MsTabbyKats

Yardley

I was going to post the same question.  From what I've been reading, I doubt any of my clients need a 3115...because, maybe at most someone paints a room, or fixes the tile on the floor...or depreciates a computer.

But...I'm wondering if I'm missing something...and they'll be getting letters.

And in addition...why would someone want to change their accounting method?  Or is the IRS saying they have to change their accounting method?

I'm going to admit...100% ignorance of this topic.

Last year I had to indicate that I was the paid preparer on my NY return.

My program has a warning system..and it wouldn't let me file without that.

I only did one for NY....she had to "pay back" about $300.

Her income was just about the same.

I haven't really analyzed "why" yet.

My sincere condolences.......

Thanks...but I don't use ATX.  My program didn't give me the option. (If it did....I wouldn't have asked.)

On the SE form itself...it said the info had to come from a C..F..or K-1.

Maybe it's just a program thing...

The client knows she has to pay tax on the money...this was NOT the issue.

It wasn't really self-employment.  She is on some kind of study program with a hospital...and the hospital could not pay her directly for this part of the program.

The issue is a VISA issue...and when she goes for her Green Card.  According to the VISA...she is only allowed to work for the hospital that recruited her.  But, part of her :job" was to do an internship (the 1099-Misc income)

When she goes for the Green Card...she doesn't want to have a problem with breaking the treaty...so she doesn't want Philadelphia to classify her as a "business owner".

Anyway...I called Philly...and got it all worked out...and filed it as "additional job income" instead of Schedule C income.

I deal with a lot of non-resident aliens on J and F visas.  This is very different than regular returns.  I have to keep "treaty regulations" ahead of IRS/Philly regulations  If the IRS questions things, you just pay them what they want. (I'm expecting the flames for this...but, this is the stuff that keeps my grey matter active. )

It's better than having a Green Card denied.

Crisis is over......TT back processing states

On their web site it says "Free"...and for the first time ever "States are Free"

So...you get what you pay for!

Wonder what the IRS reaction would be if he take the advice to go to someone else who knows less, they do it wrong, he gets tagged by the IRS, and he shows them the printout of the email you sent him which essentially recommended that course of action.

Honestly....I'd rather deal with the IRS and me telling him to go to someone incompetent than what I went thru last year with his NJ refund.

I finally e-mailed him.  Here's an excerpt:

So...the choice is: file the 1040 as planned and do not hold me accountable for anything that happens in the future

Or...if you want....you could go to another preparer for an opinion (I won't take offense...and I actually recommend this.  Maybe someone knows more than me...or less than me (meaning they don't know what's supposed to be done).

If anyone complains.....I'll check it on line...but as long as the return is there...no real follow up until after 4/15.

This is a real sad story.

They bought the house in 2007 (I think)...and got the $8500 bonus...but that was when you had to pay it back if you didn't live in the house for 3 years.

They both got laid off in 2009.  They got jobs in separae states.  They still have jobs in separate states.

So, they had to pay back the $8500...and rent out the house.

I subtracted the cost of the land when the property was put into service.

So...for example if they received $100,000 for the sale from the buyer...would I report that they received $80,000 for the sale (of the house)?

First time doing this:

Client lived in home until 2011

Moved and rented it out

I adjusted the basis for depreciation purposes for land value.

When I enter the info for the sale....is it the total cost of the home?

Am I supposed to adjust the sale price for land?

I didn't mean to imply that you don't have the right experience; I was suggesting someone with a specialty so that when he received the same counsel he could not fluff it off since it will not be to his liking.

Oh...OK...and a good idea.

I got so busy I put him out of my mind.

FYI...there is a little known NJ...J-1 treaty.  They don't pay tax, ever.  However...NJ really goes over those returns.  This guy just got his 2013 refund last week!  But...he kept e-mailing me...and implying (not implying..actually said) that I screwed up and that's why it was taking so long...and calling NJ and fighting with them was part of my job.  I told him my job was to prepare the return....that's it.  That's when I offered him his money back.

Now imagine...if he gave me such aggrevation over $2000...and if I do the return and he gets "caught" (I'm reasonably sure he'll get audited)...what he would do when he owes about $20,000.

When I get some time off...I'm gonna sit down and write a nice..."I suggest you get a second opinion.   If there are problems down the road, I don't want to be held accountable" e-mail.

If you prepare this return, prepare it correctly with the data you are given and have knowledge of, not however you can best finagle it to hide what really happened with his overstaying his visa. That is your job. You should also explain in writing that he caused this problem by overstaying, and also compute the potential tax impact of that inaction on his part so that you've made him aware and put the responsibility back on him. That gets you off the hook for any blame that he may try to place later and tries to hold you responsible for the interest and penalties that will be assessed. Once you show him the impact on those back taxes, suggest that he amend to get ahead of this, but the choice of amending or waiting to see if this is caught should be his. You can't force someone to amend a return.

