Terry D EA

My questions are the same as Tom's. If I'm subpoenaed, how can I charge when it is a court order to appear? i did not volunteer to be a witness or anything else. I was given a heads-up that the possibility exists, and the court date is set for February. I will do as Max said and get the copies of the circular 230 ready. I have been deposed before in a wrongful death claim for my father and hoped I would never have to go through that again. I can't testify to what the guy actually did with the insurance proceeds. All of this is to prove he replaced a multi-family rental unit that fell to a catastrophic loss (fire), that was part of a pre-nuptial agreement, with other property making other said properties part of the pre-nuptial agreement and not on the table for the divorce. I have nothing but worksheets and not even the tax returns as the transaction occurred in 2014. Because I had nothing to do with the bookkeeping, bank accounts, receipts or other records, I have no idea why this even involves me. For all I know he could have bought the other said properties with funds from who knows where. My personal take, there is significant real estate on the table, close to 30 properties, along with other assets, and it sounds like the soon to be ex-spouse is taking him to the cleaners. Another twist to add. The guy gave verbal permission for his attorney to contact me regarding any items he, the attorney, may need. Provided me the attorney's name and phone number as well. I wrote down nothing and did not agree to give out any information unless there was a signed disclosure statement. In this case, I think I will require the disclosure statement to be notarized.

I will start off by apologizing for the lengthiness of this post. It is necessary to gain a full understanding of the situation. A previous client who I prepared multiple years tax returns for their rental enterprises, including three different 1065, personal returns, calculated all the depreciation, etc. Our relationship began around 2010 and lasted until 2021 when I moved my office. The client always provided me documents beginning in late December to prepare the upcoming year. For 2021, I sent several emails, voicemails, and text messages requesting the documents. No phone, calls, emails, or text messages were ever returned. I assumed the client moved on to another preparer. Now, the client is going through a serious divorce and has reached out to me for prior year tax returns to provide them to their attorney. Before I agreed to anything, I asked what had happened to our relationship and they said they wanted their accountant close to them. Okay so far, no problem. I just thought it would have been a decent thing to do to at least talk to me or let me know instead of ignoring me. The client wanted tax returns from three different LLC's and individual returns back to 2011. I could not provide all of them due to some of the software not being available. He said his partner in the rental enterprises was responsible to keep the copies and he did not. Ok, not my problem. I was able to produce copies for 2015 moving forward. Mind you, that each year they received hard copies of all of their returns. Some of these returns were so large I had to buy a paper binder. For providing the copies, (digital), I charged $15.00 per year. The client is good with that and paid the invoice. Now they have notified me that I may be called as a witness in their divorce proceedings regarding a property transaction that resulted from a catastrophic loss and discuss where the funds were applied and the taxation. (I can't track the funds coming and going, all I did was prepare the tax returns and had nothing to do with the books.) The client needs this according to their attorney to prove the property purchased from the insurance proceeds were used to replace the property that was destroyed that was part of a pre-nuptial agreement. As I see it, none of this is my problem. If I am called as a witness, do I have a right to charge the client for my appearance? Would there be any reason to contact my E &O insurance? No IRS errors, no notices, no reviews, no audits, my work is not being questioned, nothing. I would appreciate any advice with this matter. I want to tell them to take a hike but there's that subpoena thing.

I had one customer get the PPP loan and did experience a loss in revenue and in my opinion, the loan was justified and served its purpose. I do remember, the first round was absorbed quickly, and I seem to remember it being reported that a lot of big firms got the first round who really didn't suffer at all. Those companies should be forced to return the funds or pay taxes on the funds received if the fraudulently applied and didn't meet the criteria. Like Judy said, I am one of those folks who is always concerned about raising prices.

Margaret, What Pacun told you is a network type setup. After all of the years seeing you on this board, I don't remember you having employees or other workers in your office that would require a network setup. A domain is a work group where the admin of the domain sets various controls and is much more involved than you need I think. Your web domain is an address on the web. Your single desktop is a stand-alone installation and is all you need to be concerned about.

Tom, I know you know this. But...the daughter's POA expired when her father passed. Don't know what CA calls them but she has be appointed the Fiduciary by the will or court and be granted letters of authority over the estate. I agree with you and others, the card should be part of the estate and as Catherine stated, you can make a good argument based on the post mark on the envelopes.

