jainen

>>Tax courts are expensive << In my opinion, if you need a tax attorney, it is a good value. But Kea's client doesn't need an attorney. If he has to petition Tax Court it's only because he dinked around for a month before telling Kea about the CP2000. (Well, technically Kea wasn't available but that's no reason not to blame the client!) There is a $60 filing fee (waived for indigents). That's what I meant is a waste, because Tax Court will certainly refer this case back to Appeals. There is no question other than plain facts, so it all depends on what can be documented. It's possible that AUR will accept what has already been sent in, but if not then Appeals will take quick and decisive action. I would guess it would go in the taxpayer's favor, if only because IRS can't afford to litigate such small amounts unless there is evidence of tax evasion or some other big principle. My main worry is that Kea might not have been very clear--I barely followed the unfolding story. But Appeals gives you another shot at making your case, so if you can't prove it there, even a lawyer probably can't prove it in court.

>>Regardless of how many forums you have everyone comes to this one<< It's hard to separate tax policy (that is, politics) from tax law, especially because part of our job is tax planning. So I don't really mind the different viewpoints, however passionate. But I continue to protest the unthinking cliches, buzz words, and personal attacks. I'll still object to them just as much in the separate politics forum. Now, if you want to set up a flame forum (as some boards do), you can have lots of fun without me whining at all.

>>Looks like I get to call IRS after all.<< You MIGHT still be able to resolve this over the phone, but don't miss the 60 day deadline! Even if the IRS promises to rescind the notice and process the 1040X or whatever, don't believe them unless you have written agreement. At this point your client has no actual right to amend or appeal or even request the waiver of penalty. Filing with Tax Court is the only true option. That's a waste of money, because Tax Court will just kick it back to Appeals anyway. Talk to your client about it, because he has to file himself since you are not an attorney.

>>I want to be sure that if I take this donation that my school system and I are not part of any illegal acts or receive equipment from someone who technically or elsewise doesn't own it.<< I wouldn't worry about that, though you might ask your school attorney. The prospective donor already received professional advice that he can give it to you, whether personally or as an agent of the LLC you don't know or care. And you have no reason to doubt it,. Your receipt would not of course suggest a value, and his tax accounting is elsewise none of your business. So, go for it!

>>I don't agree with selling the assets for a profit<< That's the standard advice for capturing a LOSS. For a profit, it might be helpful in some situations, such as he has capital losses to offset or needs a higher AGI for something. If the property was written off already, claiming a deduction for FMV would not be allowable and it would be subject to an additional 40% penalty. I don't know if I should ask why he is coming back to you, or why he left you. I guess both questions are relevant.

>>never withhold depreciation schedules, NOL worksheets, claim of rights histories, or anything except my own research and notes. What's the point?<< Sometimes that lowball offer they were chasing gets away when they come in with the details! I only deliver documents to clients directly. They can give them to the third party. All I release is what was already in their packet anyway, including carryover worksheets. If the current year isn't complete, then it is simply the source documents. If they need a prior year, after January 31 I generally charge a copy fee.

>>57% of Americans<< Or, rather, 570 Americans. How and why were these Americans chosen to answer the survey? Anyway, how credible is a survey methodology that asks about something that doesn't exist and never could exist, so the responses are backed by no commitment whatsoever? The sponsors of this survey are two news bureaus with a HUGE stake in dramatic disconnects between Congress and the constituents. What I can't figure out is why they had to contrive a story like this, instead of just honestly reporting what's going on.

>>tell me where I should go from here<< Go back to that same office. You don't need professional help. Newark posts the actual ordinance, and even the instructions for 2012LF say to use Box 5, so be polite but unyielding. Ask politely to speak directly to the clerk's supervisor. Ask politely to speak directly to the department head. If none of that works, stop being polite. Ask about your appeal rights, but point out how utterly stupid they are being. Conspicuously write down names and quotes from the start. Apparently this is a deliberate, system-wide fraud, so the consumer affairs reporter for your local paper will be interested in your notes. Be a good citizen and give them to the reporter, even if you win. "I don't know, we just use Box 18" is the same as "We don't care what the law says."

>>get the marginal tax rate<< I don't know about a report, but the rates are on page 16 of the Instructions for Form 1120.

>>Sec. 1250 is specifically about possible recapture of depreciation<< There is also that odd concept of "unrecaptured 1250 gain." Since you get a tax advantage of taking the 1250 loss against ordinary income, you can't turn around and claim a zero percent capital gain tax rate if you make money on other property. The look-back period is five years, and the maximum rate is 25%..

>>What makes you the "Sponsor"?<< As I said before, the sponsor is the employer who sets up the plan for the company's employees. The sponsor has to file for a Health Reimbursement Account (which is NOT an insurance plan itself). Even if management was outsourced to a 3rd party, that doesn't relieve your client from filing his own tax returns and paying his own taxes. If there is also an insurance plan (unless self-insured), the insurance company must file separately for that, so the same employees will be counted and paid for twice. What research leads you to tie Form 720 to filing requirements for Form 5500? Yes, the ruling (i.e., final regulations) rejected the proposal to aggregate employees in multiple plans, based on the specific language of the law. What do you feel is overbroad about Congress passing a law that applies to every separate plan? Never mind. There's nothing we can do about it anyway! In my opinion, filing tax returns (including Form 720, which is titled "Quarterly Federal Excise Tax Return") is very much a part of the tax world.

