Medlin Software, Dennis

An S Corp shareholder/employee IS considered an employee and a self employed person, depending on who is asking...  I am no expert on this, but taking the OP at face, if the amount beyond the allowed amount is given, it would itself become taxable wages.

2 minutes ago, cbslee said:

Why can't the SSA email you a temporary password like everyone else?

Opinion only.  They expect employers to be timely, not wait until day of filing to sign in, or to realize they don't have a current password.  Security, email is not secure.  We are talking about what would be thousands of pieces of PID, so they have to take all reasonable steps to keep it secure, including not sending a password via email.

Mail, mail is no longer a few day affair, not even across town using the same local distribution center.

I had no trouble just before EOY.  I have not heard any complaints from my customers, other than those who wonder why they have to sign up with SSA (such as ask me what an SSA ID is).

If you do mail, I always suggest using something which offers proof of delivery.  Personally, I would mail, first class, but I need to do what my customers might do, so I efile.  Mailing is less time consuming (I know many will argue, but print, stuff, and mail takes what, a few minutes, versus sign up, login, password reset, etc.), so less costly, assuming you keep copies, have proof of delivery, and monitor for receipt (as mentioned in a different thread).

13 minutes ago, mcb39 said:

I find this totally encouraging.  I know time flies, but this allows me to stop worrying for a while. 

Microsoft is very transparent about their end of support dates.  Any search engine will return a list.  Most use such a list not so much for planning, but to see how far behind they are <smile>.

For the hold outs, the last time I checked, Microsoft will support Windows 10 until (at least) October of 2025.  If getting a new box, there is zero reason to get anything other than a current OS.

If software does not run on the current OS, it is time to get new/different software! It has been many years since MS released a new OS which was not reasonably backwards compatible.  Yes, there is still a command prompt, and things like CD and MKDIR still work.  What you might run into, is a program (programmers) who use undocumented API's, or elect to use some function or feature which is known to be deprecated, and tell their customers not to use a NEW OS because of "compatibility" (rather than a decision they made) issues.  Or, a software dev may say something like "hold on", we have not done any testing with the new OS (even through devs have access early on to relatively close to release versions of the new OS).

Just free thoughts, from a long time developer, worth what you paid for them.  (I do not miss trying to stuff data into 300-400k of available memory, or having to come up with special code to hook keys into to do what they should have done within the OS.)

1 minute ago, Lion EA said:

The IRS notes at the bottom of notices if they've been replaced by a later notice or if this is replacing an earlier notice. Otherwise, the IRS just keeps piling on regulations for us tax preparers to follow.

Remember that some documentation actually belongs to the IRS; we're just the IRS's filing cabinets. So, the IRS has the legal ability to drop in unannounced to view certain things, such as Forms 8879.

Filing cabinets and first line enforcers... That is the "rub" of my part of this thread, many are doing things which put them, and the clients, at risk, via the e records rules.

I have some awful first hand experience in this area, as I have shared before.  Person had my software on their computer.  (Convicted tax fraudster, preparing returns for others and taking fake refunds for them.)  Feds searched/inspected the computers, found my software, and asked what part I had in the situation.  The convicted party, while they could, made death threats against me and mine if I even spoke to the officials investigating.

I think I already asked here, and most clients do not ask things about how secure their data is kept (IIRC, it was a topic which should now be for anyone not using at least Windows 10).  I ask those questions (now).

8 minutes ago, Lion EA said:

I think we have specific steps to take in the case of theft, physical or electronic. We have newer IRS projects, such as Security Six and WISP. We need to document our own record retention policies, as allowed, and follow them. https://www.irs.gov/pub/irs-pdf/p5708.pdf

Does WISP supersede 97-22 (and the like)?  The ones where e record POTENTIAL or actual loss requires notification to the IRS? (Potential is the issue as it can easily be argued a computer change means there is potential for data loss, so a letter to the IRS is mandated. Same for a power outage. This is, unless the holder checks all required data, one by one, after a computer move or power loss.)  How about the requirement to agree to "inspection" at any time?  (The one no one should ever agree to IMO!)

That is what I am always hoping to hear, that 97-22 (etc.) has been updated/replaced by something less onerous.  My suspicion is there is no reason for the IRS to make the rule less impactful, so they haven't.

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While maybe not for tax data, there are localities (Local PTB) who have delved into data retention, such as requiring data to be kept under the liable person's control, and IIRC, WITHIN their jurisdiction (no commercial online backup likely would meet this).

I self handled creating a corp (mostly) in my naive 20's.  I would never do so again, since I am not a lawyer (or more specifically, do not have insurance to cover those types of attempts).  Just one person';s experience...

