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I've gotten the fake IRS robo calls repeatedly too, got my first one on the cell phone earlier today. It's just so annoying.

Catherine, I read that too and one friend said it is blocking calls on her service that comes from her cable company, and I do have one of those lines that I'll try it on.

Thanks Tom. I made a post on facebook about a call today and it turns out that 2 friends are already using the service through nomorobo.com and are very pleased! I have to do some investigating so that I don't inadvertantly block calls from mom's medical alarm company. I have to be absolutely sure that this service will allow those to come through.

Absolutely, at every opportunity!

I meant to post here on the forum about another scam too. About 10 days ago, I received a call on my office line from someone claiming to be from Medicare and needing to update my husband's personal information in the Medicare database. Yeah, right! The caller had a foreign accent and with lots of background noise, and is obviously a similar scam to others that try to fool the recipient into sharing personal data. I did a quick google search and found that this is targeting those on Medicare, Social Security, and that might have supplemental insurance, and it may be phrased as needing to update the information presented on any one of those cards.

I agree that it's a waste of time reporting it. I save myself a lot time and aggravation over this by not answering the call if I don't recognize the caller id. I let it go to my answering machine and then call the person back. The amount of incoming calls from other than clients is crazy with the calls from scammers, charities, political polls, card processors, office suppliers, CPE and software providers, just to name a few. I was up and in my office working on a large project a few nights ago when, at 2:30 a.m., I received a call from a "private caller" with a foreign accent.

Hey, keep asking the questions if it helps; we all have those brain freeze moments. I didn't mean to discourage anyone, and I almost never get to the point of wanting to Rita-hug anyone. We don't need everyone prefacing posts with "I did all this research and still can't find the answer" type of statements. Actually, I think we get some good thought provoking questions and darned good answers given on here considering we are a pretty small group compared to other forums. I'm as nervous as everyone else during the height of the season with those wondering thoughts of if I'm thinking through the tax issues properly. I don't know about the rest of you, but I get kind of nervous processing my own simple return. It's not the numbers because I know those are all correct, it's that moment when I send the e-file. Why? WHY?

Thanks for the interesting topic, Sara. I agree with a lot of what's been said already. I don't think it's a bad thing to take on work that will be a stretch of our abilities as long as we are confident in the end of arriving at the correct result, but if in doing research and studying the topic, we find that the path is not 100% clear or over our heads, then we need to be honest with ourselves so that we don't do a disservice to our clients and leave ourselves open to claims and penalties in the end. In those cases, I agree that a better course would be to either turn that work over to someone more qualified or arrange a paid consult with an expert in that area. One thing that you mentioned in your original post that only RitaB addressed is the wide range and level of questions asked here and on other forums. I have mixed feelings at times on this topic of seeking help on online forums. As in life, there are those that will expend all effort to do things themselves, and then there are others that frequently look to others for help. I'll say that my first steps are always to research first through all my available means before posing a question, because I feel that is what I'm being paid for, not for someone else to do the work for me. With that being said, I think some people really know the answer and are only looking for reassurance since many of us are solo practitioners that don't have someone in the next office to bounce an idea off of or ask "am I on the right track?" As for the level of questions posed, I do scratch my head at times when the answers are easily found in a form's instructions, and my first reaction to that is to think that the person probably spent more time typing the question here, and possibly duplicating it on other forums, than if he or she took the time to open the instructions. From that end of the spectrum, we also see the other end of it with questions that are very complex in nature (like some on trusts and estates), or that the member is asking so many how-to questions (liquidating a partnership comes to mind), that they are almost beyond the scope of help that can be provided here or on any online forum. With both issues on the questions, those that don't do their homework before asking for help and those questions that are either overly simplistic or overly complex, that is the nature of on an online forum and it is what it is. It also stems somewhat from the diversity within our membership, with some fairly new to tax preparation and others whose careers are winding down. At least we are a forum that doesn't help the general public! One thing that really bugs me about the way some people use online forums is when the exact same question is posted within minutes across multiple forums. Those that are doing that should realize that many of us are on here and are also on those others forums too. It shouldn't come as a big surprise that this is the forum where I spend most of my time, and there have been multiple occasions where I and others have taken time out of our day to help someone only to visit another forum and find that the question has already been answered, or it has an ongoing discussion, and I don't think that is exactly fair to those that have taken the time to help. My last thought is that I want to express to you all that I think this is a really terrific group of people that are always willing to take the time to help a fellow member and share information freely. There aren't many days when I visit that I don't learn something new or realize there is more to an issue than I'd previously considered. /rambling, disjointed post

