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Client: "I thought you said this investment plan is designed to fund the education expenses for the kids ! " Broker: "Oh, sorry. I guess you misunderstood. I was telling you it's set up to fund the education expenses for MY kids."

I recently prepared a return showing 1099-B with some $550 in dividends and $300 in capital gain distributions. There were two minor sales of funds which netted another $200 in capital gains. The last page of the information statement showed $1600+ in brokerage fees to maintain the account. Looking back over the last few years, I would estimate that, like the above, the investment fees are more than the income generated by the portfolio. The brokerage firm is making more than their customer. Until a few years ago, these firms were not required to show their fees. I have sounded the alarm to my clients whom I find in this situation, but to no avail. They have been told that the brokerage firm has THEM as their first priority. I won't get into the subject of banking and financial services industry - there is plenty to tell. Have any of you noticed how much your clients are having to pay for these charges?

From Tax Pro Today:

In my experience, that fee you are seeing is possibly also covering other expenses you aren't considering or don't know about. There may be other accounts like IRAs where they roll some of the fees into the taxable account. Trustee fees aren't cheap. They may have 90+% of their assets inside biotech or tech stocks that don't pay dividends at all to defer taxation costs. Maybe they are using some concierge services you don't know about? It's readily acceptable on this board that taxes are hard and people should be willing to pay for a professional. Oddly when it comes to managing their entire financial future and possibly that of their children and spouse those same people should go as cheap as possible because it's so easy. Would you tell someone to go to WebMD instead of their doctor to determine if they are healthy? It's dumb to get tax advice from someone who has never done or studied taxes but it's perfectly reasonable to get financial or estate planning advice from a journalism major.

Have you considered that some investment portfolios are geared more toward increase in value and not on current income payouts?

This has always been a difficult topic for so many reasons. Most people do not take the time or perhaps do not fully understand the choices they make when using investment services. After preparing taxes and observing the investment activity of a recently deceased client, after thirty years of investment 'help' from a nationally known broker, my client was proud to say he had not lost any money over that time period. Wow you say! He said to me...I ended with the same amount I started with! Never lost any money over all that time. I thought to myself...how sad to hear that after thirty years you ended with the same amount. Sure he took some distributions in the later years but never made what he should have if he had not chosen that broker. The Law of 72 states that if you make 7.2% interest, your money will double in 10 years and the inverse.......if you make 10%, your money will double in 7.2 years. The broker pulled 2% of the balance every year in fees plus had him in expensive loaded (commissions) mutual funds. I always point out the advisor fees when preparing tax returns even now when they are no longer deductible. People should be aware. If you give an advisor 1% of your account every year then you have given away 30% of the account over thirty years. How do you justify that?

If only Wolters Kluwer could get things back online as fast as you do!

Yes, I have been shocked more than once when seeing the fees on the consolidated 1099's. And I usually point them out to clients. Most don't seem to realize how this affects them in the long run and how easy it is to manage your own money. That's what I do. The money management business is a lucrative business. In the past I thought about it briefly but personally I do not have the ability to sell something that I would not buy. Sooo I am still doing taxes. However I am sort of proud that several of my clients have thanked me after transferring their accounts to Vanguard.

Link to 10 great quotes from "Where Are the Customers' Yachts?": https://awealthofcommonsense.com/2015/02/10-great-lines-customers-yachts/ They're all great, but I'm especially fond of #2 (and #10 runs a close second place): --> 2. On the value of “I don’t know”: For one thing, customers have an unfortunate habit of asking about the financial future. Now, if you do someone the single honor of asking him a difficult question, you may be assured that you will get a detailed answer. Rarely will it be the most difficult of all answers – “I don’t know.” <--

I think I posted something similar to what I'm about to say on another thread, but here goes anyhow. I've never thought it is worth saving the equivalent of a couple of tax return fees in return for being tied to an unproven product. Once you're committed, there's a strong bias against making a change even if the vendor shows signs of serious last-minute problems. It's also important to have a standby product already in mind just in case. Sure am glad I was following this policy when the 2012 debacle reared its ugly head. I just jumped to Drake (my pre-determined standby), and found it so good that I never looked back. For me, Drake is far superior to ATX and I should have made the move much earlier than I did. However, even though I have an extremely high level of confidence & trust in Drake, I don't take advantage of their discount either. Maintaining flexibility right up to the last minute has monetary value to me.

If there is no deficiency, Taxpayer can sue for refund - 28 USC § 1346 - District courts, concurrent with the U.S. Court of Federal Claims, have original jurisdiction over the following actions commenced against the United States: tax refund suits;

Done!

I think you nailed it with the research comment. What passes for research in the investment field is little more than "investment porn". The airwaves and internet are full of this nonsense, and it all comes at a heavy price. As John Bogle famously repeated, "Nobody knows nothing"" when predicting the future. Investment advisors exist to make weather forecasters and astrologers look like geniuses. Anyone who will take the time to read and understand his speech entitled "The Dream of a Perfect Plan" in March of 2000 will know virtually all they ever need to know about investing for the long haul. The fact is, smart investing & wealth accumulation is quite boring once one grasps the basics. http://johncbogle.com/speeches/JCB_AZ_Republic_3-00.pdf

scottmcfly: Steering them to Vanguard is one of the most important things you can do. Next best is getting them to read and understand John Bogle's philosophy on investing. He revolutionized the industry with the index mutual fund - I'm referring to the Total Stock Market Index, not some of the expensive knock-offs other companies are pushing. Understanding and properly applying Bogle's investing advice will increase ones wealth exponentially without the drag associated with the fees one typically encounters. But it takes a little work and many people just won't invest the time to educate themselves.

Rich, I'm confused by your statement that an NOL can not be carried back if the election to roll back is not elected. Whether an individual or a corporation, the election is to forego the NOL carryback. Without that election, any NOL must first be carried back before any carryforward is calculated. If the prior years have no income to which the NOL can be applied and if the election to forego is not filed, the taxpayer must still show the calculation that the carryback to prior years has been considered and results in no reduction in the NOL before carrying it forward. I haven't weighed in here until now because I'm still unsure of what was or wasn't elected because of the way Edsel worded his response shown below. Does "indicating desire" mean that the election to forego carryback was included with the 2015 return?

Don't you realize that these brokers and investment sellers get compensated based on the VALUE of the investments in the portfolio it's what they boast about "$ Under Management" - not how much earnings the investments make? It's what's called "basis points". The riskier the investment, the more basis points they get.

Alright, I'm feeling motivated. I'm going to move the site later this evening. The transfer itself will be very quick. I probably won't start it until after 10pm eastern.

The IRS can not take collection activity on the individual mandate penalty, but as Max pointed out that has nothing to do with repayment of PTC.

Before Edsel's latest comments I had thought of TAS, as well as some other measures, but seeing the absolute complicated mess that is involved, I would have little faith in having the TAS resolve it. I had a case in which involved an amended return and it took the TAS 18 months to resolve it. I would strongly lean on going directly to tax court. It will take its time, too, what with getting a date for the court and, then, if appeals doesn't resolve it , waiting for the court's decision. The client can represent them-self at tax court, but at least consulting with a good tax attorney would be worthwhile, as there could be legal issues involved here in the way the IRS acted.

Medlin does not efile Forms 94x.