Catherine

I wonder if it was a shorter version of the same "reasonable compensation" talk given at the NE IRS Rep Conference just a couple of weeks ago. Frankly, I paid more attention to my cross-stich project sewing than that particular talk, as I gave up working on partnerships and corporations some years ago. Didn't do enough at that time for it to be worth keeping up with the myriad of changes, so I gave them all away. But it was definitely a group with software, they had court cases, and a number of people were interested in the software. Guy next to me was thinking about it - but his niche is small corporation consulting, advising, and evaluating. For him having an evaluation/recommendation tool rather than having to evaluate every case individually, may well have been worth the cost.

It is supposed to be. We've seen plenty of returns "filed" weeks and even months after the postmark (as shown on transcripts). Even some where client was told by IRS to e-file as their paper-filed return was lost. Yes, they have now "fixed" all those issues. And I have a bridge to sell you. Keep in mind, this is not my decision to make, but the client's. I give the client the options and let them decide (and document that). I do recommend waiting to e-file. In the cases I've done that, the return is already late, and e-file re-opening is less than a month, rather than more than two months.

Those get picked up in the SE taxes. I am also not saying that 1099-NEC is the best-practices way to go, but to my mind it's more important to get the client straight going forward if that's the way to get them to agree. Plenty of people will not agree to do wages, file now-late 941's, and all the rest - but they will agree to a 1099-NEC plus PR starting Jan 1 of the year (already back-dating start of PR to the then-current year, since these people tend to show up in March). I would explain - in writing - the possible consequences. In our experience, the no-PR problem has mainly been new-and-small companies who are not making a ton of money (if even running at a profit at all). Straighten them up as best and as quickly as you can, and have a loyal client for years to come. Remember, we can only advise on changes prior to meeting the client; we cannot compel. Draw your own lines that you will not cross, but as long as the client fixes going forward, I would most likely agree to 1099-NEC the owner(s) if they balk at doing prior-year payroll with late 941s. Because we know most of them would then take their papers to some shyster who will let them continue to mess up for years to come. Better to get them in current compliance and keep them there.

For that very reason, I recommend waiting until e-file opens again. That paper-filed return could very well be officially received, and then processed, long after e-file re-opens. Then the smoking gun gets pointed at you for not e-filing. Or, give the client the two options, and let him decide. But get his decision in writing ("Option 1" "Option 2" checkmark and signature. Make sure the possibility of delay and penalty is listed on both options.)

As Lee B said, it does not stop the late filing penalty. But it does stop interest after the payment date (on the tax).

As I've often said - if they were competent, they'd be far more dangerous than they already are!

I have clients for whom Form 8938 is required, and that is a tax issue. I wanted it very clear in the engagement letter that the requirements are different, and that they are on their own for the FBAR. I don't want a case of someone not filing, then blaming me for not being clear enough. If it's in the eng ltr, they were told clearly *and* accepted it.

Have him pay the balance due now. Stops further penalties and interest from being added to the balance.

"Hey, we're the tax agency. We don't have to make sense!"

I am recommending payments NOW (whether via coupon-and-check, or Direct Pay), and e-file later.

We have the FinCen requirements on our annual document checklist, but for 2023 I'm putting it in the engagement letter, too. As soon as the draft comes out and I can edit it.

The e-signature for a 2848 also has to be approved by the taxpayer through their own online account. Forget that! Not sure I have even one client whom I would trust to do that correctly. I have uploaded wet-signed-and-scanned 2848s to the online submission portal and had them accepted. Faster than faxing them! As far as I've ever been able to tell, Memphis CAF uses the faxed pages as paper airplanes. They don't seem ever to get them entered. I always faxed to Ogden - those at least get entered.

