Lion EA

Is that also the case for us (CT or where ever) tax preparers with remote CA clients?

Tax software is no substitute for tax knowledge. You can replace the words "tax" with any profession.

And, that is an age reference that I can identify with.

Because they are already a state entity, and LLC, they do NOT file Form 8832. They file Form 2553 to elect S-corporation taxation.

The IRS notes at the bottom of notices if they've been replaced by a later notice or if this is replacing an earlier notice. Otherwise, the IRS just keeps piling on regulations for us tax preparers to follow. Remember that some documentation actually belongs to the IRS; we're just the IRS's filing cabinets. So, the IRS has the legal ability to drop in unannounced to view certain things, such as Forms 8879.

I think we have specific steps to take in the case of theft, physical or electronic. We have newer IRS projects, such as Security Six and WISP. We need to document our own record retention policies, as allowed, and follow them. https://www.irs.gov/pub/irs-pdf/p5708.pdf

I they are trying to be an S-corp during the time it was a SP, then they have 2 steps. If they want to be an S-corp when they were a SMLLC, then it's 1 step. IF they meet the qualifications for late election. As someone already asked, did they act like an S-corp and just fail to file the 2553?

From IRS Pub 1345: Record Keeping and Documentation Requirements EROs must retain the following material/documents listed below until the end of the calendar year at the business address from which it originated the return or at a location that allows the ERO to readily access the material as it must be available at the time of IRS request. An ERO may retain the required records at the business address of the Responsible Official or at a location that allows the Responsible Official to readily access the material during any period of time the office is closed, as it must be available at the time of IRS request through the end of the calendar year. A copy of Form 8453, U.S. Individual Income Tax Transmittal for an IRS e-file Return, and supporting documents that are not included in the electronic records submitted to the IRS; Copies of Forms W-2, W-2G and 1099-R; A copy of signed IRS e-file consent to disclosure forms; A complete copy of the electronic portion of the return that can be readily and accurately converted into an electronic transmission that the IRS can process; and The acknowledgement file for IRS accepted returns. Forms 8878 and 8879 must be available to the IRS in the same manner described above for three years from the due date of the return or the IRS received date, whichever is later. The Submission ID must be associated with Form 8878 and 8879: The Submission ID can be added to the Form 8878 and 8879 or the acknowledgment containing the Submission ID can be associated with Forms 8878 and 8879. Forms 8878 and 8879 must be available to the IRS for three years from the due date of the return or the IRS received date, whichever is later. If the acknowledgement is used to identify the Submission ID, the acknowledgement must be kept in accordance with published retention requirements for Forms 8878 and 8879. The acknowledgement is not required to be physically attached to Form 8878 and 8879; it can be electronically stored. EROs may electronically image and store all paper records they are required to retain for IRS e-file. This includes Forms 8453 and paper copies of Forms W-2, W-2G and 1099 R as well as any supporting documents not included in the electronic record and Forms 8878 and 8879. The storage system must satisfy the requirements of Revenue Procedure 97-22, 1997-1 C.C. 652, Retention of Books and Records. In brief, the electronic storage system must ensure an accurate and complete transfer of the hard copy to the electronic storage media. The ERO must be able to reproduce all records with a high degree of legibility and readability (including the taxpayers’ signatures) when displayed on a video terminal and when reproduced in hard copy.

Brownstein January 9, 2023 NEWS The Federal Trade Commission Proposes Ban on Employer-Worker Non-Compete Agreements On Jan. 5, 2023, the Federal Trade Commission (FTC) issued a Notice of Proposed Rulemaking (Proposed Rule) seeking to categorically ban nearly all employer non-competition agreements nationwide. If passed in its draft form, the Proposed Rule would: (1) prohibit employers from entering into virtually all non-compete agreements with all workers, (2) require employers to rescind existing non-compete agreements, and (3) require employers to notify past and current employees that their non-compete obligations are no longer in effect. The Proposed Rule would supersede all less-restrictive state non-compete laws, which in many jurisdictions are common and enforceable if the restriction reasonably protects the employer’s legitimate business interests. The Proposed Rule marks a major shift to the legality and enforceability of non-compete agreements. Employers who have historically included non-competition provisions in employee handbooks, employment agreements and equity grants will need to make significant changes before the Proposed Rule is implemented. The Proposed Rule is in response to July 2021 Executive Order 14036, which directed the FTC to issue rules to limit the use of non-compete clauses “that may unfairly limit worker mobility.” In response, the FTC took a sweeping approach to banning non-competes, deeming such clauses as categorically unfair. The Proposed Rule broadly defines a non-compete agreement to include any “contractual term between an employer and a worker that prevents the worker from seeking or accepting employment with a person, or operating a business, after the conclusion of the worker’s employment with the employer.” The Proposed Rule also forbids any contractual provision that achieves a similar effect, such as an overly broad nondisclosure or non-solicitation agreement that would effectively preclude a worker from working in the same field. The rule applies to all employers nationwide and all “workers,” including an employee, independent contractor, extern, intern, volunteer, apprentice or sole proprietor who provides a service to a client or customer. Further, the Proposed Rule would require employers to rescind existing non-compete clauses no later than the rule’s compliance date. The Proposed Rule places the onus on employers rescinding a non-compete clause to provide notice to current and former employees before the date the rule becomes effective. The Proposed Rule provides model language for such notice and would also establish a safe harbor provision whereby an employer would satisfy the rescission requirement when it provides satisfactory notice to the affected workers. Finally, the Proposed Rule would also prohibit an employer from representing to a worker that the worker is covered by a non-compete clause where the employer has no good faith basis to believe the worker is subject to an enforceable non-compete clause. Under this provision, employers are prohibited from threatening to enforce a non-compete clause against a worker, advising a worker against pursuing a particular job opportunity due to a non-compete clause, or representing to a worker that the worker is covered by a non-compete clause. AUTHORS Sarah Auchterlonie Kayla Dreyer Craig Finger Rosemary Becchi, Strategic Advisor and Counsel Annmarie Conboy-DePasquale, Policy Advisor bhfs.com © 2023 Brownstein Hyatt Farber Schreck, LLP This document is intended to provide you with general information regarding the FTC's non-compete ban. The contents of this document are not intended to provide specific legal advice. If you have any questions about the contents of this document or if you need legal advice as to an issue, please contact the attorneys listed or your regular Brownstein Hyatt Farber Schreck, LLP attorney. This communication may be considered advertising in some jurisdictions. The information in this article is accurate as of the publication date. Because the law in this area is changing rapidly, and insights are not automatically updated, continued accuracy cannot be guaranteed.

