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I will not do it until the Fed's legalize the product. I will not take on the risk. There are more adventurous preparers out there who might, but not me. I am not making a moral judgment, I am just not going to risk my license for a trade that has unsettled legal implications. Tom Newark, CA

I tend to agree but I wouldn't update an existing system to W10. When I buy new, I'll go with W10.

I spend quite some time educating my clients, especially the business clients. They know all about their profit and loss reports, and I show them the M-1 as where their books, that they understand to the penny, meet their tax return - which loses its mystery once they are shown the "book to tax" adjustments. I think a big problem with crappy tax preparers might start with them taking on more decision making than is even remotely wise. Clients don't pay us to make their decisions, they pay us to explain and ask the right questions. We really should charge more money

I use box 1 wages as well, even if it includes health insurance premiums. It's all compensation.

I believe it would be based on box 1 wages, which is the shareholder's compensation, as I read the pub referring to in applying the percentage.

Problem is getting them to move the payment to theSRP. It took my client going to the IRS office to get the payment applied. This took several months.

Thanks for sharing your experience, and I will call first thing in the AM.

Ordered a large pizza and huge antipasto salad. Going to binge watch Buffy the Vampire Slayer on Netflix and stay up real late. Digging around for most comfy jammies. Turning AC down to about 60 and resurrecting soft lap blankie. Hate everything right now. Practically sucking my thumb at this juncture. Dealing with a new computer and the pleasure of Win10, hubby out of town, and now this annoying subpoena. Thanks for listening. See, it's times like this when a nice soft cat purring in your lap just solves everything.

The thing that frosts me is that, instead of going after the bad apples, they instead levy all sorts of extra requirements across the board. Well, that's not going to make a gnats-pee-in-hell worth of difference to a crook or "just" an incompetent -- but it does but all kinds of extra burdens on us good preparers to NO effect. Grrr.... Then we get info like this latest newsletter I just got this morning (see the lines in boldface - added by me - especially): Preparers Plan for Shrinking IRS Budgets and Growing Penalties by Eric L. Green, J.D., LL.M. Budget cuts have decimated the ability of the IRS to perform its job. From exams to collections, the IRS has insufficient resources to work cases and perform basic customer service (the last time I called the Practitioner Priority line I waited over an hour, and I called at 7 a.m.). Nevertheless, Congress expects the IRS to collect revenue. It’s no wonder that voluntary compliance is down and the tax gap has increased. It appears that the government may be seeking to increase compliance by placing new burdens on return preparers by way of increased application of preparer penalties. We have seen several recent instances where preparers, after giving accurate advice and performing proper due diligence, are assessed penalties after their client fails to heed that advice. For example, the IRS has always been concerned that S corp owners may not take reasonable salaries. Thus, most preparers who have S corp owners as clients provide a letter identifying the requirement and suggesting a proper level of salary based on historic income. However, when the client returns the following year for tax preparation, lo and behold, the income level taken was too low. First and foremost, the obligation of the preparer is to accurately report the events that already occurred. Second, the tax year is closed. Fixing the problem would require the preparer to convince the client to recognize more salary, and amend quarterly employment returns, causing the incurrence of large penalties. When confronted with this, and similar scenarios, the IRS is looking to preparers to fix the “problem.” The preparer has no power to force their client to do anything. By attempting to hold preparers responsible for the pre-existing actions of the clients, the IRS can use the specter of preparer penalties and ethical charges against professionals to cause preparers to perform basic IRS audit tasks. When confronted with preparing returns for a taxpayer who will be reporting information that may not be compliant with tax laws, it is incumbent on the preparer to understand available safe harbors and ethical responsibilities. For example, under §§ 6662(d)(2)(B) and 6694(c)(2), preparers are entitled to a safe harbor if they disclose a position taken on a tax return. Preparers should always request that their clients comply with the tax laws and explain how that can be done. Finally, if necessary, preparers should consider not working with clients who chronically fail to adhere to their advice. Having to defend against a preparer penalty assessment or Office of Professional Responsibility investigation is expensive, time consuming, gut wrenching and, simply, not worth it. The new IRS has fewer resources. Do not be surprised if it leans more heavily on return preparers to do its job. Preparer penalties constitute a powerful and coercive tool to force preparers to police their own clients. Preparers must prepare. Eric L. Green is a frequent instructor for CCH® Webinars and the creator of the CCH® IRS Representation Certificate Program.