kcjenkins

Jack, there is nothing you can say to a client that dumb, that will satisfy them. So keep it short and sweet. "You had less withheld this year." Or "You made more, but your withholding is less." Or, "They changed the withholding tables to give you more up front." Or my favorite, "The IRS is playing games with your head."

We really do have to wonder about those type clients, don't we? I don't miss not having to deal with them any more.

A wise choice, especially given the small amount involved. If she later becomes really serious about this sport, teach her the great importance of good record keeping, and keeping a log that shows how it all ties together. There are some serious competitors that truly make it a business, but it's not easy to do, and impossible without great records.

MY MOST EMBARRASSING 'SENIOR MOMENT' Several days ago as I left a meeting at our church, I desperately gave myself a personal pat down. Iwas looking for my keys. They were not in my pockets. A quick search in the meeting room revealed nothing. Suddenly I realized that I must have left them in the car. Frantically, I headed for the parking lot. My wife has scolded me many times for leaving the keys in the ignition. My theory is the ignition is the best place not to lose them. Her theory is that the car will be stolen. As I burst through the doors of the church, I came to a terrifying conclusion. Her theory was right. The parking lot was empty. I immediately call the police. I gave them my location, confessed that I had left my keys in the car, and that it had been stolen. Then I made the most difficult call of all. “Honey,” I stammered. (I always call her “honey” in times like these.) “I left my keys in the car, and it has been stolen.” There was a period of silence. I thought the call had been dropped, but then I heard her voice, “Ken,” she barked, “I dropped you off!” Now it was my time to be silent. Embarrassed, I said, “Well, come and get me.” She retorted, “I will ... as soon as I convince this policeman that I have not stolen your car!”

It's going to be considered a hobby in any audit, because anything to do with horses is automatically considered by IRS as hobby unless you can prove it's a business, and operated on a regular basis as such, with great records, etc. Put the income on Line 21 with no SE income, and the expenses on Sch A.

If you have 150 in the return manager, and efiled 140 of them, shouldn't you have 280 in the efile manager? one fed and one state?

Well, I've never seen the IRS complain about 'excess income' except where it was reported to get EIC. So if they hear the bottom line and don't say anything, that is the most I think you have to do. Frankly, I find it hard to believe that they would tax that much in extra taxes just to look good on a mortgage app, but neither do I think it's within the scope of our responsibilities. They are not trying to defraud the IRS, and that is what we are required to look out for. As long as you are not writing a letter for the mortgage company, the fact that they leave off some expenses that they MIGHT have taken is not your business. On the alimony, though, you might mention to them that the mortgage company is going to ask for more than one year's tax returns, in most cases, and the alimony will show on last year's return, so they might as well take the deduction.

Think he must have either forgotten to attach it, or he sent it to Ken as a private message.

Congrats to all!

Plus, a few of them could easily be done in a slightly smaller level without qualifying for the 203 section. Two staples would not qualify as contempt, just accidental. Big envelope is not contempt, either. Signing an extra page or two would be the client, not the Preparer, so not subject to 203 either.

Friends, I know many of you remember our favorite expert on Canadian tax issues, Brian Levy. He was always willing to offer help, and a kind word too. I just read this on a post of his on another tax list: " Please understand I am going through cancer treatments including chemo and have other health issues and spending up to 2-3 days per at the hospital. Not interested in charging; helping someone that keeps me challenged and my mind in use is more than adequate compensation." I hope you will all consider him in your prayers, etc. He has retired because of his health issues, but is still reading the lists, as he feels able. So if you want to send him an email, he's still using Dr. Brian Levy [email protected]

I've done them grouped by casino for years, never had a single problem as long as the total matches the total that the IRS has.

Then just put "See attached worksheet of NOL carryover computation"

Thanks to all for the kind words. I will 'lurk' here now and then, and try to offer help when I can. I'm too addicted to taxes to go away totally. Still read up on the changes, Rev Rulings, etc.

