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Not so much; anarchy quickly reverts to an elementary school playground with no teachers. The biggest bullies take over and run the show.

There is also the issue of folks you just have NO clue how to track income and expenses. This is especially true with ( 1 ) older folks who (for example) rent out part of a duplex they own, or ( 2 ) therapists or other "people not numbers" people (I have yet to have a therapist for a client who has not been through bankruptcy at LEAST once and usually more than once). They have no concept of tracking miles, of NOT using the business account for personal expenses or the personal account for business expenses... argh. And trying to get details; forget it. It's not that they are trying to obfuscate; they are truly clueless.

Tanning bed models. Additionally, they give your cell number to TN Dept of Revenue.

Looks more and more like we are becoming auditors.

This complex scenario brings up a scary thought I had today--the IRS is so underfunded right now that none of this is going to get audited (unless for some reason it comes under the automated underreporter system). I know, many argue that they were wasting too much money anyway on expensive retreats and nonproductive employee bonuses, but I believe those days are over. They now have a lot less money to spend (in absolute dollars) than they did just a few years ago, a lot less employees (including at CI, the ones who bring in the big bucks), and customer and tax pro service is minimal. Even ID theft victims only got through on the phone 10% of the time this season. We professionals work hard to keep our clients in compliance. We insist they have records on everything from mileage to charitable contribs to day care to rental income and expenses. Let's not forget some reasonable basis determination of stocks, partnership interests, inherited property. Today I was working on a return for a brother and sister who jointly own a brokerage account that is reported in the brother's SS number. We put half on hers, but she told me every year her brother gets an IRS letter from the AUR. He puts together an explanation and that's the end of it. He does not issue her any 1099-int or -div statements, and I don't know how he could issue her a 1099B for the stock sales. Some of the years in question she did not report her half on her return, so it's not like the auditor checked out his story. It made me think that the IRS can no longer do the job it is mandated to do--collect tax revenues and fairly administer the tax laws. So why do we try so hard to keep our clients in compliance? The chances of Deo's return, or my sibling returns, being audited are nil. The computers won't notice that Deo reported more W2 income than they know about. The 2106 expenses likely won't be enough to trigger a DIF audit, and even if they are it will likely be bypassed for bigger buck returns. My client's brother will go on forever reporting half the brokerage account income and explaining it away to the computer, the IRS just trusting that a response--any response--is good enough. PS. I am recommending they form a partnership, title the account with the EIN, and let the partnership do the accounting and pass thru the results. Today I was wondering why since they seem to be getting away with their rudimentary reporting. In the same vein, Deo will spend a lot of time trying to get the client's expenses and reimbursements just right, which is what we tax pros do. If the IRS is no longer strong enough to care, it's tempting to wonder if we should.

We have that exact situation and we add the allowance to box 1 of the W2. Plus we also add the gas reimbursements to box 1 of the W2 because we do not know if it is more or less than the standard mileage amount because the employees are not accounting for mileage to the employer. This leaves the employee to report their mileage on the 2106 and subtract the amount of reimbursements the employer paid for gas and allowance. http://www.irs.gov/instructions/i2106/ch02.html#d0e429 We've tried for years to get them to just report their mileage and get reimbursed a set amount per mile, but we can't get them to switch, even though we tell them it would save both the employer and the employees taxes. Their reason: this is the way it's always been done.

It should be included as W2 wages, with all the pertinent withholdings. 1099-MISC treatment is (and always has been) incorrect.

I changed my cellphone number and none of my clients has it unless they are also a friend.

Posted because WE will be called upon to explain (and we have had threads about aspects of this recently). http://www.marketwatch.com/story/the-newest-obamacare-fail-penalties-of36500-per-worker-2015-07-23?siteid=nwtpm

Reagan: "Government is not the solution to our problem government IS the problem"

Thanks for the banana - it was delicious!

Rita: I also want to give credit where credit is due. You're more tolerant than I am.

My client who failed to mail something to TN Dept of Revenue gave TN Dept of Revenue my cell phone number today because she is too busy to be bothered with the consequences of her own negligence. No, I did not answer the call. Yes, I did listen to the message. But I wanted to give credit where credit is due and report that I did not kill my client. Also, I don't call Customer Support very often, but I don't recall having anything but good happen when I do.

This can be a piece of cake or it can be a criminal case that demands an attorney. The difference hinges on whether the taxpayer reported the income from his foreign assets on his US tax returns. If he did, you can go ahead and file the late FBARs (now FinCENs) on the BSA website. You have to register first, but it's not hard to do. http://www.irs.gov/Individuals/International-Taxpayers/Delinquent-FBAR-Submission-Procedures If he did not, you have a problem. The first thing I would do is apply for the Offshore Voluntary Disclosure Program by faxing the application. If the IRS doesn't already have the taxpayer's name from the foreign bank or brokerage, he should be accepted (but it can take months to be notified). At the same time tell your client to get a tax attorney who will call the shots from that point on. The attorney may hire you as a Kovel accountant, meaning you're working for the attorney and not the client so you won't have to testify against him ("Please understand, Mr X knew he had to file these forms but just didn't get around to it."). Set aside time to amend EIGHT years of tax returns. Form 8938 may also be required for the years it existed. There is a streamlined procedure to apply if your client qualifies. All this is explained at http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Report-of-Foreign-Bank-and-Financial-Accounts-FBAR Let the attorney make all the decisions. Make sure your client knows this is going to be expensive--your fees, attorney fees, past due income taxes, failure to pay penalties (mandatory). I had a client who originally owed maybe $100k and settled through the voluntary program for multiple times that (plus the attorney, plus me). The alternative is paying half of the highest balance in the account for EACH YEAR, plus jail time. The stakes are high, but don't let it scare you. With a competent attorney in control, all you'll be doing is tax returns and FBARs, and you can do those. Charge a lot--you're worth it.

From Experience: Personal....had to consult a specialist in this specific field; then we decided how to proceed Professional....client went to somebody else (a tax lawyer) who handled his foreign inheritance & tax return for 2012; it seems lawyer screwed up and client had to pay a major penalty (now an ex-client, so no follow-up); moral of the story....it's not a learning experience for a "general lawyer" or even a tax attorney unless he's experienced with this My advice.....don't get involved. I can give you a referral for the lawyer I used if you want.

There are nine different circumstances under which the Split account can be granted. The most common is Bankruptcy. For a death situation - " Exam agreed / unagreed cases — when only one spouse agrees to the tax deficiency, while the other spouse does not agree, but does not appeal or file a petition (this could include a deceased taxpayer and neither the surviving spouse nor the executor sign the Revenue Agent Report).