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No, there are both a tax and legal issues of concern. If you take it upon yourself to decide that it's only a tax issue, then you are doing your clients a disservice. Do you think Attorneys and their legal advice provide a useful service? So do these clients even have an Attorney?

Sending a 1099 is almost never wrong. If some entity gets a 1099-K as well as a 1099-NEC for the exact same income (unlikely) they can report both, and back one out as "reported on 1099-K and 1099-NEC but only received once" or something else that makes sense.

Well written. All the group can do is offer advice and experience, and the reader gets to ignore if they elect to. I do this daily with my customers. I stick my advice to areas which fall within the scope of what they pay me for, but I will often, with disclaimer, add stuff from the college of hard earned experience. The former, I expect then to heed, since they are paying for the reply, the latter, it is up to them to do what they wish with the information from my experiences. With the OP's handle including the word "tax" and not including JD, Esq, or anything similar, it would be tough to believe the OP should not be farming out whatever the client has asked which prompted the post. I presume there are professional referral options available everywhere, some which may even come with a referral fee?

LLCs cannot be shareholders of S Corps, but S Corps can be members of an LLC. If the best structure for each entity is a Sub S, then each should have own ein, payroll..etc...keep them independent of each other!

I did the Bob Jennings seminar on the 19th and 20th of December. I forgot how much I enjoy his presentations. I took two of my staff members, and they both enjoyed the presentations, also. Not my only continuing ed, but a good refresher and energizer for the upcoming season!

There is not enough information to make any suggestions here. Reference is made that two parties are involved in each business, but a Schedule C is filed for each. How are each of the parties involved in regards to capital investment, asset ownership, time involved and compensation? There are concerns if husband is involved in business which also rents property owned by him. Was the property solely his to begin with? Was there a bonified business purpose if wife transferred any ownership to him? What are the long term plans and succession goals for each of these business? How interrelated are the businesses and how much profit from each. I would refer any legal concerns to their attorney.

I believe there is a backup withholding rule that applies.

The best way to have gotten this resolved is with a Collection Due Process hearing (CDP), form 12153. However, there is a time limit on this of one year from a notice to levy, or a lien filing notice. Since the penalty assessment was in 2020, it may be too late. (see the instruction pages of form 12153).

January update is available for download. State programs, Eng Ltrs, etc.

Pay for the expertise, but try to understand what you are signing too. Said as I had to get to page 73 of my BOP document (past exclusions for E&O) to get to the E&O rider! When I first reread the policy documents, I reached out to the agent because the disclaimer was, 70 pages before the rider.

Over the years, it is amazing how clients think they are saving money by avoiding the use of Attorneys. So many people who regard legal documents as something to be signed and forgotten?

I appreciate the mention of succession (and I also include ending - voluntary of not, and possible sale). It is rare indeed for someone organizing or starting a business to look at the end game. Some decisions at startup can drastically alter the possible end, or at least make it costly to alter. Thus the earlier mention of completely separate entities is not to be ignored, depending on the long term plan. While some call it a game, it is a game, protect the interests. One may have employees, and suffer something costly (like UI claims or WC issues) and should be insulated from others. Not suggesting UI dumping or anything along those lines, just to be wise and think things through. There are plenty of experts in this specific topic to engage. It seems like it may be wise to avoid multiple entities which make little or no money as I suspect those may be looked at strongly going forward.

Agree, and make sure the person acting as the agent for the entities is a qualified attorney at an established firm. DIY is rarely a good option in these situations.

I have a customer claiming they entered their checks accurately but the irs is telling them they did not. Never ends, but ensures employment… I expect it is a data entry or setup issue, but I can’t be sure until I see their data. It is never productive to believe verbal information fully or to let it taint my thoughts prior to seeing the data.

if they operate as LLC then no payroll is needed for the owners.

I had to do this with 2 clients, similar situation. took about 5-6 years of correspondence and then one day a client got the letter saying everything is ok and the other client never heard but the letters stopped coming.

If these were my clients, I would set up each business as a separate business entity with separate payrolls which would give you a lot more long term options especially from a legal point of view.

