Lee B

You need to take some CPE.

Tom, You make some very valid points. I really don't get your "intimidation and fear" point. Your "accept the audit finding or else" point is really over the top. I don't fear the IRS, I want them to do their job.

i am supportive of this legislation especially since under current law the Treasury Department has to go to court and obtain a conviction in order to shut down a fraudulent preparer. However this will not halt the preparation of bad returns. My state of Oregon requires the Licensing of all Tax Preparers plus 30 hours of CPE every year. This law applies to every preparer except CPAs and Attorneys. Earlier this year I picked a new business client (Monthly Write Up, Payroll & Tax Returns). The prior preparer has been licensed since 1991, has a bigger office than mine with licensed preparers working for her. My client's 2019 1120S and 1040 were poorly prepared with a number of mistakes showing a real lack of tax knowledge. Just because you are licensed doesn't mean you are competent.

Scam, the IRS would never contact a taxpayer that way.

I think most preparers are aware that for 2021, similar to 2020, that nonitemizers will be able to deduct $300 in cash contributions. In addition MFJ will be able to deduct $600 in 2021. However, I would suspect that most preparers like me were not aware that the deduction has been moved from above the line reducing AGI to below the line thus reducing Taxable Income but not reducing AGI. Who knew?

Excerpt from the TIGTA Report: "For its report, TIGTA analyzed all the S corporation returns received by the IRS between 2016 and 2018, looking for returns where the profits exceeded $100,000, there was a single shareholder, and no officer’s compensation was claimed. It found the IRS didn’t select 266,095 of such returns for a field examination. The analysis found that single-shareholder owners made profits of $108 billion and took $69 billion in the form of a distribution, without reporting they received officer’s compensation for which they would have needed to pay Social Security and Medicare taxes. TIGTA estimated 266,095 tax returns may not have reported nearly $25 billion in compensation, allowing business owners to avoid paying approximately $3.3 billion in FICA taxes." Well I guess Audit Roulette still works

The FFCRA does not include SS

Given all the late and retroactive tax law changes for which the IRS couldn't reprogram their computers, I am not surprised. The millions of tax returns hung up in processing which need "eyes on" manual intervention makes it a certainty that there will be a number of refunds and balance due amounts that are not right.

Here is an in depth analysis of all the states ( almost 20 states now ) that have passed a PTE Tax: https://www.bdo.com/insights/tax/state-and-local-tax/five-more-states-enact-pte-tax-elections#:~:text=On July 19%2C 2021%2C Oregon enacted S.B.&text=An eligible PTE%2C which is,through business alternative income tax.”

Copied from Accounting Today: "Following enactment of the state and local tax deduction limitation in the Tax Cuts and Jobs Act in 2017, many states began looking for structures to circumvent the limit. These included trying to shift to a deductible charitable contribution, shifting to a payroll tax, and shifting to an entity-level tax. The Internal Revenue Service took a dim view of the charitable contribution approach, and the payroll tax approach appeared to be too complicated to implement. However, the entity-level tax has been blessed by the IRS, leading to a stampede among states to implement that approach. Notice 2020-75, issued Nov. 9, 2020, states that the IRS intends to issue proposed regulations clarifying that state and local income taxes imposed on and paid by a partnership or an S corporation are allowed as a deduction by that entity in computing its taxable income or loss in the year of payment. The notice also clarifies that the rule applies in a tax year ending after Dec. 31, 2017, covering the period back to implementation of the state and local tax deduction limit."

The key difference is that the CT PTE Tax is mandatory, while I believe the other state's PTE Taxes are voluntary.

Yes, there are at least 16 states that have passed a PTE Tax law now. It is a SALT workaround that actually does work. but only for S Corp owners and PTS partners.

Oregon has passed a very similar bill which goes into effect the beginning of next year. It allows PTEs to pay state income tax and then the owners/partners get an equivalent credit on their personal tax return. While Oregon hasn't written any rules or regulations yet, so far it seems like a win- win. I plan to use it with my own business.

Reading this post definitely reinforces my decision not to deal with divorced clients.

How do I get rid of the "Enable Push Notifications" popup? Every time I sign it pops up

"According to the IRS website, as of July 31, there were approximately 13.8 million unprocessed individual income tax returns. This is down from 15.6 million as of July 17, so the backlog is being chipped away slowly but surely,” said James McGrory, a CPA and shareholder at Drucker & Scaccetti in Philadelphia."

When I was still using ATX, I never had a problem with using the Reload Forms Utility Function. Of course you should save the return before you do it. Perhaps someone who currently uses ATX can chime in.

Perhaps reloading forms will fix this?

What does that mean?

Since you don't do their bookkeeping, there will more than likely be questions that you can't answer regarding 1099s and payments to individuals.

My past experience with these audits is: 1. Reconcile payroll records with quarterly reports 2. Review any subcontractors with Form 1099s to see if their classification is appropriate 3. Review Cash Disbursement and GL Records for payments to individuals with no 1099s. All of mine have been audits in my office.

I have $ 250,000 of coverage for $340.00

I have a very reasonably priced policy with Hiscox through my local insurance agent.

Your scenario implies your client is a cash basis C Corp, in which case the numbers don't don't make sense to me.

It will be interesting to see how this works out? My guess is that you will have pay via third party using a credit card or debit card