Lee B

Sounds like a variation of a classic barter transaction. Generally, barter transactions are subject to all taxes including sales tax. Does Missouri specifically exclude this type of transaction from sales tax?

Iowa State University Center for Agricultural Law and Taxation is an excellent Resource: https://www.calt.iastate.edu/

Here is one of the many resources on this topic: https://www.thetaxadviser.com/issues/2014/jul/skarbnik-july2014.html

IR-2023-182 https://www.irs.gov/newsroom/irs-delivers-new-capabilities-to-tax-pro-account-latest-expansion-part-of-effort-to-improve-technology-tools-to-help-tax-professionals-serve-clients

FYI: Another subcontracted function not performed directly by the IRS.

Distributions in excess of basis definitely are treated as capital gain. Were there any distributions during the year?

I don't understand. If there were no loans, there must have been some other liabilities in significant amounts otherwise liabilities plus equity would have had a debit balance and total assets would have been negative. Without seeing the balance sheet, who knows?

The CPA may be correct. The big question is what other balance sheet liabilities exist? If the stockholder loaned the S Corp funds, then the stockholder has debt basis which exceeds stock basis which might support a bigger loss deduction. If the S Corp borrowed funds directly then the CPA is correct.

I stopped preparing tax returns for family members and etc. I asked my daughters to find someone else. Last spring, I fired the young woman who used be our dog sitter because she emailed me bits and pieces, never had everything I needed to prepare her return. I decided I was happier not knowing their financial details.

"Page Last Reviewed or Updated: 06-Sep-2023" https://www.irs.gov/tax-professionals/ptin-renewal-checklist-what-you-need-to-get-started

https://www.identitytheft.gov/#/

I agree, 3 years ago i terminated two long term clients who were legally separated at 12/31, when i discovered one spouse was not truthful. I mailed them each a letter along with their tax documents saying that I could not prepare their tax returns due to a "conflict of interest."

Interesting discussion. It's a balancing act between due diligence and getting the return out the door with the least amount of work possible

I didn't use to have an engagement letter either but I have always had a tax organizer, which some clients filled out and other clients made a half hearted attempt. Lesson learned, now I insist that every client sign the engagement letter and complete the tax organizer. This year I handed back two client's tax organizer and all their tax documents and told them to come back when their tax organizer was complete. Last year I filed MFJ for a divorcing couple who were longtime business clients for 30 years. Big mistake, in the future I will always file MFS in this situation!

I agree with DANRVAN.

He's in the infotainment business to make money for himself

It's not well publicized but most of the data management, all of the computer programming and system engineering functions are performed by third parties under contract. Consulting firms like Accenture, Booz Allen & Hamilton, Deloitte Consulting, Microsoft and ID.me.

Yes they have been going after the low hanging fruit because it's easy picking. The average taxpayer can't afford or usually doesn't retain competent representation. Going after the wealthy tax cheats requires experienced IRS Agents. The wealthy make political contributions and have some clout with our elected representatives. That's not the way it's supposed to work, but the wealthy have power and the average taxpayer doesn't.

How would you report the W 2 wages on the 1065?

If they obtained an EIN, won't the IRS be expecting a Form 1065?

Did they obtain an EIN?

Sometimes failure reinforces the process of learning lessons. This happened several times with my clients before you could efile amendments.

Lion and kathyc2 It's kinda ironic since you both imply that anyone who disagrees with you is an idiot.

IRS expands use of chatbots to help answer questions on key notices: https://www.irs.gov/newsroom/irs-expands-use-of-chatbots-to-help-answer-questions-on-key-notices-expands-on-technology-thats-served-13-million-taxpayers Frankly, I don't like chatbots. A few days ago I was stuck with a Comcast chatbot in a circular loop going nowhere.

This year I have also discovered that the IRS AUR units that process a taxpayer's response to CP2000s are backed up at least 90 days.