>>Only when public safety is a serious factor should they be able to set the rules.<< I believe the government has an obligation to enforce civil rights. The Supreme Court has interpreted the Constitution to include age discrimination in that regard. It does not apply to the privacy of your own home. But if you want to run a business in the public marketplace, you have to comply with the law.

>>worth a try<< No it isn't. The rule for administrative use just says a fixed location where administrative or management work is done, not necessarily an office. Anything more than incidental work at the restaurant would disqualify the home office. So unless he has job applicants come to his house for the interview, and employees show up for training and getting fired and so on, and customers demanding to speak to the manager are referred to his home office.... It doesn't matter that the head company lets him have equipment at home. That is not one of the criteria for a QUALIFIED home office. For the same reason, he can't use an accountable plan to reimburse his home office expenses either. And that also means his commute miles can not be reimbursed except as a taxable fringe benefit. It sounds to me like the savvy head company already deducts everything possible. It's all covered under his franchise fee, of course, so he can deduct that.

>>the Insurance Company should be paying this fee<< The requirement also applies to the plan sponsor. Generally that means the employer, who determines which employees are eligible, how the funds are invested, and so on.

>>Could thid be looked at like partnership interest is?<< I'm not sure what you are referring to, but anyway the loan proceeds were used to acquire stock in a corporation, which is an investment. All that matters is what the money was for, not the relationship of the parties. Even if he had borrowed the money on behalf of the corporation, it was not used for operating the business so you are still just looking at investment interest expense.

>>can I component depr the improvements/repairs to the building?<< Theoretically maybe, but it isn't easy and it isn't cheap. Cost segregation requires an engineering study.

>>because of no payments, interest and RE taxes<< Unfortunately I don't have access to my regular computer, so I can only suggest what to look for in your own research. There is some example or other clarification in the regs or a pub, explaining that interest and taxes accrued later are not eligible for the debt exclusion because they are not part of the original acquisition debt. Section 121 plainly says one must use the house as a principal residence for 2 out of 5 years. That is NOT saying the 2 years defines principal residence, which only means where one spends the most time during any tax year (generally, at least six months). The one month thing sounds to me like a deliberate, self-serving misunderstanding. I would guess it's loosely based on a minor point of a specific court decision or Private Letter Ruling, with little or no relevance to your client's facts. Ask for a citation.

>>I had never seen liberals discussing tax on this forum<< Yeah, we just slunk around out of sight! But there's different aspects to it. Much of our chatter here is technical stuff about filling out the forms and somehow getting paid for it. Then we explore our role in tax policy, for example, whether our due diligence really helps accomplish the legislative purpose behind EIC. Legislative purpose has been mighty foggy of late, and everything looks different in the fog. One thing that has certainly changed recently is the IRS abandoning its good old audits in favor of Automatic Under Reporter and Math Letter blitzes. That might not seem political, but if you think about it computers have really changed the relationship of citizens to the government quite a bit.

>>most expenses are reimbursed<< Employee expenses are only deductible if they are for the convenience of the employer. Since there already is a reimbursement plan, I would guess additional expenses are not authorized. However (anticipating their arguments) they might use Form 2106 and/or Schedule A, assuming the expenses are in proportion to their W-2. Even then, I would be skeptical of meals & entertainment, especially if it is "to see what the competition is doing" or some such nonsense. Remember that although generally we don't audit records, the law sets specific standards for documenting M&E so the preparer should verify annotated receipts. As for business use of home, it is never deductible when there is another fixed location.

>>One possible solution to combat this would be to have the bank account of the taxpayer pre-verified with the bank and IRS and a unique PIN generated. That PIN must be used with the 1040 submission.<< I think that's already available, especially through Santa Barbara S&L. Used to be called Rapid Refund, but now it's Diamond Plus or something. Sounds like a good idea, but in practice it seems to have INCREASED fraud, in spite of high fees.

>>at least you should TRY to sell one<< No need to go to all that trouble--just don't forget to apply for your "declining market transition payments."

>>I am a Conservative. I am NOT a Republican. There is a difference<< I wish there were a way to make Republicans understand that. No, I mean I wish there were a way to make Democrats understand that. Oh well, I can't even understand it myself, so I just wish everyone would stop using using all those labels.

Knee-high by the 4th of July.

>>increased penalties under these sections would not deter identity theft<< One problem they don't talk much about (but WE talk about a lot) is that it isn't clear what exactly constitutes "improper disclosure or use of information by preparers." Our work product is intended and commonly used for non-tax matters like mortgages, student aid, and child support. We have very little authority to claim confidentiality in the face of official demands. We also have inherent conflicts of interests among partners and entities and within families, so inadvertent errors are certain to occur. At the same time, we have very little control over the accuracy of the information, but are generally held responsible for its accuracy. Specifically targeting tax preparers would not address any of that. We would probably have to refuse any disclosure at all except to the individual who gave us the information.

>>You can not make a honest person steal just by not watching them<< Well, no, but most people are not 100% saintly, and you can usually keep them in line by clearly defining what that line is. We even have a term, "crime of opportunity."