TaxCPANY

1. No; the new entity is a for-profit corporation -- so, 2. N/A. 3. Grant made in client's personal name + that of SE, deposited in client's Sched C bank account. 4. Haven't seen the grant terms yet; have asked for a copy. 5. Gal -- actually -- is independent of grantor.

Much obliged for your interest, samingeorgia.

TaxCPANY

I have a few questions: 1. Is the new entity intended to be tax-exempt? 2. Has the new entity filed the paperwork asking for recognition of exemption? 3. To whom was the check from the first 501-C-3 made payable? 4. What are the terms of the grant? 5. The guy who received and spent the first $ 2,000 -- what is his relationship to the first organization -- officer, director, what?

I agree it looks like they got the cart before the horse, here.

New client received 20K grant from 501(C )(3) to found new "service enterprise (SE)." Client accepts grant personally. One month later, he funds now-incorporated SE with 18K remaining (after spending 2K fully in compliance with grant terms).

Can I finesse this by declaring on 1040 line 21 that grantor's 1099 'really belongs' to the EIN of the SE instead of client's SSN --- as works when vendees erroneously issue 1099s to individuals instead of their EIN'd partnerships and S corporations?

It's the 501(C )(3) source that baffles me -- despite 'running' several nonprofits for some years; it's the first time I've encountered such mis-timing.

All astute, experienced remarks welcome. VTY, TaxCPANY

North Carolina changed the makeup of its sales-tax, effective October 1, 2008 -- i.e., for the month whose returns (E-500) are due TOMORROW. My bad; I'd been relying on CCH Wolters Klutzier to update its forms in a timely manner.

The change shifts 0.25% from the NC counties rate to the overall state rate; so the total amount doesn't change, but the amounts entered on Lines 4 and 9 do -- as do the entries on Form E-536.

TaxCPANY

Hey Catherine,

I'd like to know more about your "serious [MA] e-filing problems;" for that's just what's 'killing' me, right now.

This Wednesday, I got a reject notice from ATX for a New York resident (with an SK-1 for MA) -- while his fed & NY e-files sailed through. On Thursday, ATX's "Loranda" promised to keep on top of my problem, and to followup call me Friday morning. Didn't happen; so, Friday noon I reached "Brandy," who merely re-logged my problem and recited the company line that there was no way for her to "expedite" the problem, but she'd simply send another email to "the programmers" -- despite my urgent news that I'm leaving the country for two weeks this Monday.

Almost needless to say, I've heard squat from ATX/CCH since. So, two whole weeks from now, I assume I'll have to reinvigorate my "case." My client & I are lucky that he owes nothing; but, if you could shed any light on what you've undergone with ATX in that jurisdiction, I'd be most grateful.

Very truly yours, TaxCPANY.

Please let us know how it goes! I'm sticking with ATX for the coming tax year, but they are most definitely "on probation". I had some serious e-filing problems (especially with MA), and lots of instances where information did not flow properly to state forms. I was sorely tempted by Drake this year, but didn't quite make up my mind to switch.

I'm sure there are a number of us besides just me who will be very curious how it goes for you -- the easy stuff, the surprise "gotcha's", the weirdnesses, and all.

Catherine

Anybody going to the IRS conference in Las Vegas? NYC? I could take the train into NYC each day, but by the time I pay for parking and train and get up before dawn... The Las Vegas hotel is the cheapest. Are they worth three days out of your life? Are the instructors any good?

Hey Lion,

For three or more years, I've daily trained in from Huntington, Long Island to attend the IRS forum in NYC -- as I'm planning to do, this August. I've never caught the first session, and so never "wake before dawn," but always have attended every session/topic that matters to my clients & me -- given the redundant sessions built into the schedule.

Most of the IRS presenters provide solid, good insight into their areas -- as do the state (including CT) & NYC presenters. Moreover, I've 'collared' not too few presenters afterwards, in order to get their contact data or even plead a particular client's case -- and that face-time has provided priceless followup recognition a couple of times. Then there's the other practitioners I meet -- always a surprise and not too infrequently leading to referrals & collaborations -- among the several *hundreds* attending the NYC forum.

Now, the cost of parking & LIRR is negligible for me, as I have enough clients in the five boroughs to require 20-30 trips to NYC annually; so I'm astonished that flying to & hoteling in Las Vegas actually would be cheaper for you. I.e., I had no idea MTA-North doesn't give you the 'deal' I get from LIRR -- e.g., its 10-ride cards good for a year, available online for a discount. I also think it's valuable to 'stay local' with my cellphone & nightly returns to my home office, for those 2-1/2 days -- i.e., the third day in NYC is so short, my spouse usually joins me for museum-hopping or shopping, supper & a show, in that order.

