kcjenkins

And don't live in Detroit!

All good advice, I'll just add one more point. When it comes to gifts to more elderly individuals, it is often smarter to plan a stream of gifts, than to make one large gift, regardless of gift tax issues. Why? Simple reality. Dad might die before he spends it, or Dad might have health problems that impact his ability to handle his own financial affairs, etc. So it might be wise not to gift him a large gift now, but rather to just plan ways to insure his comfort and care, as needed, in future.

I like to remind clients that while their situation might not have changed much, sometimes tax law frequently does!

Just like the examples above of stupid warnings. We agree that an extension is not like a return, JM, but it was still generated because they are intending to protect.

And if it's a HUGE CHECK, there's probably going to be gift tax on what she gives away, although since you gave us no idea who "he" is to her, we don't know what the relationship is. We are just 'assuming' it's not her spouse, for example.

Good to know, although 20 years is still crazy long.

I agree with Tabby and with Jack. I'd do it IF THE CLIENT WANTS TO, but I'd let them know that IRS will ignore such a small change, because it costs them more to process the change than they collect. That is why, in an audit, if the change the auditor comes up with is less than $50 they write it up as a no-change audit.

I think jas is right on Form 587, btw.

It is his CHOICE to be a NY RESIDENT but having made that choice, he has to follow their rules. He could have chosen to become a FL resident but he did NOT change drivers license, car registration or voting registration. All credit cards, cell bills etc list NYS address. All these are indications of his INTENT. Especially keeping the NYS address. So it's not how much time he spends there that controls.

Rule 501 is the applicable rule, and my reading of it is that he can ask for payment first. 01 Rule 501—Acts discreditable A member shall not commit an act discreditable to the profession. [As adopted January 12, 1988.] Interpretations under Rule 501—Acts Discreditable .02 501-1—Response to requests by clients and former clients for records Terminology Client records prepared by the member are accounting or other records (for example, tax returns, general ledgers, subsidiary journals, and supporting schedules such as detailed employee payroll records and depreciation schedules) that the member was engaged to prepare for the client. Interpretation When a client or former client (client) makes a request for client-provided records, client records prepared by the member, or supporting records that are in the custody or control of the member or the member's firm (member) that have not previously been provided to the client, the member should respond to the client's request as follows: • Client provided records in the member's custody or control should be returned to the client. • Client records prepared by the member should be provided to the client, except that client records prepared by the member may be withheld if the preparation of such records is not complete or there are fees due the member for the engagement to prepare those records. • Supporting records relating to a completed and issued work product should be provided to the client, except that such supporting records may be withheld if there are fees due to the member for the specific work product.

Jack, it's HIS, not her, name/SSN that is rejecting, on HER return, where he is the "spouse". Yet his own return, using the same name/SSN has already been accepted.

Rich, I feel your pain. BUT, so many users DEMAND that their programs protect them from making mistakes, so we end up with more and more 'warnings' that should not be needed, but if they let us opt out then some goofus will sue them for letting him/her screw up. That's the same reason we have so many ridiculous 'warnings' on everything we buy. "DO NOT put any person in this washer" "6PCS Precision screwdriver set not to be inserted into PENIS" "Do not eat Ipod shuffle" (found on apple's website) AND MY PERSONAL FAVORITE: "Use care when operating a car (...)" (on a bottle of dog's pills)

Cat, remember that a few years back CA tried to tax as "CA Income" the retirement benefits paid to people who had moved out of CA after retirement, based on the idea that since the pension was earned while working in CA it was still CA income forever. Of course, they lost in each court it went to, BUT THEY TRIED. So it's not impossible that they could try to collect taxes on such sales, even tho once it got to court they would lose, since the 'nexus' rules are solid. That said, I think the customer may just misunderstand those rules, so I'd suggest starting with a letter spelling out 'nexus' and why it does not exist in this case.

A perfect example of why you need a lot of info before you can make a fair determination of most any situation. Something we are reminded of a lot in our business. I'm glad we're all back to being friends.