"Easy decision when they emailed their documents - not sure what the solution is when they mail or drop off?" I don't think you have a choice. Could be wrong but, I mail the docs back with their copy of the return. "I can relate to this so much! The pictures of documents are the absolute worst." I agree totally. Been trying to figure out how to turn the monitor around, up and down, to see the ones they send upside down and backwards.

I did this the second day it was available without any problems. I submitted my renewal for my EA and haven't heard anything yet. I called the offie of enrollment to check to see if they received it. Yep, they got it, just sitting there waiting for someone to process it. Kinda scary.

I just spent two hours in a webinar learning more about this form. I have a fair understanding of its purpose as well as who must file the form. Good information on stock basis and debt basis and the need to re-create if the shareholder is clueless. The webinar was hosted by an Attorney who admitted several things were not tested in court yet as all is too new. One question that I couldn't get answered that hopefully we can discuss here. Yes, I've tried researching this with no definitive answer. I have an LLC who in 2015 chose to be taxed as an S-Corp. All required forms filed, IRS accepted; etc. Here are my questions: 1. When an LLC chooses to be taxed as an S-Corp, they retain their LLC status correct? They have not established a full corporation correct? 2. LLC's do not or are not permitted to issue stock. Hence the stock basis part of form 7203 calculation. 3. Should the LLC who elected to be taxed as an S-Corp choose the desired number of shares at the time the election was made to properly track stock basis? This particular entity doesn't meet the filing requirements for form 7203. But... the attorney in the presentation it would be best practice to fille the form anyway. I can't find anything in the regulations or anywhere else that gives any instructions or exceptions for an LLC taxed as an S-Corp. Applying logic, being tax as an S-Corp means you follow all of the S-Corp rules when filing form 1120-S. I'll welcome all comments and opinions.

Agree with both the above. Cash it, put it away until either the SOL runs out or if questioned.

Update, client just confirmed they have the proper documentation and agreed to enter the partnership effective 12/31/2020. He originally told me the other partner left before the end of the year which triggered all of my thought. Now it is easy.

Thanks, Lion, I got it. Form 1065 for TY 2020 has already been filed by another accountant as I stated. So, should the return be amended to reflect the short year and closing of the partnership?

Lion, you were reding my mind on the short year. New client for me, an accountant in NY prepared the 1065 and apparently wasn't aware the partnership had ended. I will be filing the remaining no longer partner's personal return with a Sch C as a disregarded entity. Just need to know if it is necessary to amend the 2020 1065 for a short year. I will find out from the client when the other partner left.

Just to add, because the partnership ceased to exist prior to the end of TY 2020, should a short return have been filed? If so, should the original filing for 2020 be amended?

An LLC was formed as a partnership. One of the partner's terminated their interest before the end of 2020. TY 2020 form 1065 was filed as the initial return. The partner's shared 20K loss. What I have seen in the partner's K-1, the basis of the departing partner was reduced by the loss and there is no gain on the return of any remaining basis or capital accounts. Please be kind here I am still gathering information. I don't know how you file an initial and final return in the same year. What I do know for sure is the partnership ceased to exist prior to the end of TY 2020. For TY 2021, am I correct the business is now a disregarded entity and is filed on Sch C with the remaining partner's 1040. BTW- This is a simple partnership, no employees, no assets other than cash as far as I can tell. Only depreciation was amortization of some startup expenses. There will be another partner added, so I assume it is ok to keep the EIN and reopen the partnership when one indeed exists. I am going to tell this client to not do this on his own.

"All we can do is admit that we're not perfect and we make mistakes too." The above says it all. Some clients are understanding, and some are not. I don't think we'll ever get past the mindset that it is automatically assumed the taxing authorities are correct and we have made a mistake. More often than not, that is not the case. My primary state has been NC for 25+years and I can tell you they are worse than the IRS at giving explanations. I've been actively looking into whom to contact at the administrative level of the NC DOR to voice my concerns regarding how we as professionals are treated by some of the agents, the unwillingness to provide documentation to the professional and the client, the automatic collection letters without prior notice or the opportunity to dispute anything. My ongoing question is how am I, as an Enrolled Agent supposed to properly represent my client when I cannot receive copies of any notices or detailed explanations surrounding the notice or collection action. Every time I ask, I'm told the same thing, "we only provide copies of notices or other correspondence to the taxpayer". Great, but for the most part, they don't resend anything. These responses can add to the client's deception that we don't know what we're doing. Yesterday, I spoke with a very nice and cooperative lady at the NC DOR practitioner priority line, every explanation was "what the system" has done. Also, stated, I see "the system" issued a check in the amount of ****** but not sure why "the system" did that. We finally got to a figure that was owed we agreed upon, took notice the client's 2021 refund was absorbed to cover what was owed and the check was the difference between the refund portion and interest and penalties. Here's the kicker, I said there should be a penalty abatement for aggravation and confusion from the NC DOR, and she said well, "I can eliminate that penalty right now and your client will receive another check in the amount of *****." Now I'm a hero and we all know what my status will change to if none of this is followed through.

