Catherine

Hi folks,

Last Friday a mandatory microsoft update corrupted by OS and I had to wipe the drive and reinstall. My backup and recover software worked great for backups and for recovering files. But. The new version won't read files from the old version. The old version is no longer supported or installable (with NO warning from the vendor, mind you - and that's including not installable from the saved, downloaded, install file from a year or two back). So I'm having to use my personal machine to restore files to an external drive, and then reload them to the being-restored machine.

That's ludicrous. Utterly and completely. And I will not continue with this software going forward; they have now proved they are not reliable and won't stand by their products or customers.

So I come to you, dear friends, and ask what software you use for backup and recovery, and whether (or not) you would recommend it. Backup to a local storage device, preferably with an option for "cold metal restore."

Many thanks.

TheTaxBook also has some excellent self-study courses.

It's not just recently; the no-green-card-return has been going on for years, and it's why I stopped recommending it. I was told by a mail carrier who delivered to a local office that the mail is delivered in bags, and it's anyone's guess as to whether those green cards are ever even seen, let alone signed (or stamped) and returned they way they're supposed to be. And our local office is a small one, not one of the big centers.

I have successfully requested penalty waiver when an elderly person died late in the year. The beneficiaries are generally unable to get distributions by EOY simply because there is insufficient time to get paperwork complete. Death certificates and notifications to beneficiaries and proof of who they are and setting up new accounts - and that's all after someone gets appointed as executor and can start to notify retirement plan custodians that there has been a death. 

Working on one case now where the retirement plan custodian is not accepting a state-certified death certificate sent by an executor, simply because the executor appointment was delayed by several months due to reasons out of control of the executor. By the time that dust settles, there will be a couple of years of missed RMDs, simply because the custodian refused to cooperate. 

But you have to wait for penalties to be assessed before you can request the abatement. You can, however, and while it's all fresh in your mind, write up the reasons for the abatement request, and have it waiting.

You might also look at TaxAct and see if they have a pay-per-return option. They were decent basic/pro software twenty years ago and have only gotten better. Ufortunately, they lagged my needs so I stopped using them many moons ago.

9 hours ago, JimTaxes said:

will i be able to access the same filers and recipients that i just entered

Yes, they will be there waiting for you.

Kudos to this young person, indeed. I hope the IRS comes down hard on the employer, too.

In this case, paper-filed returns with check payment(s) enclosed is indeed the only way to file. 

21 hours ago, Terry D EA said:

doesn't always satisfy some states

The EF ack saying "received by stateDOR on date x" sent out by their own computer systems isn't accepted? That one I'd fight, for sure.

4 hours ago, JimTaxes said:

but could never get registered

I managed to get registered, years ago, but it was always so clunky to use. EFMF is much easier, and also for the inevitable client whose contractors payout doesn't match the 1099s. Query them and get "oh, gee, can't believe I forgot to give you the numbers for Gary and Sheila" and just add those in separately later. Easy-peasy.

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. 

19 hours ago, DANRVAN said:

The return is considered filed on the date it is postmarked, regardless of when it is actually processed.

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.

15 minutes ago, Lee B said:

substantial understatement of employment taxes at both the federal and state level

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.

16 hours ago, DANRVAN said:

And you don't want the smoking gun pointed at you when client gets extra months of late filing penalties due to waiting to efile on an unknown date in January. 

My advice is to file by mail ASAP, don't sit on it.

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.)

On 12/10/2023 at 10:25 AM, kathyc2 said:

Does full late payment stop late filing penalty? 

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!

18 hours ago, BulldogTom said:

 I did the above because I don't feel it is a tax issue and it is not my responsibility to even notify them of their requirement to comply.

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. 

1 hour ago, Terry D EA said:

and then use the direct pay to pay the balance due

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

1 minute ago, Medlin Software, Dennis said:

One state has new calcs, which depend on whether or not a new state W4 is used, but they have yet to publish the new W4

"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.

18 hours ago, Medlin Software, Dennis said:

our medical student offspring will say "this too shall pass", coupled with drink more water

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!

18 hours ago, Medlin Software, Dennis said:

I would add a late fee of some sort for those who bring in data after saying it is all there. 

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