BulldogTom

Your points are well taken. I understand the mess that blatant fraud can make. My gut feeling is the tp is just afraid. The problem has snowballed and he kept running from it instead of taking care of it. If I can be of assistance in putting him on the right track, I will. If the IRS and CA are really seeking fraud, I will definately send him to an attorney (perhaps Joel is reading this). But I will make the first contacts and see if the IRS and CA will look at giving him some time to get the returns together and in, and from that first conversation, I should be able to judge their intentions and make the appropriate decisions. My dealings with the IRS in the past normally are good if the service believes the taxpayer truly is working to make everything right. CA is not always so forgiving, but in general will give a taxpayer one opportunity to get everything on track. Thanks for your comments Jainen. You know I value what you post, even if I don't always agree with it. Tom Nashville, TN (for 2 more days)

Thanks for all your answers. You are confirming my thought process. I have not seen his records yet, he is supposed to bring them to me next week. I suspect he is mostly W2 with an odd 1099 thrown in. I also suspect the tax withholding will cover the majority of the taxes due. So it comes down to a penalty fight, and the best you can do is ask for mercy. BTW, I am in Nashville TN and was looking for the advertising for Betty and Jerome. I would love to ask them what they would do, and maybe get a haircut and oil change at the same time. I will be here until Friday, so if you can get in touch with them, tell them to post their business address. Tom Lodi, CA

OK, phone rings while I am waiting for a BK client to arrive. Guy asks "Are you a tax attorney?". I should have said no and hung up right there, but silly me, I ask why he thinks he needs a tax attorney. "I have not filed in a loooong time and the California Tax Board or whatever they are called is gonna take my paycheck next week." So we talk for a while. Turns out he is 60 years old, makes $12/hour working construction. Has had multiple employers over his lifetime. Is not sure if he was ever self employed or not. Is not sure where his records are. I thought he was going to bail when I asked for a fairly good sized retainer, so I gave him some pointers on what to ask the next guy he called. Turns out I did not scare him away. I have an idea on how to represent this guy ($12/hour in my part of the country is not much and that should buy some time). I will get the first 3 returns done in case there are any refunds to go after, then start working backwards. The question is, how far do we go back? I am thinking 5 years (if his records look good on those, then I will send him back to look for more, but when he starts pulling numbers off the ceiling, then I think it is time to stop). What do you think? Thanks in advance. Tom Lodi, CA

Joel, Just noticed your tag line. How long ago were you in? What stations? I was in Jan 1984 to Dec 1987. San Francisco Yerba Buena Island Small Boat Station, Estartit Spain Loran Station, and Bodega Bay Small Boat Station. Boastwains Mate 2nd. Tom Lodi, CA

I'm in. You will be in my prayers. May God give you strength, courage, and peace during these difficult times. Tom Lodi, CA

How much income is going to be reported? How much were his "draws"? Can he take the tax hit by showing no salary, and including the dividend "draws" into income? When did he begin his business? Is it possible he did not start really begin the business in Fla until later in the year and can go with a fiscal year? If so, he could then make a payroll check out and pay back the loans from the corporation. Is it possible that he can have a corp in FL and a sole proprietorship in Texas and report them separately and the corp loaned some money to the proprietor? There could be some notes executed that would include the interest that is to be paid as a balloon at the end of the 18-24 month term of the note. Way to many questions, not enough info to really get a good answer. There are possibilities to minimize the taxes. It just takes a little working through. Tom Lodi, CA

I can vouch for that. I am one of the few people on this board who have actually had the pleasure of meeting this beautiful southern belle. Tom Lodi, CA

Booger, The conversation between you and Joe is probably what all of us are thinking right now. There is a part that wants to beleive that ATX is going to be as good or better than we have come to expect. There is another part that believes CCH has damaged it so much that it will damage our practices. Who to believe, and how much faith to put into that entity is the 68,000 dollar question. I don't trust CCH for many of the reasons Joe has stated. You seem to believe it will all be OK. One of us will be right, but we won't know until next year. Each of us will be making decisions based on our beliefs about CCH and other software companies. BTW, I am skeptical too about the TRX, but that does not mean I won't take a look at it. It may like ATX was a few years ago - a good product, great support, low price. Probably not for $299, but I will take a peek anyway. Tom Lodi, CA

