Lee B

Actually the IRS is a reflection of our current culture and dysfunctional political system. Observing what is going on in the USA recently is like watching the "Fall" part of the "Rise and Fall of the Roman Empire"

One of the most closely watched and discussed issues in Washington this year is tax reform. While talk of reforming the U.S. tax structure has been going on for decades, there has been a lot of work done on the issue at the committee level recently in Congress, and it’s getting the attention of small business owners around the country. As accountants, you are likely getting questions from your small business clients on the subject, asking for more information about what changes could be on the horizon. Partner Insights According to a recent survey Paychex conducted of startup businesses with fewer than 50 employees, taxes and the U.S. tax structure were identified as the biggest issue impacting businesses this year. Forty-seven percent of respondents identified this as the most important issue, with health care reform (25 percent) and government regulations (20 percent) rounding out the top three. To help you stay on top of this issue and better serve your clients, Paychex has highlighted the top tax issues being considered by Congress as they work on the reform package. Here are the four key components of reform you need to be aware of: 1. Pass-throughs: One potential change that is frequently discussed as part of tax reform is alterations to the rates paid by “pass-through” entities such as partnerships, S corporations and LLCs, which pay taxes at the personal tax rates and are often small businesses. These pass-through changes would dilute existing tax advantages popular with small businesses. If this were to happen, small businesses would not benefit from reductions solely in corporate tax rates, which is another possible aspect of reform to keep an eye on. 2. Tax Extenders: Several popular tax breaks, including some particularly attractive to small businesses, were typically extended by Congress each year, but not for 2015. One example is “Section 179” expensing on certain purchases of equipment and other capital items. Small businesses took advantage of this to lower their taxable income and capital gains breaks for investments. While it’s unknown if tax reform will be passed this year, many observers think that some of these tax extenders will eventually be retroactively reinstated by Congress, even if broad tax reform isn’t accomplished. Accountants should know that there is also support for permanently adopting these measures, which would eliminate the uncertainty around tax planning that small businesses face under the current situation. 3. Simplification of the Tax Code: This is a primary theme of most reform proposals as many small businesses find the complexity of the current tax requirements daunting and would likely welcome a streamlined approach and lower compliance costs. According to a survey conducted by the Small Business Administration on federal taxes, small business owners are more concerned about the complexity of the tax law than the actual amount of taxes they pay. Respondents to the SBA survey also identified income taxes and payroll taxes as the two most burdensome taxes from a financial and administrative perspective. Here are some additional statistics of interest from the survey: • More than half of small business owners spend more than 40 hours a year handling federal taxes; • 40 percent spend more than 80 hours; • More than 25 percent spend more than $10,000 annually on tax preparation; and • Only 12 percent do their taxes themselves. 4. Corporate Tax Rates: Another possible component of reform is the streamlining of corporate tax rates. Based on what has been discussed so far, this could result in only a handful of rates and an offsetting reduction in “loopholes” available to corporate taxpayers. For small businesses that are organized as traditional “C corporations,” this could be risky because the streamlined rate they would pay would not be low enough to offset the loss of the tax breaks available to corporations. While tax reform is still very much a work in progress and it is unknown what components could be included in a final reform bill if the process gets that far, this is important information to keep in mind when providing counsel to your clients. Knowing what they think and what help they need from you will position you as the advisor your clients can trust

Something similar to what we currently have existed from 9/10/2001 thru 2005..

The beat of a different drummer continues: House GOP slashes IRS tax enforcement budget Jul 15, 12:25 PM (ET) By ANDREW TAYLOR WASHINGTON (AP) — The GOP-controlled House has slashed the budget for the Internal Revenue Service's tax enforcement division by $1.2 billion, a 25 percent cut that would mean fewer audits of taxpayers and make it more likely that people who cheat on their taxes will get away with it. The House approved the cuts by voice vote after little debate Monday night as it took up a $21 billion spending bill that sets the IRS budget. The cuts reflect GOP outrage over the agency's scrutiny of tea party groups seeking tax-exempt status and frustration over the agency's failure to produce thousands of emails by Lois Lerner, the official formerly in charge of the IRS division that processes applications for tax-exempt status. "The use of a government agency to harass, target, intimidate and threaten lawful, honest citizens was the worst form of authoritarianism," said Rep. Paul Gosar, R-Ariz., author of an amendment to cut the IRS tax enforcement budget by $353 million. Rep. Bill Huizenga, R-Mich., followed up with an amendment to cut $788 million more. The Democratic floor leader on the funding bill, Rep. Jose Serrano of New York, opposed the amendments but opted against demanding a roll call vote. "The answer is not to cut the IRS to bare bones, because our next problem is that the deficit will continue to grow because we won't be able to do the proper collecting of tax dollars in this country," Serrano said. The White House had already issued a veto threat on the legislation, saying it shortchanges the IRS, impedes implementation of the new health care law and undercuts the new regulations on Wall St. that passed in 2010.

