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Extending the use of your most-wonderful appellation from earlier, we are now in Q7 of 2020, almost to Q8. Can we all go hide under our desks now, and stay there till this is all over? Please?

I vote for hide under our desks now.

Allocate the selling price and the expenses of sale to each type of property sold. You will have separate sale entries for the land, the building and its improvements, and any 1245 assets that were on the fixed asset schedule. If I have lots of improvements over years, or have lots of 1245 assets listed, once I have the SP and expense of sale allocation figures, then I do group/bulk sale for each of those types.

Of course it will. Just like licensing gets bad drivers off the road and has eliminated corrupt builders. It's amazing anyone opposes this.

Building this in to my software, it is likely to be a nightmare for many... if there are any ERC or FFCRA figures to include. So be forewarned if you handle any 944 forms for your clients. The issue is there are different credit calculations for different quarters, and with 944 being an annual form, some may not have the required quarter figures readily available. Notice the draft form has been available since June, but still no instructions... I am cobbling together what I think the calculations will be, based on the individual instructions for the 941 quarters.

For the purpose of due diligence by a purchaser of a tax practice, under sec 7216(n) the seller is allowed to disclose names, addresses, emails, phone numbers, the tax form and entity classification of the clients. You may find the following blog helpful in this regard: https://www.johnrdundon.com/irc-7216-disclosures-issues-to-consider-when-selling-your-practice-start-with-a-tight-nda/

Selectively asking 'how can we afford this' makes me . Also, there's a lot of overreacting on this and I suspect the reality will not be so bad. Wait until we have details and real world examples.

I have been standing firmer, more so late in this season, about not starting returns until I receive the signed engagement letter AND the signed due diligence questions, which include EIP1, EIP2, & EIP3. Few will remember EIP3 next year, and many are confused about reporting EIP2 now instead of next year, so I ask for all three. My questions also include the 2021 advance CTC payments, because few will remember next year. So, getting the first one, two, or three gives me a good reminder about asking for the rest of them next year.

I have had at least one client who swears she did not get the second stimulus payment, and actually looked at the bank accounts to check, but got the letter from the IRS saying that she did. When we checked, they had issued the payment as a debit card. Once they have done that, the only recourse is to contact the "bank" that actually issues the debit cards for the IRS. She did that, and they reissued the card, but after she activated the card, it showed a zero balance. And apparently it is impossible to talk to an actual person to get anything cleared up. This is a huge waste of my time holding their hand through all of this.

Those are both good tactics, @FDNY and @joanmcq - and have the other great side effect of leaving the bulk of the day open. Call first thing - any day except Monday - or wait until an hour-ish before West Coast closing time (until 7pm-ish East Coast time). Especially on Friday, when you can bump that back to shortly after 5pm East Coast time! Not only have many offices closed for the day (increasingly with every minute that passes), but on Friday many go home/close up early, husbanding their strength and energy for the Bataan Death March emulator that the filing season has become.

It'll go the way of the 1099-MISC to corporations; suspended from implementation because they won't have the computer processing power, or storage space, for all the data. Imagine it - a notice every time a small company pays its credit card bill, rent, buys a computer or desk, renews its insurance, etc etc - a notice is sent to the IRS. If we thought they were slow this season with all the hand-checking, they'd simply grind to a halt just about immediately.

I remember reading that with the Dec tax law changes and the Dec-Jan 3rd stimulus payment, the IRS didn't have the time or resources to coordinate the computers that contained the stimulus with the 2020 tax computer systems. Therefore all returns that claimed a rebate recovery had to be hand reviewed, leading to huge backlogs in a department that typically cleared its inbox every day. The delays caused many refunds to be paid after the 45 day statutory period, so many got more than they thought because interest was added. I believe the interest was paid back to April 15 because in their haste, congress never considered that the due date was changed to May. Like everyone, I've been getting several of these letters recently. One was from a guy who got a bill from IRS. My notes showed that he supposedly looked up his stimulus amount and I used the figure he gave me. When he called about the letter, he said he looked it up and IRS was right! I always queried every client who gave me an amount that the software didn't predict or who said they got nothing. Most looked it up and agreed with my calcs, some didn't and are getting letters. We can't trust ordinary people who never even glance at their bank statements to go back and try to figure out what's in there. Next season our questionnaire is going to have two questions at the very top: How much did you get for stimulus and how much for advance child tax credit, with a warning that their return will not be started unless those questions are answered.

Of course it's easy -- if it fits the rubric the IRS auditors are given, which will be newly-written to work with the new bank reporting forms. But it will be very time-consuming for me and for all my small biz clients. Clients won't feel it's their fault (it isn't) and expect NOT to pay me. I'm spending hours each day corresponding with clients waiting on refunds and with clients receiving levy letters now, because the IRS hasn't processed their online payments yet. Clients are angry. At me. They know they paid, so it must be my fault. Even if they want to rant at the IRS instead of me, the IRS doesn't answer their phones or faxes or process letters. The IRS just holds onto their refunds or keeps sending ever more threatening letters. My clients' rants should be directed at Congress, but they know they won't get any action there, either This is just one more thing that will go wrong next tax season (if this one ever ends). One more thing we have to clean up after Congress' new idea.

I like to start calling one minute before they open, get the recording, hang up and keep hitting redial. Always gets me at the top of the queue.

I just got through to the PPL in about 3 minutes. Trick is to call between 5pm & 7pm. Most practitioners go home at 5. Now I’m on Pacific Time, so maybe this doesn’t work in the East, but I’m rarely on hold more than a half hour. oh and don’t call on Monday.

