mcbreck

I mentioned it a long time ago that one of my best friends is going to prison for Medicare Fraud. He's plead guilty finally and is scheduled to be sentenced in a few weeks. We are having lunch tomorrow and I'm interested to hear what he has to say. Our previous luncheons have been interesting. Per the sentencing guidelines I think he'll get 4 years (out in 2) and then 3 years of house arrest. The key will be how much money he has left and whether they'll be able to keep the house when it's over. One thing I've learned, when you withdraw money from your retirement account to pay a court order of restitution, that's taxable and he'll owe a penalty for early withdrawal. I'm wondering if his previous accountant isn't going to do a whistleblower case on him to get the IRS to come after his expenses claimed on an illegal kickback scheme. Not that he'll have any money most likely.

Seems to me this client needs to be released into the wild. I'm very close to informing mine that they need to go elsewhere. I'm certainly not paying a penalty which will likely lead them away - hopefully. The wife is very nice, the husband thinks he's a VERY big deal. Previous years he made 2.5x more than she does and this year she's expecting to make about 50% more than him. I'm interested to see how that dynamic unfolds in our conversations.

Client makes a ton of money ($400k) and does a Roth conversion which generates an additional tax bill. Sweet. They are in a high tax bracket and couldn't explain why they would do a Roth conversion except the Ed Jones rep suggested it so it's his fault. I give them the extension and which includes an estimated penalty for underpayment and they decide to not pay it and just pay the tax bill - deducting the penalty amount. Now the IRS sends a letter requesting the penalty and the client thinks I should have to pay it because somehow it's my fault and they pay too much in taxes.

My brother is a workaholic. He works 365 days per week and when he was CEO was monitoring activity on Xmas morning. We always joke that if he "retired" and took a 40 hour per week job it would be part time work.

My brother was a CPA and went to work for a company he audited. He was treasurer and moved up to being CEO. Now he's the CFO of a large company. He refused to be a partner of his CPA firm because of the Arthur Andersen meltdown and financial meltdown it caused the partners. He also didn't want the stress of having to bring in clients.

I should mention, 40 hours per week is enforced at my nephew's firm. The CEO is often in the lobby of the headquarters as people come in as they want people IN THE OFFICE. At the same time management wants them OUT by 5pm and no meetings can be set after 4:30 / 2:30 on Friday. My wife works for a company that says you must work 40 hours but you can show up anywhere from 7am to 9am (thus leaving floats but many leave at 3:30pm). Then consultants set meetings at 5pm on Friday and everyone throws a fit but management quietly ignores it as long as they aren't included in the meeting. My wife's boss tells her to automatically respond with OUT OF OFFICE at that time but she misses a lot of meetings.

From what I've been told it's a three fold problem: it's the extra hours of college that are required. 150 hours versus 120 means you need a 5th year or you are getting your masters. My nephew considered it but that extra year was a deal breaker so he chose the Finance degree. Now he negotiates contracts. The other issue is the extra hours of work a CPA is required to do. His job is 40 hours per week except for 2 weeks at the end of the year when companies get desperate to finalize deals. His CPA friends are working 50-60 hours per week for the same money year round. When you are 20 years old, who wants to commit to that for the next 40 years? The public auditing requirement is perceived as overly burdensome and boring. The perception is that nobody wants to do the job and that's why it's required as a condition. They get low cost labor nobody wants to do.

Listened to a podcast on AI while on vacation last week - it's fun to laugh at it now but be prepared for the revolution.

Same sort of auditing is in place for SEC and FINRA. 30 years ago we had an SEC auditor in our offices and he tells us our books are clean, he can see it in 20 minutes because they are simple but still had 2 people auditing them for 2 weeks. His example was Prudential Financial but he said something like "we have auditors in their offices year round, we spend weeks figuring out where money was coming / going and by the time we figure it out they change their methods and we have to start over." Personally the FED audit is the one that should matter and the Fed knew Silicon Valley was about to blow up a year before it did and they did nothing about it. We had a former New York Fed Chairman who under Congressional testimony declared he'd never been a bank regulator. The New York Fed IS the primary bank regulator. We had a FINRA audit with 2 guys - one decided a client's kids were stealing from their mother's account and I was liable ($10k per month was being wired to her nursing home). After 6 hours the other auditor looked at it for 5 minutes and pointed to the line where they deposited more money than they withdrew. He declares "why would the daughters deposit an additional $500k into an account where they are stealing $10k per month?" Our last SEC (20 years ago) audit we had two auditors for Monday and Tuesday and one flies home. On Wednesday morning the remaining auditor looks at a money market account and wants proof we'd sent a prospectus to every client of the firm for that account. I told her we didn't and BLOW UP. All day Wednesday she's in conference calls to the home office. Thursday same thing and on Thursday afternoon she schedules us a conference call with management for the next day. On Thursday our secretary tells me something huge is up and we are in trouble. Friday morning I'm sitting in the conference room waiting on people to dial in and she tells me we were required to send out a prospectus. When I mention there is no client money in the account and it's all ours - you could almost see the blood drain from her face. We showed it as an asset of the firm on all our financial statements for years which they thought was also fraud. woops. She flies out 2 hours later having done absolutely nothing of substance.