With the current Congressional threat to the IRS's funding, I think we'll see a later date, such as the third week or even fourth week of January. But my crystal ball is broken.

+ 2 CEs of Ethics EVERY year for EAs. But I hear that the OPR or whichever department renews our EA designation is understanding about illness (COVID seems to be reasonable cause for most things) and one-time errors -- if you contact them and make-up any shortage immediately. Also, if you're an NAEA member, you need 30 CEs per year, IIRC.

Happy, Healthy New Year!

The IRS hasn't announced yet. They just announced biz e-filing for 12 January, and that's been as early as the 1st week, has the shortest shut-down. A wild guess would put 1040 e-filing at least a week later. I have seen professional organizations guess 20 January and even 28 January. Maybe IRS is holding its breath to see if any more laws are voted on! You'll see the date in all your tax newsletters the minute it's announced.

Issue Number: IR-2022-226 Inside This Issue Note: This is updated to include the correct notice. IRS announces delay for implementation of $600 reporting threshold for third-party payment platforms’ Forms 1099-K WASHINGTON — The Internal Revenue Service today announced a delay in reporting thresholds for third-party settlement organizations set to take effect for the upcoming tax filing season. As a result of this delay, third-party settlement organizations will not be required to report tax year 2022 transactions on a Form 1099-K to the IRS or the payee for the lower, $600 threshold amount enacted as part of the American Rescue Plan of 2021. As part of this, the IRS released guidance today outlining that calendar year 2022 will be a transition period for implementation of the lowered threshold reporting for third-party settlement organizations (TPSOs) including Venmo, PayPal and CashApp that would have generated Form 1099-Ks for taxpayers. “The IRS and Treasury heard a number of concerns regarding the timeline of implementation of these changes under the American Rescue Plan,” said Acting IRS Commissioner Doug O’Donnell. “To help smooth the transition and ensure clarity for taxpayers, tax professionals and industry, the IRS will delay implementation of the 1099-K changes. The additional time will help reduce confusion during the upcoming 2023 tax filing season and provide more time for taxpayers to prepare and understand the new reporting requirements.” The American Rescue Plan of 2021 changed the reporting threshold for TPSOs. The new threshold for business transactions is $600 per year; changed from the previous threshold of more than 200 transactions per year, exceeding an aggregate amount of $20,000. The law is not intended to track personal transactions such as sharing the cost of a car ride or meal, birthday or holiday gifts, or paying a family member or another for a household bill. Under the law, beginning Jan. 1, 2023, a TPSO is required to report third-party network transactions paid in 2022 with any participating payee that exceed a minimum threshold of $600 in aggregate payments, regardless of the number of transactions. TPSOs report these transactions by providing individual payee’s an IRS Form 1099K, Payment Card and Third-Party Network Transactions. The transition period described in Notice 2023-10, delays the reporting of transactions in excess of $600 to transactions that occur after calendar year 2022. The transition period is intended to facilitate an orderly transition for TPSO tax compliance, as well as individual payee compliance with income tax reporting. A participating payee, in the case of a third-party network transaction, is any person who accepts payment from a third-party settlement organization for a business transaction. The change under the law is hugely important because tax compliance is higher when amounts are subject to information reporting, like the Form 1099-K. However, the IRS noted it must be managed carefully to help ensure that 1099-Ks are only issued to taxpayers who should receive them. In addition, it’s important that taxpayers understand what to do as a result of this reporting, and tax preparers and software providers have the information they need to assist taxpayers. Additional details on the delay will be available in the near future along with additional information to help taxpayers and the industry. For taxpayers who may have already received a 1099-K as a result of the statutory changes, the IRS is working rapidly to provide instructions and clarity so that taxpayers understand what to do. The IRS also noted that the existing 1099-K reporting threshold of $20,000 in payments from over 200 transactions will remain in effect.

