JohnH

I agree 100% with Randall. I've never seen IRS ignore a truthful letter from a taxpayer, even when the answer is "no". Including a 1040x is also helpful, because it gives IRS a way to resolve the issue within their normal channels if they decide to accept the info. I've also never seen them refuse to do an audit reconsideration when there was not a taxpayer-signed agreement to the assessment (even after the time had passed) but maybe I just have lucky clients.

I'm pretty sure that baby grace period only applies if your return is prepared by a qualified & licensed hair stylist or auto mechanic.

That's how you do it.

Well, what are you going to say?

I don't have any cites for you, but I think this is a pretty good explanation & summary: In order for assisted living expenses to be tax deductible, the resident must be considered "chronically ill." This means a doctor or nurse has certified that the resident either: 1) cannot perform at least two activities of daily living, such as eating, toileting, transferring, bath, dressing, or continence; or 2) requires supervision due to a cognitive impairment (such as Alzheimer's disease or another form of dementia). In addition, to qualify for the deduction, personal care services must be provided according to a plan of care prescribed by a licensed health care provider. This means a doctor, nurse, or social worker must prepare a plan that outlines the specific daily services the resident will receive. Though not required by law, most assisted living facilities prepare care plans for their residents. Generally, only the medical component of assisted living costs is deductible -ordinary living costs such as room and board are not. However, for a chronically ill resident who is in the facility primarily for medical care, and the care is being performed according to a certified care plan, then the room and board may be considered part of the medical care and the cost may be deductible, just as it would be in a hospital. If the resident is in the assisted living facility for custodial and not medical care, the costs are deductible only to a limited extent. In any case, the expenses are not deductible if they are reimbursed by insurance or any other programs. Residents who are not chronically ill may still deduct the portion of their expenses that are attributable to medical care, including entrance or initiation fees. The assisted living facility is responsible for providing residents with information as to what portion of fees is attributable to medical costs.

W-2 copy A & W-3 does not need to be Red. Black & white copies are just fine provided the right software is used, but as already stated I don't fold them, for the same reasons Form 1099 & 1096 IRS copy does still need to be Red.

Definitely don't need to get into the baby-sitting business. I do everything possible to keep my clients OUT OF MY OFFICE so I can get some work done.

I can't remember the last time I used a 2848 - other than a full-fledged audit. 90% of the itme it's much easier to call IRS, conference the client in on the call, then take car of the matter. I typically check with the client that they will be available for the next hour or so and explain that I'll be calling them with someone from IRS on the line and what IRS will ask them in terms of verification. Then I call IRS and put them on speaker while I do other work until the agent comes on the line. I explain that I'm calling for a client who is standing by and ask permission to put them on hold while I conference the client in. Problem solved. I've never had but one or two occasions where the person from IRS was cranky and refused to let me put them on hold. In those rare situations I just apologized to the jerk, hung up, and called right back. ( I assumed they needed to get back to their nap or coffee break) There's always someone else to talk with, and usually with a good disposition. No sense wasting time & energy with the ones who lack people skills. Why complicate matters when 75-90% of CP2000's can be handled this way?

I re-upped this year, but like most others on this thread I'm re-evaluating. I may cancel after this time around, for all the reasons already discussed.

Merry Christmas everyone. And if you're doing any sort of post-surgery physical therapy, just remember; "if you don't come to hate your physical therapist, they're not doing their job!"

If the church members get a tax deduciton for the gitts, it is definitely taxable income to the pastor(s). http://www.ecfa.org/...ed-for-a-Pastor http://www.irs.gov/pub/irs-wd/09-0038.pdf

You can attach the letter to the return, but it will probably be ignored and a penalty notice sent out. So it will be wise to keep a copy of the letter and send it in again in response to the penalty notice. You will probably be successful in getting the FTF and FTP penalties removed, but interest will still be due on the unpaid balance. In any event, it won't hurt anything to attach the explanatory letter to the return - who knows, someone might actually read it. I;d forget about sending the 2210 - it doesn't apply in this case.

