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The punishment for competence.

Thanks @Lion EA. I can now see why this is being put into effect and that this may be put on tax preparers to file these reports. Not to derail this topic, but I will say though that as tax preparers, we should not be "forming companies with the Sec of State for [your] clients" as you said. At least in my state, that would be considered practicing law and also most likely would not be covered under tax preparers' typical malpractice policies. If anyone here is doing this, you may want to check with your insurance carrier about your current risk exposure.

I tried to get rid of one PITA client this year by suggesting VITA and local free-file services, telling them I had to increase my fees but they could get good service for free. Nope; they came back saying they'd rather pay me more, because they like and trust me. Ah, well.

If I had not "fired" 85 clients last year, I would have been totally burnt out and quit. A much more pleasant year and I'll be renewing ATX in a few days. I did lose some PIA clients along with their "healthy" fees, but a slight bump in price and 99% retention means I'm still profitable.

I agree about forming companies with the SOS. Not for me to do. I just ask for the proof of filing, articles, EIN, etc. However, since this is an IRS reporting requirement, and we do IRS STUFF with our clients, I think they are going to want us to do the reporting for them, very much like our clients wanted us to do the FINCEN reporting. Where do we draw the line in what we do for our clients? Tom Longview, TX

The Corporate Transparency Act was in my update classes last December. https://www.fincen.gov/boi Also, if you have been forming companies with the Secretary of State for your clients, you might want to revisit that decision before 2024: 11. Who is a company applicant of a reporting company? There can be up to two individuals who qualify as company applicants — the individual who directly files the document that creates, or first registers, the reporting company; and the individual that is primarily responsible for directing or controlling the filing of the relevant document. No reporting company will have more than two company applicants. If only one person was involved in filing the relevant document, then only that person should be reported as a company applicant. Only reporting companies formed or registered on or after January 1, 2024, will have to report their company applicants. Companies created or registered before January 1, 2024, do not have to report their company applicants. The following examples illustrate how to identify company applicants in common company creation or registration scenarios. Example 1: Individual A is creating a new company. Individual A prepares the necessary documents to create the company and files them with the relevant state or Tribal office, either in person or using a self-service online portal. No one else is involved in preparing, directing, or making the filing. Individual A is a company applicant because Individual A directly filed the document that created the company. Because Individual A is the only person involved in the filing, Individual A is the only company applicant. State or Tribal employees who receive and process the company creation or formation documents should not be reported as company applicants. Example 2: Individual A is creating a company. Individual A prepares the necessary documents to create the company and directs Individual B to file the documents with the relevant state or Tribal office. Individual B then directly files the documents that create the company. Individuals A and B are both company applicants—Individual B directly filed the documents, and Individual A was primarily responsible for directing or controlling the filing. Individual B could, for example, be Individual A’s spouse, business partner, attorney, or accountant; in all cases, Individuals A and B are both company applicants in this scenario.

You remind me of the first CPA I worked for. "Explain it so a 3 year old can understand". Tom Longview, TX

I think an amended, or corrected. return is in order - but is should be paper filed with an explanation of what happened, the two 1099-R's and the closing brokerage stmt. The pertinent information on the docs should be circled in red with a letter notation ( A, B, C etc) and spelled out in the explanation. What you want to do is to lay it out so it makes the reviewer's job the easiest possible.

I can only speak about my state's requirements for formation, and corporations and LLCs incorporated here in DE must designate a registered agent, either themselves or hire an attorney or other agency that represents/handles the legal matters on behalf of these entities. These attorneys or agencies file the annual franchise tax with the state SOS here that keeps the companies in good standing and this new FinCen reporting seems to be similar to me and should be handled by either these corporate clients or their registered agents, not by me. I'm with Catherine, and I've submitted 8938s for several years for exactly one client in my entire career. He also needed FBAR filings that he did himself as I wasn't going to be responsible for that or having to sign up for yet another government agency's filing access for only one client. He moved recently and changed to a more local preparer, so I no longer have that worry anyway. There are the separate agencies that we deal with such as the SSA for filing W-2s that are still tax forms, or some of us utilizing the directly filing of 1099s through the IRS FIRE system, but those are all tax prep-related forms being filed. As I stated above, I think this is beyond the scope of tax preparation, and this is one more reason that I'm closer to the end of my career than the beginning of it.

I draw the line at anything outside the tax return that has large preparer penalties attached (even when filing is done correctly based on information given by client that turns out to be incorrect). So, no FinCen 114 (FBAR) forms - just the link to the online forms, and a suggestion to print the pdf first and fill it out where one can double-check all the info before submitting. I will include 8938s in a return. I would touch exactly none of these corporate filings.

