JohnH

Because the IRS business model has changed. Whereas in the past, many penalties were designed to encourage compliance and many penalties could be forgiven with a simple request , penalties are now viewed as a source of additional revenue. If you don't believe me, look at the fact that new legislation often refers to increased penalties as the revenue stream to offset tax cuts. So IRS is much less forgiving (and common sense doesn't count for much) when it comes to penalties.

Sounds similar to a conversation I had with a foreign client a few years ago. He was covered by his country's retirement system and thus his earnings in the US were exempt from Social Security taxes for many years under a totalization agreement. He married a US citizen a few years before he retired. Then after a couple of years, when he brought me his tax info, he had an SSA1099 in his documents. WHen I asked about it, he said the Social Security Administration contacted him and told him he should apply for a "spousal benefit" based on his wife's earnings. Plus, he is covered by Medicare. He said he was very surprised by all this but he was just following the instructions the SSA gave him. After explaining all this to me, and with a big grin on his face, he said "Dis iss a vonderful country!"

Tell them the penalty meter is running at a rate of $195 per month. Maybe that will get the client on the ball.

Wonder what the Good Lord would think of her sloppy approach to financial stewardship.

I like to enjoy the summers AND winters. If it weren't for extensions, I likely wouldn't be able to get in any skiing in Jan-Feb. And it's hard to postpone that activity until May-June.

Filing a return clears the $3k out of the system and starts the SOL clock running. It will save possible CP2000 correspondence in the future and also protect the client against any surprises down the road.

I don't believe it stops there. Even after selecting the vendor for 2013, good business practice demands that you have a backup vendor. I switched to Drake back in late Jan, but it wasn't a blind leap of faith. I had evaluated them in the past and they have been my backup plan for several seasons. I expect to stay with them next year, but I'll still be evaluating other vendors. Just because they're now my primary, I'll still have a backup vendor in the wings. (Maybe even ATX if they get their act together) If iI were running a practice with more than 300 or so clients, not only would I have a backup vendor chosen , I'd also be preparing selected clients on their software on a per-return basis. As Warren Buffet said in a slightly different context - "You never know who's swimming naked until the tide goes out."

Why would he need extra staff? Extensions are a great way to stretch the filing season out over a more reasonable time period to increase personal production & associated revenue. Extensions keep you from sweating. Sound business strategy as far as I'm concerned. I routinely pepare 50-60 extensions every year (including my own).

No borrowing ability and a big tax bill. Looks like the client needs to consider an installment agreement. And start paying estimated taxes as she is being advised.

Wishing everyone a wonderful Resurrection Day weekend.

I was only kidding. A gastroscope is used for the EGD and a colonoscope is used for the colonoscopy. They are different lengths, different diameters, and the design is slightly different.

If they do, hopefully it's in the correct order. At least there's a 50% chance they'll get it right.

Now THAT'S an interesting motivator. If they could develop a colonoscope which could filter out the red hue, but then tell everyone to use red gatorade, red Kool-Aid, or cranberry juice for the bowel prep. I'll bet once that evening is over, they'd be running to the doctor's office to get the procedure done.

There could be pictures, and he may have actually told her something or the other during the after-procedure conversation. But I wouldn't really know because I pretty much dozed through that conversation. The best part is going home after the procedure is over. What man wouldn't enjoy napping on the sofa, watching TV, eating everything in sight, and passing gas all afternoon? Plus your wife being pleased about all of it...

I asked my doctor if he'd give me a note for my wife certifying that my head wasn't up there, but he politely refused.

Bad decision. If you're right, no problem. If your doctor is right, you're in big trouble. Colon cancer is on of the deadliest cancers once symptoms appear, and one of the easiest to treat/prevent if caught in time. At age 65 I've had 4 colonoscopies and they're no big deal - less stressful than a trip to the dentist once you get through the evening before. And far easier than a sigmoidoscopy - I've had a couple of those as well.

Good point Lion. If the client considers the POM to be the equivalent of insurance, then the taxes on the POM are the equivalent of a deductible.

Everybody should stay focused on the main issues and not allow these conversations to degenerate into personal attacks in either direction. Each person's experience is what it is, and there's no purpose served in anyone questioning another's experience. This is a community of equals, not hostage to a single vendor, and with the overriding purpose of exchanging tax-related information. At the end of the day, the problems ATX is having this year are a side issue. At this point everyone has made their decision for the current year and will have to live with. No minds are likely to change for the remaining 3 weeks. Let's concentrate on what's important for this community in the long run.

Did you calculate the additional tax generated by the 1099-Misc, just so the client knows how little it cost them to report the income? It would be nice if the compensation included the additional tax liability, but that isn't going to happen. So I'd be sure the client has a good perspective on how small the additional tax is in comparison the the P&I.

All that glitters is not gold, but still valuable IMO.

Given the topic and the context of the post, I think ethnicity is relevant in this case. I can't figure out why you have a problem with it.

Lion: there's no problem filing am extension for someone who is on an installment agreement. Even if the extension anticipates that they will owe additional taxes, it still won't invalidate the I/A.

I suggest a slightly different strategy. File extensions immediately as the returns come in the door after your cutoff date (mine began 2 weeks ago). That keeps the pressure off, and it allows you to better prioritize as the deadline approaches. Personally, I think this allows me to get more returns finished between now and Apr 15 because there's no pressure. For me Apr 15 has become just another day on the calendar. I usually come in late, spend a few hours reviewing extensions and calling a few people to be sure they paid their balance due, and go home early. Ron, your approach achieves the same result, but what happens if somebody gets sick or other unavoidable delays happen around the 12-14th? I learned this the hard way years ago when a business partner had a heart attack during the final week. The next year, I became proactive with extensions and have done that ever since. There are a couple of other advantages as well. Sometimes you have a client who gets really unnerved about extensions. You flush that out early in the process and then can make a good decision about whether he's worth making an exception or do you want to take the chance that he will go elsewhere. You're not dealing with his obsessiveness under deadline pressure. The other benefit is with those who's work comes in after the deadline, you tell them they're going on extension, but they still call, text, or email to ask "How's it coming?" My answer is always "I filed your extension, will get back to you after Apr 15." End of discussion. For me, this works quite well.

She: I don't think they charged sales tax on the interest. You: Ok, your right. Just forget I brought it up.

I will go into the office Apr 15 about mid-morning and spend a few hours reviewing all my extension filings. Then home around 5pm to take my wife to dinner. This became an annual Apr 15 ritual for us many years ago, once I learned how to manage extensions the right way. Sure beats working until all hours of the night and risking mistakes. After dinner we will pack and leave for the beach the morning of Apr 16 to spend the rest of the week relaxing.