JohnH

I have one or two whose info I should have shredded the day they first came in the door. It would have been less aggravation in the long run.

Federal Immigration enforcement should be declared the disaster that it already is, but I dont think that will help your client.

As long as they pay their bill, it doesn't matter much to me whether they listen or not. Just as long as they are willing to live with the consequences. Years ago a church member asked my advice about a tax matter. After I told them what needed to be done, they thanked me and said they were going to take another approach (which was incorrect). A second church member who happened to be standing there during the conversation asked if it bothered me that the person was going to ignore my advice. I replied "There are plenty of people who pay me good money for advice that they ignore, so why should it bother me if someone ignores free advice?"

I like progressive rates too. I should pay the same rate as anyone who makes as much as or less than I do. Anyone who makes more than I do should pay a higher rate. I think that's fair.

I'm with Joan. No way I'd prepare one. I do have a couple of clients who have to file it - I give them the form and instructions but that's all I will do. You could always tell the client that after looking it over and even investing in a course, you've come to the realization that: 1) it's not a tax form; 2) the liablity is just too great 3) the form is fairly simple so he shoudl have no trouble filing in the blanks and mailing it. 4) So you will give him the paperwork (at no charge) and he can fill it out. If he isn't willing to provide the simple info on the FBAR and accept total responsibility for it, that alone should be a red flag. Theres no amount of CYA paperwork you can have him sign that will get you off the hook. If he gets stuck with a penalty for any reason, you can be sure he's going to be looking for someone to blame. Even if he takes his business somewhere else, you are still better off refusing to prepare this form.

Sometimes sales managers just throw stuff against the wall and see what sticks. That usually occurs when they've run out of good ideas and are grasping at straws. I see it all the time in the sales business. If enough people bite, they will use it again next year. If not, they will try some other oddball promotion. (I call it the Abe Lincoln sales method)

Another good one. Any way it's expressed, it all comes out as "Jeeronimo" from Brown's perspective. And he doesn't have to say a word.

I know I'm not addressing your tax question directly, but that usually doesn't stop me from chiming in anyhow, especially in the off-season. Two points come to mind: 1) What assurances could she possibly have that she will retain the customer? Unless the customer is bound by the agreement, this "customer purchase" is nothing more than an expensive paper snowflake. If the customer has agreed to keep using your client's services for a period ot time, maybe there's something you could hang your hat on. 2) In the advertising business, 3 years is a long time to retain a customer. So the hard fact is that this likely won't matter much beyond 2-3 years anyhow, regardless of what your final decision may be regarding how to handle the purchase price. When the customer bolts, there's the deduction because jainen's last paragraph would kick in.

Whatever you decide, maybe your client needs to evaluate this from a business perpective and not get too hung up on the tax side. Assuming a 40% tax rate, if it turns out that the acquisition cost could be written off in the year of acquisition, his net cost would be $1,900. If it can be amortized over 15 years, he will realize the tax-deduction difference of $1,265 at an average of $84 per year. If it isn't amortizable, he paid $3,165 for whatever revenue stream he is getting from the client. Given those relatively small differences, I'm guessing that if the new client isn't worth $3,165, they probably aren't worth $1,900 either.

In NC, the LLC would pay a $200 annual report fee. A corp pays a $20 annual report fee, plus a minimum $35 franchise tax. NC would not require a separate filing for each activity under the corp or LLC, just a single annual fee for the entity. There might be some separate local licensing fees assessed by various municipalities.

I don' think I can read it only one way. I don't think, I can read it only one way.

The difference between the almost right word & the right word is really a large matter-- it's the difference between the lightning bug and the lightning. - Mark Twain, in a Letter to George Bainton, 10/15/1888

"This is the sort of arrant criticism up with which I will not put." :)

Everybody's intent on going paperless. They don't give much thought to things such as per-digital recordkeeping, bank mergers, snd basic sloppiness in the businesses they deal with. They just assume somebody else has it taken care of, or perhaps they will be able to bully, beg, belittle, or shame somebody else into covering for them if a problem comes up.

Pub 15 is so informative. Very helpful info if the employee hands you a W-4 and says "Here ya go, but it's false." I've never understood why they eliminated the requirement to send in W-4's claiming more than 10 exemptions. Even if the IRS didn't follow up on them (or only followed up on a small number of them) the mere threat that they would be scrutinized would deter some cheating. I'd set the cutoff at 8, plus require that the worksheet accompany the W-4 when the threshhold is exceeded.

I'd tell the client he needs to get all documentation from the lawyer and bring it to me. Chances are, the tax side of this won't be solvable by anyone other than a tax pro, regardless of what the lawyer did. Fees for reviewing everything and preparing IRS correspondence could be pretty high, but certianly less than the tax on $18K.

I agree. But if a politician is going to be in moral, ethical, or legal trouble of any kind, their chances of sliding through the mess are much better if they come from the left side of the aisle. As a general rule, they get a pass unless the behavior is especially egregious. If I wanted to make a living as a politician, devoted only to getting elected & holding onto power, as a practical matter it would be wise to just abandon my principles and move over to that side.

I have seen several sales of this type go well, and also one which went terrilbly wrong. The one which went wrong was instructive, because the sale was structured to take advantage of potential tax savings while leaving the seller exposed to some unlikely problems. Naturally, the unexpected happened and the seller wound up wishing they had focused on legal protections at the expense of saving a few tax dollars. (I came into the picture after the fact, and had nothing to do with the original arrangement) My advice is to focus on the legal aspects of the sale and be sure your interests are protected there in your initial planning. After that, look to the tax aspects for making adjustments, but be sure you dont sacrifice thousands of dollars of legal protection in order to save a few hundred dollars in taxes (or simply the timing of tax payments). You said in your orignal post that you are planning to meet with profesional advisers - smart move. Find a good lawyer and a qualified tax pro, then listen to their advice. Hopefully you've located people who have experience with this sort of transaction. Their services wont come cheap if they are good, but they will pay for themselves many times over.

New political term I just ran across today - Fauxcahontas. I like it.

http://www.dornc.com/publications/nonprofit2008.pdf See the bottom of page 3

Jack: I like your attitude about pricing. The only thing dumber than always buying from the lowest bidder is always trying to be the lowest bidder.

Yes, many thanks to everyone who takes the time to contribute here. This forum is a valuable business resource as well as an enjoyable place to visit when some mind-clearing is needed. Wishing everyone the best post- tax season, and hope it was profitale & rewarding for you. And thanks for the reminder to contribute - i just sent mine in. Eric, we really appreciate all you do to keep this fine resource in tip top shape.

Did you discuss fees? I'm thinking he's going to want a discount because "it's pretty much done - all you have to do is push the send button." Besides, you couldn't get it done on time so he did you a favor by letting you put it on extension. (Just trying to think like the client here for a minute)

Pretty much finished here. 51 extensions filed (and maybe 3 or 4 stragglers - they will be added to the list if they show up in the next couple of days). After reviewing extensions, I'll circle back and finish a few of those already on extension if I feel like it. Or just go home early the next couple of days, since they're just another day around my office. I'll always be grateful to the person who taught me years ago to begin filing those extensions AS THEY COME IN THE DOOR beginning mid-March. Especially this year, since a death in the family prevented me from working most of this weekend. Any of can have unexpected circumstances pop up - it's well worth the effort to hedge your bets with the extension. Best of luck to everyone still racing that clock. Hope everything goes according to schedule for you over the next couple of days.

I have several clients who will tell you that you don't have to pay income tax if you're over 75. I know they will say that because that's what they tell me every year.