BulldogTom

But the question really is - How come Harry Reid, who has been in the Senate since Noah's Flood, has not changed the laws so that Mr. Romney could not take advantage of the tax laws and only pay a 13% rate? Sorry for the Rant, but the speech he gave on the Senate floor accusing Romney of not paying taxes without providing proof is Un-American. We don't allow government to accuse with no evidence and then make the accused prove that they did not do it. How would Mr. Reid feel if I accused him of being a sexual deviant and then told him to prove he wasn't? It is a very "small minded" issue when looked at in perspective. Gas prices are soaring again, Unemployment hasn't been south of 8% in 4 years, and congress can't even work to save the post office. How much a candidate "legally" paid in taxes under the current law is a very small issue. How many years of returns he provided (when he complied with the legal requirement) is a small issue too. He provided what the law says he has to. I want to see Obama and Biden show me where they paid more than the law said they had to on their tax returns..... Rant over..... and I don't even like Romney. Tom Hollister, CA

Yeah - Why the hell didn't Harry Reid make the laws so that everybody pays the same. What a Jerk Harry is, because it is his fault (as president of the Senate) that we don't have a flat tax so everyone can pay the same rate. It is also Harry Reid's fault (since he is in charge of making the laws right now) that we don't have a law requiring those running for public office to display for all to see 20 years worth of Tax Returns. And it is Harry Reid's fault that we don't have a law requiring all candidates for public office prove they are eligible by doing things like...I don't know.... showing their birth certificate maybe.... proving their age and citizenship... things like that, before they can be put on the ballot. If we didn't have that damn Harry Reid screwing things up, this would be a much better world. OH - sorry, this was not supposed to be political. Tom Hollister, CA

Now I remember why I hated my Partnership Tax Classes. This stuff sucks. Tom Hollister, CA

You are echoing what I thought myself. My take on how the IRS would recast it looks like this. 1. Early distribution from a retirement plan to the President. Taxable as ordinary income and 10% penalty tax. State penalty tax as well. 2. Cash is a contribution of capital to the corp and increases basis and any return of that cash to the Shareholder is a dividend (no deduction to the corp and income again to the shareholder). The other concern is an accuracy related penalty on the individual tax return. I don't know if the plan or the trustee of the plan would incur some liability on the plan tax return for the transaction (I don't do benefit taxes - so that is speculation). Finally, I think the Corp would have some worry as well, as the plan distributed funds for the benefit of a beneficiary, and the corp confiscated those funds. I think the Department of Labor or whoever oversees benefits would have a fit about that and have some penalties in store for the corp (but again, I am guessing). Do you think I am reading this correctly? Tom Hollister, CA

Here is the scenario: C Corporation has a profit sharing benefit plan for the employees. When the economy took a dump, most of the employees were laid off or left the company and took their retirement money with them. The plan does not allow for loans to be made to the beneficiaries. The normal process is for the plan to distribute the cash to the corp, who in turn distributes the cash to the beneficiary and issues a 1099R for the distribution. The Corp President and Sole Shareholder is the trustee for the plan. All money left in the plan is 100% vested to him. No contributions to the plan by the corp in over 5 years. Hypothetical Question - If the trustee distributes the money in the plan directly to the Corp, and the Corp does not distribute the money to the beneficiary, does the Beneficiary have an individual tax liability? What are the consequences to the plan and the Corp if they employ this scenario? Yes, the trustee of the plan, the Corp, and the Beneficiary are all one in the same. Thanks for your thoughts.. Tom Hollister, CA

jainen, This is not an attempt to evade (in my opinion). If it was, I would not take the engagement. The clients have a large outstanding balance due to his failed business. Right when she retired from her job. He can't find a job because he is over 50 in a tight job market. They have a son who still at home and is sucking a great deal of medical costs. The education plan was for the kid to go college, but it doesn't look like that is going to happen because of his condition. This wasn't how the end of their American Dream was supposed to happen.

