NECPA in NEBRASKA Posted February 28, 2008 Report Share Posted February 28, 2008 Spouse of carpet layer, Sch C, just came to pick up their return to take to the lawyer that is working on an offer in compomise for many years of back taxes. She says "things will be different next year, because they made him an LLC." I said that not's a problem, he will still be a schedule C with some liabilty protection. " Oh no! They said that he won't have to pay self employment tax anymore" So I sent her to find out if they set him up to be taxed as a corporation. I explained to her a few highlights of the changes that would have to be made to their bookkeeping, office in the home, vehicles in personal names, not to mention needing officer's payroll, because they have a very hefty profit. She was floored. They didn't explain anything to them, just told him to sign the papers and pay them for the LLC papers. Better quit my griping and get back to work. Bonnie Quote Link to comment Share on other sites More sharing options...
Cathy Posted February 28, 2008 Report Share Posted February 28, 2008 Bonnie, I can't possibly understand why you should have been consulted ...you are ONLY their CPA! Quote Link to comment Share on other sites More sharing options...
JohnH Posted February 28, 2008 Report Share Posted February 28, 2008 I actually had a client a couple of years ago to tell me that her son didn't have to pay either Social Security Tax or Self Employment Tax on any of his income any more because he changed his sole proprietorship to an LLC. When I explained that wasn't the way it worked, she said "Well, what does Limited Liabillity mean if it doesn't mean Limited Liability for Taxes?" I told her to talk to the lawyer who set up the LLC since he's the one who collected the fee. I'm just glad the son wasn't my client. Quote Link to comment Share on other sites More sharing options...
Terry O Posted February 28, 2008 Report Share Posted February 28, 2008 I have a client that left me a few years ago with a Sched C - -came back last year with Sub S corp for 2004 & 5. I file for 2006 - -the IRS has NO record of ever receiving the election for those 2 years . IRS is not happy. Now the fact that the client sat on those letters - - -"it didn't say payment due so I ignored them" means there's enough blame for everyone!!! I tried multiple times in the past few months to contact the CPA who filed the returns - -he finally has his SECRETARY call me yesterday to say they relied on the lawyers word - -they will NOT accept responsibility for amending - -no responsibility for any interest or penalties that may occur - - - BUT WAIT - - -THERE'S MORE - - - -they never even gave the client copies of the tax return - - only a few select pages!!! AND - -heaven only knows where the "lawyer" is - - - Quote Link to comment Share on other sites More sharing options...
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