Lion.  Thank you for the above.  It appears nothing has changed since I dug into it heavily a decade or two ago.  If the references, like the one above, included all of the relevant information (I shared above), I doubt anyone would stop keeping paper. I did not (then) find any issues where something like a fire, theft, or accidental loss required anything of the keeper of paper records as far as proactive notification of loss.

I say all of this as I am on the lookout for a good looking enough (SWMBO vetoed metal) tall 4 drawer file cabinet for my office/grandaughter room...  4 years is my data cycle.  Current is in a drawer next to me, the 4 prior are in the dedicated cabinet.  The drawers get labeled for shred date, then the empty one is used for the data no longer current.

2 hours ago, Abby Normal said:

That's from 1998. I'd say it's long past time for an update. The procedure doesn't even mention PDF files, only 'machine sensible records.'

One part is from '97.  What gets me is how anyone would agree to this, because of the requirement to proactively notify if there is any chance data is not available (such as even a computer change, or upgrading software - and not taking the item to recreate every required item), and the essentially giving rights to a search at any time for ANY reason (what those on parole must give up!) .  Imagine one of these (random, or not so random) searches during your busy time and your computer(s) are either occupied, or more likely, taken away for search.  I know, they state is is not a "search", but items found during any allowed examination are not likely to be prohibited from being evidence.  Imagine having to explain that to your clients, E&O provider, your BOP provider, and your debtors.

Personally, I don't consider PDF's to be a specific issue, unless the PDF readers ever abandon an old format.  But, I have multiple local backups and multiple secure online backups, so anything where I could not get to something would have far worse consequences than a data review.  But, the eltter of the rulings, even PDF's are considered e records, so the onerous allowance of not keeping paper records still applies.

Paper - while I have not ruin across it, if there is no corresponding rule for paper, then paper remains king.  A file cabinet or drawer by year, labeled with the first allowable shred date remains a safe way to comply, and to not retain any data which (being not required) could be used against you/client).

I guess for me, a "sum it up" for the original topic, I would not be comfortable using some sort of data retention service UNLESS they warranted they meet the IRS data retention rules.

I am sure I have brought this up before, but how do you comply with https://www.irs.gov/businesses/automated-records, or if you are not subject, what allows you to go paperless and still maintain compliance?  I have NOT reread all the rules, but the last time I did, I could not find a way any reasonable person would elect to have only e records.  I know, the odds of a review are slim, but I suspect those with certification, degrees, or other things causing them to have to meet extra standards, could be in a bad position if they knowing or unknowingly are not meeting the e records rules (such as no E&O to cover the expense of lost data).

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(1) The District Director may conduct a records evaluation at any time the District Director deems it appropriate to review the taxpayer's record retention practices, including the taxpayer's relevant data processing and accounting systems.

1) The District Director may periodically initiate tests to establish the authenticity, readability, completeness, and integrity of a taxpayer's machine-sensible records retained in conformity with this revenue procedure.

To maybe add some prevention, there is merit to using a PMB service for all important mail.  For PMB services, many will have scanning ability, and all will have forwarding ability (sometimes only forwarding what you select via their images).

For USPS, their informed delivery ability is pretty good for letters, postcards, and packages, to be able to see what is on the way.  The flaw is things like a 9x12 don't create an image, just a notice that "something" is being delivered.

Similar for important email messages.  Use an email service which offers NO filtering before delivery (which is not going to be any of the free services!)  You can then manually, over time, select addresses, subjects, whatever, to be put in spam on your local machine(s).  That is the ONLY way to be sure to get all important messages.

14 minutes ago, cbslee said:

 

No, there are both a tax and legal issues of concern.

If you take it upon yourself to decide that it's only a tax issue, then you are doing your clients a disservice.

Do you think Attorneys and their legal advice provide a useful service?

So do these clients even have an Attorney? 

Well written.  All the group can do is offer advice and experience, and the reader gets to ignore if they elect to.  I do this daily with my customers.  I stick my advice to areas which fall within the scope of what they pay me for, but I will often, with disclaimer, add stuff from the college of hard earned experience.  The former, I expect then to heed, since they are paying for the reply, the latter, it is up to them to do what they wish with the information from my experiences.

With the OP's handle including the word "tax" and not including JD, Esq, or anything similar, it would be tough to believe the OP should not be farming out whatever the client has asked which prompted the post.  I presume there are professional referral options available everywhere, some which may even come with a referral fee?

4 hours ago, michaelmars said:

if they operate  as LLC then no payroll is needed for the owners.

Sorry, missed this earlier.  Unless there is a wonderfully in place and funded self retirement plan, I am personally not fond of not paying into SS.  It does require belief the government will never let SS wither, which is not a crazy belief.

Examples.  Disabled child/adult child able to get SSDI from SSA retired parent earnings.  Non working spouse benefits.  Survivor benefits.  etc.  Let alone the worker's personal benes.

