BulldogTom

<<No assets or money will change hands. The 20% partner simply ceases his involvement with the business>>

That partnership interest must have had some value (positive or negative). That value was transfered to the remaining partner, which is an acquistion of a partnership interest to him, and a disposition of a partnership interest to the minority partner. In addition, the value of the client list that the minority partner took should also be evaluated. He may have traded the client list (intangible asset) for his partnership interest?

Are there any debts in the partnership that the majority partner assumed? or that the minority partner is relieved of?

There are many questions that need to be answered before any determination of tax consequences is made. And if I am reading this correctly, the partnership disolution only memorializes what happened LAST YEAR, when the tax consequences would apply.

Tom

Lodi, CA

One of my clients who has a boat sales dealership here in Alabama went to Gatlinburg, Tenn for a vacation and said he passed out some business cards while there. He wanted to know if he could deduct the expenses for the trip as advertising. He was serious about the question.

Does Tenn have income tax for businesses?

If so, ask him if he has a nexus in that state, and if so, you would be happy to prepare the Tenn Non resident tax return and deduct the advertising that he did in that state.

See what he wants to do then.

Tom

Lodi, CA

Merry Christmas to all.

Congress just put the AMT present under the tree. GW says he will sign it.

Tom

Lodi, CA

The following is an excerpt from the web; just checking, this is where you are going to "fund raise?" lbb

Jamaica: Living in Extreme Poverty

While the economy of Jamaica has improved, many still live in dire poverty. For these families, every day is a new struggle for the most basic necessities. Because families can’t care for their children, they often abandon them to an inadequate and overburdened social welfare system.

More than 407,000 people in Jamaica still do not meet the minimum nutritional requirements set by the United Nations Development Program.

Due to the nation's heavy dependence on imports, the population spends a large amount of their incomes on basic necessities, leaving little room for savings and education, thus keeping families entrenched in the cycle of poverty.

Many homes are split apart as parents search for viable incomes, often leaving children without caregivers.

The work of SOS:

At present there are two SOS Children's Villages in Jamaica, four SOS Youth Facilities, two SOS Kindergartens and one SOS School. As is the case around the world, SOS schools also provide education opportunities to the larger community.

Take Action to Help Orphans in Jamaica!

I don't think L.S. is saying his church is going to Fund Raise in Jamaica, what they are going to do is have some fundraisers in the US to offset the cost of the trip to Jamaica.

Tom

Lodi, CA

>>I think I put the peanut butter on the "right" side! <<

Is there a penalty if you put the peanut butter on the "left" side?

Y'all are crazy. Everyone knows that you forget the peanuts and just put butter and jelly on the bread.

JELLY BREAD RULES!!!!!

Tom

Lodi, CA

Why wasn't it disclosed?

Eli

I still have not found it anywhere on the ATX websites. It does say on the MAX page that there are no hidden fees. I wonder what CCH considers "hidden"? There is nothing on the bank products page.

I am waiting for some info from ATX. Lets see how this comes out.

Tom

Lodi, CA

<<Why Court of Claims?>>

Because he has missed his opportunity in Tax Court. The Notice of Deficiency was issued in 2006, well beyond the time for filing in the Tax Court. Unless I am mistaken, there are only 90 days to file the tax court protest after the Notice of Deficency is mailed. I would very much love to petition the tax court, but I believe he is barred by statute. Also, since this is a credit, the tax is already paid and I can get him in without him having to put up more money.

<<you aren't going to get awarded legal fees>>

I know this.

<<I don't think a taxpayer could represent himself there; he must have an attorney>>

He can go to the court of claims pro se

<<It is also pretty expensive >>

You may file an Application to Proceed In Forma Pauperis which I think means I am a Pauper and can't afford to sue the United States.

This is the same taxpayer who has not been able to get any of his child related tax benefits because of the 2003 improperly filed tax return. The taxpayer has been audited every year and had his dependency exemptions for his children (his sperm and his name on the birth certificate) who live with him year round denied, his filing status changed from HOH to Single, and lost his CTC, Additional CTC, and EIC. The prior preparers did a crappy job of representing him, making it easy for the IRS to just ignore him. This is the client who the IRS will not even acknowledge the request for audit reconsideration that I prepared 4 months ago.

If you have a better thought on how to proceed to at least get a fair hearing with the IRS, I am all ears. It seems to me that a judge outside the IRS is the only options for a fair hearing. I thought about the Taxpayer advocate, but I am not sure they would not send me back into the same beauracracy that is ignoring the taxpayer right now.

Tom

Lodi, CA

If any one has an example of a Federal Court of Claims complaint against the IRS commissioner for a denied credit, would you be willing to share it with me? I have a client that I believe this is their only recourse. Of course they are poor, and I don't know an attorney that will take a case with a 50% chance of success pro bono.

I have been all over the internet and not finding anything. The Federal Court of Claims website has the basic instructions. I am looking for an example that I can follow.

