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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

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

I'm currently on the phone with PPL for a reduction in a 2023 refund for a 2019 additional assessment. My client never got the CP letter since his wife is in the army and they move quite frequently. His address on record was/is his dads and apparently his dad didn't take notice of any IRS letters. I'm not sure if I will be able to do anything for him. Learned a lesson though - I'm getting 2848 for all my clients in the military so I can get the correspondence.

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...

I had an elderly client, gone these many years now. He had interest from a dozen or more different banks every year, chasing interest on 1-year CDs. His great joy and glee in life was calculating (by hand on paper!), and paying, his estimated taxes such that he owed less than $25 in April, each to the state and the IRS. But always he wanted to owe and never overpay into refund. I got a real kick out of him and he (and his wife) were lovely to work with.

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?

I filed my father's returns years ago when he was in LTC. If the LTC totally pays for medical expenses or LTC, I do not believe it is taxable, but you have to subtract it from any medical expenses you've paid as itemized deductions.

It's my understanding that basis gets full step up in value as if the life estate never existed.

Because I have a vendetta against Intuit, I will never willingly purchase one of their products. I have never forgiven them for what they did to Parsons Tech; the program that I started with in 1992. Also, I see some of my clients struggling with and being limited to use of Quickbooks; which, IMO, is overkill and over priced. So says the person who knows that she should never hold a grudge. I have committed to Max for one more year and am moving on. And, yes, it does do the calculations for the WI OS form.

don't know if anyone else has experienced this, but I had a number of clients in the past two years whose wage withholding dropped and they told me they didn't change anything at work. Not knowing what their payroll department is up to, I usually advise an additional $ amount based on how often they are paid, rather than try to rework a W-4. for retirees who owe, I usually print out a W-4V for them to file with Social Security. Although not ideal (often 12% is too little and 22% is overkill), it is an easy method of getting more withheld. The State of Florida used to have a surprisingly simple W-4P form but that went by the wayside. But sometimes all we can do is point out how much they are paying in interest and that it is currently at 8%. You can lead a horse to water...

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'm in the never ending merry-go-round with the IRS. Client had a fraudulant 2020 return filed mere days after she passed away. We didn't know at the time, but when we went to file the returns 2020 & 2021 rtn (yes, 2020 was late) in Sept 2022, obviously it was discovered a few months later when the refunds weren't issued. I have been through ID verification 7 times for the 2020 & 2021 returns. I finally got the 2021 refund, but 2020 (the return that actually had fraud) still, 1.5 years later is in limbo. Strangely I got another letter that they needed me to ID verify 2021 again and soon after a copy of the cleint's tax transcript for 2020 that said I requested it, but I didn't. Of course, I have called the ID verification number at least 50 times, and it says, you "due to high call volume, we cannot take your call at this time." Adding insult to injury, the main IRS reps cannot field any calls regarding the still outstanding 2020 refund until I ID verification, for the 8th time, has been completed. And the true cherry on top. They said processing after ID verification is taking upwards of 650 days!! (This is much worse than the 430 days number I got 6 months ago.) WTH. I don't even know who to go to for help. Can't the gov't be held accountable in some way for this nightmare of disorganization. It has got to be criminal the way the IRS is being managed these days.

Double "YEAH!" to everything you both wrote.

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.

Changing to Sigma Tax Pro to save $400 isn't worth it to me. I can make that up with one tax return.

IMO, changing software should only be done as a necessity (i.e. the program being discontinued) unless you are prepared to put in a large amount of work. Drake just looked around and saw what others were charging for what they offered. A robust program is going to be fairly pricey but you'll need it for recreating returns and when you get into the weeds. Less expensive (like OLT) will work great for 85-90% of your clients but...the other 10-15% are probably your best paying clients. I also found when I tried them that they don't reproduce returns from other programs, just creates a basic framework with name, social, etc.

Amen; I hated cleaning up Turbotax returns with a passion. And I inherited one client who only wanted me to review his work in Turbotax for a nominal fee--I did it once (the 1116 was a total mess) and when he came back next year I doubled the price. Thankfully that was the last I saw of him. But funny how proud he was of his work, I think he just wanted me to congratulate him.

Back in the day, I worked for an Accountant who used Turbo Tax big floppy disks. She had to pay extra for every single module. Efiling was barely heard of. We printed and printed and assembled and assembled. Once I started my own business and graduated (by force) to Sabre; I introduced her to the ATX products and she embraced the (Everything for the price of one). She happily continued with Max until she retired. We often question why people are willing to pay almost as much for Turbo Tax as we would charge them for a professional return. Sometimes we end up cleaning up the messes that they create. I have never gained a client by advertising. 276 returns for a small, in-home office isn't bad for "word of mouth" growth. Integrity and personal interest will win out every time and I sleep very well at night.

maybe file 8821's for all those clients and wait until they need representation (and that you want to represent them) for the 2848's? just a suggestion

Thank you, ladies. And, duh, when all else fails, read the instructions! I did tell mom and daughter that I want to see her LTC contract to know what's covered (she talked as if it's NOT the per diem coverage, but need to read her contract).