I have clients that like to pay me via PayPal and Venmo plus credit cards I process via Intuit. I would receive Forms 1099-K from all three of those. The Intuit payments land in my biz checking account, and I move all the Venmo and most of the PayPal to my biz checking account. Under Biden, my biz checking account will issue me Form 1099-whatever on those transfers. The same income will get reported twice. My disbursements from PayPal and from my biz CC and from my biz checking account will NOT be reported twice. My net profit will look waaay too high! I can't imagine the time it will take to argue my own situation with the IRS, let alone argue for all my clients!

I may be the only one to disagree, but I think the IRS has bigger problems to deal with - like the ones addressed by Olsen every year in her review. This doesn't mean I support bad preparers or bad tax returns. None of us do, and I wish they weren't out there. Especially shifty-eyed Sam across town who will deduct anything or lie for his customers. But Sam would be most likely to be shut down by increased audit activity than regulation. The problem with regulation of any industry is the enforcers pick and choose who to scrutinize. They are quick to go after low-hanging fruit to justify their jobs, but are not so anxious to tangle with difficult violators who can effectively throw up roadblocks. In other words, they could shut me down for accidentally failing to sign a return, or a failure to observe a petty regulation in Cir 1230. But a very bad preparer in a nearby town some 30 miles away has been spewing out inaccurate returns for 30 years, but is married to a Federal Judge. Big companies support regulation and in public relations campaigns they decry bad practices in their industry. Regulators can eliminate small competitors by shutting them down, but if a regulator knocks on the door of a Fortune 500 company, they are told "Our lawyers will be in touch" and that will be the end of it. I don't expect "like" emoticons from the group, but this is where I stand.

If you use the Chrome Browser, make sure it's up to date due to several serious current security exploits. "Chrome is up to date Version 94.0.4606.61 (Official Build)"

Oh! I know how that is: your eyes see it but by the time it gets to the brain.... it does not register. It is definitely difficult to keep straight what are eligible expenses for tax-free scholarship vs. AOC vs LLC vs 529 expenses. ...you said he is leaving for the Marines. Did he have ROTC or Veterans benefit scholarships? Make sure that none of the allowances for housing are included in the scholarship amount. BAH is paid separately and not included in income. If he had those, look at the Veterans Administration section of Pub 970 and/or go to: https://benefits.va.gov/gibill/. Probably you are looking at the 1098-T. BAH would/should never be a part of the box 5 scholarship figure. So you do not have to consider it.

Qualified education expenses. For purposes of tax-free scholarships and fellowship grants, these are expenses for: • Tuition and fees required to enroll at or attend an eligible educational institution; and • Course-related expenses, such as fees, books, sup- plies, and equipment that are required for the courses at the eligible educational institution. These items must be required of all students in your course of instruction. Expenses that don't qualify. Qualified education expenses don't include the cost of: • Room and board, • Travel, • Research, • Clerical help, or • Equipment and other expenses that aren't required for enrollment in or attendance at an eligible educational institution.

If he made a contribution to a roth and then converted the contribution to traditional, he can change it back to a roth. If he converted an existing Roth balance to a traditional ira, then it cannot be changed back to a roth.

A recharacterized contribution can be reversed on or before the due date per 408A(d)(6)A whether it be from a traditional to roth or vice versa. 408A(d)(6)(B)iii prohibits the unwinding of a conversion of an account balance (rollover) from a traditional to roth or vice versa.

Good luck to you - and our thanks for beating your head against this particular wall for us.

Oooh, @Sara EA I *like* that warning that the return won't be started until those questions are answered! May have to snag that for our letter, too.

I seriously doubt that

I’m confused as to whether your client is a US person who worked in Australia for a summer job or an Australian who worked in the US. In either case, the 2555 isn’t used. If client is US person with Australian earnings, put the wages on the FECWKS, and the income taxes paid on the 1116. Don’t forget to convert the Australian dollars to US dollars before putting the numbers on the return.

What does the IRS do with all the Forms 5498 they receive? Seems like nothing.

FTB must dig "Hotel California": "We are programmed to receive. You can check out any time you like. But you can never leave!"

CA FTB has had a reputation of being very aggressive for many years.

I remember reading George Orwell's book "1984" in Jr High in the 70's and thinking this can never happen in the United States. Guess I was wrong.

Thanks for the quick service, jklcpa. You are way within error-tolerance limitations and have definitely got your cheese together!

True, BUT - they are completely and 100% in control of stopping the computer-generated letters threatening people! They *know* they are behind in processing what has been mailed to them. They should *not* be threatening people when there are stacks of unopened mail a mile high and phone calls of which they are answering less than 10%. If they just stopped the letters and seizures until they catch up, 90+% of this nonsense would be resolved once the dust has settled. We'd still be sane, their phone lines would free up, and people would not be panicking and blaming us.

That's great! The great-er news is that I sold my business and finally grew up to be an employee! So thankful to have the responsibility off my back, and excited to help the next one build her business. I'll work for a few more years, just because.

i am supportive of this legislation especially since under current law the Treasury Department has to go to court and obtain a conviction in order to shut down a fraudulent preparer. However this will not halt the preparation of bad returns. My state of Oregon requires the Licensing of all Tax Preparers plus 30 hours of CPE every year. This law applies to every preparer except CPAs and Attorneys. Earlier this year I picked a new business client (Monthly Write Up, Payroll & Tax Returns). The prior preparer has been licensed since 1991, has a bigger office than mine with licensed preparers working for her. My client's 2019 1120S and 1040 were poorly prepared with a number of mistakes showing a real lack of tax knowledge. Just because you are licensed doesn't mean you are competent.

As long as there are DIY'ers, anybody can do taxes, and anybody can cut hair. Truth. We need the DIY'er returns audited.