I don't form companies for clients. I do see preparers talk about doing that on message boards. I also do NOT want to do this filing, so hope the publicity from now through 01/01/2024 talks about "company owners" filing. Clients will still come to us (if they even know about this) with their tax information. I think I'll give them the FinCEN link. What we won't know about until the following tax season are the new companies that form and have a 30-day deadline to register their owners, etc., on FinCEN. Well, more of my clients call me before/when they make financial moves each year, so one more thing to advise them about. This was in my update classes in December 2022/January 2023. I hope to hear a lot more this year, best practices stuff like "give then the FinCEN link" or whatever. I don't expect the nitty gritty of registering to be final until it actually opens 01/01/2024. I'm seeing a larger price increase for my businesses. Does this include Schedules C, E, and F? Form 4835?

Just an update from tax season, I did not end up setting a minimum price but I did raise my rates 15% and posted that in my letter as well as in the office. I also provided information on free services from VITA and AARP for those who felt like my service no longer met their needs. I lost some but not as many as I thought I would and pickup up almost as many new clients as I lost but at the higher price point. I had less push back on the price increase from old clients than years I had a 2-4% increase and did not post it. Still have too many but I actually enjoyed my work again up to March 31 then same craziness hit.

Thanks for the link to the bill. It passed the House and latest action in the Senate was in the fall of 2019. I'm not going to worry until it passes, at least not at this time.

Those are now termed "spoiler alerts" Tom.

We knew what you maetn or meant. Or whatever! Best way to find errors and typos is to hit "Send" (or "Enter"). Works every bleeping time!

The only reason it came up was Spidell sent me an email with a 4 minute primer on the topic. It is not as in depth as it will be at their update seminars, but it was a good overview of what to expect coming down the pipeline. @cbsleeI am thinking about packing for our vacation more than I am thinking about this issue. Tom Longview, TX

The cost to prepare one Form 1065 thru Drake's PPR would be $345 + $49.99.

Just a helpful update, I moved from Taxwise to Ultimate Tax Software, who is a reseller of Taxwise and saved a bundle. Tax season was great and much easier to get ahold of live support, which only used for two issues. Still have the limitations of Taxwise which are slow to roll out updates for states. Now I need to find a PPR software that supports k-2, k-3 and AAR filing for a correction on a partnership return to finish off the year.

Adult child with a minority interest (less than 25%) of the company but the parents own more than 25%.... Tom Longview, TX

Not that it means anything, but I haven't heard about this. Do you have something authoritative to share on this? The definition for responsible party is here at this IRS page, and is currently also found in the instructions to form SS-4.

@cbslee Nope, there is not an IRS form for it. It will be an online portal (Like FinCen?). Corporations forming in 2024 must report within 30 days of formation. Existing corporations must report by 1/1/2025. Responsible Parties (25% owners and board members) must be listed with current residence address and picture ID uploaded (Like ID.me?). Any changes to the information must be updated within 30 days of the change. Penalty for non-compliance is $500 per day. Tom Longview, TX

* Can't. I always proofread ten minutes after I hit sned.

How time flies. However, I would like to enjoy some profit rather than invest in five computers to replace the ones that are working perfectly well. Technology is finally beginning to pass me up. I find myself unwilling to deal with it much longer. The cost of doing business is beginning to outweigh the satisfaction that I get from offering a fair and decent service.

I can not improve on mcb39's comment one iota. Everything Marilyn stated is spot on. When downsizing, I started with the most time consuming clients (a.k.a - pain in butt), Ones who proved they couldn't / wouldn't get their 'stuff' together regardless the number of times I explained things. Clients seldom complained when I raised fees for same work as last year. They usually realized everything increased. If one questioned why - I explained, "many recent tax changes required added work" or reply on a more personally identifiable level "At least it's not as much as our utility company's monthly increase." Today, grocery prices are # 1 topic. Of course that worked for general type returns. Make a few lists, by category, of clients who take too much of your time for their fee ~ the ones you know they won't change. If they won't change ~ guess what, You gotta make the change ~ for your individual and / or family's health & wellbeing. I wish you well on your changes. So many of us have been there. REMEMBER: Your mental & physical wellbeing is more important than any tax return. Reread mcb39's comment. I've "known" her via ATX for decades & I trust what she says.

I have been gradually downsizing and raising my fees hasn't resulted in any clients leaving. Every year I send out letters telling selected clients that I won't be able to prepare their tax returns, or payroll or etc.

"Intuit to cease support for QB Desktop 2020 at month's end"