BulldogTom

my wife got one this year. But she put it on the invoice, so I only had to pay her commission on it instead of her putting it in her pocket. So that makes it a tip for me as well. Tom Hollister, CA

A couple of things come to mind. 1. What is the state situation? How much does he owe and can he pay it. If he can, that would mean you are only working with one agency trying to get his money. 2. I don't know why mailing in the returns is a problem. It will also buy you a few weeks before you have to deal with the installment agreement. 3. I doubt his employer will do this. Better strategy is to have an automatic withdrawal from his account. Have the client get set up on direct deposit from his employer to make sure that the money is in the account when the IRS tries to pull it. 4. Your best value to the client is to come up with a great reason for him to not have filed so you can work on the FTF and FTP penalties that are going to push the bill up. You might be able to get some relief because you are coming forward (at least it sounds like they are not coming after him yet). It might play in his favor to have you in front of their collection activities. Just my thoughts. Tom Hollister, CA

Client had a revocable trust when she died. The only assets in the trust are a home that was left with a life estate to her partner, personal belongings, and a small amount of cash. The cash was distributed by the executor per the grantor's instructions, and the personal belongings were donated to charity. The home, which generates no income, will be used by the partner until his death or he moves out, and then sold with the proceeds being distributed to the beneficiaries. Normally, you have to have income to make a charitable contribution. But since this is a pass through, can I include the value of the donations on the K-1 to the beneficiaries. Sorry, I should know this, but I am too tired to look it up, and I am sure one of you knows the answer lickity-split. Thanks Tom Hollister, CA

Good point. I read that into the post. It is not there. Thanks for catching that. Tom Hollister, CA

There are so many variables in the pricing that you give to a client. It is really hard to know if $110 is fair or if 3X that amount is fair. I have clients who bitch about my fees, and I just smile. If they think it is too high, they can go elsewhere. I have clients who tell me they paid a lot more and got a lot less service in the past. I have clients who don't even know what they paid before me, and don't know what I charged them last year, or this year for that matter. Every situation is different. As for being upset at low fees and preparers who charge too little, you would really have to know why they are doing it. When I first started, I really went out cheap, trying to build a practice. I don't do that anymore, but if I moved into a new area, I might just do it again to "buy" clients so I could start building a client list. Tom Hollister, CA

You need to read the trust document and the will. This will answer most of your questions. You need to identify the beneficiaries of the trust. If the nieces and nephews are just getting a testimentary transfer of assets, they do not get a K-1. Only the income beneficiaries will get a K-1. First thing you need to do though is identify the benficiaries. You need to talk to your client about the disposition of the trust assets. If they are not going to be disposed of (sold or distributed), then the trust will stay open indefinately and the income or loss will be distributed to the beneficiaries via the K-1. The trust can sell the assets and distribute the gains, or the trust can distribute the property and let the beneficiaries sell and recognize the gain. There are a lot of questions that the trust document will help you with. A good consultation with the executor will fill in the rest of the plan of action. Good luck. This is where good interviewing skills and planning will help both you and your client. Document everything they say and you say to them. The tax return and the K-1's will be the simple part of your engagment. Tom Hollister, CA

Talked to the FTB today. The issue is that it is on the Trust Account at the FTB. Need to file a 592 from the Trust to the Taxpayer. 6-8 weeks processing time. Then they will credit to the taxpayer's account. BTW - they did not have my POA on file because they are working on March 7th POA's. They are 1 month behind on processing POA's. The rep on the phone was a little peeved when I pointed out that was a long backlog. I hate California. The government employees just don't do their work. Tom Hollister, CA

Damn Judy, why don't you say what you really feel.... Tom Hollister, CA

None of my clients. I don't ask, and I won't ask. Tom Hollister, CA

I don't have your issues with the server because I use stand alone. Overall, I am much more pleased with the software this year. And I don't think ATX is monitoring this board anyway. But I do have a couple of pet peeves: 1. The education credits. The input is clunky and the information does not flow like it should. No where does the software check the grants and scholarships against the qualified ed expenses. This is a joke. 2. The home office worksheet. While I appreciate where they are going with the form, it is clunky and hard to work with. 3. E-file CA 541. Their inability to get this form to E-file is a joke. 4. CA 100S Schedule B depreciation differences. It is a joke that I have to override all the fields to get the CA depreciation in when the depreciation comes from the rental activity. This should flow through to the form. With that being said, I am still happy with the software. Good value for a good product. Just no support anymore, which is a dirty shame. They were one of the greatest support departments ever, now they are the biggest joke ever. Tom Hollister, CA

