Max W

Once an S-corp converts to a C-corp, it can not convert back, for at least 5 years.

After rereading your question, I would be almost certain that the original S-corp was not properly terminated using form 966 and that the same EIN was used for the C-corp.

Maybe the outside firms will do a better job than the IRS.

If the parents reside in a state with a state tax, why wouldn't you file the state return to begin with?  Regardless of the address?  Too much overthinking on this one.

When a state return is filed in the state of residence and the address is in another state, that state will pick it up from the IRS exchange of information.

The address state has no knowledge of the residence state filing and will make inquiry as to why the address state has not received a filed form.

I have had to deal with this several times and a copy of the residence state return with a short explanation suffices.  However, when the residence state is a non-tax state, the problem becomes more difficult and all sorts of documentation showing residence are needed. 

No overthinking here, Jack.  

There should not be any problem with the feds, but unless the son lives in one of the non-tax states, the state could come looking for their share of the tax pie.  

The son might then have to get involved with proving the actual residency of the parents.

Was the S-corp election - form 2553 - timely made?

Thanks again.

Thanks, Catherine.

Am prepping both a 1065 and personal returns for 2012 & 2013.

So, are you saying no MA efiling at all? -and to check the box on the MA1.

Is there anything similar on the MA 3?

Does MA still accept efiling for 2012 returns?

TIA

A separate form has to be filed and franchise fee paid by Apr 15.

http://www.tax.ny.gov/pdf/current_forms/ct/ct5_4i.pdf

Thanks Jack.  it will come in handy.

Under certain circumstances - MFS - the wife can be claimed as a dependent, but not for 1/2 a year , of course.. 

If you file a separate return, you generally report only your own income, exemptions, credits, and deductions. You can claim an exemption for your spouse only if your spouse had no gross income, is not filing a return, and was not the dependent of another person.

http://taxmap.ntis.gov/taxmap/pub17/p17-013.htm

As I recall, it usually shuts down the day before Thanksgiving and resumes the 4th week of January.

It would be foolish not to take the NOL.  As Jack says, keep shopping around until the right bank is found.

Thanks, that's the way I interpreted 3 years ago, but wanted a 2nd opinion because the client has been coming up with dozens of questions and hypothetical scenarios of living part year here and part year there, giving up her US citizenship, and on and on.

Disagree.  Because the income and additional fica/med is a W-2 issue, the employer is responsible because he hasn't complied with the regs.

Even last year, it was taking 4 to 6 months.

For older years, it can take much longer.

We had a 1040X filed for 2003 filed in Aug 2011, IRS indicated it was in process dec 2011.  Processing was finalized and a $40K reduction of balance due was issued in Aug of this year, 33 months later.  We had to get the TAO involved and it still took over a year from that point.

Maybe.

If he is an attorney, then he is a legal professional and referral fees are subject to SE.

If he is an employee in another capacity, office manger, administrator, etc. then the argument for Line 21 might carry some weight.

Ahah! That's the rub.

Article 11 that deals with interest is on page 15-16 or the following-

http://www.irs.gov/pub/irs-trty/aus.pdf

How would you interpret this?

Maybe someone that has dealt with AUS issues can answer.

I am aware of the WW Income and the tax credit.  That is not what I was asking.  I am asking if interest from AUS source is exempted by the US-AUS tax treaty, specifically paragraph 6.

Client is naturalized citizen and resident of US and has bank accounts in Australia that generate about $10,000/yr in interest.

By treaty, Australia is allowed tax up to 10% of the interest.

It is not clear in reading the tax treaty (paragraph 6) if the taxed interest income is exempt in the USA.

Any ideas?

It is not up to the preparer to determine this.  It should be determined by the employer who has to timely notify the employee of the method (there are 3).

being used.

It is then included as wages.

Lynn has chosen the easiest of the 3 ways.  There are a number of qualifications that have to be met.

If you want to have fun with this topic, read the attached.

http://www.gfc.com/pdf/Tax%20Services/2012%20Guidelines%20for%20Personal%20Use%20of%20Company%20Vehicles.pdf

Judy,

 

Thanks so much for the links.

 

The weird thing is that my client can't let his parents, me or anyone else know where he goes. So I have no idea which country he was in.

 

Right now he is somewhere out of the US waiting to be assigned to some country.

 

Anyway, I am guessing that the ME&I per diem rate is subject to the 50% limitation. Is this correct?

 

Thanks.

Point him to the link jkl provided and instruct him how to calculate the expense. And yes, it is 50%, unless he is covered under DOT.  

You also said where he goes.  That is different than where he went.  He may want to clarify that with his supervisor as some people with security clearances sometimes over interpret the rules.

There is no need to petition the tax court, or worry about immediate collection action.  Before the IRS can collect, they have to issue a series of letters conforming to the due process requirement.  

This can take several months after the assessment and the 90 days for filing with the tax court. The Red Flag warning letter will state "FINAL NOTICE OF INTENT TO LEVY" . There are 30 days to act on this.  Generally, what we do in such a case is to file a CDP request near the end of the 30 days, which will take another 3 months or so before a hearing is even scheduled. 

This will provide 7 to 8 months of breathing room, by which time the matter should be resolved.  In one instance, I was able to delay collections for 11 months, so that the client could sell property to pay part of her back taxes.

File a paper return with an attachment to Sch A Line 11 with the required info.

On Sch A, type in on the name or address line "See attachment", and enter the amount.

If he filed an extension for 2013, there is no late filing penalty as long as the return is filed by Oct 15.

Late filing penalties are 5%/month to a max of 25%, so worst case for your clients would be about $325 plus late payment penalty & interest, about $37, if it is 6 months late.