Still a thought-provoking reminder of practice building opportunities, which I felt some might find value in.

IRS Violated Procedures in Trying to Collect from Bankrupt Taxpayers Washington, D.C. (March 14, 2014) By Michael Cohn The Internal Revenue Service did not always follow established procedures when trying to collect taxes from taxpayers who had declared bankruptcy, according to a new government report. The report, from the Treasury Inspector General for Tax Administration, found that in a sampling of such cases, IRS specialists did not always follow established procedures in 17 out of 30 Chapter 7 cases (that is, 57 percent), 15 out of 30 Chapter 11 cases (50 percent), and 13 (or 43 percent) of the 30 Chapter 13 cases reviewed by TIGTA. Specifically, IRS the specialists did not always properly conduct the initial case analysis in a timely manner, follow up on scheduled case actions within a reasonable time, or properly close cases in a timely way. TIGTA also reviewed a random sample of 30 bankruptcy cases with Automated Proof of Claim flag conditions, that is, with errors that need to be resolved by an IRS specialist. In those cases, IRS specialists did not properly resolve the flag conditions, or resolve them in a timely way, in 12 (or 40 percent) of the 30 cases examined. TIGTA noted that there is a bankruptcy automatic stay provision that prohibits the IRS from taking certain collection actions against a debtor as soon as it learns, or is notified by a U.S. bankruptcy court, that a bankruptcy petition has been filed. Debtors may also be granted a discharge, which remains after the case is closed and is a permanent injunction order prohibiting the IRS from taking any form of collection action against the debtor personally with respect to discharged debts. “If the IRS does not observe the automatic stay or the discharge injunction, taxpayers’ rights could potentially be violated and the IRS could be sued for damages,” said the report. In fiscal year 2012, IRS data showed that the Field Insolvency function received 306,920 bankruptcy cases for taxpayers who owed approximately $2.5 billion in taxes, penalties and interest. TIGTA initiated an audit to determine whether the function has effective controls and procedures in place to take appropriate and timely actions to protect the government’s interest and taxpayers’ rights during bankruptcy proceedings. However, TIGTA found that the IRS’s Field Insolvency function specialists frequently did not follow the required procedures when working on bankruptcy cases. Although TIGTA did not identify any violations of taxpayers’ rights or failure to protect the government’s interest during its review, the Inspector General’s report said there is a higher risk that this could occur when procedures are not followed. TIGTA recommended that the director of field collection at the IRS’s Small Business/Self-Employed Division enhance the group’s casework priorities and efficiencies; ensure that specialists are properly conducting the initial analysis and closing actions; ensure that the Automated Insolvency System follow-up tool is the preferred method for creating follow-ups; make sure that case actions are properly documented for Automated Proof of Claim flag conditions; and ensure that the Flagged Cases Report is the preferred method for monitoring cases. In response to the report, IRS officials agreed with all of TIGTA’s recommendations and plan to take corrective actions. “This is the first audit of Field Insolvency undertaken by TIGTA,” wrote Karen Schiller, commissioner of the IRS’s Small Business/Self-Employed Division, in response to the report. “We appreciate your acknowledgement that the audit did not find any violations of taxpayer rights or instances where the government's interest had been compromised. We take seriously our obligations to safeguard taxpayer rights and protect the government's interests.” She added that prior to receiving the draft audit report, the Field Insolvency unit had entered into negotiations with the IRS’s Centralized Insolvency Organization and the National Treasury Employees Union and signed a memorandum of understanding that took effect last July in which changes were made to how bankruptcy cases are assigned.

I've always done a mix. Some, the simple ones, I do with the client there so it's done, signed, paid for and transmitted in one visit. Complex returns done when alone, so I can concentrate. Often late which is my best time.

I fixed the B = in the original post, so deleted the two posts referring to it. For anyone who does not want that in their posts, the 'fix' is just to add a space between the B and the ).

