taxxcpa

I finally managed to e-file Form 941 for the first time the other day. I first had to send in something to my software provider (Drake) to get me a PIN. This was the hardest part since it wouldn't submit, but finally, Technical support had me change the calendar on my computer from the 7/27/12 format to the 07/27/2012 format--then it went through. Next I had to get the client to request some kind of number (by mail) and fax it to me. Then I had to enter that number in my tax program. Then after I prepared the Form 941, I transmitted it and it went through OK. It was immediately accepted by Drake and the next day it was accepted by the IRS. You have to get a client PIN from each client. If there are more than about five clients, you have to get a reporting agent PIN--and you must have an EIN. If you don't have one, you need to get it before applying.

When I worked for civil service, everyone got a card showing how much they "had" to give which was based on your salary. One guy didn't want part of his money to go to an organization to which he had a religious objection. Every day the boss called him into his office and hassled him about it. The guy finally gave in and made his donation. Another time when I was in the Air Force they had a big push to get everyone to buy US bonds. Later, one day,, when I was auditing the Finance Office, I checked the base commander's pay card and found that he was not having anything withdrawn from his pay for bonds. In my opinion, donations should be made willingly and only to organizations you want to give your money.

I keep thinking I want to retire, but I keep putting it off for just one more tax season.

Years ago the United Fund allowed you to specify which organization you wanted your donation to go to. However, they deducted those donations from that organization's share of the pot from the total contributions. So it was impossible for any organization to receive more than the predetermined share of what the United Fund collected. Designating an individual, however, would be designating a person, not a qualified organization.

One version of the consumption tax I've seen involves a rebate (or pre-bate) of a certain amount to everyone, rich or poor. For the poor, it offsets or more than offsets the consumption tax they will pay. For the Rich it is something like a standard deduction. Of course, if you are rich enough, you don't spend all your money on consumption. A fair tax that goes easy on the poor without punishing someone for success is probably not possible even in theory.

I would suggest practicing looking up things in Pub 17. Get familiar with how it is indexed noting that you might think of something by one word but Pub 17 has it indexed by another word that could be used to designate a topic. Every question on the test is probably covered by Pub 17 or Circular 230 and I understand it is an open book test, but you have to access the information online. Like a lot of CPE, they probably dwell on a lot of things like "how much is an exemption allowance" which is hardly indicative of your tax-preparation abilities since that sort of thing can be done by your tax program.

Once I e-filed one before it was on the IRS data base and then had to paper-file it. The next time I had one with a new EIN I waited about a week after the EIN was issued, and e-filed it successfully.

Soak the rich. Punish them for their success. From each according to his ability; to each according to his need.

The only problem is that you spend the time and money sending it by certified mail. Another problem is like the other day a client sent her documents by certified mail. I wasn't here to sign for it and ended up having to go several miles to the post office and stand in line for half an hour to pick it up. I told her it would be better to xerox her documents, mail the copies to me and keep the originals. She said that is what she had done. I raised her fee $ 50.00 for the inconvenience.

My tax software offers an option to e-mail Form 9325 to all clients that have an e-mail address. The software also includes an e-mail account which I never use to send anything other than the Forms 9325. It would be a lot of extra work if I had to print and send them to every client. The e-mailed 9325 goes out shortly after the return is accepted.

As a former long-time career auditor, I agree that, as a tax preparer, I should not also be expected to audit my clients. If I am representing their interests, I should be allowed to accept their word about anything other than something that I know to be untrue. When I was an auditor, my role was adversarial in relationship to the people I audited. Even in internal audits, it worked that way. People that I audited might disagree with me and it was their job to prove me wrong. In most cases issues could be settled without going to court. Shell Oil was an exception. About the only thing I ever got them to concede on was after my client hired a law firm and sued which resulted in an out-of-court settlement.

If you have gross sales of stocks, the IRS assumes your basis is zero unless you indicate otherwise by filing. I've seen this come up several times when a client assumed that because he lost money by trading stocks that there was no need to report the sales.

My license expires every year in November. I thought it might look funny to say that it expired in November 2011 so I renewed it as soon as possible after submitting the PTIN information since I had indicated November 2012 on the PTIN renewal. Some states may not have an expiration date and would let it remain unexpired as long as you paid the fees, took the CPE and stayed out of jail.

The IRS doesn't want you to use automatic EIC checking, but I do it anyway. I only do about three EIC returns and am not adding any new ones. After going through the inquiry process several years ago with my few EIC clients, there is no need to go through it again as long as they continue to qualify. Fortunately, for all of them, their children will soon be too old to qualify them and I won't have to bother with it in the future. Prohibiting the use of automated checking will not stop the fraud. The IRS should get out of the welfare business if they want to stop the fraud. But they are stuck with it as long as congress wants it that way. If the IRS wanted to check my office, I would immediately delete the macro that checks all the EIC boxes. (Then add it back when the IRS completed its examination.)