Thanks...I appreciate the advice.

I've already spent too much time on this return (working on it...and complaining about it to DH) to start making calculations about penalties.

The more I think about it....the more I want to "cut him loose".

On top of all this....he needs to apply for an ITIN for his child.

Nope; he needs one of two things.

 

1.  A serious come-to-Jesus talk from you about how HE overstayed, so now HE owes back taxes and that's the cost of over-staying, or

 

2.  A referral to someone with MUCH MORE experience, who might know legal and ethical ways to deal with this.

Someone with more experience would tell him exactly what I told him.  (Not sure if there are many people with much more experience...I'm considered "the expert" on J/F treaties.)  I would be happy if he told me he wanted another opinion.

Someone with less would "just do the return"...oblivioius to the consequences.

I'm not really expecting any solutions here.....just maybe a nice way to say "I think you should get a 2nd opinion".

BTW...this guy as my #1 2014 PITA.  I even offered him his money back a couple of months ago.

Just some sympathy about how frazzling dealing with these PhDs in rocket science can be.....

I have this client....J visa issue

Last year he was a major PITA...and because of all of our correspondence, I became fond of him (Think Sheldon..."Big Bang Theory")

Client was exempt for tax for 2 years....under the condition that he return home after 2 years.

Client overstayed his visa (this is very common).

The problem is that his W-2 and 1042-S, when put together, clearly indicate that he was here for more than 2 years.

No matter how I do the return..what I include...what I exclude...the data is being sent to IRS from his university....and when all the puzzle pieces fall into place...he will have to pay the back tax. (That is...if the computers are doing their job.)

I really don't want to do the return...because, as I said, no matter how I do it...the IRS will have all the data...and I don't want to be held responsible (please note...I don't mean the IRS holding me responsible....I mean the client holding me responsible) when they ask him for the tax.

I'm on the verge of telling him that he needs a second opinion from someone less experienced than me...who won't see all of these potential problems.

He is not "absent".  He has never lived with my client...he has lived and still permanently lives in California.  Client has and still lives in Ohio.  Spouse just also happens to be in military and is permanently stationed there...I just have trouble seeing that as a temporary absence due to deployment.

I'm with you.   If he weren't in the military he'd be in CA...and she'd be in OH.

This may not be the popular answer here: I'd file as HOH and warn the client that the IRS may challenge it.

Simple solution....ask client to call the bank and verify the routing number

I don't think marriages are reported to the IRS.

I know, in 2 cases I did, I filed people as "joint".

Later on I found out they were just living together...and NY is not a common law state...so, in no sense of the word were they married.

If it's an "old" check....it may have a routing number from years ago.

Oh, you mean the Audited Financial Statement that I slaved over and you never paid me for because you didn't need it?  That one?  And it might go downhill from there.  Do you have the email request from him that he sent you in 2013?  That thing would receive new life.  Brother, I'm healed.

A bit softer....

"As soon as you pay for it, you can have it".

Remind him (great if in e-mail) that he claimed he never requested it and now the price is more because of the rush.

She will absolutely get charged and she won't like it. Maybe next year she won't show up until it all comes in. 

Maybe next year she won't show up at all if "she won't like it".

My take is completely different.  We all forget things...and a rollover is very easy to forget.

I don't know if she is a high income person, the fee you charge her, the complexity of her return, or if she "forgets things" every year.

However...this 1099-R will not affect anything....and most likely this will just be 2 pages.

I'd give her 2 options:

1. We can do nothing...and then when you get "the letter" you'll just need to send in the 1099-R at that time

2. Wait until after the season...and I'll amend.

She'll be happy....and next year you raise her a few dollars.

It's called "good customer relations".

What's wrong with saying on line 21 "income wrongly reported on 1099" and fill out form SE.

Because Line 21 will not flow to SE.

I put it on the C....just as a lump sum...no expenses....and coded it as "educational".

I know a few years ago there was an option to report on Line 21...subject to SE.  I was hoping that option still existed...but it doesn't.

The issue wasn't really with IRS...but with Philly.  I didn't want Philly to think she had some kind of business....based on a C being filed.  But, I solved that one this morning.  (You need to get a Business Number with Philly if you have a business....that was the real problem.  She didn't want to do that.  If I could have used line 21...it would have eliminated the possibility of potential issues.)

So...all is good.

Use Form C-EZ.  Problem solved.

Not solved.....

For H1-B visa/green card issues....client doesn't want to show "self-employment"...or having a business.

However....her main job requires this internship which reported on a 1099-Misc....so I'm coding it as "educational".  And, if it becomes a Green Card issue, her employer will state that it was part of her job, and for whatever reason, they had to pay her directly, instead of to her university.

Then, Philadelphia becomes a problem...since they have a requirement.  But, I've already discussed with the happy helpful rep how she can avoid the Philadelphia business tax form.

Thanks...... 

Life would have been so simple if I could have just put it on Line 21.