Lion EA

OK, talked to client (instead of just him mom) who says he's on a ship 200-500 miles out in international waters for a month at a time, them back to CT for a month, and repeat. So, NO work location in LA or CT or any state. With work location in international waters (explains why no state withholding) and CT has always been his home and continues to be his home between "voyages," he's taxed as a CT resident, right? CT considers you as a resident until you move to another state (or out of the country) and "stick" the landing. He hasn't moved out of CT as far as I can tell, per CT's rules. His work location is in international waters. He could live in LA or anyplace. With a month off at a time, he chooses to remain at his parents' home in CT. But, I would think it's just commuting to get back to the port when the ship is ready to sail, yes? How would LA view this? Is he just visiting his family in CT? He's not required to live anyplace, just be on board the ship when it's ready to sail.

Finally talked to client (up to now, it's been his mom). He's assigned to a ship 200-500 miles out in international waters for a month or so, then back to CT for a month or so, and repeat. Only works on ship, not in CT and not in LA. So, I think taxed in CT where he resides, right?

Client lives in CT with parents. A Louisiana employer hires him to work on a ship in the Gulf of Mexico for a couple weeks at a time, then sends him home, then back again, etc. Withholds federal FIT but no state. He has no other work location in CT or LA or anyplace else other than a ship for a couple weeks at a time. During 2013, this began in April, so less than a year. But, it has continued, so now more than a year. Does LA have any claim to him? Does he need to file a LA return? I think we lost any benefits to a temporary job when it went over a year, right? But, I'm most concerned with his work location. If out in the Gulf of Mexico, is it LA or no state?

New twist. Young man lives with his parents in CT. Works for Galliano Marine Service, LLC, in LA who sends him on a ship out in the Gulf of Mexico for a couple of weeks. Then he returns to CT for a couple of weeks until he's sent back out on a ship, usually in the Gulf of Mexico for a couple of weeks. During 2013, he did this back and forth since April 2013, so not a whole year. But, it continues, so over a year. Are these temporary assignments? He has no other work location, no land location in any state. Employer withheld FIT but nothing for any state. (He had a job on a US Navy ship off the coast of Italy that also withheld FIT but no state when I first took on his family as clients.) Does Louisiana have any claim to him?

Thank you, Lynn. Young man, so doesn't respond to emails. I'll call or even text him today to find out where he lives/lived. He's had multiple temporary jobs as well as those expected to be permanent (marine engineer sometimes on a ship out to sea or docked someplace), and the LA job began after the start of 2013. I'm not even calling up the state returns until I find out where his 2013 tax home(s) was, which states are nonresident and which resident. You might see a PM later today!

At this late date, in this large family of multi-state returns, son has CT, RI, and LA. First time preparing a LA return. Anything I need to watch for? Like MA rental info or PA cities or having to know NY counties or school district or parishes...? By the way, his employer is in Cut Off, LA. Just emailed my client to see where he lives.

It was an employee of a law firm referring a client to an attorney at a different law firm. So, ETax 847, is your client a lawyer or a secretary or...?

My software does have that function. The lady in PA told me to fax it to her when efiling 2012, so I did both! For 2013, I actually did only the .pdf and not the fax as the refund was something like $2 so not a big deal if delayed (it's my kids and a free return, so they really can't complain!). CT also requires me to keep the other state return with the 8879 (CT accepts the federal 8879) in case they ask for it. But then, CT still doesn't receive e-filed trusts (you can upload returns on the CT site); say they will later this year.

Agree with KC. I do a couple of PA returns and have to fax (mail is also an option, but they state they will not process the refund until they receive the other state return) to a special number. Call Indiana's efile desk.

(1) Interest from sources in one of the Contracting States, being interest to which a resident of the other Contracting State is beneficially entitled, may be taxed in that other State. Interest from sources in Australia, being interest to which a resident of the US is beneficially entitled, may be taxed in the US.

Does the treaty say it is?

Worldwide income. But, a foreign tax credit is available for taxes paid to Australia on the same income.

I would read the IN instructions or contact IN. I work with a couple of states with similar requirements for paper returns, but for e-filed returns the states just require me to keep a copy of the other state return with the 8879.

Green card holder? On what basis did he receive a SSN and right to work in the US? Or, what treaty provision have you used to not report his worldwide income?

I just started typing "p" and IntelliConnect suggested things such as Per Diem and Per Diem Rates. I chose one of those and then looked for International and Foreign in the title and beginning text that's displayed.

Citizen? Permanent resident? Report worldwide income.

Below is one of the choices using IntelliConnect for "per diem rates": News: Federal Tax Day - Current, I.3, October Maximum Per Diem Rates for Travel in Foreign Areas Released, (Sept. 26, 2014) - October Maximum Per Diem Rates for Travel in Foreign Areas Released...released a listing of maximum travel per diem allowances for travel in foreign areas...14,417.421 October MaximumPer Diem Rates for Travel in Foreign Areas Released

Thank you, all.

