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I don't think there's anything wrong with telling a prospective client their situation is unnecessarily complex and I don't want to move forward with the relationship. One reason might be that their income is so low it wouldn't justify the cost of handling the audit which I think is inevitable. That doesn't even get into the fact that she's probably already doing things that are wrong or certainly beyond what I'd consider to be a gray area.

Uh Boy... I think I took a client that I don't want. The more I look at this, the less I want it. There are many things going on with the 2016 tax return I am reviewing. I'm NOT amending it unless she gets a love letter from the IRS. There are 5 Sch C's, one for each 1099 including a rental income from renting out farm land. Yes, she put it on Sch C. Wait, it gets better. She started a "non-profit" and she is the founder. She receives a "salary." No, it isn't a W2, it is a 1099, Box 3 "other income" for $7,000. Wait, it gets better. In 2016, her net income from all those Sch C's was $-2075.00. Yes, NEGATIVE $2075.00. There were zero wages, zero withholding, zero refund/balance due. Wait, it gets better. Her self-prepared return listed her occupation as "Attorney." But, you probably already knew that, right? All of that is really just annoying. Not earth-shattering by any means. Here's my question: She has a hiking business, sole owner LLC with an EIN tax ID number. She has income from that LLC which is not reported on a 1099, PLUS two 1099s issued to her personal SS number. I believe I can lump all that income into the LLC (on one Sch C) since it's all hiking work. Am I right? The 1099 from the "non-profit" must go on its own Sch C, I believe, because this is executive-type work. Am I right? It is Box 3 income, but it's subject to SE tax since it's her "salary" for working. Did I mention the THREE K1s? ohmygerd.

I wouldn't want to touch that one either, and yes, John put it very nicely. You post did make me laugh though as it sounded like those TV commercials with "but wait, there's more"

You're welcome. I was lucky enough to have spent my early years in a small CPA firm having a diverse client base where I worked on a wide variety of projects. The owner was a perfectionist when it came to the work product, and he gave me the guidance and leeway to learn. He's gone now and I miss him, but his training and expectations still resonate. And... Google.

Is the non-profit really an non-profit? Did she receive a letter from IRS granting non-profit status? Is she filing a 990 for the non-profit? Etc. Etc. Etc. I'd worry about the non-profit really mucking things up.

As for the 1099's issued in her SS for hiking work, yes they can go onto the Schedule C. That's rather normal. You enter the 1099 and attribute it to the Sch C and the IRS will easily see it. I have a farm rental on a Schedule C. It's not real clean and obviously not preferred but I don't think it's horrific. The previous preparer did it that way but you can also change it. Thing is if it's rental - I'm not sure it really makes a big difference unless they are showing a loss. I agree with you that the 1099 for the "non profit" is also to go on its own Sch C. I do hate doing non-profits. Do you need to fill out a special return for the non-profit or is someone else doing that?

About that networking...

Max is giving the general rule for claims for refund or credit on amended returns under sec 6511(a) and (b)(2) or (c), but there is a special rule under 6511(d)(2)(A) that allows the claim for refund or credit if it is attributable to carryback of an NOL or capital loss. It must be filed on 1040X to be a valid claim at this point because using the 1045 alone would be a tentative filing that has a shorter SOL, and Edsel's client is already well beyond that date.

I just LOVE the movie "The Princess Bride!" In the same vein are both "Undercover Blues" and "Real Genius" neither of which get the attention they deserve.

Make sure you check ALL your carry-overs (including state). I had a couple of clients with charitable donation carry forwards that did not convert and NY LTC insurance carry forwards that I had to manually input. Make sure you take the time to learn how to write macros. They are a huge time saver for repeated entries. If you search on macros in the software discussion page in the Drake forum you will find many useful macros.

Thanks, I am considering that and you put it quite nicely. She was a personal referral, as they all are, and her boyfriend is a good client. I wouldn't want to lose him, so I'll stick my neck out and simplify this.

The window is still open for that. It's three years from the due date, including extensions, or the original return for the year of the NOL, so three years from 4/18/16 or 10/17/16. April 18th is not a typo; special rules kick in when Emancipation Day falls on a Saturday. You must file this on 1040X though and include the form 1045 as part of that filing. See #4 below. Also, Link to IRC Sec 6511(d)(2) as referenced. Stupid rules on Emancipation Day's effect on due date, for anyone that doesn't yet have a headache: https://www.irs.com/articles/tax-deadline-alert-2015-tax-returns-are-due-april-18-2016 From the IRM, easier to understand than 6511:

My sympathies, @Edsel! Those complications just make it all worse. First time I did an NOL/1045 I did it three times with the same info and came up with three different answers (on ATX). Finally did it by myself, on paper, and then strong-armed the software to come up with *that* result (because I knew how it calculated, I decided that one was right - it had the other advantage that the result almost matched one of the three by computer). Then I took motrin and had myself a lie-down for a while, to deal with the massive headache. Either I've gotten more used to them, or Drake makes them easier. Maybe both!

