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I'm sure many of you have heard the same story. Some clients ALWAYS have to pay...never get a refund. Client speaks up with an air of genius: "I don't want to let the gubbermint use my money interest free for a whole year, so I keep the money for myself." As if we should admire him for his financial prowess. Funny, I've never had a single one of these "genius" clients have any interest income to report. I believe the threshold for a bank to issue a 1099-INT is only $10. Go figure...

Reimbursements of actual expenses are not taxable. You'll get a 1099-LTC with Box 3 indicating that the amounts were reimbursed expenses. You'll file Form 8853 showing nothing is taxable. But if they are paid on a per diem basis, Box 3 will indicate per diem and any amounts in excess of the actual expenses OR an excluded minimum are taxable. The excluded amount changes each year and can go up or down ($390 for 2022, $420 for 2023, $410 for 2024). So if the actual expenses amounted to $300/day for 2023, they would only have to pay taxes on payments in excess of $420/day. If actual expenses amounted to $500/day, the excluded amount is irrelevant and they pay taxes on payments in excess of $500/day. (You look at the totals, not the actual per day expenses) Accelerated death benefits from life insurance are reported in Box 2, but are not taxable if terminally ill (otherwise, they are treated as Box 1 amounts and are only taxable to the extent they exceed expenses or the excluded amount).

I make all my tax payments/withholding in Dec. I am within 500 either way. I have interest income. But, a significant % of my income is on Dec. AND I understand the rules, such as withheld on or before Dec. counts for the entire year. Just part of the game we all make money playing. Use/cost of the money has a value even if there is no interest collected as described in the OP. Many fail to account for that.

I have a client who purposely has no Federal taxes withheld so that he can use the money all year. What part of "penalty" don't these people understand?

Double "YEAH!" to everything you both wrote.

That is the 64 thousand dollar question. I am amazed that the IRS spends so much energy on not talking to the very force multiplier that they need, US! We can talk to them and get them what they need to close their cases, but they have treated us like the problem and not the solution for the last decade. Congress and the tax code are the IRS problems, not reputable tax pros. The IRS knows who I am. They gave me my EA license. They hear from me every three years when I renew. They gave me my PTIN. They collect a check every year for that number as well. They gave me my EIN for my company. They gave me my EFIN number. They gave me my CAF number. They know my SSN. They require my software provider to know my information before I can use a software that they approve every year. They can look up how many returns I prepare and how many POAs I have on file and how many times I call in and the number of returns that are selected from my client list for audit and the resolution on those audits. The Commissioner knows me better than anyone except my spouse. And they treat me like I am the problem instead of the TurdoTax software they allow on the market. I am just so fed up with the incompetence of the IRS leadership, especially the Commissioner. I wish he would realize I can get his backlog on my clients through the system faster than his staff can without me. Just staff the PPL line and let us work with the quality revenue officials, like we used to do when I first got my license. Stepping down from my soap box now. I feel better. Tom Longview, TX

The proposed regulations are here: https://www.federalregister.gov/documents/2020/06/10/2020-12213/certain-medical-care-arrangements, but indicate that they take affect when finalized. I also don't believe they have been finalized.

We all have clients that think differently and have different priorities than we do. So what

No, they're not cloning it. They paid Drake for a license to use it and resell it.

Look at Drake single-user full license. Not worth any small price "saving" to me if I'm going to spend dozens of hours learning a new software, converting returns, checking every single bleeping depreciation item (those are most likely to get mucked up in conversions), every single carry-forward amount, etc. I have easier ways to hurt myself, and easier ways to save a couple hundred bucks. YMMV.

I feel better just from saying "YEAH!" to everything you wrote.

Only the one who creates the workspace can control signatures. I had a client do this, and I started a new workspace for her & her husband, saying it was the only way for me to get signatures. It was a mild annoyance only. Next year, I'll start her workspace early, so she does not.

Pat Dimmitt over at the NAEA site in February commented that the rules remain in proposed form and therefore sticks with a previous opinion:

See instructions for 8853 Section C.