In the case of a Life Estate, the basis is stepped up to the value on date of death. Besides which, being an inheritance as well as a (gift), there are no tax repercussions unless there was a profit on value on date of death. The gift tax return was unnecessary at the time that the Life Estate was drawn up. In the case of a Life Estate, the property is not (gifted) until the date of death.

Because a life estate changes the gift into an incomplete gift. https://www.stoufferlegal.com/blog/navigating-life-estate-remainderman-tax But the death of the "previous owner" essentially wipes out the life estate and the beneficiaries get a full step up in basis. Basis is more complicated if the house is sold before the life estate owner dies.

It was tax year 2012. I remember it well and not fondly!

And the recording still qualifies for CPE credits.

Reseller programs can be a savings, but there is a reason. The support may be offloaded to the reseller, or some fee per use from the developer (assuming the reseller pays the developer and reports your sale to the developer). At one point in the 90's, our product was available from a reseller or two. One sold many licenses, but never paid us, or reported the customer information. As inevitable, the customer contacted us (at the time, via phone) for help, and we were in a Catch-22. Help them for free, supporting the thief/reseller, or explain the theft which made us look like the bad guy. So for us, it quickly became a lose-lose and was ended shortly after starting. Unfortunately, back then, the reseller was able to keep going the about a year, as it was just a matter of copying the software onto another floppy to sell. IIRC, either the same or a different reseller was supposed to handle their own support, but they did not, or when the customer found out how to reach us, they did, making the agreement a money loser in that manner. The reseller, once we went to a different license method, resold their own license over and over too. We eventually noticed (for the same reason, via support inquires) and came up with a way to prevent that type of theft too. We still get issues when someone orders for another, sometimes collecting more from the customer, then the customer complains to us. Happened last week. For me, I avoid resellers for anything major. My current computer is a new model, in short supply. Resellers had some inventory, but I figured out when the manufacturer updated inventory, and was able to order in the few minutes/seconds when they had stock. Why? The return policy was cleaner, and they give a longer warranty option (which for a new device, for me, is important).

The price of $999 is thru Sigma Tax Pro who is a reseller of several software providers including Drake. This price is for a single user as I have no employees. I got a "demo" of their " DR" software desk top version (Drake) from them and it is exactly the same as my regular version of Drake and appears to work the same. I was able to register with them for the 2024 tax software for $49.99 payment now and will not have to pay the balance until the software is released late in Nov. This will be my 1st year with them so I will update my post as next season progresses.

I had a self-employed client who owed in the five digits every year. The first time I prepared his return I dreaded telling him he owed something like $20k. He didn't even flinch. He said he makes better use of that money in his business during the year and the profits more than make up for the interest and penalty. He had figured out what was best for him. I like Dennis's idea of having all the withholding in December. For clients who take their IRA distributions in December, they could have their year's taxes withheld and not bother with estimates. Now that banks actually pay decent interest, putting the estimate money into a savings account could yield some profit. I usually pay all of my estimates at once in April since I make most of my income in the first quarter and have the cash. I might rethink that strategy.

WE all know that the IRS has been woefully underfunded until recently. This isn't to disparage mcb39 and GR2's comments, but you've got to give them time to hire and train people.

Or, your client's Congressperson.

Perhaps you should try the Taxpayer Advocate Service https://www.irs.gov/advocate/the-taxpayer-advocate-service-is-your-voice-at-the-irs

I won't purchase anything from Intuit - I do hear that their Pro Series is good, but their TurboTax product overtly tries to put us out of business. Their advertisements really irk me - one of them shows a guy with a briefcase and the impact of the ad is that if you buy their product, you will be just as good as a CPA. For years they also advertised "free, free, free" which was a blatant lie, and I think they finally had to stop. There are no telling how many people buy Turbotax to avoid paying for a real professional, and forego the service we can render to them.

If I can add, I too have been using Verifyle for the last few years. The signature portion is approved through the IRS due to the 2 factor authentication. You do get and can print the certificate which I recommend to. I keep everything digital. Yes, a single email can be used for two people sharing the same email address. I highly recommend this program. The majority of my clients hated Drake portals. I now have at least 85% of them using Verifyle. There are some older folks who just can't seem to deal with any technology. One client suffers from some form of paralysis and can no longer use their hands well. I'm pretty sure Verifyle gives the option of choosing a digital signature or a handwriting signature so a mark can be made. As Margaret said, use workspaces. You have to use workspaces to multiple signatures. Workspaces also keeps thing organized. One thing I want to know is if there is a way to stop a client from becoming the host once I create their account. I have had clients do this which prevents any signing. I'd be happy to help getting someone started. It is easy and you'll love it. If I drop my NAEA membership, I would have no gripes about $9.00 per month. Drake portals has increased to $21.00 per month.