If anyone wants to know, the PTIN renewal system is now up and running. I just renewed mine. Beware, the site is horrible slow.

Don't know if this helps or not. I spoke with a long time support agent at Drake this morning. I had a brain fart moment with not getting the partner's information for their capital accounts to show on the K-1. Felt stupid when I was told what to do as I should have known that all along. Anyway, I asked about the changes, they are trying to make sure our support requests get to the right places for better assistance. Normal concerns, they are getting bigger and it is harder to find hep. The normal cry of any business. The support is now attempting to be placed in Tiers. They didn't see anything really happening with Drake heading down the same path as ATX did. We'll see if the price goes up again this year. I guess Mr. Drake still has a lot of input.

Catherine, I know. I had to call again today to try to figure out why a NY 2020 was ready to e-file with a green check box, but the button was grayed out. I have always received excellent support. But today, was a bit scary. The rep had an accent and wouldn't take time to listen to what i had to say before offering an answer. I managed to figure it out on my own which was really weird the way the program acted. I just don't want to go down the old ATX road. Remember the days when you called ATX support and got someone on the other side of the pond named Bob or Susie? Gosh that was horrible.

Congratulations Joel, Enjoy your retirement

Something very discouraging happened today. I called support to verify that form 7203 is not automatically filed with the return. I don't call support very often and usually don't need to. This all was to put my own mind at ease as I have only done a couple of these forms. My call got placed on hold and I was told I my call would be answered between 35 and 40 minutes. Instead of waiting, I attached the pdf as instructed. I hope this is not a sign of things to come. Back in the day, Sabre Pro, ATX was great. CCH bought them out and, well, we all know what happened. Drake support was fabulous and now a merge or whatever they're calling it, has taken place and the very thing their business was built on is beginning to diminish. I did not object to the price increase this year as it had been a long time since Drake increased prices. It will be interesting to see what happens this year. Big conglomerates seem to ruin good companies.

Hmmm, would this possibly qualify for the first-time abatement? What is the reason he filed late?

Judy, Yes, I do look at the additional entries but they, sometimes and in my current case, still don't apply. CA is just plain weird. There is no K-1 input, so you have to know what the code is to manually enter them on the correct forms. I'm not being lazy, but it did take a bit of time to figure out where things on the provided CA K-1 were to be listed. I'm sure if I worked with CA more, it would be easier. BTW- I did call support and by talking it thru, I got it figured out. They were aware of no CA K-1 input and the response was some states have them and others don't. Thanks.

How do all of you Drake users deal with the Drake missing code syndrome on the K-1 forms? I completed a CA return that contained Pass Thru and R&D credits. The code used on the K-1 for CA is not in the list on the federal K-1 input. My only option was to enter the credits on the individual forms. I love my Drake software, however, this is a major short coming. Masny states have their own K-1 input. I know the federal input has a state column but lacks the codes and nothing will flow which makes sense cause the program doesn't know what to do with it.

Thanks for the Tax Advisor Article. After much research, I don't really see an advantage to changing the tax year. If anything at all is the S-Corp making a tax payment that would as you say, defer the taxes for the client. That in and of itself, may eliminate late payment penalties but wouldn't help on the S-Corp end of getting the financials done in a timely manner. I guess it is best to wait and see what affect their proposed changes will have. Thanks to all who responded.

>>>>>>Tell them that they either need to pay you to keep the books up to date, or hire a third-party bookkeeper that you can train and work with. <<<<<< I agree totally and have already been down this road. They are using QB Enterprise, which I would like to see them get rid of but, that's not happening. I'm taking the "I told you so" attitude. Just trying to see if there is any way to help them that is not a crutch.