Me too. He wants to ask questions, fine. Speaker is willing to answer, fine. I don't want to listen during my break time.

Bingo! That's my cue to head for the door, even if it's at the front of the room. I don't mind being disruptive at that point.

One more lick: Last one I went to a couple of years ago there was (always, always is) someone who didn't ask during Q&A, but waited until the monotone speaker announced, "Oh, it's break time; let's reconvene in 15 minutes..." at which time everybody who's been bored out of their gourd for the last two hours is closing books, limbering up, attempting to get launched and stumble to the refreshments table for caffeine and pastries. It's right at this exact moment that some %$^#*&@ blurts out "Wait; I didn't quite get that last point; would you expand on the new Tax Court ruling vis-à-vis IRS reg, code...." A collective groan from the audience and the urge to strangle...

And Jesus was a real cowboy - he rode an unbroken colt bareback through a cheering crowd without getting thrown off.

Oh, it won't be cheap! Yes, someone else is doing the 990. One of the K1s appears to be a law firm and her name is on the title of the firm. My guess is that it is a family business. They are probably setting up all these K1s and they probably set up this "non-profit." Me thinks her 1099 for $7k means it's not really a non-profit at all. It's legalese. The farm rental income will go on Sch E out of my office. They are not performing any actions or services, so it's straight rental income. Since I'm not following another professional, just an "Attorney" DIYer, I'll do it right.

I wouldn't touch this for double or triple the normal fee !

One of the things clients overlook is that filing late deprives them of various options. With a carry back from 2015 to 2013, there is no refund and the worse is that part, or all, of the NOL gets used up without getting any refund. The exception would be if there was tax still due on the 2013, or if the tax had been paid within the last two years.

Thank you so much Judy. I have Drake, but the numbers aren't flowing because of taxpayer identity. I'm having to populate 2013, 2014, 2015, and 2016 in Drake although they were prepared by someone else. Some returns list the husband first, others list the wife, plus the husband died during the time interval. Very complicated returns, prepared by 2 CPA firms and a tax lawyer. Now ME. Thank you for specific answers.

Judy, how do you know all this stuff?? If I tried to learn all this my brain would explode from overload. Thanks, Edsel

My youngest son graduated from Cal this year. But he still roots for the 'dogs with his old man. Since they don't play each other very often (like every 25 years), it is not an issue for him to support 2 teams. And thanks for the head coach. We love Tedford in the valley. Tom Modesto, CA

I have to admit that I've always had a preference for live courses, but this year the changes are so immense I've decided to immerse myself in any and all types of courses so I get enough exposure for the new stuff to sink in. Like all of you I'm sure, I've been bombarded recently with offers for unlimited CPEs from groups I've never heard of, and I'm tempted to sign up with at least one. Judy said she likes one in particular but didn't name it. Please tell us! Any specific recommendations for any of these providers?

Edsel's reply was purely tongue in cheek and he even pokes fun at himself. I do not know what you are taking offense to. Yes, I say he can "take it" and rather gracefully.

No one from our ATX Community Family would ever do this though, John.

Since we're still beating this dead horse, I'll toss in another lick. One of my pet peeves about seminars (of any type) has always been the Q&A time. Occasionally there are good questions on important matters. Usually there are also some questions asked about complex or unusual singular situations which have narrow application and have virtually no relevance for 99% of the people in attendance. But almost every seminar has someone who asks a question they already know the answer to (or at least they think they do), with their primary purpose being to try and trip up the presenter in a vain attempt to impress everyone else in the room with their superior knowledge. They're usually easy to spot, and that's generally when I get up and leave (unless the signup sheet is held to the end).

Careful Mr. Golar - statements such as the above could subject you to the scorn of fellow comrades, identification with moral turpitude and worst of all, the dreaded "thumbs down" by other members, formerly reserved for Edsel and a few other ill-respected sources. You might have even destroyed any hope you have of being a "Tax Afficianado" - this board's version of designated knighthood...