Wow, thanks for taking the time to go to all that trouble. I am glad you can see where my confusion came from. Tom Lodi, CA

I know you say you don't want an all in one, but I LOVE my Canon MF3110 print/copy/scan. The toners are expensive and don't last as long as I would like, but the ability to scan and copy right at my desk as well as 22 ppm works for me. I have 3 of them. I would not even think of having just a printer ever again. Tom Lodi, CA

I will pray for you. And I will ask that God provide you with the knowledge, wisdom, and confidence to impart your teachings in a way that glorifies Jesus Christ. I am sure you will do extremely well. And if I may follow up one more time. http://www.guidestoneretirement.org/~/medi...dule%20pdf.ashx I don't know how to paste a link, but this is the form directly from the Guidestone website. If you look at the document, in section 1, it lists minister housing allowance as compensation for purposes of contributions. Is there a chance you have time to look at this website and comment? I know you are extremely busy and you are giving professional advice for free. I am just so confused now. I thought housing allowances were excluded, then I thought they were allowed, now I don't have a clue. Thanks in Advance Mike. Tom Lodi, CA

I am sorry to say that you all are going about this the wrong way. By answering all 0 or 1 million, you make it easy for them to screen you out. You need to intentionally answer incorrectly within the bell curve, so that you skew the data without them knowing it. So, most of us should be answering that we are 20-30 something, with masters degrees and 500-1000 client bases, 5 employees and 2 locations. Our clients are all 20-30 something with AGI's in the 100,000 range. We do approximately 20% RALs and 30% other bank products. 30% of our clients have business returns and we do write-up work for 20% of our clients. 15% of our clients have partnerships, and 25% have active trusts for which we prepare the tax returns and maintain the trust accounting. Now, If 150 of us filled out the survey just like above, it would probably make it into the totals and skew the data. CCH would then either have to scrap the results if they thought it was invalid, or they would make decisions based on incorrect data, and then we can sit back and laugh at them. Wait till you see the advertising for the trust accounting and returns fill you e-mail in box. Just a thought. Tom Lodi, CA

I don't have any problems, but I am still on QB 2003 Pro. I have it open almost all the time with ATX 07, 06,05, 04 depending on what I am doing. I don't notice any perfomance issues with ATX with it open. Tom Lodi, CA

You work too hard my friend. I guess the paychecks are bigger in Texas also. I bought the tickets Friday. We are flying out on a red eye July 2nd and will arrive early morning the 3rd in Hartford. Trying to find a hotel in Boston for the 4th without costing one of your overtime paychecks. Not going so well. But Patty and the boys are really looking forward to the trip. Still planning to go to Plymouth, Salem, Kennebunkport, Boston, and NYC before coming back to Hartford to fly home. I need to look at the Matinee theater schedule for that Saturday in NY. I am threatening my kids to take them to Shakespear if they are not good. I see you have good weather right now. Been over to the island for spring break? Tom Lodi, CA

That is funny. You have been scarce on the board lately. Is every thing OK down there? Tom Lodi, CA

There is a spot on the IRS website to report suspected scams. While it is totaly plausible that this is legitimate, it don't smell right to me as you describe it. I would report it as a potential scam. Tom Lodi, CA