I'd expand a bit on Tom's advice. This is an instance where I'd advise thinking long and hard about putting any assets into joint names. The operating checking account (for the electric bill and groceries and the like) should be fine, but I'd keep everything else separate. Further, if the financially stable person has any health issues or is in a risky profession, the couple should talk to a trust attorney and consider if that person's assets be placed in a trust whose secondary beneficiary is the spouse-to-be, for their benefit but not for their ownership. This gets into legal areas and I'm not giving legal advice - just advice to talk to someone able to give legal advice! Trustee who is not the liened spouse would have to be chosen, perhaps a trigger for wrapping up the trust once the IRS issues are resolved (or not, if the spouse-to-be is still bad with money). It would not be simple or cheap, but possibly less expensive (and peace-of-mind-bringing) than the idea of leaving substantial assets in the hands of one with a track record of making poor choices and bad decisions.

Our now-retired dentist, when he wanted to keep an eye on something, would say "One of three things will happen. It will get worse, it will get better, or it will stay the same." With the first, you act. With the second, you give thanks. With the third, keep watching!

I had one client (fired long ago!) who would promise and promise and promise. At the end, I was charging him quadruple my regular fee plus a late charge, and he was getting IRS late-filing penalties, and he never cared. I got sick of him and dumped him. If I wanted to nag people, I had teenagers at home (at the time).

I just got an email from eFileMyForms stating that 2023 forms are now available. At the least, you can go play, put in your vendors and their contractors. Until you save, put in cart, and check out, nothing happens. @JimTaxes

You can do either. Each 1099 gets added to your cart, and you can check out at once with all of them. Got info for two, and that customer needs to confirm the ssn/ein or amount for the last contractor? Get the two done, go back later for the third.

Probably on January 2nd. I've never had a problem filing 1099s or W2s very early in January.

As if we were not busy enough?

My mother-in-law had a SEVEN-DAY to-the-minute pre-Thanksgiving schedule. Starting from cleaning the refrigerator to make room for it all, grocery lists for serving by number of people, then when to take the turkey out of the freezer to thaw in the fridge, to when pie crusts were prepared, then pie fillings, side dishes, stuffing, and more. She even had charts, on grid paper, comparing roasting times by weight for stuffed versus unstuffed turkeys, plus suggestions for coping with the chaos and dealing with leftovers. It was truly astounding. But this also pre-dated Excel, so it was all on 5x8 index cards, plain paper, and grid paper. 31-page pdf from her paper records. Does that still count?

(Oldy but goody, adjusted for clean speech - extrapolate on your own) Choose a new password: potato Sorry, password must contain at least 8 letters. boiled potato Sorry, password must contain at least one number. 1 boiled potato Sorry, password cannot contain spaces 50bleepingboiledpotatoes Sorry, password must contain capital letters. 50BLEEPINGboiledpotatoes Sorry, capital letters must not be consecutive. IwillShove50BleepingBoiledPotatoesUpYourPosterior,IfYouDoNotGiveMeAccessImmediately Sorry, password must not contain punctuation. NowIamSeriouslyGettingPissedOffIwillShove50BleepingBoiledPotatoesUpYourPosteriorIfYouDoNotGiveMeAccessImmediately Sorry, you can't change your password to a password that has already been used with this account. Choose a new password :

I have used it for years and like it a lot. Send a PM if you want details, but in general I've found it very easy to use. PDF copies are now available instantly, too. Years ago when I first started using them the PDFs were available the next day.

UMass Tax School still exists, too - but I don't recommend it. It used to be fabulous, and I went every year. Yes, there were old fogies sleeping and snoring (one guy always amazed me that he never fell off his chair!). The best ever Ethics class I ever attended was at one of those; all about the grey areas and when trying to help a client pushes the preparer, all unwittingly, against those limits. I learned SO much from that one class and it has really stuck with me. Unfortunately, the man running it retired and it was taken over by a self-important bimbo who made it all about her. It was awful, and useless, and annoying, and I stopped going after the first year she ran it. She had been one of their "featured speakers" for a couple of years beforehand, and I always gave her the worst reviews and written complaints. She was truly atrocious.

If you do this regularly, they do sell pre-punched paper that would at least relieve you of one long hard slog of a task!

I have Mercer as agent for E&O. Switched away from Hartford some years ago when Mercer had better coverage limits for less than Hartford. They shop out to different companies; currently covered by Carolina Casualty. Cyber is separate through ERO Cyber Security.