Leaderboard

I still have my first tax return from 1955.

Nah, not really intentional, just an old file cabinet that got moved around and never emptied out. I have an old desk with stuff from my youth too. I found a very funny short story that I wrote at about age 8 entitled "The Story of My Life" and also some things and writings from my father too. Now those things are very precious and glad I still have them.

I think we should encourage our clients to register with the SSA and make sure they have the correct information for each year. I check mine every year and it seems to be correct.

Wow, Judy. I am sure those old writings are precious now, but I can't imagine still having tax returns from the 70's. I filed then, but they are long gone. Kind of wish I had saved my very first return, though.

OK, that is just too .... too.... something retentive. Tom Longview, TX

Good thing I still have all my own tax returns ever filed and supporting documents going back to the '70s and and also for husband and I starting with '92.

Have you determined that this is a real inquiry? Why would SSA wait 30 years to contact the person, and was there something extraordinary about that year's earnings compared to the others?

"Houston tax lawyer Carlos Kepke had been tutoring rich Americans like Robert F. Smith for decades on how to move assets offshore when an undercover agent posing as a bar owner turned up in 2018. The goal was to gather evidence for a tax fraud case against Kepke. It wasn’t hard. As the wired agent recorded the conversation, Kepke bragged about placing assets in offshore trusts, notably in the Central American nation of Belize. Clients move money and claim to yield control, in keeping with federal law. But they decide how it’s used, not the foreign trustees. “You never lose control,” Kepke assured his visitor. “You’re just playing with bank accounts.” That assurance, and others like it, are spelled out in a newly public affidavit in Kepke’s case. It sheds light on the Internal Revenue Service’s two-decade pursuit of Kepke, a player in the global network of lawyers, accountants and financial advisers who help hide billions of dollars in offshore money havens. And it opens a rare window into how the schemes function." https://www.accountingtoday.com/articles/the-sting-that-snagged-the-tax-lawyer-to-a-pair-of-billionaires?position=editorial_2&campaignname=ACT Tax Practice-07122022&utm_source=newsletter&utm_medium=email&utm_campaign=V2_ACT_TaxProToday_20210503%2B'-'%2B07122022&bt_ee=xGJK6MJlr5NSrROCOhZxHw4kjEiAXC9BJC9wqB1NCub4vbjFD3qqroDEE2tRpKrj&bt_ts=1657641643456

My client turns 70 next month, so at this moment I am assuming that it was triggered by his applying for SS, like what happened to Abby. Still waiting for a copy of the letter.

Electronic records are the way to go. Hire a student for the summer to start scanning, starting with the most recent prior year. We did this and went back ten years. All the paperwork was then shredded. We did keep the paper records of a very few clients who had really complex histories, but now all original docs are returned to the client when the return is completed. We also keep original docs with sigs for POAs. We offered clients with massive old files the opportunity to retrieve them if them desired--only one did. It is so easy to find things in the electronic file cabinet--no digging in file drawers, where something is always misfiled, no need to refile anything. Client needs W2s for the past three years? Print them out in a minute. IRS notice and your response? Right there under the year in question. The back room is now usable instead of being lined with filing cabinets, and no one has to muster the courage to go down in the basement.

Nothing much more frustrating than being hung up on by someone you don't want to talk to. My friends, there are your dangling participles for the day... maybe for the year... for you to ponder on... You're welcome.

SSA contacted me about a possible duplicate W2 from the early 90s when I applied for SS. Unfortunately, I had shredded all my tax returns from 1972 forward and didn't consider scanning them before shredding because I had the last 20 years in PDF form. I had switched jobs with the same company and it's quite possible they did give me two W2 forms for one year and the total income seemed about right as well, so they allowed the extra W2 to be part of my earnings record.

You can open two tiny returns, but two average size returns or a large and a small return. But for me, having two returns open at once is something I need about 1% of the time.

How true; which only leads to more work due to a simple act of negligence. I would much rather be safe than sorry!

Hey, if one can fake ethics and honor, the sky's the limit! Most of the "ethics" taught is nonsense and easily gamed for those of a mind to so do. Best I ever sat through was a long conversation (yes, a conversation with two instructors and a room full of 100+ tax pros) on gray areas. How to recognize when "helping a client" slowly pushes you into grayer and grayer areas (client doing this on purpose or by accident). Recognizing hidden places for conflicts of interest. There was nothing cut-and-dried in those two hours, and plenty of disagreement in minutiae, but it was the best and most thought-provoking ethics ever. I still think back to it and those same thought patterns have helped me recognize several gnarly situations and back out before they got too gnarly.

