taxxcpa

When I prepare several versions of a return, I duplicate the original then when I save it, I give it a different name similar enough to recognize. The same is necessary for an amended return--you need to name it different enough to make it easy to distinguish.

If you have two with almost the same name, the last part isn't visible. When I have this situation, I just make the change on the Return Manager which is just a matter of deleting an old name and typing in a new name.

Financial Times named Krauthammer as America's most influential commentator, saying he "has influenced US foreign policy for more than two decades [and] writes with wit and occasional venom."

Reminds me of a quote I've heard attributed to Winston Churchill: "Anyone who is not a socialist at age 20 has no heart and anyone who is still a socialist at age 40 has no brain".

As usual, you neglected an important part of the statement. So are you stating that Americans who work full time should live in poverty? Are you saying that only the members of the lucky sperm club are entitled to a living wage? Your statements sound as if you belong back in the feudal system. It sounds like you are saying if you are born into a family that encourages and supports you to have minimally an undergraduate degree you are worthy.

Now that we've finally reach the minimum wage, let's expand and simplify the Earned Income Tax Credit so no one working full time lives in poverty."

I can see how you may think she was implying that some people should be stuck in the 'class' in which they were born like in the Feudal system. However, I see no such implication. I have known a lot of people who have moved up from poverty. Some of the top administrators in the Dallas School system were the children of migrant workers. I believe the current superintendent came from such a family. Some others who grew up when I was growing up also came from Mexican descent--which usually meant discrimination by Anglos, yet managed to became highly successful: one becoming a four-star general to whom Colin Powell and Norman Schwartzkopf once reported to and who they mention favorably in their autobiography. The general's brother became President of Texas Tech and later Secretary of Education.

When I worked at ARCO I once attended a meeting of all Management employees in which we were asked to tell a little about ourselves. All but one of us (the only female in the group) mentioned that we had grown up in a low-income family.

Things like the earned income credit provide a hand-out but do not provide an incentive to do better. Often it may have the opposite effect--if you make more money you offset it by losing part of the EIC. The EIC is probably justified when someone needs a temporary helping had like one of my clients who hurt his back and was unable to work in his normal capacity for a year or so, but who later recovered and went back to work.

But even if the EIC is fully deserved, it is still one of the biggest ways to cheat since people 'borrow' children to claim in order to get the deduction. The IRS cannot possibly do enough investigation to weed out the cheaters.

The government would do better to find ways of guiding people to more productive lives (if that is possible) and should stop the process of creating generation-after-generation of welfare families by the misguided programs which seem humanitarian on the surface, but have the effect of giving a man a fish instead of teaching him how to fish.

The perpetrators of this fraud were probably highly qualified experts. The biggest frauds are always done by people who have a lot of expertise. Frequently they are successful, but in this case they got caught.

A big fraud, by its very nature, requires someone who has all the qualifications to obtain any license that might be necessary to pull it off. The purpose of licensing is not to prevent BIG fraud, but to prevent unqualified people from presenting themselves as qualified professionals.

Preparing taxes without a license is like driving a car without a license. It's not the license that makes you a better driver or a better tax preparer. A license does not make you more ethical, but it gives you something you have at least some incentive to protect. Also it is some evidence that you have the ability to meet the licensing requirements.

Licensing will not cure all problems but it could weed out some unqualified preparers and possibly force some of them to learn enough to move from the unqualified category to the qualified category.

Of course, like people who drive without a license, there will be people who would prepare taxes without a license.

James Bond has a license to kill, but there are a lot of unlicensed killers who do just as good a job as 007.

The best thing would be to get both a license to prepare taxes and a license to kill which would tend to reduce the number of clients who do not pay.

This is a copy of an e-mail that I just sent to ATX. I doubt if I will even get a response. Just my two cents worth.

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I called today and asked if I could find out what I paid last year for the 1040 Office package. I was told $595.50 (Included shipping). Good. It matched my records. I then asked for this years price for the exact same thing I bought last year. I was told $604. It was not until I asked further questions to make sure the packages were identical that I learned that there was about another $200 in E-file charges that I would need to pay. I do not appreciate being told false and misleading information. If you are going to make package comparisons, you must do so or indicate that there have been changes in that package. I should not have to ask additional questions to make sure that I am getting an apple's to apple's comparison. As a result of this misrepresentation I will be looking at other products, posting my results of this conversation at the ATX message board, and telling those that I came across in the tax prep field to look elsewhere for their software. It was then suggested that I trade up to MAX at $1065. Not my price has gone up $500. I understand that 2nd Story has a similar package to 1040 Office, priced at about the same as my last year price.