1. Suspended loss is gone. 2. Property Received as a Gift To figure the basis of property you receive as a gift, you must know its adjusted basis (defined earlier) to the donor just before it was given to you, its FMV at the time it was given to you, and any gift tax paid on it. FMV Less Than Donor's Adjusted Basis If the FMV of the property at the time of the gift is less than the donor's adjusted basis, your basis depends on whether you have a gain or a loss when you dispose of the property. Your basis for figuring gain is the same as the donor's adjusted basis plus or minus any required adjustment to basis while you held the property. Your basis for figuring loss is its FMV when you received the gift plus or minus any required adjustment to basis while you held the property (see Adjusted Basis earlier). If you use the donor's adjusted basis for figuring a gain and get a loss, and then use the FMV for figuring a loss and have a gain, you have neither gain nor loss on the sale or disposition of the property. Example. You received an acre of land as a gift. At the time of the gift, the land had an FMV of $8,000. The donor's adjusted basis was $10,000. After you received the land, no events occurred to increase or decrease your basis. If you sell the land for $12,000, you will have a $2,000 gain because you must use the donor's adjusted basis ($10,000) at the time of the gift as your basis to figure gain. If you sell the land for $7,000, you will have a $1,000 loss because you must use the FMV ($8,000) at the time of the gift as your basis to figure a loss. If the sales price is between $8,000 and $10,000, you have neither gain nor loss. For instance, if the sales price was $9,000 and you tried to figure a gain using the donor's adjusted basis ($10,000), you would get a $1,000 loss. If you then tried to figure a loss using the FMV ($8,000), you would get a $1,000 gain. Business property. If you hold the gift as business property, your basis for figuring any depreciation, depletion, or amortization deduction is the same as the donor's adjusted basis plus or minus any required adjustments to basis while you hold the property. FMV Equal to or More Than Donor's Adjusted Basis If the FMV of the property is equal to or greater than the donor's adjusted basis, your basis is the donor's adjusted basis at the time you received the gift. Increase your basis by all or part of any gift tax paid, depending on the date of the gift. Also, for figuring gain or loss from a sale or other disposition of the property, or for figuring depreciation, depletion, or amortization deductions on business property, you must increase or decrease your basis by any required adjustments to basis while you held the property. Gift received after 1976. If you received a gift after 1976, increase your basis in the gift (the donor's adjusted basis) by the part of the gift tax paid on it that is due to the net increase in value of the gift. Figure the increase by multiplying the gift tax paid by a fraction. The numerator of the fraction is the net increase in value of the gift and the denominator is the amount of the gift. The net increase in value of the gift is the FMV of the gift less the donor's adjusted basis. The amount of the gift is its value for gift tax purposes after reduction by any annual exclusion and marital or charitable deduction that applies to the gift. For information on the gift tax, see Publication 950, Introduction to Estate and Gift Taxes. Example. In 2010, you received a gift of property from your mother that had an FMV of $50,000. Her adjusted basis was $20,000. The amount of the gift for gift tax purposes was $37,000 ($50,000 minus the $13,000 annual exclusion). She paid a gift tax of $9,000. Your basis, $27,290, is figured as follows: Fair market value $50,000 Minus: Adjusted basis 20,000 Net increase in value $30,000 Gift tax paid $9,000 Multiplied by ($30,000 ÷ $37,000) .81 Gift tax due to net increase in value $7,290 Adjusted basis of property to your mother 20,000 Your basis in the property $27,290

OMG I LOVE THOSE!!!

Sounds like someone who deserves that EITC, IMHO.

http://www.forbes.com/sites/robertwood/2014/03/14/irs-can-audit-you-forever-but-key-steps-can-prevent-it/

https://www.linkedin.com/today/post/article/20140311152431-458190-how-accountants-turn-a-tax-season-cost-into-a-money-maker?trk=eml-ced-b-art-M-5&midToken=AQH49Atu_ljIvQ&ut=2g1fEXIOMKOm81