JohnH

At some point you have to put an end to things and decide how much time you're going to invest in a $60 dispute. There are cases in which I've refused to pay interest, other cases in which I've paid part of the interest and some in which I've paid it all. (plus penalties if I coudln't get them abated) You have to use your judgement rather than rely upon (or hide behind) some sort of inflexible policy. In this case I'd probably send her a check for the $60, plus enough additional interest to get her through 60-90 days, and tell her that after that she'll be on her own. That should give her enough time to get the money together, but if not then she will just have to work out her problems with IRS from that point forward. They are pretty easy to work with, so you could fill out the 9465 and enclose it with the check.

I wouldn't want my tax return prepared by someone who relied upon an input sheet for anything beyond using it as a reminder or checklist. If they need the input screen to tell them how to actually prepare the return, they need to stick to short forms and very simple returns.

Ken: That is very good news. Thanks for posting and thanks for being willing to give your time in this effort.

For what it's worth, the $1,600 that turned into $6,000 isn't as bad as it first appears. The FTF penalty maxes out at 25%, so the effective interest rate represented by this penalty actually DECREASES when averaged over a long period of time. Even when you add in the ongoing FTP penalties and interest, and I'll bet you his actual cost of borrowing the $1,600 from the government will work out to an equivalent of about 15 - 17% APR if you run the math. I consider the penalty to be no different that interest for an individual, since interest on consumer debt is not deductible anyhow. So both penalties and interest can be lumped together as simply a cost of borrowing money. Certainly not wise to borrow money at those rates, but it's cheaper than standard credit card rates and he didn't even have to fill out an application. The unauthorized borrowing also didn't show up anywhere on his credit reports (at least not until the liens are filed, if any). I've used this line of reasoning in the past to help a delinquent taxpayer understand what really happened. Sometimes it helps them to realize that the situation is less dire than it first appears and makes it easier for them to stomach repaying the money. Doesn't make it a wise thing to do, but it makes the point that the government isn't horribly mistreating them either. Nobody would expect the bank to loan them $1,600 for 5-8 years with no payment of principal or interest on the note and then not expect to pay accumulated interest when the balloon payment came due.

Happy anniversary Eric & Brandy. I remember when my wife and I celebrated our 5th anniversary. That was 35 years ago, but still a milestone at the time. (Every anniversary is special)

If the distribution took place in 2009, it will show on the taxpayer's 2009 tax return. If it takes place in 2010, it will show on the taxpayer's 2010 tax return. All of this is irrespective of the year showing on the corporation's tax return, although the return for the FY ending 3/31/10 would be the 2009 return. The year of a FY tax return is normally the year in which the FY began.

Your client will probably be required to file form TF F 90-22.1, especially if the proceeds from the sale are deposited in a foreign account prior to being transferred to the US. Of course, she may already be filing it anyhow for a number of reasons, but if not then this transaction may trigger the requirement due to the questions on Schedule B, Line 7.

Sounds like you made a rational decision based on your intuition, judgement, & experience. Regardless of what any of us may speculate from a distance, that's what counts most when you're sitting eye-to-eye with the client anyhow. Apparently you're off to a good start and I hope you'll keep us informed about how things progess - this is an interesting situation on several levels.

As long as you have certified mail documentation for paper filed extensions, you're OK. Without that documentation, you may have a problem. Thanks to the new penalty situation, I mail all S-corp extensions and any C-corps expected to report a profit via Certified Mail with Return Receipt.

There's nothing in his contract that says he can't work a part-time second job, is there? http://www.whitehouse.gov/sites/default/files/president-obama-2010-complete-return.pdf Did you notice the K-1 income from the Freeman Trust Pin Money Fund? $12K annually for the first lady, dating back to the first Bush administration. That's an interesting story in its own right. http://en.wikipedia.org/wiki/Henry_G._Freeman_Jr._Pin_Money_Fund

In any event, $1,000 on the table is chump change with this client. Retainer is likely to be all you'd get, and once you start withholding additional work because he hasn't replenished the retainer, the fun would begin. You'd be in a hassle with him over his accusations of incomplete work and him trying to use his "uncooperative accountant" as another ploy to try and keep the IRS at bay. Worse yet, he will use some of the retainer you should have charged him to hire that lawyer you should have sent him to in the first place, and then you'll have a professional aggravator staying in your face. Anyone who would decide to take this guy on had better get the full amount up front and then start work once you know the check didn't bounce. In the highly unlikely event that he turns out to be cooperative, it's easy enough to give him a refund when the work is completed (probably sometime next year) - he can apply it to the taxes he still owes at that time.