Hope I've added a few, new factors to your deliberation.

VTY, TaxCPANY

Just kickin' in, y'all, as to why I'm most likely to re-up before this month ends.

Yesterday, I finally had the time to 'grieve' the fact that my Kleinrock Federal Tax Expert CD's (under my TTO contract) hadn't been updating since last December. Reached a most-obliging (southern-accented) person in under three minutes. After only 10 more minutes, she escalated me to a hard-core techie, who spent the next 1-1/4 hours *devoting* his brains to my problem.

We concluded it's an effect of Microsoft Net Framework 2.0, that ATX's programmers need to address -- BUT, nonetheless, he put my desktop's app on par with the online version. (MS Net Framework also had been the culprit @#$%ing up my Norton Ghost 9.0 backup regime, when I simply installed a second hard drive, last month -- requiring way too many hours to fix.)

Overall, I got the impression that CCH finally has been pumping-up tech help to the degree I took for granted before the December Massacre -- note, my capable techie was hired only within the past year.

So I'm almost fully inclined with kcjenkins that ATX's half the cost of his former TAASC is worth trusting CCH to get its @#$% together for 2008.

...stil haven't seen *any* news that Drake has remedied the 1041 problems I'd found with it, last summer.

VTY, TaxCPANY

This has come too late to help me with my 990-PF problem, but I'm bookmarking the site.

In some other thread, I held out hope that ATX/CCH finally had got its tech help together. That was last week. This morning, I made my fourth call about the problem, and the *only* improvement is how fast I reach a person. Over 1-1/2 weeks my "incident number" *always* fails to appear on the tech's screen, and not one of the four techs I've spoken to has called me as they all promised -- and the problem remains despite the May 15 deadline for filing the form.

At least I can unprotect the form and fix it myself, but, how lame!

Dear JohnH,

If you prepare fiduciary returns, test Drake on that. Drake failed my test, last summer -- e.g., no fix *and* no callback -- despite uploading the problem file to them. No problem with my test individual return, but after that, I didn't want to take the time to test other entities before re-upping with ATX.

VTY, TaxCPANY

My overall experience this tax season was fine, so at this point I'm still pleased with the software itself and am remaining in the "will probably renew" camp. However, I'm not trusting enough to commit this early and so I'm also still in the "won't renew early" camp. I'll renew in Dec at the earliest unless they do something to lose my confidence in the interim.

Meanwhile I'm going full steam ahead to evaluate Drake (any maybe Tax Slayer Pro) during the extension period by using it to prepare most of my extension returns (except those with carryforwards, depreciation, and other issues that affect multiple years) and I may even opt to run dual programs next tax season. Learning the basics of another program isn't very difficult - finding the shortcuts and navigation techniques that increase efficiency is the biggest problem. That's why I prefer doing that sort of thing during the extension period as a means of keeping the powder dry.

KC's assurance is a force to be reckoned with, as is ATX's TTO price for providing *everything* under one roof. And, today, I called tech help -- about Preparer info not rolling-over or even F3'ing into Form 990-PF -- and, for the first time this whole, blemished Season, reached someone in only a minute or two. Granted, it took another 20 minutes before she could only promise to call me tomorrow AM after escalating it to the developers -- but, as soon as she recreated the problem on her end, it indeed was escalation, not runaround nor aw shucks, time.

So, by the way, anyone else having this problem with page 13 of Form 990-PF?

VTY, TaxCPANY

dude,

you have a couple, implicit but crucial questions need outing.

1) by "cost accounting" are you referring to "accrual" basis accounting?

2) are you asking about irc sec. 263A?

The latter concern's the easier one. If your client grosses $10 million annually, or has averaged that over the past three years, then the prior cpa's treatment is inadequate.

the former question's harder, cuz it usually serves an inventory-based business best to reckon its returns (& financials) on the accrual basis. but the irs allows "small biz" to use the cash basis -- and not too few lenders accepted *compiled" financials that way too -- as long as the numbers on those weren't distant from the tax returns'.

the prior cpa might have made a pragmatic decision to forego rigorous cost-accounting, to save the client a lot of hassle and cost -- and it's quite possible the client wasn't dis-served, especially if there aren't notices piled-up from prior returns, and the client has a clue how well or ill his operation is faring.

hope this helps, taxcpany

My client's balance due return was rejected because the ex-wife hijacked his dependent exemptions. It was transmitted around 8:00 pm April 15, couldn't get through the traffic any earlier. I printed the reject notice April 17.

He must now file a paper return to start the dependent claim dance. Is he timely filed, if his paper return mails today, April 18?