Warren Buffett says that if you offered him all the Bitcoin in the world for a total price of $25 he would pass. Cathie Wood says Bitcoin is going to be priced at $1m per in 7 years. Crypto is not an investment as it offers no ability to perform a discounted cash flow analysis. It is a speculative instrument like gold or Beanie Babies.

On Monday I visited with a 100 year old client for about 30 minutes as I dropped off his taxes. What a joy that was. He has a lot of health issues but what a terrific outlook on life. He was telling me stories (with names) from his college fraternity years before WW2 and after his service years. That was a fun part of the day.

What a wonderful feeling. Congrats.

I'm usually done with taxes except 2-3 pickups on the final day. I've got 18 people who are coming in tomorrow. I've had 5-6 in the past week who've had rejected efiles because of their exchange healthcare when they've never had it before (adds a twist). I'm also at significantly higher extensions. People just can't get their act together to get me basic information.

The one outside my office was hit this winter. I don't really use it anymore.

If the deceased has kids of his own who get a substantial portion of his estate, the wife could MFS and then the beneficiaries share the tax bill. If they file MFJ it is all hers. Just an idea.

If they have no other assets, I could see MFS being a good route to take. Otherwise I think the debt is going to have to be paid from assets of the estate.

My wife and dad are in agreement - I need to move this summer. I didn't mention anything in the meeting but they noticed half my office is packed into boxes. Bookshelves are all empty and photos are off the wall.

I'm still deciding if I'm going to make the statement today or wait until he comes in next week to do it privately. I'm not a confrontational type of person (thus why this all bothers me so much). I'm having lunch with my dad today, I'll ask him as he's the smartest person I know. Thank you.

Honestly, you wouldn't believe the drama this family is about if I told you (really it's just the wife and son). I'm just guessing but I'd say the sole purpose of this meeting is to show how important the son is and exert his authority (which he literally has none) and put his sister and the father in their place as he takes complete control. I posted it on here previously, he has an ivy league education and couldn't figure out why his father's gross income on his W2 didn't match his net paychecks and he made accusations about it. It's that level of idiocy, I called him out on it and now he's been slighted and needs to put me in my place. (the co-worker is OLD and doesn't actually work - he just likes being able to say he still works and collect a small check)

This company has a space that holds up to 20 people. The lady showing me around told me that when Covid hit and a local tech firm went "remote" that they had a team come into that space 7 days per week to work together on a project for 18 months. They were told to work from home - worked in this space and the company could turn their head. When they were done and allowed to go back - they picked up their laptops and left everything. She said they had printers, about 40 monitors and stands, huge TVs, cameras and special lighting for zoom calls. They left everything and told them to give it away.

That is something I considered but there are already 2 CPAs working out of the space, a financial planner and multiple healthcare professionals (they do their billing and schedule appointments out of the space). I also take my computer home every evening now so I don't have that as an issue. It would be physical files which I have VERY few of anymore as everything is digital. I'd need a locked secure box better than the filing cabinets they provide. I think I'd need the private office all year as you can't have a client conversation in an open space. I'm concerned how many older clients I'll lose but there is a space near my home and there is a space 3 miles from my current office. I could have my office near home (2 miles) and work in their co-working space 1-2 afternoon per week near my current office just to meet clients. As an example I could declare I'm working out of the other location every Mon and Wed afternoon for client appointments. I offer a LOT of housecalls now and people refuse, people might take me up on it. If a client wants privacy for the meeting, they need to come to my private office. I have a meeting with my co-worker's entire family tomorrow and their son is going to "put the foot down" on what he needs. The rest know what that means for me. It means their father will be forced to retire but the son doesn't care (or hasn't thought about that).

My co-worker is making life unbearable (his family actually) and it's time I move on from this place. Anyone run their office out of an Office Sharing work site like WeWork or Regus? They have tiny private offices which I could rent I think just for tax season and then do a dedicated desk the rest of the year. I'm going to visit two of them this week and see about moving once tax season is over. I can't continue with this arrangement. Just wondering if anyone has used such a place and if they liked it.

Where are you going on vacation? Having a vacation scheduled right after tax season is both a nice thing to look forward to and shocking how little planning we've accomplished.

Many years ago I put an envelope into the UPS box with a stack of stock certificates (the box was in the lobby of our building). 1 year to the day from dropping it in the box it showed up at the destination. The very first time it was scanned was just a few days before delivery so it was sitting somewhere. I followed a lady on a twitter for a months and she lived in Finland (exchange student). Her parents sent her a package that went back and forth across the Atlantic 2x and was in Japan for a while.

If the trust has its own EIN and is getting tax forms, it should be filing a tax return. How it's handling that income is written into the trust documents.