Not even sure if the client has a 529 plan, but they are certain it is one. They have been saving for their kid to go to college for years. Have 15K in an account for him. They say it can't be withdrawn from the account with out a penalty unless it is used for his education. Will be getting clarification from the clients in the future. Just the same, if it is an Education IRA or a 529, does it need to be listed on the 433 form for the offer? I am early in the process and have not done one of these in years. Could use some help if any of you are experts. Tom Hollister, CA

Because neither of them made that happen. The government bailout of GM and Chrysler made the car sales happen, and that ungrateful salesman should have to pay more in taxes because of it. Tom Hollister, CA

OMG - Jainen taking the side of the stupid taxpayer instead of just letting them suffer the consequneces of their own stupidity. NEVER, NEVER, NEVER let the client go it alone. Because when they do.....well....stuff happens. I am 100% in agreement with Jainen on the strategy to use. Appeal that muther....and with good ammunition. I would almost do it on a contigency (which is legal if it is an appeal) just to prove to the clients how dumb they are and how smart you are and how they should NEVER NEVER Ever do an audit by themselves again. Tom Hollister, CA

We have moved to a new city and are attending different churches looking for a new church home. Saw this on an envelope just this Sunday and thought it was brilliant. "While we try to honor your wishes, we cannot guarantee your gifts will be used as designated". Tom Hollister, CA

Ever since "cloud computing" came along, I just get this mental picture in my mind of bill gates sitting on a john deere tractor pulling a big server behind him plowing through the "clouds" with a big smile on his face as dollar signs go flying up from the server. Tom Lodi, CA

who will be able to plow your data in the cloud? I am certain that "they" will tell you that your data is secure and no one can take anything from it. I don't believe it one little bit. The first one of these companies that figures out how to farm out the data in your files will do it without thinking twice. Just my humble opinion. (it isn't paranioa if they really are after you). Tom Lodi, CA

I have this problem with Foreign Income Exclusion. If you exclude all of the income, you can't efile. So we exclude all but $1. Tom Lodi, CA

I would tell him. The story that will get around about you is that you did this to him intentionally and your business will suffer because of it. Call and let him know that the deadline is Tuesday and until you have the signed forms and the payment for your work, you cannot process the returns to the IRS. Then, he can decide to file or not file (ie pay or not pay) Tom Lodi, CA

I had one IRS auditor tell me one time that the quickest way to get an audit is to file MFS in a Comm Prop state. Nothing matches, and the computer will almost always kick it out. They "suggested" that if they really wanted to file MFS, keep any income that is reported via third party on their own return (W2, 1099's). You have to remember that in CA, community income only starts when the community starts, so the first or last year of marriage may present some planning opportunity. Community ends in CA when the couple splits with no intention of reuniting. Tom Lodi, CA

Doesn't he have to start taking distributions? And if he does not, in the 5th year, it all dumps on his tax return? I think he has to take it over the life of the decedent because only a spouse gets special considerations. I would double check or you might be getting a nasty letter in 6 or 7 years from the IRS. Tom Lodi, CA

I know this is got to be simple, but I can't find the answer right now. Is the American Opportunity credit good for 4 tax returns or four full years at school (which would mean on 5 tax returns)? Everything I see right now just says first 4 years of school, at least a 1/2 time student, yada yada yada..... Example, my son enrolls at Fresno State in Fall. On my first tax return I take the AOC. He goes for the next 3 years spring and fall semesters. I take the AOC on 3 more tax returns. His final semester (the end of his 4 years of education) would fall on my 5th tax return. Do I get to take it, or have I used up my 4 years? Tom Lodi, CA

Does the Chevy Volt Credit have a carryover? If you qualify for 7500, but you only have 2k in taxes, can you carry the rest to 2012? Thanks Tom Lodi, CA

That was how I was taught to do it many years ago. See others just put in an amount that zero's out income and carry the rest. Tom Lodi, CA

Sounds absolutely how I would expect it to come out. Tom Lodi, CA

Every client (besides my mother in law - but she doesn't pay, so she may not be a client) signs an engagement letter in my office. Every year. If anyone balks, they don't get a return. No one has ever balked. Tom Lodi, CA

Have you gone into the Sch E and clicked on the box for "Complete Disposition of a Passive Activity"? I think that is your problem. It is a two step process to dispose of a rental activity in ATX. You have to do the sale in the Asset Entry form and then click the box on the Sch. E. Tom Lodi, CA

Amen & Amen

My prayers are for you both. Keep the faith. We love you, and so does HE. Tom Lodi, CA

forget it. After completing the joint return, there is no tax. Tom Lodi, cA