.

And a lot more to charge them!!

If ATX suppoort will even return your call !

When the IRS announced their new "no bid contract" with Equifax, they said it was because Equifax had a "unique set of capabilities." LOL

Well, with the IRS using bleeping EQUIFAX to "verify" who we are, they might as well just open all their systems to all and sundry, fer gosh sake. *WHAT* were they thinking? (More to the point, *who* got paid - and what, and how - for that one?)

Well said, Tom !

There's a little confusion going on here. JKLCPA notes that the 1116 instructions say it's okay to put the foreign taxes paid on Sch A if the requirements are met. That is not the same as putting it on page 2 of the 1040 as a credit against tax liability. I think that only foreign taxes reported by Regulated Investment Companies (e.g., mutual funds and brokerages) can skip the 1116 and go directly to Line 48 of the 1040 (could be wrong). PTPs are not regulated investment cos. And even if the 1116 is not required, your client may benefit more from a $61 credit than a Sch A deduction (they might be subject to AMT or not even itemize so lose the whole thing). And like Lion, I notice that clients who have one of these PTPs have others, and you never know when you start out if they will meet the threshold for skipping the 1116. Mod edit - the following portion of this post is going off topic, yet it warrants further discussion so I have copied and posted it in its entirety into a topic of its own pertaining to various software vendors and program robustness: UltraTax also does not have an entry for Box 16 of the K1 either but supplies a link to the 1116, another thing that makes me think it's required. Lion notes that sales of these investments require hand calculations of adjusted basis and ordinary income. The broker statements where these are held list the sale under "basis not reported" but usually give some number, which is wrong. Also note that the rules are different if you sell the entire PTP holding as opposed to selling some of it. If you sell it all, you just follow the formula and adjust for ordinary income and calculate gain/loss. If you only sell some of it, it is not treated like sales of stock where you can do FIFO. Instead the entire investment is treated as one unit, even if different blocks of shares were purchased at different times. Then you have to do something like average cost basis (like with mutual funds) then calculate gain/loss and take the ordinary income portion out of there (and yes, even if you have a loss on the sale you still have ordinary income, which ends up increasing your basis and your loss). Last week I did one of these partial sales out by hand so I would know what the result was supposed to be. I fully expected to spend the next hour or two coaxing the software into putting the right numbers in the right places. Well, UltraTax just did it! No coaxing required. Add this to our list of second thoughts about quitting UT and staying only with ATX. Maybe I'll put this return and some other doozies into ATX and see what it can and can't do. We'll definitely keep ATX for payroll and 1099s--can't beat the ease of use or the price. For tax, though, we really need a strong program. We would love to save the $15-18k price of UT, and geez I did the partial sale out by hand anyway, but ...... And thanks Lion for the motivational comment: "So, let them pay you for the tax reporting consequences of their decisions." My client with five K1s from PTPs and the partial sale is going to pay $500 extra.

OP didn't mention if her client has other foreign taxes paid. My clients with a K-1 often have more K-1s plus lots of other investments with total foreign taxes running more like $800 and requiring the full Form 1116. Or, are children with no tax liability so we want the 1116 carry forward to use in a later year. Or, had foreign earned income in the mix. There are options with foreign taxes and foreign income, just like with education credits/adjustments/deductions. Knowing how to input in your software for ALL the options makes it easier to calculate the best option for a given client in a given year, while you save time by putting your software to work for you. (That's why this is a great forum with users of different software to chime in!)

The thing is about bypassing the 1116 altogether and putting it all on the 1040 directly, we are still supposed to calculate the FTC with any limitations that might apply that would reduce it. Does anyone actually do that? Rhetorical, don't answer. For $61, I'd force the flow of it to page 2 of the 1040 and move on.

Drake sounds lame.