Any help would be appreciated.

Tom

Lodi, CA

I called ATX sales today and asked for : " Why other people who use Santa Bank do not have $10 charge on Bank App Trans? ".

She said : " it does not matter $10 appear on "my product " or not, ATX will charge $10 for every bank appl( no matter what bank you use). In this $10, ATX keep $6 and will rebate to you $4. "

Tom

NY

This is interesting, because the HSBC agreement limits the amount that can be charged for a loan. If ATX is causing this limit to be exceded, then the loans are in violation of the new Armed Forces Lending Law. I wonder if HSBC is aware that ATX is screwing up their rate calculations.

I am sure that ATX is going to say that it is a transmission fee or e-file fee, but I would guess that if a good lawyer looked at this, it would be a part of the interest calculation regardless what ATX and HSBC call it.

Could be interesting if an Armed Forces member comes into a tax shop with ATX software and gets a RAL through HSBC. I would like to see them squirm.

Tom

Lodi, CA

OK.. for others that might read this and wonder, it doesn't matter what accounting method or year end. A corporation may not deduct a shareholders wages on the books that have not been actually paid in cash before the corporations year end. If such wages are on the books they are a page 4, Sch-M, adjustment in the year booked and an adjustment when deducted in the year actually paid.

Sorry, I guess I should have made that clear. The code section 267 says that a 50% or more shareholder accrued wages or bonus may not be deducted until the day paid. The 2 1/2 month rule does not apply. The above rev ruling is deceptive, because it is before the 1984 code changes. It should be obsoleted by the IRS, but since the taxpayer losses because of the 2 1/2 month provision, I think they are keeping it as guidence for non-shareholder bonuses.

Thanks Jack. I will try to follow up on my posts in the future.

Tom

Lodi, CA

It was in my ATX software and it was in myAtx.com( click on "my product " ). I also have called ATX and they confirmed. It suprised me because it costs more $ for me anywhere between $2000 - $3000 for bank products. I am not happpy at all but I have to deal with it.

Tom

NY

When I go to myatx.com and click on "My Product" I only see the MAX product and the $69 Shipping fee. There is nothing about any bank products at all.

In the past, Republic and ATX did not play nice in the sandbox together. I am assuming this is the same situation, that ATX is going to get paid for dealing with a vendor that they don't like to work with. Just a guess, not anything I know for sure.

Eli, are you seeing anythin else on your order?

Tom

Lodi, CA

Has anyone known that ATX going to charge $10 Transmit Fee for each Bank(Republic) application ? This is new charge for this year.

How did you find that out? Is it only Republic?

I went with Santa Barbra and don't recall any disclosures about fees for transmitting the application. I certainly don't want to get that suprise, since I don't charge a lot for the bank products.

Tom

Lodi, CA

>>tell me if Rev. Ruling 68-114 has been superceded<<

It is still in effect as originally written. It's old, though, so other laws or rulings on Section 267 might have nipped at its edges.

Thank you Jainen

Second question

Can any of you with great research software tell me if Rev. Ruling 68-114 has been superceded? If not, I have my answer.

Thanks

Tom

Lodi, CA

Is the rule that a corporation with a fiscal year end may accrue year end bonuses and deduct them on the corporate tax return if paid within 2 1/2 months? If the employee is 100% shareholder, does the above rule still apply?

Regulation §1.267b seems to take care of the first question, but I think I remember something about the loss of deduction on related parties, even if paid in 2 1/2 months.

Thanks for your help.

Tom

Lodi, CA

At least here in California legislators are working hard to solve the budget problems without raising everyone's taxes. Last week, in fact, they raised their OWN taxes--and only their own! Yep, it's true. That pay increase they gave themselves will increase the tax liability for each of them.

I hope they all get hit with AMT. And I hope they have to fill out the forms by hand. And I hope that they have to call into the IRS to get help with their returns. And I hope that no tax professional will allow them into their office, let alone prepare their tax returns. That would teach them.

I am not angry with the government! AM NOT AM NOT AM NOTTTTTTTTTTTTTTT!

I feel better now.

Tom

Lodi, CA

>>they never got my letter<<

Thanks for the interesting update on audit recons. I assumed they would deny it, for exactly the reason she gave, but it didn't occur to me they would just throw it in the trash without even reading. I hope you took my advice about not writing "a very detailed, comprehensive letter."

I'll send you my location, and thank you very much, but I recommend you drive over to the coast in person. The waves are just awesome from that big storm up in Oregon!

Jainen,

I did take your advice and wrote a 1 page letter asking for the reconsideration based on IRS misapplication of the 2005 Working Families Tax Relief Act. I assumed they would just deny (which is what I expected) via a form letter. It is possible that the letter "got lost" in the office, but I think you are on the right track about the "round filing" of it.

Don't think I will be getting over the hill anytime soon. 2 boys active in sports, a full time job, and a tax practice keep me pretty busy. I may be that way next summer when our church takes the youth group to the boardwalk.

