Catherine

Have a corporate client who (mildly) mucked up their payroll and 941s. I have 941-X's all prepared and ready to mail. When I file an amended 1040, I prepare a 1040X and attach the "as amended" 1040 and the "as originally filed" 1040 (all clearly marked with highlighter). Was taught to do this years ago as even though they generally say "just send the schedules with changes" the first thing they do upon receipt is ask for all the rest, as well. Have never had a request for further information doing it this way, for years. But I have never had to file a 941-X. Should I include copies of the "as amended" and "as originally filed" 941s as well? TIA, Catherine

The principle remains the same, and it is disgusting that the tax code allows this extremely basic travesty to exist. Shame on us (AND our forebears!) for not tossing out of office any and all congresscritters who allowed this "prove you are innocent" standard to creep into the tax regulations.

Some real "shining lights" at the bank that processed the "check," as well.

Another reason to go to a consumption-based tax system instead of an income-based tax system.

Jack -- quick clarification. I did NOT recommend sending the check back by itself! I recommended sending it back WITH a letter AND a copy of their (potential) bill/demand/notice if it turned out to be an error. By doing that, they then revoke the imposition of penalty and interest, as the taxpayer never took the money back. That's all. Sending back an uncashed check with no IRS letter, no explanatory letter, just because you're not sure you should have gotten it? No way! Catherine

I had a client get one of these checks last year. We tracked it down ourselves and the amount was very close to that of an estimated tax payment they had made -- which they did owe. I advised them to hold on to the check for a couple of weeks before cashing it. Sure enough, a couple of weeks later a bill arrived from the IRS for the amount of the check, PLUS penalties and interest, for the "underpayment." We sent them back the original check with a letter requesting that penalties and interest be abated as the IRS had indeed had the funds and that the taxpayers did not cash the check that was sent to them in error by the IRS. Another letter came another several weeks later, abating penalties and interest and re-crediting the returned overpayment check. So, you may have done everything right and the check may well have been sent to your clients in error. I advise waiting until a few weeks before the check becomes outdated before cashing it. But put a reminder in _your_ calendar to check in with your clients then, as they will almost certainly forget if no letters are received by then.

Same sort of thing happens with voter fraud -- hundreds of people registered to vote from single addresses. Big favorites are business parks, warehouses, and abandoned lots.

Not quite, Elrod -- if they got it, they'd spend close to _twice_ that amount.

Certainly they live far past their "Use By" date! If they were milk, they'd all be curdled by now. ^_^

I have a policy from Travelers through the Placer Insurance agency. Used to have a Hartford plicy through another group but Placer got me better coverage at a better price. Your state's acctg society may have a "preferred vendor" program which will NOT care that you aren't a CPA (most likely) but will understand the coverage you need. Get several quotes; many times policies WILL cover prior years. Also ask about "pre-claim assistance" programs (where they'll give you the mortgage letter advice, or how to protect yourself if you discover a potential error, or a client gets mad enough about something that you are concerned they'll sue). Don't have the policy details in front of me but limits are about like what the others have said and I pay about $500/year. Good luck, and GET that insurance!

Congratulations!

Congratulations, ACS41!!

Eric -- I concur with Margaret. If not part of his regular business, Line 21. If it is his regular business (has a job writing copy but this was outside his employment), then definitely Schedule C (or C-EZ). Expenses (including mileage) for this job push him towards Schedule C-EZ rather than Line 21.

Yay to everybody!!

Thanks to KC and Elrod!

Thank you, KC. If folks do click on the link, they should note that the "total" attendance as given by MeetUp is off by roughly an order of magnitude. It only counts people who rsvp through their system.

Ah, missed the time frame; thanks Joan for the correction.

Not so much on the "progressive" rates. If you live in an area with a high cost of living (NYC, LA, San Francisco - you can rattle them off as well as I can), an income that would be extremely comfortable in Dubuque is barely subsistence level. One could make a good case for higher tax rates for income brackets in lower-cost zones. The whole basis of taxing income instead of consumption is nuts. Consumption is easier to define, easier to track, much harder to escape - even career criminals eat out, buy cars, blue jeans - even black pull-over hoods, LOL. As soon as you say "income" -- well, define income. With deductions. Exemptions. Depreciation. Depreciation recapture. Exclusions. With that one word, an entire can of worms is opened up. Plus it penalizes people for doing well - when they could be investing that income (and that includes putting it in a savings account; that is one source of where capital to borrow comes from) and thereby help others to do better (or at least make the attempt).

US citizens are subject to US taxation on worldwide income. Perhaps it can be excluded on Form 2555; perhaps he can get a credit for tax paid via Form 1116, or take a deduction on Schedule A. Look up the various instructions for those forms, and try it all three ways to see what works best for the client (it can vary - and the results can surprise you, too). Just be sure NOT to try to take a credit for taxes paid to Switzerland for income excluded on F2555 - that's double-dipping, and only allowed for Treasury officials and state employees. Even then, it's technically not allowed, but they get away with it all the time so in essence it's the same as allowed.

The Print Manager (always a weak point in ATX) has been even worse than usual this year. It has been randomly re-ordering forms, not printing forms chosen - and many here have complained of the oddities they've seen during the season. Lodge a complaint with CCH and/or make a suggestion for next year that they FIX the fool thing, and we hope they pay attention. Other than that, all I can offer is to check every return carefully -- not just when you check the boxes, but with the paper (or pdf) you end up with -- to make sure it is what you want/need.

Every time they have "simplified" the tax code, my phone starts ringing off the hook.

Here is some more "intolerance" and "offense" for those inclined to see in that way. http://www.mcnaughtonart.com/ONUG.pdf

blah blah

Bleeping picture would NOT post... trying again... getting a "post too short" or a "must enter a post" error?! Eric - what's going on here? Won't let me attach a file, won't take the picture, won't take the post as it is too short...? ONLY when trying to add the picture. Huh?

Came across this over the weekend and just loved it....