Could be, like we elected years ago, that one gets a W2 and earns as close as possible to the SS limit (or enough so the SS calculator shows the desired benefit level when planning to take SS retirement).  In the case of wanting to leave the best for the non working spouse, and any now or potential before age 18 disabled children, maxing out SS earnings could be a long term win (among other possible wins).

So much to consider, likely way more than a tax/payroll pro should even consider delving into.  Makes the case of having some sort of overall advisor, with specialists available (a bigger accounting/attorney/estate/succession firm).

5 minutes ago, cbslee said:

Over the years, it is amazing how clients think they are saving money by avoiding the use of Attorneys.

So many people who regard legal documents as something to be signed and forgotten?

 

Pay for the expertise, but try to understand what you are signing too.

Said as I had to get to page 73 of my BOP document (past exclusions for E&O) to get to the E&O rider!  When I first reread the policy documents, I reached out to the agent because the disclaimer was, 70 pages before the rider.

I appreciate the mention of succession (and I also include ending - voluntary of not,  and possible sale).  It is rare indeed for someone organizing or starting a business to look at the end game.  Some decisions at startup can drastically alter the possible end, or at least make it costly to alter.

Thus the earlier mention of completely separate entities is not to be ignored, depending on the long term plan.  While some call it a game, it is a game, protect the interests.  One may have employees, and suffer something costly (like UI claims or WC issues) and should be insulated from others.  Not suggesting UI dumping or anything along those lines, just to be wise and think things through.  There are plenty of experts in this specific topic to engage.

It seems like it may be wise to avoid multiple entities which make little or no money as I suspect those may be looked at strongly going forward.

1 hour ago, cbslee said:

If these were my clients, I would set up each business as a separate business entity with separate payrolls which would give you a lot more long term options

especially from a legal point of view.

Agree, and make sure the person acting as the agent for the entities is a qualified attorney at an established firm.  DIY is rarely a good option in these situations. 

I have a customer claiming they entered their checks accurately but the irs is telling them they did not. Never ends, but ensures employment… I expect it is a data entry or setup issue, but I can’t be sure until I see their data. It is never productive to believe verbal information fully or to let it taint my thoughts prior to seeing the data. 

Not a lawyer so just conjecture. Unless there are statutory damages, it would take some proof of damages to get a contingent lawyer to file.

From my perspective, payroll is easy compared to income tax reporting...

There are some, to me, seriously broken parts of payroll, such as the increasing number of tax agencies profiting via required "retirement" or other "helpful" deductions (they contract out the back end processing and keep a cut as profit). The lack of common rules with items affecting all states, such as minimum time in local to trigger nexus.  But, there are many families whose living depends on a tax agency having an office to set and monitor rules - process returns etc. -  so the likelihood of a tax agency making thing easier is nil.

I saw an article about a non US jurisdiction where the tax agency monitors income and adjusts withholding on the fly so there is no need for tax returns.  How would that go over here, let alone across the US?  I struggle with this issue whenever I think about it, as simplicity has merit, but will never happen because complication leads to jobs, and opportunity to believe one is paying less tax than required.  (I often wonder if there was no opportunity to believe we beat the system, we would not care if the system was made simple.)

Many owners are also employees. Easy to use the ssa site to see if their personal earnings data is updated. Could be a way toonitor the data recording, or prove the data was actually recorded.

With phone or any other non written information, how to you handle they said/I heard issues?  While we are in different industries, the issue is very relevant to both. In the current environment, many (including me) insist on having a trail for nearly everything, to reduce miscommunication, to provide backing, etc.

It has been a bit since I looked, but I remember finding a couple of services which handled scheduling and getting paid for phone/online/remote access support time with customers.

Time is still money, offering one on one for free is costly, other than email and sms.  In the case here, it is unlikely you can get paid for initial consultation, but once retained, all time should be compensated in some manner.  At least for me, it has been a couple of decades since I could afford to chat on the phone, and a decade since I could take support calls on the phone without cutting into time I could have used to help others.  I ponder paid support, but have so few complaints about written support, it is a non starter at present.

I have no insider knowledge.  However, Adam bought a programming tool several years back, and as of at least mid 2022, was still occasionally participating in an online programmers forum (at least with a handle looking like his name).  Unlikely this could have been done for anything other than self protection, to maintain a tool they used in house.  Now, no idea after the sale/purchase, and a quick search did not find anything relevant in the programmer's forum.

I have no insider knowledge.  What I do know is Drake bought a now dead programming tool which many used to use.  IIRC, it was because they depended on it for their own software.  Likely, whatever happens next (if it has not already), the odds are good they are or have been working furiously on rewriting their code to use whatever programming tools the buyer is comfortable with.