Merry Christmas.

Tom

Lodi, CA

I'm telling you again. I'm warning you. Do whatever you want for those past years; you have nothing to lose there. But get that 2006 closed this week.

Jainen,

I finally was able to talk to someone at the audit reconsideration office in Kansas City about the 2005 return. She told me they never got my letter (I have proof, but oh well) and that even if they got it, they probably would not open a prior year audit on a point of law, only on new evidence. Then she said they take up to 6 months to decide if they are going to open the audit, and about a year to process the second audit if it gets that far.

So much for that idea, we will look for a new strategy.

As for your warning above about 2006, we have been waiting for 4 months for the return to be transferred to the local office. Practioner priority line operator gave me a number in the local office and I got in touch with them. The return is still not there. No one knows for sure where the tax return is. The Atlanta office sent it out and it is not there anymore. That is the only thing they know for sure. So we wait.

Please send me an e-mail with your mailing address. I would like to get something in the mail to you (it won't be a Jeroboam - but I hope you like it).

Tom

Lodi, CA

Just a follow up, after about an hour of working on it, I found that there was not enough profits on those activities to get a deduction.

It is interesting that there are three levels of computations depending on the size of the company. I was unable to use the easiest method because the company was too big. The client was able to use the second method, but it resulted in no deduction. Did not have to go to the most complicated method.

Pretty cool to learn something new. Not sure how much I will need this in the future, but I can say I know something about it now.

Thanks again to Taxbilly for his help.

Tom

Lodi, CA

It's really simple to do.

Are you picking on me KC? Saying I can't do something simple?

Well, you probably are correct. But that don't make it right.

I knew there was an easy way, but I just couldn't remember because it is something that you don't do very often.

Tom

Lodi, CA

Is there anyway to roll over the billing charges from the 06 to the 07 program?? I thought they did it last year? If someone knows how or if it could be done please fill me in. Thank you

The first time you roll over a return, it will ask you if you want to roll the billing rates, preparer info, etc. Check the box and they will come over. If you forget to do it on the first rollover, there is another way, but I forgot how.

Tom

Lodi, CA

Are we allowed to enter the ATX program on a desktop and laptop without additional licensing? I'm not talking about networking. I have a one personl office, generally use a laptop but on occassion at a different office would like to use a desktop. This would make it nice.

Mike

We were last year. I hope it is the same this year.

We have 2 computers in the office and one laptop for traveling. The office computers are networked and the laptop runs ATX stand alone, even though we can access the network from the laptop when in the office.

Tom

Lodi, CA

The do have pretty good reasoning, so he needs to bring in other issues such as judicial precedents and administrative procedure.

Most important of all, he has to find a way to chart the financial terms on a single page so it will be INSTANTLY clear to the judge that his payments were made solely from his own share of the marital property that was otherwise divided equitably.

Listen to Jainen,

Make it simple and easy to follow. Concede on the property settlement portion and fight like a dog for the rest. A paper trail of regular, even payments in accordance with the decree underneath a 1 page summary of the terms of the divorce and the payments made in compliance with those terms might be enough to win.

Good luck.

Tom

Lodi, CA

One thing I like about this board is that we can discuss other programs without feeling like traitors. BJM, think you for sharing your feelings. I also have been with ATX since about 1995 and was very disappointed with the change of ownership. I considered changing, but decided to try them one more year. We'll see what happens from here.

Gene

I sat on the fence too, just renewing 2 weeks ago so that I could get my banking set up. I almost went with DRAKE. In fact, I sent an e-mail to the sales rep last night telling her I would not switch. Very similar feelings as BJM. I am pretty certain that ATX will not be my long term solution, because CCH will price it out of the market.

BJM - please post the name of the software company (no one is going to pull your post here - CCH is not controlling this board) and your experiences. They are really valued, as are you in this community. Just because you don't use the software, don't leave us. WE may be joining you with your company.

Anyone who switches to Drake, please let me know how it goes. Especially in CA. I was all set to switch until the sales rep said "We are going to be much better with CA this year". That scared me away, since they admitted they had issues to get better at with CA returns. It was that unknown more than anything that prevented me from leaving ATX. Its the devil you know versus the devil you don't. I have been through the worst of ATX (remember the e-file fiasco 3 or 4 years ago complete with airline vouchers?) and can get through it again if need be. I don't want to figure out how to get through some new issues with another software company.

Tom

Lodi, CA

I always deduct painting as maintenance & repair expense. It does not extend the life, etc. The dishwasher and floor are 5-year MACRS items, and the faucets and showers I am guessing should be 5 year items, but if any piping was replaced this should probably be 27.5 year property. Anyone have better suggestion for the faucet and showers? -Bob

Not technically correct, but I would make the argument that all of it is maintenance, and that the amounts are de minimus anyway, and expense the whole thing(perhaps I would depreciate the dishwasher).

Tom

Lodi, CA