NECPA in NEBRASKA Posted March 22, 2014 Report Share Posted March 22, 2014 I had a perfectly good client that is another client's daughter; then she married Mr. I know everything about taxes and how to deduct anything. Since they turned their old residence into a rental house, he declared that they have a business and that they can deduct their trips to Florida, Mexico, Wyoming and Missouri as investment expenses because they are "looking for rental properties".$4,096.76 for travel.They threw in a page from a website from some guy that wrote a book of deductions for landlords that says that you can deduct long distance travel for your rental activity, including meals, airfare, etc, "If you plan your trip carefully, you can even mix landlord business with pleasure and still take a deduction." It goes on to say that IRS auditors look at this and that they need to properly document their long distance travel. They are documented by receipts that they have written "rental search" on. So I printed off IRS pubs, etc. to show them that the travel would need to be capitalized if they ever found what they were looking for. I'm glad that they are trying to do research, but they are too cheap to even buy the guy's book. Maybe it would have been more explanatory than his website trying to suck them in. I'm sure that I will be in for a fight when they come to sign, but I'm prepared to show them the door. Her daycare is suddenly showing a large loss this year now that she is married. Lord knows what crap is in there that I don't see. Thanks for listening. I just want to get this one done and off of my desk. 4 Quote Link to comment Share on other sites More sharing options...
RitaB Posted March 22, 2014 Report Share Posted March 22, 2014 One year, one of my Realtors (and they are special anyway), was all set to deduct her new houseboat as a business expense. Entertained clients on it. Printed articles for me and everything. Guess she knew I would be a problem. Her return was already an ordeal. Cause, you know, she's a Realtor (don't know why we capitalize that). I didn't have the energy to argue with her. Told her I was getting her an extension, and she needed a new preparer. 6 Quote Link to comment Share on other sites More sharing options...
jklcpa Posted March 22, 2014 Report Share Posted March 22, 2014 ... a Realtor® (don't know why we capitalize that). It's a trademarked word...because they are that special. 3 Quote Link to comment Share on other sites More sharing options...
MsTabbyKats Posted March 22, 2014 Report Share Posted March 22, 2014 Time to say good-bye. Unless you're desperate for the money....you have to cut loose anyone you gives you a problem. Read my rants .......I have a list of these people. Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted March 22, 2014 Report Share Posted March 22, 2014 I always found it better, rather than firing them, to just raise their prices enough that I could smile when I saw them. After all, now that they have this "more complex" return, naturally it will cost more. They either chose to leave or, often, they actually value you more when they pay you more. Sometimes they just decide it's not worth the extra cost to try to save a bit of the taxes. All are wins. 3 Quote Link to comment Share on other sites More sharing options...
MsTabbyKats Posted March 22, 2014 Report Share Posted March 22, 2014 But even if you raise the price you're still in "a situation". If you want to avoid the situation...you gotta let them go. I'm not getting into my "3 Pimps" story...but I got sick and tired of their "party expenses". And they were really good payers. Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted March 22, 2014 Report Share Posted March 22, 2014 You did not raise it enough! You still don't let them take a bogus deduction, you just confuse them with complex BS filled with lots of tax terms they don't recognize, etc. You can let them give you those 'party expenses', they just never get to the return. 2 Quote Link to comment Share on other sites More sharing options...
Lion EA Posted March 22, 2014 Report Share Posted March 22, 2014 I also raise fees. BIG fee jumps. Charges for the new forms plus research or consultation or anything that fits. If the fee is large enough to cover my time, including the time I need to vent and recover afterwards, then I'm OK. And, if the big fee jump each year drives them away, then I'm OK also. But, I still file a correct return, no matter how much they pay me. 2 Quote Link to comment Share on other sites More sharing options...
MsTabbyKats Posted March 22, 2014 Report Share Posted March 22, 2014 You did not raise it enough! You still don't let them take a bogus deduction, you just confuse them with complex BS filled with lots of tax terms they don't recognize, etc. You can let them give you those 'party expenses', they just never get to the return. The expenses were real. Each had income of about about $500K....the expenses even more....on a C. No tax due.... One was audited and only owed about $3000. I just didn't like doing a return for 3 men who I knew were pimping...and importing Eastern European women. Their official occupation was "Entertainment entrepreneurs". I didn't about the legitimacy of their deductions....I did care about me being a part of it. 4 Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted March 22, 2014 Report Share Posted March 22, 2014 Well, that's a whole different thing. I would not want them as clients either, nor would I buy that they were not making a profit, either. Quote Link to comment Share on other sites More sharing options...
Jack from Ohio Posted March 22, 2014 Report Share Posted March 22, 2014 "Bring me all the expenses and items you mentioned. I will account for them appropriately on your tax return." it is a line that is accepted 99.99% of the time. And it is totally truthful. 4 Quote Link to comment Share on other sites More sharing options...
Lion EA Posted March 22, 2014 Report Share Posted March 22, 2014 For the pimps, you must report worldwide income but cannot deduct expenses for illegal operations. 1 Quote Link to comment Share on other sites More sharing options...
RitaB Posted March 22, 2014 Report Share Posted March 22, 2014 For the pimps, you must report worldwide income but cannot deduct expenses for illegal operations. This is something I never really thought I would need to know. The things you learn on here. All this time I thought pimps were exempt from taxes. Quote Link to comment Share on other sites More sharing options...
BulldogTom Posted March 22, 2014 Report Share Posted March 22, 2014 For the pimps, you must report worldwide income but cannot deduct expenses for illegal operations. Going off on a sidebar here, are any of you being asked to prepare a return for a Marijuana facility? The same concept applies as it is a controlled substance on the federal register and the activity is illegal for federal purposes. I think CA and CO are allowing deductions against income for these activities, but so far I have not heard that the feds are allowing any deductions, not for COGS, not for wages paid to employees, not rents, nothing. Would you take on one of these businesses? If you got in on the ground floor, you might be able to specialize and get a lot of business. On the other hand, you might lose your license to practice. Just an interesting practice item, not making or taking any political stance. Tom Hollister, CA Quote Link to comment Share on other sites More sharing options...
MsTabbyKats Posted March 22, 2014 Report Share Posted March 22, 2014 For the pimps, you must report worldwide income but cannot deduct expenses for illegal operations. The occupation wasn't "pimp"....they were hosting events which required the presence of beautiful foreign women. The auditor believed it anyway.... They looked right out of a movie.....black guys in leopard pants with big gold chains...with beautiful Eastern European blondes on their arms....but they had EINs for their "entertainment promotions" endeavors! Oh...give me my foreign PhDs 2 Quote Link to comment Share on other sites More sharing options...
RitaB Posted March 22, 2014 Report Share Posted March 22, 2014 Oh...give me my foreign PhDs Oh...give me Realtors® Quote Link to comment Share on other sites More sharing options...
Catherine Posted March 23, 2014 Report Share Posted March 23, 2014 Oh...give me Realtors® Because you certainly don't want to deal with Fake-tors! 3 Quote Link to comment Share on other sites More sharing options...
Jack from Ohio Posted March 23, 2014 Report Share Posted March 23, 2014 Because you certainly don't want to deal with Fake-tors! Or Faux-tors either. 2 Quote Link to comment Share on other sites More sharing options...
Catherine Posted March 23, 2014 Report Share Posted March 23, 2014 Or Faux-tors either. Yeah but they only sell overpriced houses. Quote Link to comment Share on other sites More sharing options...
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