samingeorgia

Somewhere in my internet travels, I found a copy of the tax return used for the short-lived income tax that was enacted in 1863 to pay the staggering war expenses of the U.S. government. Basically, it was 1.5 to 3% of income, minus some deductions (including a $ 600 personal exemption!), four pages including instructions, and it was declared unconstitutional by the Supreme Court. That got me to thinking: what a visionary Salmon P. Chase would have been if he had come up with a way to e-file using the telegraph!

I had a client with this issue earlier this year. I agree with Old Jack.

No, for a partnership with over "x" partners, e-filing is mandatory. Update: I heard from ATX yesterday and they said that they have no plans to make 1065B e-fileable, but that if I was so inclined I could make a request in the "suggestion box" ay myatx. Needless to say, I'm pretty disappointed. I'll be calling the big boys later this week. I have a colleague who swears by UltraTax and I'm familiar with it because I do some contract work at his office. It ain't real user-friendly and it's horrendously expensive, so I don't think I can use for the run-of-the-mill tax returns, but they have a PPR option.

About the first of April, I attempted to create an efile on a return and it wouldn't create. I called ATX and was told that they did not have this form approved. This is a Form 1065B - Electing Large Partnership with 250 +/- partners, so there will be penalties out the wazoo if this return is not efiled. I extended the return. Is it possible to get a form approved this late in the year? If push comes to shove, I guess I'll sign up for one of the high-dollar packages (Lacerte, UltraTax, etc.) on a pay-per-return basis, but I hope it won't come to that. Any ideas?

Rita, that was a great article and video! I may have to look at Pro-Series on a pay-per-return basis -- does that work well?

So here I sit at 7:55 on the 18th. The phone rings. It's a client I haven't seen for two years. "Can you file an extension for me?" Enough.

In the past, I printed extensions and sent them in. In 99% of cases, I had been told that the client wanted an extension; then again there are those people who just always get an extension and never call until after the 15th. With e-filed extensions, am I supposed to get a form (8878?) signed and in my hands before submitting the extension? In other words, am I supposed to round these people up and get them to sign an authorization form by Monday? I suspect that most of these will be paper filed if that is the case. The extension form doesn't have to be signed.

I beg to differ. As I understand the facts, the taxpayer gave the cash to his brother, who was acting as his agent, and who was to pay the taxes on his behalf. The brother, acting in the scope of his agency, wrote a check to pay the taxes. The fact that the check hit the bank before the brother deposited the funds has no bearing on the facts of the case, because the brother had the funds available to make the payment. The taxpayer should count himself lucky if he can get the cash back from the brother in order to make the payment good. From what I'm seeing around here that cash would ususally be long gone.

I'm working on a taxpayer who lives in Georgia but has a large amount of income ($100K +) from a royalty interest in a gas well in Louisiana. I believe that they should file a non-resident return. Am I right? The website for the Louisiana Department of Revenue has lots to say about pro athletes, but not so much on energy. I would have thought that oil and gas was a bigger deal in their state than sports, but what do I know....

Thank you a lot: it seems to me that D-30 kind of overlaps the D-40. I assumed that I needed to do a MD return because he did work in MD and was paid by their court system. He has no employees and only an office in DC. He was a resident of DC all year. Thanks again!

Would you wear this to a religious observance? To a party not sponsored by the employer? To a job interview? This is the kind of questions I would ask.

I have a client who lives in DC and works as a self-employed attorney in DC and Maryland. Part of his compensation came from the State of Maryland and part from DC. Do I apportion his income somehow? Or do I need to file a Maryland non-resident return? Finally, what is the difference between a DC 30 and a DC 40? Does he need both? One is showing zero tax liability, but the other is a whopper. Thanks for any help you guys can give at this trying time of the year.

I agree with filing the return. The only way I advise not to file is if IRS sends the taxpayer a letter (usually an older person with limited income) and tells them not to file anymore. Since this is a rental, you do need to keep up with rolling depreciation, since the depreciation "allowed or allowable" will reduce basis if they decide to sell one of these days.

