Lion EA

A very :bday:

A very :bday:

Way to go!

A very :bday:

Hope your client bought JH's guarantee. Is it void if they have anyone other than JH represent them?

PS: With the loss, round numbers, and apparent lack of books, you should also be on the look-out for hobby loss rules. Does anything in the IRS letter suggest they suspect this activity was not run like a business?

If JH operates like HRB, they keep absolutely nothing except the electronic version of the return and return ALL client documents and lists and...to the client. HRB staples them into the client folder that contains the return. If you have the client folder from your client, you can see what documentation he gave his preparer. Everything else was given verbally by your client to his preparer. Or, if the preparer was trying to be helpful, maybe he filled in some blanks. If the client qualified for or purchased the JH version of Peace of Mind, he might be in line for free audit representation by an EA from JH plus JH reimbursement of his additional taxes as well as penalties and interest. If you're not trying to retain this client for future years (record-keeping is a mess, for instance) then you might return him to the nearest JH for help and representation.

A very :bday:

A very :bday:

A very :bday:

A very :bday:

Makes me less sad that I left Santa Barbara decades ago...

Funny, you don't look a day over 1000. Hope it was happy and that you have 2009 more!

Thank you.

A very :bday:

A very :bday:

A very :bday:

Congrats, Jack! :D

NOT putting real estate into any type of corporation will avoid a nasty tax surprise as he sells properties. Hope he has a real good insurance policy. Depending on state law, he might have some liability protection with each property in its own LLC. He'd have to treat each property separately and not act as if the properties are his own personal checking accounts. And, he still wants good insurance coverage. Certainly look to see if he qualifies as a real estate professional, especially with that many properties.

A very :bday:

That's going to depend on state law. In CT, I cannot violate any terms of my divorce decree without risking consequences no matter how many violations my ex has. Anything my ex does or does not do does not let me off the hook. The decree is quite clear re still standing even if a section or more is violated. The IRS does not care. But, my ex might. I've seen ex-spouses sitting in jail with too much time on their hands take their exes to court re real or imagined violations of divorce decrees. Very costly by the time you hire a lawyer, take time off work, hire babysitters, etc.

Well, the IRS claims to be above state law, so it will rely on its own definitions of dependency. If minor children live with the mother and meet all tests of dependency, they are dependents of the mother for IRS purposes. That said, your client does have to abide by her divorce decree and state law. If she is supposed to sign the dependency over to her ex for one child but the ex does not request Form 8332 for this year due to no need for an extra exemption, then your client can decide to claim both children. The IRS does not care who supports the children as long as a child does not provide more than half his/her own support. Explain the rules to your client and let her make the decision. You don't want to be responsible for her ending up in court.

Thanks. Good point. Now, I'm definitely calling the Hotline

IRS letter suggested RP 2003-43 as a relief, requiring 1.) Form 2553 with signatures from everyone 2.) statement of reasonable cause, blah, blah 3.) statement from all shareholders attesting that they reported income, etc. 4.) declaration by officer under penalties of perjury, etc. all of which I'll draw up for client. Anyone have any good boilerplate paragraphs you've used successfully? Just really mad at the lawyer who insisted company form an S-corporation to the (former LLC) partners and to me and then did not fill out the final form needed to actually BE an S-corporation. I was suggesting a C-corporation to the lawyer so the $25,000+ health insurance could be a fringe benefit instead of reported on their W-2s (and they could have a broader range of future investors and they could have more than one class of stock and...), but the lawyer insisted he should form an S-corporation for them. Lawyer had plenty of opportunities to tell me that he was NOT going to file Form 2553 and that someone else would need to do that piece of the package.

BUMP Client said his lawyer formed an S-Corp for them effective 1 January 2008. I prepared Form 1120-S. IRS writes that they cannot process Form 1120-S because no Form 2553 was filed. Husband and wife shareholders did receive their K-1s and did report K-1 information on their joint personal tax return for 2008. Do I use Revenue Procedure 2007-62 for an entity that has not yet filed a tax return -- they mailed it in, but the IRS did not process it? Or, Revenue Procedure 2003-43? Any tips on what to include? By the way, I'm definitely blaming the lawyer!