https://www.law.cornell.edu/uscode/text/26/2036 The value of the gross estate shall include the value of all property to the extent of any interest therein of which the decedent has at any time made a transfer (except in case of a bona fide sale for an adequate and full consideration in money or money’s worth), by trust or otherwise, under which he has retained for his life or for any period not ascertainable without reference to his death or for any period which does not in fact end before his death. Sounds to me like as long as they had the right to possess the house until they died, it is included in their estate and the kids get a step up in value. In other words, a de facto life estate should work. In instances where the owner of the property has deeded the property to others but did not retain a life estate in the deed, but nevertheless continued to live in the property as a life tenant, see IRC § 2036 which uses the word “retained” not “reserved”. It has been successfully argued in the past that a right can be retained without being reserved, and that the continued occupancy of the home after the transfer of title, without paying fair market rent, is evidence of an implicit agreement, understanding or assumption of the parties of the transaction. Estate of Linderme v. Commissioner, 52 T.C. 305 (1969)

After a bit more research, I found this on Cornell Law website: life estate A life estate is an interest in property that lasts only for the life of a specific person, usually the possessor of the estate. The owner of a life estate cannot leave the property to anyone in their will as their interest in the property will terminate at their death. The holder has full rights to possess and use the property, and may also transfer their interest during their lifetime. If the measuring life for the life estate is someone other than the possessor, the estate is considered a life estate pur autre vie. A life estate is created by a deed that gives the property to the person "for life" and identifies what should happen to it after that person dies. For example, a deed stating that land would go "to John Doe for life, then to Jane Doe" gives John a valid life estate, and Jane a remainder. John could use the land during his lifetime, and even sell his interest to a third party, but that third party would have to surrender the property to Jane upon John's death. So I'm wondering now and again about the deed. I'm reading this as though the mother (the possessor orignally) transferred the interest during her lifetime (gifted to daughter). But then it seems that the deed must state that the property is given to the person (mother) "for life." The client has not yet responded. I hope they used an estate or real estate attorney.

See instructions for 8853 Section C.

Thanks again. I'm now wondering if this was something thought to be a solution outside of actual legal guidance. It seems to me that the gift tax returning, gifting the condo to the daughter, was a way to 'transfer' ownership without specifying a life estate, that it was de facto. I've asked the questions. The closing document shows daughter's name only as seller. I wonder what the deed shows.

Thank you, Marilyn! As I wrote, this is my first, so unsure of how to handle. Client will be so happy! I have no idea why there was a gift tax return, not my client at the time or maybe I would have known all this already. I will double check on documentation showing life estate rather than just letting mother live there. Client told me 'life estate,' but I want to see it. I will still do research but have great guidance now.

https://verifyle.com/Verifyle_8878-8879_compliance.pdf

yesterday Catherine White EA was the presenter for Tax Practice Pro, a c.e. provider. Her presentation was a case study of what happens when a client changes tax professional, and issues with prior years are discovered by the new tax pro. Kudos to Catherine on a well developed and perfectly presented class.

It could be deducted on a Sch C as ordinary and necessary, since they're essentially borrowing the money from the IRS to fund their business. If line of credit interest is deductible on Sch C then this is just a substitute. Facts and circumstances apply.

The client can type their name and choose the font they want displayed.

Yes, they have priority access to the TAS

Like others in our community I have received my annual renewal notice and I too have wondered what is the rush? In looking around I find that some other providers are coming out with product that is cost competitive with ATX and has features from the perspective of a small time tax guy like me that bear close scrutiny such as unlimited efiles as opposed to ATX's upper limit of 75 and then they tack on an additional fee which becomes not insubstantial to your total cost. Now that the pressure is subsiding I am going to take a close look before pulling the renewal switch this year.

I have been with ATX MAX since its birth and will never change. That is a lot of years since 2005. It ofers everything I would ever need and then some.

The notice tells you who issued the 1099R. Have the client call them.

This is a legal argument, not the bailiwick of the tax professional. Don't go there. While we aim to please and serve our clients, sometimes they ask too much of us.

And I learned something new today. Thanks for the education. Tom Longview, TX

I believe the IRS does require ID verification (see below from IRS Website). Does Verifyle include identity verification and do they charge extra for it? I know Drake uses a soft credit inquiry to generate questions used to verify identity. What are the ERO’s responsibilities with regard to e-signature? If the taxpayer uses the e-signature option, the ERO must use software that includes identity verification. The software must record the following data: Digital image of the signed form; Date and time of the signature; Taxpayer’s computer IP address (remote transaction only); Taxpayer’s login identification — user name (remote transaction only); Results of the identity verification check validating that the taxpayer’s ID verification was successful; and The e-signature method used to sign the record. The ERO is also responsible for maintaining a tamper-proof record in a secure, access-controlled storage system for 3 years from the due date of the return or 3 years from the IRS return receipt date, whichever is later. ERO's must be able to retrieve and reproduce legible hard-copies of the signed form.

I too was with ATX during Saber, Max, Zillion Forms days. I am not sure what year it was but there was a year that ATX software had a lot of issues. ProSeries reached out to me with a discount offer ot switch.. I took them up on that offer and am very happy with ProSeries. Intut may very well ofer you a discount if you switch. You can also try the software for free I believe.