Sounds OK to me. Book 'em Dano!

I had a "secret" clearance when I was in the Air Force, but I don't know if the FBI was even involved in that. Unless you are absolutely sure that the FBI clears you as an EA, I would be afraid to make such a claim. Even if I were absolutely sure the FBI had cleared me, I would still want to know if advertising it would be legal. I think you could say you have passed background checks without mentioning the FBI, CIA, Hawaii Five-O or any other agency.

There was a glitch the other morning. I completed the online registration successfully, but I couldn't pay the fee. I tried several times and gave up. Later that afternoon, I gave it another shot, and I was able to pay the $ 63. Maybe they were doing some kind of web maintenance. I had the same thing happen when I tried to renew my CPA license--got all the way up to paying and got an error message. The next day I went back in and paid for my license renewal. So, if at first you don't succeed--give up! (or try, try again)

Drake has a feature called "Forms based entry." for Form 1040 returns. Just right-click and select "Forms based entry" or you can press Ctrl+G. Then you go to the line on Form 1040, click it, and it takes you to the input screen for whatever you are looking for; e.g. Schedule C, Est tax paid, etc. Once you get to the input screen it is very much like entering it on the form itself. Drake has a feature called "macros". The offer a lot of them, but you can add new ones or change some existing ones. For example I have created one macro that checks all the proper boxes For Form 8867 (EIC). They also have a way to import Schedule D information from an Excel worksheet which will carry forward to the input screen and is much easier to do than inputting it on the input screen itself. It takes a little time to get used to all of the features, but the more you use it the easier it gets. One of the more difficult things is e-filing 1099s. You have to go through the IRS FIRE system and will need to keep a record of all passwords, IDs and other hoops the IRS requires you to jump through--but it works very well and if you make an error you can correct it after you e-file it. (Once I entered the same figure twice so the 1099 was twice the correct amount. As soon as I discovered it, I went back into the FIRE system and changed it.)

I thought mandatory e-filing only applied to form 1040.

To record UPE, enter it as if it were a separate K-1 with the same EIN as the actual K-1. Then show it as UPE. Read the instructions for Schedule E, page 2 which explains it. My software has a place on the K-1 input form to enter UPE and creates the second line with the UPE as prescribed by the Schedule E, page 2 instructions.

I agree. You must first e-file it if you want to correct it by an e-filing. I e-file using https://fire.irs.gov I made a mistake on a filing recently and contacted fire and they reclassified it as "bad" then I was able to re-file it as a 'replacement' filing which they accepted.

I would establish term limits: one term in congress and one term in prison. I would require a balanced budget unless we were attacked by a foreign army. I would end all welfare and warfare. Fighting useless, un-winnable wars has cost us billions of dollars and numerous human lives of our military who should be defending our borders instead of "nation building." I would eliminate many federal programs and let the states handle those which should not be entirely abandoned. I would end the income tax and set up a national sales tax with a pre-bate or rebate to ease the burden on lower incomes. I would make lobbying illegal. I would try to devise some method of selecting people for all levels of government that did not depend on massive spending and advertising to get elected. This might require eliminating political parties and replacing them with something more like a town hall or precinct convention-type system which selected representatives to the next level in some hierarchical method in which people moved to the next level based on their stated positions. We have too many congressmen, so I would reduce the number to maybe twice the number in the senate--and base it on population--if necessary, two states might need to be combined to elect one representative while another state might get four or five representatives. The senate is properly limited and gives each state an equal voice while the lower house is already based on population, but just has too many members to operate effectively. Of course the ideal solution would be to make me dictator so I could implement all of my brilliant reforms without having to convince anyone whether I was right or wrong.

Page 7-5 of the Tax Book: Rental Income Rental income includes any payment received for the use or occupancy of property. In addition to normal rent payments, the following items are reported as rental income: Types of Rental Income Description Advance rent Any amount received prior to the period that the payment covers. Payment for canceling a lease Any amount paid by a tenant to cancel

Someone on another forum has one and uses it mostly with existing clients, inviting them as "friends" on the business facebook rather than on the one they use for friends and family. The business version can be used to post new tax developments and reminders, etc. I don't think it is a major source of new business, but you might pick up someone that way.

Welfare and warfare are getting to be too much of a good thing. Before long the interest on the national debt will be more than the gross national product, then what? We cannot continue policing the world, giving foreign aid, allowing illegal immigrants to latch on to the welfare gravy train and keep passing the bills on to our children and grandchildren. We should have enough tax in good times to provide a cushion in bad times. Instead, if we have good times, we make sure we increase spending to make sure all of the tax money goes down the drain and run up a deficit for good measure.