ACS41

The client just faxed over a copy of her dependent's mail that comes to her (taxpayers) address. The fax included his small bank statement that she funds. I am cool with this dependent.

MY post did not refer to H & R Block. My general comment to all regarding my original post is a 45 year old dependent should raise eyebrows. The fact that I personally know the client just makes it more obvoius that I cannot ignore what I know.

Jainen, I am with you. Other than looking for mail to the dependent with the correct address, is there anything else you feel a prudent accountant should ask for?

A former client called me to file her 2006 return after she received a letter from the IRS. She is single and owns her home. She faxed over a list of 2 dependents so she can claim headof household. The first one is her Step Dad. To my knowledge he does live with her. The second is a 45 year old man who she claims is mentally challenged and cannot work. Based on personal knowledge (my wife used to work with her) I do not believe this 45 year old man lives with her, or she provides any meaningful support let alone 50%. What proof should I require to claim this man? I am not sure how one proves that this person lives with her. The one thing I can think of his goverment disability check should come to her address.

I have an S corp client (Florida) who filed for unemployment he had zero revenue coming in due to his contract expired. I went throuh the unemployment application and if taken literally, he is elligible. If you pay into the syatem, at some point you may need to file a claim.

I believe it is the same thing as name control. For instance, if the company is "Johnson, Inc., "John" will be the 4 letter IRS code. The 940/941 EF Info tab gives definitions depending on the name of the company.

Thank you. I "think" my problem may be my 09 tax tables are not activated. I will call Peachtree Monday. Have a nice weekend.

When I get to the last step in Peachtree (SFS W2/1099 Printer) it does not prompt me to generate the txt file. What Iam I forgetting?

When I get to the last step in Peachtree (SFS W2/1099 Printer) it does not prompt me to generate the txt file. What Iam I forgetting?

Sorry to ruin you day! I took the last few days off. Went to see the Canes hoop game this afternoon with my only son who turned 18 today. Friday it's time to get going. Happy New Year!!

Thank you.

Preparers are now required to sign form 941. Can you sign, scan, and electronically send the form to your client? For clients who do file electronically, I am accustomed to sending all tax returns through a secure electronic format instead of snail mail. ATX does not have a function to sign this form in the same manner as a 1040. Happy New Year to all!

Preparers are now required to sign form 941. Can you sign, scan, and electronically send the form to your client? For clients who do file electronically, I am accustomed to sending all tax returns through a secure electronic format instead of snail mail. ATX does not have a function to sign this form in the same manner as a 1040. Happy New Year to all!

I find Cross Loop works better than the 2 already mentioned.

Thank you for your help.

Actually the "unit" is around $45K. The seller badly needs cash. Sometimes it is hard to quantify reveune from promotion. The unit is meant to show his significant talents to a potential customer. He does own a car so he is not buying the unit for his transportation.

Graphic Designer/Artist client plans to buy a motorcycle for $8,000. Furthermore, he plans to do a high end paint job ($3,000) to the motorcycle that will display his logos. The motorcycle will displayed prominently at his place of business and home as well as on his website. He will not ride the motorcycle very much. Can this purchase be treated to any extent as a marketing expense versus automobile expense?

My client subcontracts work to an individual in Moroco. He receives an invoice and sends the person a money order Western Union. As long as he receives a legitimate invoice, is there any issue paying in this manner? Of course I would prefer he pay by wire.

Though my client is fickle, he will listen. What would you recomend if this were your client. Record keeping (as you mentioned in your original post) should be no issue as the client is an ex CFO & CEO of a bank and I am an accountant who ran his accounting department years ago.

Your answer looks great to me! Of couse my fickle client would now rather bypass the S corp and use a separate LLC for each property. It seems that for each LLC used for "owning & operating real estate" (investment rental property) it will generate capital gains and ordinary losses under sec 1231. Each member will take reasonable guaranteed payments to handle the SE obligation. For each LLC used for fixing and selling, ordinary income and/or loss will be generated since these properties will be considered inventory for sale in the normanl course of business. Each member will also take reasonable guaranteed payments for their SE obligation. Anything we are not considering?

Client has a 2 member LLC and will be buying parcels of real estate. Each parcel will be bought by a different LLC. Some properties will be developed and sold while others will be rented. The main issue is to structure the business so gains will be capital and not ordinary. Of course this assumes the property is held more than 1 year. A secondary concern is the self employment tax issue. The attorney suggested establishing an S corporation for the management and maintenance (the LLC members will be providing both management and sweat labor). Under this scenario, the SE tax will be paid when the shareholder compensates themselves through the S corp. This part seems OK to me. A concern is rental income. Can the rental income be run through the S corp if the LLC owns the property? It does not seem logical? If it is run through the LLC are we then creating an active business and therefore ordinary gain treatment? In summary, is there a way to separate the asset from the management/maintenance to have capital gains as opposed to ordinary gains? Thank you.

Asking the NATP and others act on our behalf seems like a very good idea. Since my South Florida Congressman Wexler actually lives in Maryland, that will be little use to me. From reading the many comments listed, it seems different individuals are going to handle the little or no compensation differently. From the start it seems to me that if a client takes zero salary, he/she is an idiot. Especially if they have been told over and over why they need to do so. Nevertheless, we cannot force the client to pay the payroll taxes. At that point we are reporting the truth. I will certainly reevaluate each client's situation and decide on a case by case basis what to do. I for one am not in the business of relinquishing monthly retainer fees, annual tax fees, and other billable services to clients who just don't get it.

I agree that the return is the owner's and if the owner does not want to follow our advice we cannot force them. Reading this comment and your original comment are you now saying that the preparer can defend themselves to the IRS by stating we are reporting what actually occured (ie, zero salary)? I send out multiple notices a year to accounting clients articulating this issue. I realize that being tougher with clients is needed, but to what point?

If the taxpayer takes zero salary, takes distributions, and is making a profit it seems clear the some of the distributions are in fact salary and W2s, 941 etc need to be prepared. Since I am also acting as the accountant, it will by my role to prepare these filings. I was finally able to make contact with my tax attorney/CPA associate (55 years experience) this morning. His take is unless there is something "gross" you will not have an IRS issue. He also said it is a real good idea to make sure the S corp pays enough salary to someone that is sufficient to operate the business.

Thank you for your insight. In the case where a stubborn client does not understand (or want to understand) why a zero shareholder salary in a profitable S corp is unacceptable, is it my responsibility to determine what salary to book and prepare the applicable payroll tax returns? According to the NATP newsletter quoted, it seems that what they are "suggesting." I have always tried very hard to educate clients on this issue. However, certain clients refuse to take a salary. Some of these clients pay me very nice monthly accounting fees. I certainly do not want to refuse to prepare the tax return!