I agree with Sara. Reference for the step up is IRC 1014(b )(1). https://www.law.cornell.edu/uscode/text/26/1014

I would take Abby's suggestion one step further. Before reworking any figures, if you have the S corp's return in the first year you bacame your friend's tax preparer, I'd first compare your original starting basis from the company's accountant to that year's tax return. If the two are in close agreement then I'd explain to your friend that you've done the calculations to the best of your ability with the information that was, and is, currently available and try not to lose any more sleep over the matter.

For transparency to the membership in case anyone saw the post, there was a response from a new member above that listed his state as NY while the IP address of his registration and post indicates those originated in India. The post included a link that was to his cloud services company.

In this client's case, I'd use the W-2 as prepared. If the employee is a nonresident and never sets foot in CA, the wages would not be taxed in CA. If the person does make an appearance within the state, that's a different story. CA uses a "source" rule to determine this. You can read it here under "compensation" : https://www.ftb.ca.gov/individuals/fileRtn/Nonresidents_PartYear_Residents.shtml Also, here is a very good article that explains it too. Its focus is on the CA auditing businesses with remote employees, but the explanation is there: http://www.sangerlaw.com/Articles/NonresidentsWorkingRemotely.pdf

When mixed-use property is involved, you must split the gain or loss proportionally between the two types of use, and it is reported as if it is 2 separate transactions. In trying to find a cite, I found the section with an example of mixed-use auto with a loss, doesn't reference gain anywhere. See: 1.165-7(b )(4)(iv) toward the bottom: https://www.law.cornell.edu/cfr/text/26/1.165-7

My guess is that the IRS won't separate out the credit's adjustment and repayment from the other reduction in tax. It's all related to the same transaction and the overall change is that the taxpayer owes more money, not a change that results in a net refund.

Maybe none of you will have this trouble, and it's a first for me. This is a company that's been in existence for a long time before computerized databases existed at the IRS. They'll celebrate their 100 year anniversary next year, my client purchased it and formed the C corp in 1946, and I've been their accountant for close to 35 years. Ok, that might be longer than the age of some of our members, and now I feel really old.

403(b) plans can have a different RMD requirements if they received pre-1987 contributions, and how the plan accounted for those. Please see the last question and answer at the bottom of this IRS page. Do you have the notice from the plan administrator that may describe an option to defer that may be available to your client? Also, here's a link to Pub 571 - Tax Sheltered Annuity Plans ((403(b ) plans) For Employees of Public Schools and Certain Tax-Exempt Organizations

A May 31st fiscal year C corp had their 7004 rejected today with the error code indicating that the year end did not match the IRS database. The IRS rep on the practitioner priority line told me that an entity code is missing from the client's file and that IRS systems now think this is a calendar year taxpayer. Last year's return on extension e-filed without a hitch in Feb 2016, and when asked what changed since then, she then added that IRS is updating systems that might stop the e-files of some older companies that are missing these sorts of "codes" and that she's had more calls recently for this situation. Similar situations are occurring with S corps and the IRS system thinking those companies should be reporting as C corps. The bottom line is that even the paper-filed 7004 will be in limbo until the database is corrected, that the 1120 itself will also reject, and it is probably also holding up the processing of an 1120X for an NOL carryback. Rep told me that this might be fixed sooner, but the advice is to wait at least 30 days or more, and that the entity division might or might not send out paperwork requiring signatures. I have this work almost done and now will be holding the return for e-filing until this is straightened out. No way we want to paper file this. With 2 calls to the client, getting the POA, the call to IRS, and the trip to the post office, I wasted a lot of time on this today for something that should have taken a couple of minutes. /rant Anyone else run into anything like this recently?