Had the same issue. To many . in my email. Had to use a different email. The old one we have used with the IRS since dial up days I did all this in early December so the wait time for tech support wasn't bad. Maybe a 5 minute hold.

"A proposed class-action lawsuit filed this week alleges that Meta, Facebook’s parent company, violated users’ trust and expectations of privacy by collecting sensitive financial information from online tax-filing services. The lawsuit, filed on Dec. 1 in federal court, accuses Meta of breaking contractual promises to users and, in some cases, violating state and federal law. The action was brought on behalf of anonymous plaintiffs who filed their 2020 taxes online using H&R Block." "Meta is also facing at least five class-action lawsuits from patients alleging that its pixel’s collection of data on hospital websites violates various state and federal laws." So far the only known government action are inquiries from Sen Mark Warner and Sen Jon Ossoff.

From my perspective, payroll is easy compared to income tax reporting... There are some, to me, seriously broken parts of payroll, such as the increasing number of tax agencies profiting via required "retirement" or other "helpful" deductions (they contract out the back end processing and keep a cut as profit). The lack of common rules with items affecting all states, such as minimum time in local to trigger nexus. But, there are many families whose living depends on a tax agency having an office to set and monitor rules - process returns etc. - so the likelihood of a tax agency making thing easier is nil. I saw an article about a non US jurisdiction where the tax agency monitors income and adjusts withholding on the fly so there is no need for tax returns. How would that go over here, let alone across the US? I struggle with this issue whenever I think about it, as simplicity has merit, but will never happen because complication leads to jobs, and opportunity to believe one is paying less tax than required. (I often wonder if there was no opportunity to believe we beat the system, we would not care if the system was made simple.)

I can only imagine it was a weird caching issue. Even if you omit the 's' from https:// the site should redirect you to the secure version.

I am waiting to see the IRS response to this one. Gonna get some popcorn and see what happens when a company pushes back on the IRS. Hasn't happened in a while. Tom Longview, TX

The W9 should answer that question if the vendor filled it out correctly. In box 3 on Form W9, if they check LLC, then they are supposed to tell you how the LLC is taxed in the area to the right by putting in a "C" "S" or "P". My rule of thumb has been if they don't fill it out correctly, they get a 1099. Tom Longview, TX

Example; You receive a bill for $10,000 with a breakdown of Equipment - $7,000, Installation Supplies - $250, and Installation - $2,750. You send out a 1099 NEC for $10,000. The recipient deducts their cost for the equipment and supplies in COGS .

As an EA, I do 40 hours on the first year of the 3 and then the minimum 16 the next two. This is my first year, doing a class in the next week or two to get a jump. Like to get it done before my summer vacation.

I subscribe to RIA Checkpoint Learning 'Premier Package" which allows access to hundreds of webinars and self-study courses for an annual rate of about $300. A great value for quality courses. Oregon CPAs are required to report 80 hours every two years. You must take at least 24 hours a year. 20 hours of carryover are allowed but cannot be applied to the 24 per year minimum. Also must include 4 hours of ethics which come with the RIA package.

From my heart to all of yours, have a wonderful New Year!!!

+ 2 CEs of Ethics EVERY year for EAs. But I hear that the OPR or whichever department renews our EA designation is understanding about illness (COVID seems to be reasonable cause for most things) and one-time errors -- if you contact them and make-up any shortage immediately. Also, if you're an NAEA member, you need 30 CEs per year, IIRC.

Unfortunately, I can't quite work up an entire year ahead just in case. As an EA, IRS requires that I have at least 16 hours each year, and 72 in the three year cycle. But working some hours ahead is a great plan to be prepared.

There's so much free CPE available that years ago I took over 80 hours one year. 40 for the current year, 40 to carry over into the next year. I've taken at least 40 each year since then so I still have the 40 carryover. If I suffer a minor tragedy and am unable to take CPE for a year, I'm still good to go.

Happy New Year, everyone!

Live long and prosper.

Happy, Healthy New Year!

Happy New Year to everyone! May it be prosperous & healthy.

So I just finished the self study course. Got 78.57% so I passed. Nothing like doing it at the last minute!