I still have 8879s both on paper and electronically. So far, my electronic files go Clients, Name, Year. So keeping the 8879s in either the year of the return or the year filed would not make them hard to find in my electronic file. (And, yes, on desktop and an external drive offsite and a flash drive onsite.) Finding paper, until I stop using it, would be a bit more shuffling to check my file still labeled DCNs for the year of the return and looking forward until finding it in the year actually efiled (or moving backwards from now until I locate the year filed). I don't have a lot of clients, so either method would not take me much time to track down that piece of paper. Just wondered what all of you do. Mostly worried for when I start shredding older folders and have to check when returns were actually efiled. But, as long as I don't shred anything that isn't also scanned/saved electronically, I'll have everything someplace (a few places). I learned at Block where we filed 8879s by DCN. So, we had to locate the return, hope we could read the DCN handwritten on it, and then find that number in the DCN file to locate the 8879 with W-2s and other withholding. It was more or less chronological, but still a big pain. Now I file alphabetically, so much easier.

I'm filing a few 2011 and 2012 trusts and individual returns now. Would you file the prior year Forms 8879 with current year (either paper or electronic) because that's when it's filed, or with the 2011 and 2012 forms because that's the year they pertain to? I'm especially concerned about paper documents. If I file them with the appropriate prior year, then when I eventually shred documents from that year it'll be too soon for the late filers. What do you do?

Well, my "checks" are either a script R or my initials RL or RLL in script. Years ago I always used a green pen. Think I'll return to colored markings again.

I learned the blue checkmark trick from HRB; although, they had stopped giving us blue pencils by the time I was there. I do put a check on each document and sometimes in each area from which I get info; I even put checks on client emails and notes as I enter info. I need to get a colored pencil, though.

I do need to reconsider my E&O limits. Yes, a few increased tax prep fees on the more complex returns &/or higher income returns would pay for increased coverage. Studying that is a good November project since my E&O renews with the new tax season. From my trust fund babies, I get, "Don't you get that from the internet?" One year, a client called to see why his returns weren't ready yet. He had given me NO information. "But, I sent you my whole notebook." Nope. He eventually found tax info scattered throughout his house and called brokers and PTPs, etc., for duplicate documents. And, I really have to scan everything. I've been spotty about that. Maybe I can have my retired hubby do some scanning during tax season. Some of the stacks of client documents are inches thick, like that 2" notebook I receive each year from TFB plus the documents that trickle in afterward as he finds them or as brokers send corrected 1099s.. As has been said, there are lots of boilerplate pages and booklets that can be removed before scanning the information specific to that client. I have been firing clients that are not pleasant to work with or have unpleasant boyfriends/girlfriends or sons/daughters or lawyers/trustees who want to tell me how to do my job. Maybe I'm eliminating the ones who are likely to sue. Thank you for the nudge to reassess my E&O coverage. No one is perfect, and working against deadlines and with laws always changing....

Yes, as was mentioned, payroll. I think the cap is 1/2 W-2 income. I see so many PTPs that give detailed tables with all the info, but the W-2 line is $0.

It wasn't a rationalization. It's a fact. The suggestion was that I pay the differential between what the IRS charges my client in interest and what my client earned on the use of his money, but there IS NO differential for me to pay him, he earned a higher rate than the IRS and even CT charges combined. My point/rationalization is that I DO offer what I feel is right and not zero. And, also, that it has not happened often enough for me to have a general procedure. But, I do NOT put in writing that I will pay interest; I need to CMA for when the interest would put me out of business. A risk-based fee schedule sounds interesting. How does it work? A new client comes to me who did not listen to his prior preparer (or his prior preparer had given up trying to tell him what to do) or his situation had changed drastically and he owes $100,000 including tax, penalties, and interest for his 2013 return this week. Do I base my fee on his P&I? The mistakes he made in not using the ES vouchers or new W-4 his prior preparer gave him? The possibility he's been doing something fraudulent so his prior preparer fired him when he discovered it? Which risks do I charge for and how much? I've heard of preparers adding $500 to EIC return fees to cover possible preparer penalties. Are there risks that I can put a cost on to have a fee schedule? Or, do you assess the risk return by return as you complete them and price accordingly on a case by case basis? I don't have a lot of clients, but most are very high earners. So the possibility of one lawsuit or unhappy client (along with their family members and their business returns and all their referrals) wiping me out worries me. For instance, I alerted my clients to their potential change in tax due because of the NII, using their 2012 information to provide an apples to apples comparison, and of course told them to alert me as they saw changes during 2013. But the client whose investments earned $85,000 more didn't notice and also didn't bring me his brokerage statement until this month! Luckily, he was smart enough to understand his higher tax bill as I went through his return with him. I do have clients who have no idea how income and taxes relate (the proverbial trust fund babies).