I love starting the SOL. I advise filing any time there is any question. Filing now not only starts the SOL but means it's done when information is relatively fresh in minds. Hate getting IRS letters demanding tax due that isn't actually due, just because proof of same was not filed in a return.

I scan everything, and electrons stack real high before they need more space. My electronic records go back to start of scanning. Paper? I no longer keep paper for anything except 8879-type sig pages (in ONE file folder by tax year and one folder for state pages; scanned as a whole and shredded after three years) and POAs. POAs because so often I need to include copies (or fax them) when dealing with a new agent or issue. No client original docs of any kind stored, except for one of my daughters who doesn't have enough room at her apartment, and at her specific request. With electronic records, I was able to provide copies of adoption papers to a former client who needed them after originals were lost in a move. It did take me a few minutes of digging in the old records to find them.

"In February, a U.S. accounting watchdog fined PricewaterhouseCoopers’s Canadian partnership $750,000 for weak controls that saw more than 1,200 employees participate in “improper answer sharing” in internal tests from at least 2016 to early 2020. Rival Big Four auditor KPMG paid a $50 million penalty in 2019 after the SEC found it had used stolen information to prepare for regulatory inspections, while some of its auditors “manipulated an internal server” to lower the pass mark in training exams." Surprise, Surprise !

Gosh, Yardley; that's a tough one. Finally though, a question that doesn't require exhaustive research by the estate/trust wizards hereabouts. I believe IRS has already ruled for the prosecution ("yea"). However, many hair-doers as well as other independent contractors feel it's a subjective question open to debate . Lots tend to be "agin" while I'm obliged to argue "fer" and the damages are occasionally brutal (for both). "Such is life"; as the old man used to say.

Sometimes, I've found that just asking the question out loud, or typing it on a forum, helps me find the answer without any input.

Unbelievable, you have clients who aren't 100 % honest? I am sure they just weren't able to remember?

Yes, and my honest clients include it in their books as income.

Correct.

It would be hard to find RD in Brasil.

May we all unite with joy for our freedom.......... But... be safe when grilling your food....

Well, I don't who raised these people, but one way to guarantee I don't respond is to direct me to kindly familiarize myself with anything. Familiarize yourself with this: Not today, Satan.

What Bulldog Tom said!

Still happening. I received this yesterday (I took out the link and typed in bold the words that appeared) Thank you for taking time to respond to my email, it has been a pretty busy week for me and my family as we are planning out our yearly family trip. I will be available for a phone conversation next week Monday around noon, will that work for you? In the meantime, find below my prior year tax forms and other tax related materials. Kindly familiarize yourself with it to make our teleconference swift and straight forward. Brent Crawford Tax Forms.PDF What is your accepted mode of payment? Hope to hear back from you! Best regards Brent Crawford

Bare land is not deductible. Interest and property taxes are deductible.

Reduces SE tax. Tom Longview, TX

Wouldn't the rental income on Schedule E only offset the rental expense on the business entity.

Too long, I guess. When we built on my office addition, we put a basement under it which makes a fine, safe storage room. However, I make external backups every single year so could always reprint the return if I had too. But, that doesn't cover the notes, forms attached, etc; so I am thinking of starting to burn more since we have an outside wood burner. On the other hand, there have been a few instances when we have had to dig way back. As you said, sometimes they leave and come back several years later. I just had one last year that hadn't been here for 9 years because I fired her. She came back asking nicely and so far all is well. I am going to say seven to 10 years because I have the room and I can just see so many of you throwing up your hands in horror. That's what happens when you started out with pencils, erasers and printed forms and a copy machine.

I have a business client for whom I have done all of their Accounting, Payroll and Tax Work since the middle of 1993. One of the owners just received a letter from the SSA wanting verification of his 1992 W 2 information. Are you kidding me? Very few people keep documents from 30 years ago. I wonder if they will remove the 1992 earning from his 35 year earnings history?

Been try to get through for 2 days. Finally got a call back appointment. Answered the phone, accepted the call, only to have the computer hang up on me. GRRRRRRRR at IRS.....GRRRRRRR at ENQ Tom Longview, TX