A few years ago, a bunch or workers at a nearby utility plant convinced themselves the taxes were not legal because of some stupid reason or other. One of them was in my office and asked me what I thought; whether he could use this theory to escape paying taxes. I listened to the lengthy tale, and said, "Yes, that sounds good to me. But in order for your buddies to win their case, they will have to appear before a federal judge who has a job for life, a big salary, great retirement, and top-drawer benefits -- all paid for by income taxes. Want to take the chance that he'll rule in your favor?" End of discussion.

Make them bring in their Social Security cards. If the wife's cards are real old, get them to go to the Social Security office or go online. I bet a nickel her card either has her maiden name or her first ex-husband's name. It's their problem, not yours.

Disco? I thought disco was dead? Now I'm going to be hearing "I like the night life" in my head all day -- and so will you!

Ken, if you click on "created" you won't see the ones marked "held". That's why I'm using the "incomplete" tag and only marking them complete when both federal and state(s) are accepted.

Because of the two-step process in transmitting E-Files, this now requires more management to make sure everything goes in with no problems. There's so much text on the E-file manager screen that I tag accepted E-files as complete, and then click to view only the "Incomplete" E-files. That has helped. But I think it would help if the "status" messages could be in different colors. They already use red for rejected, why not use green for created and blue for everything else? Transmitted to EFC, transmitted to agency, accepted -- it's all the same to me. But I sure need to see what is created that needs to be transmitted! What do you all think? There's one or more members of this community that have the ear of TPTB -- maybe they could pass this on?

Chanp, when you are involved in long-term projects, especially construction projects, you need to capitalize costs that you and I think of as "operating" or "period" costs until the property is placed in service or sold. This is based on the principal of matching costs and revenues. Imagine that you had one project in your business, a high-rise office building that will take two years to build and get ready for occupancy. You will be paying lots of construction period interest, insurance, and property tax. These would be added to the cost of the building until you reach a certain percent occupancy. I hope this is clear; it's 5 AM on the east coast and I'm waiting on the coffee....

Just yesterday, I got a call from a former employee of a client,complaining about inadequate withholding. The caller wanted to claim that it was his employer's fault that he now has to pay. I asked him whether the employer gave him a paystub each week with his check; I knew that they did issue a paystub. He begrudgingly admitted that he had looked at them and that they showed zero withholding. I told him that he should have corrected it at that point and not to wait until March to try to "change something". The real problem is the attitude in this country that if I've got a problem, somebody else needs to pay for it. That's what's killing this place.

Based on my interpretation of the facts you posted: 1. The corporation is not in the trade or business of remodeling houses, 2. The owners are not building contractors by profession, 3. The properties were remodeled by outside contractors, and 4. The properties were held for a relatively short time. I would say that the cost of these properties should have been shown as "Other Assets" on the balance sheet and not shown as inventory. All costs, including insurance and taxes, would be included in this "Other Asset" category and will reduce the gain on the sale of the properties. The sale should show as capital gain and flow to the shareholders' returns as such. Although, since the holding period is so short, the gain will be short term. I don't think it will make a big difference unless they have a big capital loss which could absorb the gain, or if you are worried that IRS would complain about an S corp. with $ 94,000 profit ($100K gain on the properties minus $6K loss from running the business) and no salaries to the owners.

Thanks, all. I suppose that if I click "Create E-File" and they all show up to add, I'll be good to go. This is a definite improvement! I resisted e-filing for a long time, but I'm really sold on it. I see that IRS has indicted one of the "seasonal employees" here in Atlanta for tinkering with her buddies' returns. E-file eliminates that as well as the headache to IRS of dealing with "seasonal" employees, who really don't give a hoot whether they do the work right or not.

OK, another dumb question. I did a return for a construction worker who worked in four states. Can I e-file all of them? Did't it used to be that you could e-file only one state???

To play Devil's Advocate: isn't the salesman in the "trade or business" of sales? If so, shouldn't it go on Schedule C?

The K-1 input for a 1065-B is not exactly like the input for a regular 1065. However, there is a column beside the columns for "end of year percentages" that I used for allocating the percentages. I took the ownership percentage and pro-rated the loss based on the number of days the partner held his interest. Looks OK to me, I just had to do it manually.