Lee B

My understanding is that this year's session ended April 30th so you may be waiting for awhile. We will do have a member from Hawaii that posts occasionally, but I haven't seen a post from him this year. It shouldn't be hard to find an email address for a tax preparer in Hawaii to whom you could send an inquiry or email the state revenue department.

I guess I have been fortunate. I just had the first client who just received an IRS letter telling him that he had balance due because according to their records he received the first stimulus rebate while he claims he never received this rebate. I told him to review his checking account records again and gave the IRS phone number to call. Other than that I told him there was nothing I could do.

I guess i would rephrase my response a bit differently. The IRS is not in control of the majority of what has happened and is struggling to deal with the current situation. While it can be very frustrating, all we can do is explain it to our clients.

I assume that you didn't have any problems filing returns with the wrong PTIN? In which case what is the point of having one? Strange that you got a phone call instead of a letter? How would you know it was really someone from the IRS calling you?

"The Internal Revenue Service plans to close its paper return processing center in Fresno, California, permanently at the end of this month, so taxpayers and tax professionals in some Western states will need to begin using a new mailing address. With the change, taxpayers located in Alaska, California, Hawaii, Ohio, and Washington state who previously filed their federal tax returns with Fresno should now mail their returns to the Ogden, Utah, processing center. The Ogden address for filing paper individual returns is: Department of Treasury Internal Revenue Service Ogden, UT 84201-0002 The IRS plans to maintain a presence in Fresno with many other operations still working at full capacity, but the impending consolidation will enable the IRS to streamline operations and make better use of existing space. When the consolidation was announced in September 2016, there were approximately 3,000 employees who worked at the paper processing center in Fresno. Since that time, the IRS said it has taken steps to provide training and find continued employment opportunities for many of the impacted employees. Others have chosen to retire or separate from the IRS. The agency is also maintaining a Fresno submission processing consolidation update page on IRS.gov."

I was quoting news articles which are of course 100 % correct I followed your links but what is your point ?

News Reports yesterday say that the IRS Backlog is now down to 8.5 Million Tax Returns. which are now all returns which will require manual intervention. The Taxpayer Advocate Service says that their caseload has increased about 50 % and that if you call them that the average wait time on hold is about 80 minutes.

If I can trust my shaky memory, I think PTIN Renewal usually opens up after October 15th.

Your post says no income, which I assume means they are not in business, therefore no tax returns need to be filed, no EIN. Husband, wife and all of the children could all be LLC members. Basically all of the tax related questions are moot.

Exactly, we still don't know what we are dealing with except we're gaining a lot of circular momentum

With the LLC as the owner entity, 10 % or 20 % interest can be gifted, sold or passed on to other family members which in the long term makes it easier to keep ownership in the family.

I have read other articles saying that forming a (nonbusiness) socalled Family LLC in situations like this is a good idea for multiple reasons. Involving a corporation, makes no sense to me.

https://files.hawaii.gov/tax/news/media/2021-01-08-income_tax_for_unemployment_ compensation-form_1099-G_distributions.pdf

Five minutes of online searching found multiple sources: "Tax on unemployment benefits: ARPA says that individuals can exclude up to $10,200 in employment benefits received in 2020. Hawaii is not going to copy the exclusion. It costs too much. If you received unemployment benefits in 2020, and you didn’t elect to have Hawaii tax withheld, you should look very seriously at paying estimated Hawaii tax." I suggest that you confirm this.

What if your distributions have zeroed out Retained Earning? Wouldn't distributions then reduce APIC or do you end in a partial liquidation?

In the last few years, I have finally realized my limitations and my areas of expertise. If these were my clients, I would tell them I am not able to do their returns any longer.

Lion is right, you need to get all of the information available with respect to the plan, before you even speculate as to what can be done.

I am not going to get into the messy details, but for years I did a 1065 return with no basis details. It was hard enough just to get the Income & Expenses! Finally earlier this year, I told them that I couldn't do their return any more.

Shouldn't need a workaround. There should be a supporting worksheet that allows the designation of uneven amounts. However standard operating agreements usually specify proportionate withdrawals.

Just combine or split the 1099 entrys in order to achieve the correct results. As long as the end result is correct it is highly unlikely that IRS will notice or respond, and even if they do you have the documentation to back up any required reply.

How is all the gain related to depreciation recapture? You don't have any basis allocated to land?

I would hope that nothing happens, but all you can do is wait to see if your client receives anything.

Good Point, In addition if it was sold at a loss, I don't believe Form 6252 applies since it would n't be an installment sale. NEI

This is a double negative so not sure what you mean? Follow the instructions and completely fill out Lines 1 thru Line 26 on Form 6252. If you do that, everything should flow to the proper places.

Find out the hours these lines are answered and have her call first thing in the day.