Is that how you get rid of the in-laws tax returns. Note to self, remember this one. Tom Hollister, CA

That is what I thought. Thanks for the confirmation. What if I see the report and they absolutely did not consider the client's true ability to pay and made up numbers like the first go round. Is there anything you can do? Thanks again for responding. Tom Hollister, CA

But this is Appeals, they are handled at Brookhaven as well. Do I have recourse to appeal again? Can I go to Tax Court? Sorry for the basic questions. Tom Hollister, CA

1. They asked for all the documents we sent 2. They asked for them to be faxed 3. They were all summarized with a cover page and detail of what was in each section and corresponded to the requests made by the agent. I bet you would make a good IRS agent. Just ignore the documents that you asked for and say no. I bet you would get promoted quickly. Tom Hollister, CA

Help for a newbie please. I just got a response from the Appeals office in Brookhaven. They said no, which is not surprising to me, but the letter just said in one sentence that they are sustaining the original position. I was hoping for some type of calculation, because both the original agent and the appeals agent told me they were able to make adjustments based on the information we provided. So my real question is, where do I go from here. I strongly suspect that they never really went through the 77 page fax I sent over documenting our position on the offer. I would really like to see their workpapers to determine how they decided to deny the offer. If this were an audit, I could have a conference with the supervisor. Do I have that same right in OIC land? Is there any further right of appeals? Thanks. This is the first time I have gone down the OIC route, so I am learning as I go. Tom Hollister, CA

Is this the case where the ungrateful little brat sued her parents for not spoiling her to the extent that she thought she was entitled? Tom Hollister, CA

That brings up a question I had about AP classes. This is personal for me. My son is taking 7 AP classes this year. Cost us about $700 for the exams. If he successfully passes the exams, they will count for college credit towards his degree. Can they be taken for LLC? They are paid to the College Board, which I have no idea if it is an eligible institution or not. Thanks Tom Hollister, CA

I did not get any error messages. I did two of them the same day, for the same transaction. Two sisters sold a rental property. Two forms from the title company. The other sister got her refund no problem, this one got kicked. I think it is because there was no TIN on the form for this one. I hate talking to the FTB. They are blood suckers who don't know crap. I would rather deal with the idiots at IRS than the blood suckers at FTB. Tom Hollister, CA

I can relate. I don't know how many passwords I have created that say "I hate frikking passwords". Tom Hollister, CA

Bump

So my client sells a rental home. Title company withholds from the proceeds and gives my client a 593 certificate. Efile the return, and the FTB disallows the withholding. Client through away the letter from the FTB, just called me because the refund was less than expected. So I go back and look at the 593 and it is made out in the name of the client's revocable trust and does not have a number in the TIN area. I am guessing, but not sure, if this is the reason for the FTB kicking out the withholding. They probably match the TIN on the tax return to the TIN on the withholding certs and it did not match. Since the Trust is revocable, everything flows to the taxpayer and it is a legitimate claim for refund of withholding on the taxpayer's personal return. How would you proceed? Amend and show proof of withholding or just send a letter asking for the money? I hate calling the FTB, but I think I will have to. Thanks Tom Hollister, CA

A firecracker. Yes, that might be a good description. Something that seems fun to play with but touch a match to it an it explodes and does damage to anything around it. On second thought, dynamite might be a better comparison. You are the bomb too...just a bigger boom. Tom Hollister, CA

Thank you Joan, that is exactly what I was looking for. You have to do the calculation of the excess amount by hand and enter it there, but the software handles it correctly once you enter it on the worksheet for "Scholarships and Grants not included on form W2". You are the bomb. Thanks again. Tom Hollister, CA

Rich, Do you have a court case cite? I would like to look that up. Thanks Tom Hollister, CA

She recieved a Cal Grant B and a Pell Grant. Semester #1 she had approx. 3,200 Cal Grant B and 750 educational expenses at the Community College. Semester #2 she received approx 6,500 Cal Grant B and Pell Grant. She had Approx 3,250 in education expenses. The rest of the money was used for room and board. Her income is approx $9,000 from her summer and part time jobs. Tax difference by not including into income is about $500. Very round numbers here. Tom Hollister, CA