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Everything posted by JohnH
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Most people needing installment agreements aren't looking for savings. They're looking for sound financial guidance from their tax preparer whom they trust to guide them in dealing with an unexpected tax liability. They're often trying to dig out of a hole while avoiding borrowing from their credit card or a few other sources at incredibly high rates. For them, the I/A is a life saver, and at a very reasonable effective interest rate when compared to other choices they may have. ("effective interest rate" = the interest plus a FTP penalty combined). Plus, it doesn't affect their credit record or available lines of credit. But yes, they do have to actually comply with the terms they agree to or else they can find themselves in hot water.
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In the current climate I'd think the best course of action would be to wait for the assessment before requesting the IA. Getting the IA online in response to an assessment letter would be the most reliable method of confirming the IA has been set up.
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Maybe the real "art" is in their valuation method...
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My oddest current situation is a client who ignores my questions about virtual currency transactions, even though I've sent multiple emails. Makes me strongly suspect the answer is "yes". So he goes on extension until he replies.
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That sounds about right. In this case it’s no big deal. It’s my grandson’s return. Refund is about $400. Along with his Christmas present, I gave him the $400 in December and told him he can pay me back when the refund arrives. So technically it’s my refund being held up. Plus, whenever it arrives I’ll probably tell him to keep it (as long as he puts it in savings).
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I respect your judgement and am not criticizing your approach. However, if I were at this point I'd still turn the instructions for filing the report with the SBA over to the client with my recommendation that they take this to a lawyer. This may be a routine matter or it may be a time bomb. Wonder what your E&O insurer would advise? It might be worth asking them.
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I still have one paper-filed 2019 return that I prepared last Feb (2020) and the refund still hasn't shown up.
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Think it's time for him to consult a lawyer? Problems with the SBA are indeed scary, as one mis-step can spell big trouble. Personally, there's no way I'd get in the middle of that situation, now that the basic facts are known.
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1099C on car that was returned under lemon law.
JohnH replied to schirallicpa's topic in General Chat
Doesn't it depend upon sate law? I thought that was why it's important to know if you're in a "recourse" or "non-recourse" state with issues like this. Also, it's possible the borrower may have been "upside down" at the time the car was purchased due to an unpaid balance from a prior auto loan being rolled into the new loan (or more appropriately, piled onto the new loan). Next to divorce, auto financing is the biggest drain on personal net worth in this country, IMO. -
Look at the bright side. At least the SOL is running on all those returns sitting in trailers.
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1099C on car that was returned under lemon law.
JohnH replied to schirallicpa's topic in General Chat
Sound like a case of trying to turn lemonade into a lemon. -
I have always had the same DL# as well. It’s six digits long. In the intervening years, NC added another digit to all license numbers. Now, whenever I give my license number, the person almost always asks for the “last digit”. Sometime they even insist the number isn’t long enough, plus they don’t believe me when I tell them to add a “0” at the beginning. So I have to explain that I’m so old my DL number should be close to 0000001.
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1099C on car that was returned under lemon law.
JohnH replied to schirallicpa's topic in General Chat
Extensions plus extra charges. -
And in some cultures "Uncle" & "Aunt/Auntie" are honorifics, generally used to refer to any respected older (but unrelated) person.
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IRS got their banking info from SSA.
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That’s pretty creative. There’s no limit to the ability of some clients to gum up the works, is there?
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Surprising how little publicity there seems to be about the extension of the March 31 PPP2 application date out to May 31. I would have expected this to be a big news item.
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I'll bet sooner or later we will have this conversation with someone: CLIENT: I've got $300 worth of receipts for masks & stuff we can take above the line. PREPARER: That won't help. You're confusing masks & stuff with contributions. CLIENT: But my hairstylist said... PREPARER: Sorry, your hairstylist is wrong. CLIENT: (S)he's pretty smart about this stuff. Can you look it up again, just to be sure?
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Listening to today's news, now I'm wondering how many clients are going to be keeping every receipt for hand sanitizer, masks, sanitizing wipes, etc because IRS announced today these are deductible as medical expenses.
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Besides, every client always says “My situation really isn’t all that complicated.” We can believe them. And all you need to do is press a button to send it - right?
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I don't have a lot of clients who filed for unemployment, but of those who did, I've prepared extensions as soon as the info came in. I don't intend to look at them again for at least 3-4 weeks.
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And we haven't even started a conversation about claiming losses and basis limitations for S-Corporation shareholders. Some VERY interesting & unusual stuff can take place in that space.
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I received a 4883C in early Dec 2020. (Not the same as the inquiry your client got, but similar I think). The agent I spoke with couldn't or wouldn't explain why I received it. Anyhow, we got the identity verified and all was well. But it spooked me, so this year I opted in to the ID Protection PIN program as soon as it was available.
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I'm printing out this thread for further review & consideration. Very interesting discussion, and may be relevant to a client situation I know is coming up shortly. Many thanks for all the comments. (I love this forum)
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Bonnie: Based on the info provided, I'd probably tell him I'm not interested in doing his work. And he needs to act quickly since the penalty clock is running. He qualifies for the "needs to be somebody else's problem" category for at least 3 reasons. Right now especially, this should be all about what's best for you, not about solving self-inflicted wounds for problem clients.