Patrick Michael

Client and her husband took out a car loan as co-signers. They were divorced the next year and the divorce papers stated the husband was responsible for making the payments on the loan. Yesterday the wife received a letter from the IRS that she failed to report $9,000 in income for cancelled debt on the car loan. She can't locate her ex-husband to find out what happened. Obviously, she does not want to pay the tax for her deadbeat ex-husband but I cannot think of any way to get her out of having to pay it. The attorney that handled the divorce never thought of having her name removed from the loan and she was not insolvent at the time of the cancelation. Has anyone else run into this situation? Any ideas? Thanks.

I was at the grocery store once and a woman was pulling all the grapes off the stem and placing them in a bag. When an employee asked her what she was doing she said was not going to pay for stems! The employee just chuckled and after she left he took the stem (which she threw back in the bin) and weighed it. She saved a whole nickel.

One my favorites..."are you sure I can't deduct that because my barber (or brother-in-law, friend, etc) said I could". Well then have your barber prepare your return and I will cut your hair! You won't be happy with either one.

I'm hoping someone with non-profit experience can help out. A potential client contacted me about filing their 990-EZ. They filed their initial 990-EZ for the tax year ending 12/31/10 and have not filed for 2011 or 2012. The treasurer of the organization claims the attorney who helped them set up LLC told them they need to file every two years after the initial filing. Not sure if he misunderstood or I'm missing something. Everything I have found says an annual return is needed. Their gross receipts have been less $50,000 a year so they qualify to file a 990-N instead of the 990-EZ. Can they still file the 990-N even if the returns are past due? Thanks.

I renewed in February and recieved the new card last week.

Client did not take his Minimum Required Distribution from his IRA in 2012. He told me his financial advisor told him he could sign a waiver form that exempted him from taking the distribution. He signed the waiver but does not have a copy of it. I can not find anything stating that a person can waive taking a MRD in 2012 (apparently there was a waiver in 2009 but that has expired). Before I call his advisor I want to see if anyone more knowledgeable than me on this matter knows of any waiver for 2012. As always, thanks for the education. Pat