Mike, Thank you for the very detailed response, but now I am very confused. The plan document for DVBA from Guidestone has a bunch of check marks and choices to make. Under the category of compensation, it asks what is included in compensation. There is a check box for housing allowance. Are you sure that housing allowances cannot be considered income when calculating the employer contributions to the employee/pastor account? Or am I reading the plan document incorrectly. It says the employer will contribute X% of the employee's compensation to the plan. Compensation includes housing allowance. Is it only that the employee must have "includible compensation" to make a deferral, but the employer may make a contribution based on "total compensation" which can be based on housing allowances? Are you saying that the pastor when he designates his compensation as housing every year might want to leave some amount as wages, then defer that amount into the 403( b ) plan? Is that a legitimate, legal strategy for the pastor to use? Thank you again. Your expertise in this area is invaluable to us that do not practice regularly in this area. Tom Lodi, CA

That is so FRIKKIN cool. Tom Lodi, CA

My avatar eats kittens. Watch out all you posters with "meow" in your avatar. If you did not know, this is the Fresno State Bulldog mascot. I pulled it off the website. Hopefully they won't prosecute for copyright infringement. Tom Lodi, CA

The tiebreakers come into play in situations where you have divorced parents, unmarried parents, or multi-generational households. Example 1, Mom and daughter live with grandma. Both Mom and Grandma meet the rules to claim the child. Tiebreaker says Mom gets her (parents win over all other relatives). Example 2, Unmarried mom and dad live together with child. Both meet the requirements to claim child. Dad has higher AGI so claims kid (higher agi breaks tie between parents). Example 3, Divorced parents have joint custody of child. Most number of nights the kid slept at each home breaks tie between divorced parents. So when multiple persons meet the rules to claim the child, you start applying tiebreakers. In your case, there is no other person eligible to claim the child, hence, no tiebreaker to apply. Hope this helped. Tom Lodi, CA

Wow, thank you indyscott. Tom Lodi, CA

My pastor stopped me on the way out of church yesterday and asked me to take a look at some 403( b ) material he was reading. He asked me to read it and he will give me a call about it later. I am not in any official capacity in the church, but the pastor and I get along real well, so he leans on me for advice before he talks to the church treasurer. Our church is very small, but we are members of the Southern Baptist Convention and the local Delta Valley Baptist Association. Delta has a 403(B ) plan through Guidestone that our church can participate in. Or we could contact Guidestone ourselves and get a plan, or we can go outside the SBC and get a plan from any commercial source (I assume). My understanding of a 403(B ) is that is basically a 401K for non-profits? The "new" thing that I learned was that the pastor housing allowance is or can be compensation for purposes of any match or employer contributions. Since we pay our pastors so little, it is all designated as housing allowance. We have two pastors (no salary, all housing) and three part time employees (all retired from other jobs, secretary, treasurer, janitor) who receive salary only. We do not pay any health or other benefits. Are there any problems with putting in a 403( b ) plan? I understand the universal access requirements and the highly compensated rules. I just don't know if there is something else we should be looking at? Any suggestions would be appreciated. Tom Lodi, CA

There is no tie breaker here. You client gets the deduction. When the IRS gets your return, they will either a) Deny the deduction for both Accept your return with documentation and start collection on the parents It is a pretty good bet there will be a hassle within the family, but that has nothing to do with the tax treatment. Good Luck. Tom Lodi, CA

Are you trying to get HOH as well as dependency from this child? Or is the return MFJ and HOH is not part of the equation? I can't tell from your post. The child is the dependent of the Aunt - your client. The rules are in §151 or §152 in the code book, but just pull up a pub 17 and walk right through the rules. You only need to worry that the child did not support herself on the dependency tests. I assume the citizenship and age test are met. Since you are paper filing anyway, include the court order of guardianship. It would not hurt to add the school records showing clients home as the official record of residence. You will need to get this info anyways, so you might as well get it now. Be prepared for the IRS to deny and make you prove it. I just did one of these (ex claimed kid) and we sent in the info with the paper filed return and the refund came in as we requested on the return. Sometimes it works out. Tom Lodi, CA

They are going to be sending out their demo discs any day to prospects and they don't want them going to the website and see what a mess the end of the tax year was. Watch for them to clean up any BB material that might not make them look good also. They are cleaning house so the prospective new clients will not see anything out of place. That is my guess. Tom Lodi, CA