Why do people ever return checks to IRS? They just set themseves up for trouble of this type. The small amount of interest involved in depositing the IRS payment and then immediately writing a check back to IRS is more than offset by the convenience of having ironclad proof of what took place. This client is learning this lesson the hard way,

Just be really careful and you won't have to worry about misteaks.

Si, comprendo. This will work PROVIDED he files the 2008 return by Apr 15, 2012. (or Oct 15, 2012 if there was an extension filed for the 2008 return) If he files one day later, the $3,000 refund vanishes into thin air. In your original example, you had refunds in closed years which you were hoping to apply to subsequent years and roll forward to offset balance due years. Unless IRS makes a processing error, it won't work (except for open years)

If you are saying that all these returns are being filed now, Here's how I think it's going to work out. For 2004, the IRS owed $ 2000 to taxpayer. (LOST due to SOL) For 2005, the IRS owed $1000 to taxpayer. (LOST due to SOL) For 2006, taxpayer owed the IRS $2,500 (taxpayer owes tax, 25% FTF penalty, plus FTP penalty and interest) For 2007, taxpayer owed the IRS $300 (taxpayer owes tax, 25% FTF penalty, plus FTP penalty and interest For 2008, IRS owed $1,500 (taxpayer eligible for refund if filed before Apr 15, 2012. This can be applied to 2009, but see exceptions in next note) For 2009, the tax payer owed the IRS $1,700 (taxpayer owes tax, 25% FTF penalty, plus FTP penalty and interest on $20 if prior year refund was applied. However, if at the time of filing the earlier years amounts due have not been paid (tax, penalties, and interest), IRS will apply the refund to the prior year balances due - first to P&I and then to tax) For 2010, the IRS owed the taxpayer $3,000 (if at the time of filing the prior years amounts due have not been paid (tax, penalties, and interest), IRS will apply the refund to the prior year balances due - first to P&I and then to tax. If there's anything left due to interim payments & applied refunds on proir tax liabilities, etc, then after all the dust settles the taxpayer will receive a refund)

It won't work. Refund is lost for all years for which the SOL has run. It can't be refunded in cash or applied to the following year. Although I guess there's no harm in trying...

Either one is fine. I switched from Quickfinder to The Tax Book several years ago and have been pleased with it, with no reason to go back. I've seen and heard comments by others on this forum slamming one or the other, but for the most part none of the negative arguments either way were convincing to me. (some of them sounded like sour grapes for one reason or another) As Mike pointed out, The Tax Book has a great forum, which I personally enjoy just as I enjoy this one. I've never partcipated in the QF forum, but I imagine the QF advocates would make a simliar positive statement regarding it. I see no defensible reason to prefer one over the other in terms of quality or convenience. At the same time there's no reason to buy both. So whichever decision you make will be the best one for you. Personally I vote for The Tax Book.

Depending upon how many hours you need, the CCH webinars are very handy. I did one a few weeks back on trusts, and got my certficate for 2 hrs of CPE as soon as it was over ( after emailing them a scan of a questionnare with answers to a few key questions from the presentation). The webinar was very informative, and the workbook they emailed me ahead of time was excellent. I will keep it as a reference book. They offer a couple of webinars on variuos subjects every week, I think. The asking price is $250 for an unlimited number of participants in the room, but I found that they will readily work with you on price if you can convince thm that you are the only participant. For me, the cost was well worth the time saved. I wouldn't have left the office to drive across town to a local seminar even if I could have saved half what I paid them. After all, time is money.