That's probably because you are in CA. Not that many here.

Thanks, guys. I really do 'feel the love' today. And that really does help me, believe me. I'll check in now and then, for sure. I'm too addicted to taxes to give it up totally.

Neil, I'm not exactly clear on this situation. The family members each inherited an interest in the contract, right? Their basis in that would be the FMV of the share of the contract on DOD, not the mother's basis. Why would that create a tax liability to the heirs?

Well, given the many changes in the code and in the IRS processing, due to identity fraud issues etc, I guess this is one bug they just have not had time to fix yet. Keep sending requests to help desk, and I am sure they will get it fixed pretty soon. It is still Feb, after all.

But Rita is totally correct, we should not have to know a client's phone number in order to complete their tax return. Some people, even today, do not even have a phone number. Others just do not want their phone number on documents that pass through many hands. Isn't this still a 'free country'?

LOL!!!!!!!!!!!!!!!!!!!!!!!!!! Elvis and I have been having a great time, guys. Seriously, I'm not on that much, taking care of Don is taking most all my time. But I still read the lists from time to time, even answer one now and then. I wish you all a wonderful tax season, even if the IRS is not making that so easy right now. I'll check in on the board now and then, if you guys really miss me that much.

Was that sarcasm I hear? If you had simply tried clicking on the efile button, which will, if possible, add the proper efile forms to a return, you would have seen a message saying that efile is not available for the 1120-H.

TWO Sch C's and two SEs. But note the second requirement below, if the business is an LLC they MUST, to be correct, file a 1065 for the business, and then enter the two K-1s on the 1040. I've never understood why so many preparers look for ways to avoid that, when it is both the CORRECT WAY TO DO IT, AND THE PROFITABLE WAY FOR THEM. From the IRS: A married couple who jointly own and operate a trade or business may choose for each spouse to be treated as a sole proprietor by electing to file as a “qualified joint venture.” Requirements for a qualified joint venture: • The only members in the joint venture are a husband and wife who file a joint tax return, • The trade or business is owned and operated by the spouses as co-owners (and not in the name of a state law entity such as an LLC or LLP), • The husband and wife must each materially participate in the trade or business, and • Both spouses must elect qualified joint venture status on Form 1040 by dividing the items of income, gain, loss, deduction, credit and expenses in accordance with their respective interests in such venture and each spouse filing with the Form 1040 a separate Schedule C, C-EZ, or For Form 4835 accordingly, and, if required, a separate Schedule SE to pay self-employment tax.

OK, that helps. Given those facts, I'd amend the 2009 to remove the entire transaction, then for 2010 I would enter the rollover transaction to the Roth on the 2010 and ALSO, on the same return, make another entry showing that rollover being recharacterized. I'd include a statement explaining the facts, which the software will allow you to do, if you use ATX. If not, I'm sure your software will allow it somehow.

If he wants to track the discounts for informational reasons, that is fine, But from a tax standpoint, he can not count the 'discounts' as advertising cost unless he includes the full price in his reported income from sales. So, since it is 6 of one, and half a dozen of the other, I see no point in doing that. It is not really income to the homeowner, unless the amount of the discount is 'material'. If it is, that should be shown as a 1099, but if the 'discount' is not a significant amount, I would not claim it as advertising nor issue 1099s. Since we don't know the amount of the total job before the discount, nor the amount of the discount, I see no way to take a position on either side.

IRS Audit Techniques Guides are excellent sources of information for us who deal with taxes. Updated ones as listed below have been released by IRS. My browsing of the Cash Intensive Business provides an overview of possible tricks the business owners use to hide unreported profits. You will find the guides both interesting and useful. Here is an excerpt from IRS news release: IRS audit techniques guides help IRS examiners during examinations but are also helpful to businesses in specific industries for bookkeeping and other purposes. Updated audit techniques guides on IRS.gov: Timber Casualty Loss My link Wine Industry My link Cash Intensive Businesses (now incorporates an updated section on laundromats) My link