Use saline eye drops, such as Refresh, many, many times per day. Eye doctor also has me on Restasis morning and night. The blue-light-blocking multi-focus glasses help a lot. And, close your eyes frequently during the day. Cataract surgery was a huge blessing. I was reading a restaurant menu after my first eye was done; something I couldn't do before with dim restaurant lighting and tiny fancy fonts on the menu. Hubby said I was just showing off!! I had both eyes done during December 2019.

https://www.journalofaccountancy.com/issues/2016/oct/taxes-for-gamblers.html https://www.cpapracticeadvisor.com/2015/07/16/taxpayer-fails-to-hit-jackpot-as-professional-gambler/19245/ https://www.cpajournal.com/2019/12/24/taxation-of-gambling-income/ Also, look up this Advice Memorandum because it has links to several court cases: IRS Advice Memorandum, Professional Gambler's Wagering Losses and Business Expenses AM 2008-013 December 10, 2008 Code Sec. 165 Code Sec. 162 Internal Revenue Service: Chief Counsel: Advice Memoranda: Professional gambler: Wagering losses: Business expenses.– Office of Chief Counsel Internal Revenue Service Memorandum Number: AM2008-013 Release Date: 12/19/2008 CC:ITA:B01 - JGMEEKS POSTN-139898-08 UILC: 165.08-00, 162.00-00 date: December 10, 2008 to: Sara M. Coe Deputy Division Counsel (Small Business/Self-Employed) from: George J. Blaine Associate Chief Counsel (Income Tax & Accounting) subject: Professional Gambler's Wagering Losses and Business Expenses This Generic Legal Advice responds to your request for assistance about a recurring issue in litigation. This advice may not be used or cited as precedent.

Thank you, all. And, thank you for the above, which I remembered but could not find. Where did you get that cite?

Taxpayer with early-onset dementia. Spouse has POA that specifically authorizes her to sign tax returns and speak re tax matters. Will their returns be eligible for e-filing or will we have to paper file next season? Do I included a copy of the POA with the return? Or, mail it in separately in advance? Or, something else entirely? Would it be any different if they use the IRS Form 2848 to authorize the wife to sign for her impaired husband?

Get the multi-focus computer glasses, with the blue-light-blocking lenses. Foster Grant has them on sale often. I've also taken pictures with my iPhone to enlarge to see detail, or called in Hubby who always wears progressive lenses to read for me.

No and No. There are no deductions for unreimbursed employee expenses under TCJA, until it sunsets or Congress votes it down. A qualified performing artist is an entertainer/performer, such as a singer, actor, musician, or artist. See the flow chart and Line 10 instructions: https://www.irs.gov/instructions/i2106#f64188v01 Your client can work with his employer to establish an accountable plan for expense reimbursements to receive nontaxable reimbursements that will be deductible by his employer. Win-Win. Help them out by providing information. Here's one source: https://www.journalofaccountancy.com/issues/2020/feb/employee-expenses-accountable-plan.html

My clients needed to pay me over time, and had a couple clients die, so my cash flow was slowed. I did receive small PPP loans. My banker actually was the first to notice my bank balance less than prior years and contacted me to apply! Otherwise, I wouldn't have been able to renew my software at the early price.

I just tossed all my Packages X, including CT and NY versions, into recycle paper. I needed the shelf space, and those were the worst looking books. I still have TTB and others of that sort with better-looking spines!

I got the Foster Grant blue light computer glasses on sale. Reading magnification for those tiny numbers on W-2s at the bottom (1.25-1.5), computer distance in the middle, and distance at the top so I can see a client across my desk or look out my window. I don't have to take them off, can walk around in them, sometimes forget I have them on. Also have a lamp on my desk, as well as recessed lights in the ceiling, because good light helps, too. I have a pair on my desk, a pair in my briefcase for going to clients' sites, and a spare that are darker and show up well on Zoom, also. They were a real bargain on sale. Also, have an even cheaper Chinese pair on my bedside table for reading my Nook. By February, my eyes were burning. As soon as I put on the blue light multi-distance glasses, my eyes felt better. When I told my ophthalmologist, he said his own kids wear them. I did buy the three pairs I use for work from my business account as office supplies. Take good care of your eyes!

Get the blue-light-blocking computer glasses. Huge reduction in eye strain. Foster Grant has frequent sales if you don't need prescription (just reading, such as 1.50). Look for sale announcements on Facebook.

If it's his own business, then just stop selling when he's close to the income level you're aiming for. It sounds like he should be closing four times a year for his surgeries and recuperations. Take vacations when he's able; think Bucket List. Wife is bookkeeper, not car salesperson. Does he have salesmen? If so, fire them -- or greatly increase their salaries/commissions. What about a C corp, salary level that you want/need/consistent with business, hire wife as bookkeeper, C corp can pay medical without putting it on W-2 the way an S corp must?