In NC, the employer will contest the claim when someone quits voluntarily for the same reasons given above. If the employee quits voluntarily, they aren't entitled to unemployment compensation. They are also not entitled to u/c if they are fired for valid reasons (or in some cases they are penalized a certain number of weeks before they can begin receiving u/c). The primary purpose of u/c is to help willing workers who are laid off temporarily or permanenetly because no work is available. Unfortunately, it has come to be regarded by many as some sort of right they are entitled to regardles of the reason they are out of work, including lifestyle decisions along the lines that "I can do just about as well drawing u/c as I can by working, plus I can make a little on the side and not tell anybody". Back to the point. In the original post you said that the money doesn't come from the employer. In fact, it does come from the employer after being filtered through a government agency and several layers of bureacruacy. The employer's reseve account is the primary funding mechanism. If the employer can establish that the employee left voluntarily or was fired for valid reasons other than lack of work, then the claim is not charged to the employer's reserve account, even if the judge rules that the person is entitled to receive u/c. That is important because even a few small claims can quickly reduce the reserve account balance and cause the rate the employer pays on wages to rise dramatically for many years to come. So contesting claims can save the employer money in the long run - sometimes a lot of money. The other side of the coin is that some employers will as a matter of policy contest all claims (except for mass layoffs) because there is a strong financial incentive to get "non- charging" status on any claim. So when there is an ambiguous situation, an otherwise deservng employee might be denied or penalized. Overall, though, it's been my experience that the greatest abuse or manipulation of the system is on the claimant side. Your second sentence in the original post illustrates that point.

I usually just duplicate the prior year's return for the client, rename it "estimate", and change the relevant entries. (For this year, it's also necessary to override the MWP credit, for example) I like doing it this way because I'm reminded to look at & analyze year-over-year differences/changes when working up the current year estimates.

I have a similar concern for this client's health. I have watched her decline as this process has played out, and it's obvious that the stress of this situation is weighing heavily on her.

Even listing her as a shareholder and officer would not make her liable for corporate debt, unless she signed something accepting personal liability. Of course, now that the credit card companies are paid, she isn't going to get any of that money back so it may be irrelevant. You know, in the aftermath of the Madoff case there is some special treatment for some situations like this. I don't know if it applies in your case, but worth looking into. I have a similar client situation that came to light in 2011 so I'll be digging into it more in the coming months. I guess my frustration over the one I'm dealing with is showing through in my reaction to what you're dealing with in your client's dilemma. Mine has many of the same elements: 1) Widow being taken advantage of by someone she trusted; 2) She was embarrassed to tell her family; 3) Signing documents she didn't understand, 4) Lost a bunch of money and maybe her home before it's all over; 5) The scoundrel is probably going to get off scott free. Disgusting.

Even if it is an S corp, she would not be liable for the FTF penalty. I haven't looked at it lately, but I seem to recall that the FTF penalty for S-corps is imposed on the corporation only. So if the corp is defunct and has no assets, the penalty is uncollectible from anybody. Just hope that the guy didn't bail out on any payroll taxes, because then things can get sticky. He says he doesn't have the records - I already don't believe him. Of course, we all knew his type the minute you revealed he was having an elderly lady sign documents she didn't understand. He sounds like the type of scoundrel who doesn't know where anything is when someone else has a problem, but can move heaven and earth to come up with documentation when it's his behind on the line. I'd question everything he says, and not believe anything I can't verify through a third party. I'd be willing to bet that even if any documents show up, there will be missing signatures or forged signatures on some of them.

Taken from IRS W-2 instructions: " Terminating a business. If you terminate your business, you must provide Forms W-2 to your employees for the calendar year of termination by the due date of your final Form 941. You also must file Forms W-2 with the SSA by the last day of the month that follows the due date of your final Form 941. If filing on paper, make sure you obtain Forms W-2 and W-3 preprinted with the correct year. If e-filing, make sure your software has been updated for the current tax year. " So you're OK to wait until Jan 2012 to do it all, unless you just want to get it out of the way before the rush comes. But even if I did prepare and mail them early, I'd go ahead and prepare duplicates to have ready when most of the employees call in late January or early February to complain that they never received their W-2.