Here's another link from the CA courts that has a link to Form FL-142 that each party fills out lising the assets and debts, and both sections do include a place to list tax refunds or tax debts with details required. http://www.courts.ca.gov/1254.htm I think your client needs to rely on his or her attorney for this.

Terry, be careful. You are talking about tax law here and the lawyers are talking about state divorce laws in that community property state. I don't know about CA law, but what the ex's attorney said may be true. It's very complicated, but in general, all the property and debt belong to the "community", not to the individual, and that includes earnings according to one site I read. I'd assume that would follow to the withholding and tax effects also. Here's one link I found: http://www.courts.ca.gov/1039.htm

If the client is married and spouse is willing to split the gifts, the total of their exclusions would more than cover the amount each cousin would receive. Either way though, unless the client has already used up her unified credit, the gift would be reported but no gift tax would be due because the available credit would take care of that. No negotiating should be necessary to avoid gift tax. Client may, however, want to negotiate and give the 1/3 based on the net after considering the personal income tax that she will incur on the full $64K.

Sorry, Pacun, we aren't going to discuss this here. We know the rules on business use of the home, but I foresee this topic quickly devolving into politics, so this topic is being locked. Better to lock it now before the ruckus starts up and everyone's panties are in knots.

If you reread the OP's posts, you'll see that OP stated in first post that this was a large amount, later stated that it would be better if amendeds could be filed rather than one lump added into 2016, clearly because the lump would be in a higher bracket, and finally that this is a police officer that had a case brought against him with this back pay that now spans multiple years coming from a large city in CA, I'd say it's pretty safe to assume that we aren't talking about peanuts here.

What's wrong is that reporting the income in those prior years is the incorrect treatment, and the OP knows that. I agree with your general sentiment that we shouldn't audit or have to tie in every statement or tax form that a client receives, but in this case she and the client know that those W-2c are not proper, and I think that when we know that without a lot of extensive investigation but that it comes up in a discussion or that it's blatantly incorrect with a cursory look at those documents, then I think that not only do we have the professional obligation to prepare returns properly, we also have a responsibility to inform the client that those W-2c forms were issued in error. If we prepare returns with forms that we know are incorrect and we do not at least inform the client of that fact or suggest that they try to have them revised/corrected, then I think that might leave us open to penalty assessments and malpractice claims. These days, most accountant's malpractice insurance claims aren't from financial reporting, they are from tax-related suits. Right, we aren't attorneys, but in the OP's client's case, the law that we are interpreting and discussing is tax law that dictates proper reporting on the W-2s of back pay to the SSA by the employer and to the IRS by the individual.

Since the LEOs isn't paying in to FICA and Medicare and there was no adjustment to boxes 3 and 5, there appears to have been no logical reason why the city issued corrected W-2s. I think that was an error on the city's part and suggest that you have your client contact the city to request that those be re-corrected to reflect their original amounts. I think it is all taxable in 2016 and should be included in this year's W-2.

I'm just now catching up on this topic, but I'm a little confused about why the city issued corrected W-2s for those earlier years since the LEO doesn't pay FICA or Medicare and why you are considering filing amended returns. This should be taxable on the individual's return in 2016 since that is when it was received. It seems that maybe (just guessing) that the city handled it this way because maybe other city employees that do pay into FICA and Medicare would need those corrected W-2s so that their earnings record properly reflects wages in the years they should have been reported, but the LEO shouldn't be reported that way and the city is in error with its reporting here.