How do I prove later that he did try to efile on 4/15? Is this going to be trouble?

i believe the service has a five-day grace period in such cases. i'm not going into my resources tonight to verify this, but i've had a couple of similar problems in years past that went through with *no* subsequent notices. (and bob's advice is good.)

hope this helps, taxcpany

Dear Eric,

ONLY now have I learnt/recognized that this site depends upon contributions, just as my favorite *independent and non-commercial* radio-stations do. Just as those stations have, this site has borne me through the past few, horrific months when it seemed naught beyond my own resources could.

I would appreciate your naming an amount above which you would not feel your inestimable and essential services would be slighted -- or a range, allowing for the typical parsimony of sole practitioners. I just haven't a clue what would be a 'fair amount' to contribute in support of your project.

Gratefully yours, TaxCPANY

P.S. I'm posting this here because "[email protected]" rejected my first sending of this message.

My client's mother lives in Italy. She was formerly married to a US citizen and collects Social Security Income. Where does this income get reported on the 1040NR? Does she even have to file a 1040NR? Thanks for the guidance.

1040NR is meant for someone with income "effectively connected with U.S.-source [business or investment] income;" so, no, your client's mother is off the hook -- especially as it seems the SSA check is her only fiscal connection with U.S. There probably also is a clause in the U.S./Italy Tax Treaty exempting her mere receipt of retirement income from U.S. taxation -- as almost always is the case.

I'm too toast to refresh my grasp of relevant cites, tonight, but, after 23 years keeping expats and non-resident aliens in compliance, my memory keeps hitting the target even after wit's deserted me.

Best regards, TaxCPANY

Is there such a thing as an amendment threshhold?

This situation seems absolutely ridiculous. A client discovered two quite small ($24.10 & $17.11) dividend statements from 2006. Running a 1040X creates a balance due of $2. Seems almost silly to file it. Client has not received any correspondence from IRS.

It's true that to be totally accurate, an amendment should be filed. But is it sensible?

What say some of you?

Elfing

Pragmatically, wait for the CP2000. It already hasn't come with this February's batch. If it ever does, consent to the change. MUCH less of a hassle than amending for such a trivial amount. TaxCPANY

Is there such a thing as an amendment threshhold?

This situation seems absolutely ridiculous. A client discovered two quite small ($24.10 & $17.11) dividend statements from 2006. Running a 1040X creates a balance due of $2. Seems almost silly to file it. Client has not received any correspondence from IRS.

It's true that to be totally accurate, an amendment should be filed. But is it sensible?

What say some of you?

Elfing

Pragmatically, wait for the CP2000. It already hasn't come with this February's batch. If it ever does, consent to the change. MUCH less of a hassle than amending for such a trivial amount. TaxCPANY

That's what I like about this community. I kept getting error messages when trying to e-file so I checked over here and I find others having the same issue. Guess I'll try later tonight when the east coast is sleeping.

Martin in San Jose, CA

Mwaa-ha-ha-HAAA! I never sleep. TaxCPANY

HELP! Client earned 300,000 in US Jan thru Oct. Earned 23,788 US dollars in Hong Kong for balance of year. How do I report income from China? Using exclusion form he does not qualify for exclusion, but if that is the case is the China money taxable here? It is a Chinese company not US owned. No w2 given..

First, determine if client will remain overseas long enough to qualify for IRC Sec. 911 exclusion. If so, file special extension form 2350 -- but pay best estimate of tax on the 300K upfront. Overall, your client has a few ways to explore, yet. Take heart.

"Long enough" is determined by either the Physical Presence Test or Bonafide Residence. If you're not acquainted with those, check 'em out.

Of course, I've assumed client is a U.S. tax resident. Non-resident alien might escape US tax on HK income if departure from U.S. for good.

Don't forget, if client indeed is on assignment overseas, JUNE 16 is the deadline for extending/filing, not April 15.

Good luck, TaxCPANY

Clients mom died in 2007. Had savings bonds. An estate was set up for the savings bonds, and cashed out. Estate has 1099 interest totalling 21000. They want to close estate - no need to keep open. Doesn't the 21000 have to pass to the beneficiaries? They want the estate to pay tax, but I always thought with such an estate, it passes thru. (I suspect they would pay less tax letting it pass thru.....but, who am I to suggest it's a dumb idea.)

Help.

Pass-through is not mandatory. Administrator has options, and, in fact, equity sometimes is better served by taxing the estate rather than beneficiaries whose marginal rates could be all over the board. VTY, TaxCPANY

5:52pm and not only no acks since last night, but now three returns aren't even getting validated. Ominous.

None here yet have mentioned Lacerte, that I use in another CPA's office -- and that I switched to ATX from, six years ago, after Intuit bought it (and, of course, started hiking its price, charging for formerly free e-filing, etc.). Lacerte support *never* has failed me as not only ATX now does but also Drake did, when I tried that out, last summer. Lacerte's input is 'indirect,' as Drake's is, but much more intuitively clear, I feel -- and its REP system affords one *every* kind of return for *every* jurisdiction, without having to buy any of its over-priced (even six+ years ago) 'suite' packages. (And as I remember CCH & ProSystems from my apprenticeships in Big X firms.)