Offer the girlfriend free use of the brick. Tell her she needs to use it either on him or on herself - her choice. If she's wise, she'll use it on herself.

Thanks to Margaret for asking the question, and thanks Eric for setting up the TEOTE button. I had been asking myself all weekend how we would actually make this happen, so I appreciate your taking the bull by the horns & making it so easy. My donation's in, and I encourage everyone else to participate. Let's show Eric how much he means to us.

I agree with Jack, but I'm a bit farther to the negative. Once 2001-2003 are cleared up, 2004-2009 won't be far behind. The client has already demonstrated that he's a total flake, so I don't think even $10,000 will be enough of a retainer. He's probably going to resist everything you do even though it will be in his interest, and his constant response will be "Well, why can't you just settle this so I can move on?" My only response to him would be that he needs a good tax lawyer, and he needs one right now.

I tried looking up local restaurants, but didn't come up with many suggestions on my first try. For example, there's The Governor's Restaurant in Presque Isle, Grammy's Country Inn in Houlton, the Village Restaurant in Fort Fairfield, for example, but each only has one recommendation. The best local choice might easliy be missing on DineSite. http://dinesite.com/city/city-4178/ Eric, I think you need to let us know where you enjoy eating - especially where you'd choose to go for a special occasion such as an anniversary, birthday, entertaining out of town family or clients, etc. WHere would you take us if all the members of this group showed up one weekend and said "Let's go to dinner!" ?

Catherine: Dinner for Eric on us - that's a fantastic idea!

Tom: You could do that with Google Wave (I think).

Seems to me that every time someone mentions a technological feature that I don't presently use, sooner or later there comes a time when it comes in handy. IN some cases it's just nice to have, and other times I find it morphing into something essential. So I'd say having a "Chat" feature would be well worth exploring. If we find it useful, we can refine how & when it's used. If nobody finds it helpful, then Eric will know from the non-use that it isn't a practical tool here. Either way, there's no downside to trying it. (By the way, I'm going to hit the "Donations" button as soon as I finish this post. Hope we all are keeping in mind that this is a self-supported forum).

Yes, so far much of the conversation seems to be dominated by a few folks who are unhappy or have a gripe to air about a feww limited weaknesses, but I assume that once they get some things off their chest it will settle down. Much like what happened when Eric first started up this forum. I do like the idea of a forum which is independent of the company - that doesn't guarantee fair and unbiased discussion, but it has its advantages. It certainly has worked extremely well here.

As my Spanish teacher in Mexico stated several years ago: "A language is simply the dialect spoken by the group with the strongest army."

If you're thinking about Drake (which I'm always doing as a backup plan), here's a new group that might be of interest. http://groups.google.com/group/draketax

Apparently THEIR economy isn't in stagnation...

I missed a couple-> not because I didn't know them, but my memory failed me. One was the draft cards, which is really odd because I served in the military from 1966-1970. For a little fun, here's a cute rendition of #4: http://www.youtube.com/watch?v=oUMwu_gXK7Q

Aw go ahead & be a smart aleck. We're not under any deadlines right now so there's time for a little levity. And I confess that a few weeks ago I wouldn't have been so up on my parts of speech, but recently a Bible study I've been working with has been focusing on deconstructing sentences for clarity. We even started doing some diagramming, which takes me way back in time.

Well, actually I thought "is" would be a very proper verb in that sentence. Maybe I should have changed the gerund to "authoring"....? But I'm surprised nobody called me on the typo - using an improper article.