I borrowed this from another website. "Since the IRS says my single member LLC is a disregarded entity, does that mean I don't have to pay any taxes?"

In every large organization there are idiots& knuckleheads doing dumb stuff. For every idiot there is usually 10 hardworking employees trying to do their job as best they can. In my 38 years, I have only dealt with 1 or 2 IRS or ODR employees that were incompetent. I don't say this to defend the IRS, but to try to keep some perspective. Sara is correct, the IRS, given it's current workload and staffing will likely continue to have these problems and more of them. K C, this will be like shooting fish in a barrel.

Just got a call reselling Taxwise for $ 695

Just got a call reselling Taxwise for $ 695

For it to remain a single member LLC, the family member could make a loan to the LLC which could pay the family member interest.

Yeah, You can see that in the way communicate with users, both in what they say and what they don't say. ATX seems to have decided that it's not worth it to attempt to fix the problems of the users that are saying, "Fix this or I'm leaving." In spite of everything, their retention rate must be high enough for them to be profitable. If it wasn't, they would fix more stuff. Personally, I think that they would have to raise their fees, in order to afford to fix everything. If they raised their fees very much, then more users would switch to Drake etc.

Jack, I'm curious. Why were you discouraged ? Thanks, Lee

Posted by ATX this morning: "We are planning on changing the backup name to be the client name in 2014." I would really like to see a complete list of the changes ATX is planning !!!

This is way past being overdue and will at least limit some of the worst fraud! Direct Deposit Limits In an effort to combat fraud and identity theft, new IRS procedures effective January 2015 will limit the number of refunds electronically deposited into a single financial account or pre-paid debit card to three. The fourth and subsequent refunds automatically will convert to a paper refund check and be mailed to the taxpayer. Taxpayers also will receive a notice informing them that the account has exceeded the direct deposit limits and that they will receive a paper refund check in approximately four weeks if there are no other issues with the return. Taxpayers can track their refunds at Where’s My Refund? The vast majority of taxpayers will not be affected by this limitation, and we would encourage taxpayers and tax preparers to continue to use direct deposit. It is the fastest, safest way for taxpayers to receive refunds. The direct deposit limit will prevent criminals from easily obtaining multiple refunds. The limit applies to financial accounts, such as bank savings or checking accounts, and to prepaid, reloadable cards or debit cards. However, the limitation may affect some taxpayers, such as families in which the parent’s and children’s refunds are deposited into a family-held bank account. Taxpayers in this situation should make other deposit arrangements or expect to receive paper refund checks. The new limitation also will protect taxpayers from preparers who obtain payment for their tax preparation services by depositing part or all of their clients’ refunds into the preparers’ own bank accounts. The new direct deposit limits will help eliminate this type of abuse. Direct deposit must only be made to accounts bearing the taxpayer’s name. Preparer fees cannot be recovered by using Form 8888 to split the refund or by preparers opening a joint bank account with taxpayers. These actions by preparers are subject to penalty under the Internal Revenue Code and to discipline under Treasury Circular 230 (also, see Circular 230 Tax Professionals page

I would make some inquiries about # 2 as to it's availability and does he have documentation re: showing it to prospects etc.

My personal favorite is "Outside Services"

Click on this link for a good article about vacation homes. http://www.accountingweb.com/article/knowing-three-tax-scenarios-vacation-homes/223530?source=tax

One of ATX's most difficult forms to use. You just have to work with it and follow the links into the supporting worksheets.

Yes, but it prompts you to reset your password. Very annoying ! I think once a year before tax season starts would be adequate.

I go to the ATX Board at least once every day and haven't had any problems other than it being slow to respond from time to time. If you haven't been there in a while, you may need to clear your browser history.

Was this a legal separation or did they informally separate, because the answers are different ?

Paste the following link into your browser for a good discussion: http://www.journalofaccountancy.com/Issues/2014/Jun/20149801.htm

In both cases I was only providing payroll services and both Schedule C businesses already existed.

I have had two client situations in the last 3 years, where they each had two Schedule C businesses. In both cases the IRS would not issue a second EIN and at the same time the state of Oregon insisted that my clients had to have separate Oregon BINs. So I had to prepare two separate payrolls for each client and then consolidate the payroll info for federal payroll reporting purposes. A lot of extra work !

Since Lion refers to "employees" a SEP could be quite expensive because contributions must be made all eligible employees. While with a Simple IRA, if all the employees decline to participate, there no effect on the owner's contribution.

Assuming that you are talking about a SIMPLE IRA, the self employed individual is considered to be both an employer and an employee of the business. Just like an IRA the actual fiduciary account should be set up in the name of the individual. If you have been reading The Tax Book then you're probably aware the maximum employee contribution limitation and the 3 % employer contribution are both calculated using self employment income from Line 4 - Section A of Schedule SE. Since neither contribution is a deductible expense of the business, I would write the check from a personal checking account.