To put it mildly, this is not good business practice.

The 2nd Story professional software is excellent and low-cost. However, it does not include all state returns. There is also a per-return fee for e-filing. You should check to see if the states you may have are covered and how much the e-filing fees will amount to. If you can use their package with these limitations, you will have one of the best programs available.

In my case, I won't order it since I need corp, partnership, fiduciary, various states and other things their sofware does not have available.

Does anyone out there have any experience with Drake? Their total price for 2007

is $995, including unlimited e-files. I would appreciate any feedback.

Booger (Mike)

I just got the 2006 Drake and it is vastly improved over the 2003 version which I tried previously. I tested a complicated return that ATX mishandled, and Drake handled it OK. I had previously considered ordering both Drake and TaxAct, but now it is clear that Drake is all I need.

The order form lists a manual for $ 25, but when I sent my order, the sales rep called me and said they had decided to make the manual free.

There has been a lot of discussion about Drake on TaxProExchange (Yahoo group). It seems to be the software of choice for people leaving ATX.

If the well was producing in 2005, why would there be IDCs in 2006? If there WERE IDCs in 2006 it would be deductible in 2006.

I think what you are confusing is that there are two different 16Ks here, his initial investment, and this year's IDC. I believe the seller is talking about this year's IDC not the 'investment'. As I see , he has a basis of 16000 - 12000 - 1620 plus a deduction of this years IDC.

KC

I've seen similar letters from the IRS, but I believe they were just trying to get the correct information and were not disallowing the deduction if the taxpayer couldn't provide the correct information. Illegal aliens often use someone else's SSN and a fictitious address.

Hi Tom:

Well, any one of a number of things might have occurred here. All the way from an honest mistake by the contractor when he recorded the sub's number originally to intentional fraud on the part of the sub. Probably no need to go into the fact that your client should have requested to see the SS card of the sub (no need to mention but I guess I did huh?)

As far as what to do now, you have not mentioned the availability of the sub, is (s)he still in town? Does your client know where the sub lives, jobs he might be working on? The only resolution, as I see it, is to physically locate the sub and resolve it that way. Beyond that, the client has learned an expensive lesson in that he will likely have to amend his return and claim the amount on the 1099-MISC as income.

I think your interpretation is correct. If he has already written off $ 12,000 of his investment, he cant deduct it again.

quote name='G Sawyer' date='Apr 24 2007, 09:12 PM' post='690']

Client bought interest in oil well partnerhip Dec 2005 investing $16,000. K-1 for 2005 showed $12,000 IDC. No problem. Elected to write off in one year. After 3 months, well turned into pumping mud, and interest terminated about March 2006, client got distribution of $1,620. K-1 for 2006 shows IDC of $16,000. Seller of investment is telling client he can write off entire $16,000 investment this year. Is there a special treatment of a "dry hole?" Where is this written? I have an old RIA Master Fed Tax Manual which says "deducted IDCs are recaptured as ordinary income on disposition of the oil or gas well," and refers to IRC 1254, which is titled "Gain from Disposition of Interest in Oil, Gas....etc." This will obviously be a loss. Does that make any difference? My view is that he has a basis of $16,000 - $12,000 - $1,620 = $2,380.

I agree with Julie's explanation. I get a lot of these and some are very clear and easy to understand while others are confusing. It nearly always ends up that the "cost/basis" is added to the W-2 form and tax is withheld from the sale with the balance being paid to the taxpayer. The cost and sale are usually exactly the same, but due to broker fees, there is a small capital loss due to adding the fees to the basis.

If the transactions are not well-documented, you need to ask the client if the value of the options were added to his W-2.

If a guy has a regular $ 50,000 salary and his W-2 shows $95,000, the difference is probably the stock options.

Short version:

The exact details vary depending on whether it's an ISO or a nonqualified option, but the latter are more common. It goes like this: When you buy a stock or option from your employer at less than face value, the difference between fair market value on that date, and the amount you paid is added to your W2. Your basis, then, is the sum of what you paid and what was added to your W2. The addition may be on the W2, or not. In this case, that's your code V. Often the stock or option is sold immediately upon purchase, and the profit is exactly the same amount as was added to the W2, give or take a broker's commission and a few cents one way or the other. So, to fix the tax return, you need to go back to your Sch D, and add the code V amount to the basis...it should come out right. If you still have significant gain or loss, then study the rest of the paperwork carefully. There should be a pile of computer printouts "explaining" this. If it's an ISO, you can have gain or loss, otherwise I'd look very carefully at numbers greater than $20 or so.