Check Lacerte out, as I certainly will after April 15. I want/need software & support that *works,* not promises or hopes that what sucks now might/should improve 'enough,' later.

VTY, TaxCPANY

I'm pretty much with you, Tony; I basically have stopped calling ATX for help. If the answer's not in ATXCommunity or the TaxBook ATX board, I invent a workaround/override, and move on.

Unless Drake gets its 1041 program uptospeed (*), I'll go back to Lacerte -- which I left for ATX six years ago, but still use in the office of a guy I consult for. I need a Swiss Army Knife; my clients are an incredibly diverse lot, always evolving.

(When I test-drove Drake, last summer, its 1041 failed at something measly, two of its techs scarcely understood the problem, and *no one* followed-up after I'd uploaded the file -- just like ATX, these days.)

Most disgruntledly yours, Kurt

I'm getting more and more dissatisfied with ATX this year. The wait-time for phone support is excessive, if I don't see some significant improvement, I'll be thinking to change to another tax software company next year. And now received an e-file error because of problems with the ATX server. After waiting 35+ minutes, finally got a cutomer service rep who informed me that they (ATX/CCH) are having server maintenance problems, try again in a couple of hours. These current experiences are quite sad; I've used ATX since 1999, loved it, service and performance was great, not anymore.

Are others sharing a similar assessment?

Hi Colleen,

What works for me is the following: ATX program installed on both desk- and laptop -- updated automatically each day I open program, before opening any returns. Desktop *only* used to rollover returns. Return must first be opened on desktop, then can be exported to laptop. (Using Wi-Fi home network these days, but "thumb drive" worked fine in past.) (Also, I keep an "ATX Share" folder on both the desktop & laptop, through which all im/exporting is conducted.)

Once the laptop work is done, I export to the laptop's ATX Share folder. Before transferring to the desktop, I delete the return from the desktop's ATX Share folder *and* Return Manager. Likewise, if re-exporting the same return from the desktop to the laptop, I make sure to delete the return from laptop's ATX Share folder *and* Return Manager.

The only problem I've had is the inability to delete a return once it's been e-filed. (However, if one knows how to enter the program's "Dev Mode," one indeed can delete such returns -- but that is such a proprietary secret that any layperson learning it was threatened with litigation, once CCH had bought ATX.)

Please note: all of the above takes place under Windows XP Pro Edition, not Vista.

Hope I've been clear, TaxCPANY

I just got off the phone with Jamie in ATX's subscription dept, who asserts that my lockout from online research will be fixed in a few hours; that her supervisor attributes the lockout to ATX's having forwarded to Kleinrock/CCH access codes only from an "old ordering system" and not also the "quick start" system in which my TTO subscription is recorded.

This was after I'd spoken to a Kleinrock techie -- who first identified my lack of privilege -- then a CCH subscription-services person who also 'saw' my account but likewise saw it lacked online privileges.

I advised Jamie to drop by this thread, and see who else is having this problem.

Fingers crossed, y'all. Kurt

I re-upped, despite my resentment over the Community Board debacle. I test-drove Drake, by prepping a 1041 I'd already prepped in ATX. Drake didn't catch a significant underpayment penalty and some trivial AMT flow-throughs. Drake's techs were well-intentioned but not as tech-savvy as ATX's. The last straw was, after I'd emailed the flawed 1041 to Drake, NO ONE got back to me about it. Never had that experience in my five years with ATX. (My worst ATX tech experience was waiting 45 minutes on the phone, one night this April, futilely. That never had happened before; so, for one thing, I was quite primed to ditch ATX.)

In addition, I need the rather full-bore Kleinrock research bundled with TTO. Drake's offer of limited RIA Checkpoint wasn't enough -- and subscribing separately to RIA would've doubled the cost of re-upping with TTO, instead. (Also checked out Tax Analysts -- too little state resources, compared to Kleinrock -- and CCH -- even costlier.)

So, in my case, TTO remains the cheapest, accurate, *comprehensive* alternative to Drake, Lacerte, ProSeries + whichever tax-research provider to add-on to one's tax-prep software.

For what it's worth, very truly yours, TaxCPANY

brother didn't mail in his balance due,, can he declare disaster relief? from the N'easter, I mean?

Thx

Hey D,

It's even better than "Don in upstate . . ." posted. New York's given us over a week, til April 26. The protocol described in Don's post still holds, but you (& one client of mine) have those further days.

Good luck, TaxCPANY