Julie

Even if there were only 100 users of the forum, there were many 'lurkers' who read the postings. As the owner of a tax-related Yahoo group, I notice that while there are over 1000 group members, probably fewer than 100 post messages asking or answering questions.

I am a fairly frequent poster of messages, but I read many more messages than I post. Often someone asks or answers questions on subjects for which my own knowledge is too limited to answer or even ask, but by reading the questions and answers, I gain valuable knowledge and new insignts.

I would have certainly renewed with ATX's MAX program until they presented us with this slap in the face. Now I am almost certain to switch. One message they seem to be sending is that this is just a prelude to more high-handed ways of cost cutting based on the idea that losing a few customers is OK if it improves the bottom line. However, I am more interested in MY bottom line than theirs.

What next? They have dropped the free zillion forms they promised to continue forever. They dropped the message board. They dropped the 'chat' feature. Next: drop free e-filing? Drop including W-2/1099 as part of MAX? All of thise are good things to market separately to improve profits. All they have to worry about is to keep up the cost cutting without losing too many clients.

If you are still using a computer with older ATX programs it will have PDF factory as one of your printers. I always print the return using PDF Factory as the printer. You can then save it on your computer, then send an email with the PDF of the return as an attachment.

The PDF button on the current ATX program does not seem to work very well for me either.

The hour glass came on, but it didn't complete the job, unless maybe I need to wait a little longer :-)

Eli

Sometimes, depending on the size of the file, it'll take a while...be patient my friend.

I might do the same if Tax Act had the TX franchise tax, but they do not list TX as one of the states with forms available. Also, not all non-resident forms are available for non-residents who need to file for temporary employment away from Texas. Every corporation and LLC that I do has to file a Texas Franchise tax, so I need something to supplement TaxAct.

I have been on the phone with Tax Act twice in the last two weeks. They have a package deal that goes like this:

unlimited 1040

all states

unlimited free e-file

price $ 500.00

I got the 2005 program and I like the feel of the program and it goes really fast with jump to features from form to form. Lots of nice worksheets etc.

Only drawback I can see is no conversion program. But they are willing to give you the 2006 program in May of this year so I have all summer to input my deprec schedules etc.

I will then be able to roll that over to the 2007 program.

I figured then I could buy the W2-1099 program from ATX for $ 140.00 and would have my payroll reports solved.

Tax Act also has other bundle prices for those of you that want the 1065 and corp returns also. You just need to call them up and ask for the preparer bundle price.

They are located in Cedar Rapids Iowa and I am in Denison, IA.

So TAXXCPA do not just go by the prices on the website. Call them up and talk to them.

I have not yet made the final decision to change yet as I am not so sure I want to input all my info into a new software this summer...

Marge Powell

I have evaluated several software packages when, a few years ago, ATX could not handle loss carryovers from S-Corps and partnerships in the year of passive gains. I tried TaxSlayer, Tax Act, ProSeries and Drake.

TaxSlayer was probably the worst. It was practically an MS Dos program within Windows. It was one of the cheapest.

Tax Act was the cheapest but also the best for 1040s. It handled the passive losses, allowing it against passive gains. It cost about $ 100. The downside was that it did not have all State returns including the Texas Franchise tax which I needed. Another problem for efile fans is that they charge $ 5.00 for each efiling. Since I don't efile many returns that would be no problem to me.

Proseries and Lacerte worked equally well for 1040s and passive loss carryforwards. They also had all state and other returns but at a much higher cost. For larger practices, the cost would probably be worth it.

Drake was also unable to handle the passive losses, and some other things on a very complex return, but would probably do an excellent job on the majority of tax returns.

My present thought is that I could buy BOTH TaxAct and Drake. I don't think Drake would have any problem with efiling 1099s, and handling all state, corp, LLC, partnership and fiduciary returns. I can get a 50-return pay per return version for $ 500 plus Tax Act for $ 79. I can do 50 or less on Drake and do the rest on Tax Act. I would efile 1099s with Drake and do all non-1040 returns on TaxAct (unless I had a state return which might make Drake a better choice.) Another option would be to pay $ 995 for the unlimited version of Drake plus $ 79 for Tax Act which would still keep the cost at an acceptable level for my practice.

My other option would be to renew ATX. I believe that I would have defiintely renewed if they had at least notified users before shutting down their message board. This lack of consideration seems to imply further disappointments that may arise with next tax season.

I will get a sample version of Drake's 2006 program in May and can determine if it will meet my needs.

I would like to hear what others have to say about various software programs and suggestions for those of us who are not willing to spend several thousand dollars due the limited size of our practices. For those with larger practices, cost is probably not nearly as import as speed and efficiency.