Terry D EA

Thanks, Lion, I got it. Form 1065 for TY 2020 has already been filed by another accountant as I stated. So, should the return be amended to reflect the short year and closing of the partnership?

Lion, you were reding my mind on the short year. New client for me, an accountant in NY prepared the 1065 and apparently wasn't aware the partnership had ended. I will be filing the remaining no longer partner's personal return with a Sch C as a disregarded entity. Just need to know if it is necessary to amend the 2020 1065 for a short year. I will find out from the client when the other partner left.

Just to add, because the partnership ceased to exist prior to the end of TY 2020, should a short return have been filed? If so, should the original filing for 2020 be amended?

An LLC was formed as a partnership. One of the partner's terminated their interest before the end of 2020. TY 2020 form 1065 was filed as the initial return. The partner's shared 20K loss. What I have seen in the partner's K-1, the basis of the departing partner was reduced by the loss and there is no gain on the return of any remaining basis or capital accounts. Please be kind here I am still gathering information. I don't know how you file an initial and final return in the same year. What I do know for sure is the partnership ceased to exist prior to the end of TY 2020. For TY 2021, am I correct the business is now a disregarded entity and is filed on Sch C with the remaining partner's 1040. BTW- This is a simple partnership, no employees, no assets other than cash as far as I can tell. Only depreciation was amortization of some startup expenses. There will be another partner added, so I assume it is ok to keep the EIN and reopen the partnership when one indeed exists. I am going to tell this client to not do this on his own.

"All we can do is admit that we're not perfect and we make mistakes too." The above says it all. Some clients are understanding, and some are not. I don't think we'll ever get past the mindset that it is automatically assumed the taxing authorities are correct and we have made a mistake. More often than not, that is not the case. My primary state has been NC for 25+years and I can tell you they are worse than the IRS at giving explanations. I've been actively looking into whom to contact at the administrative level of the NC DOR to voice my concerns regarding how we as professionals are treated by some of the agents, the unwillingness to provide documentation to the professional and the client, the automatic collection letters without prior notice or the opportunity to dispute anything. My ongoing question is how am I, as an Enrolled Agent supposed to properly represent my client when I cannot receive copies of any notices or detailed explanations surrounding the notice or collection action. Every time I ask, I'm told the same thing, "we only provide copies of notices or other correspondence to the taxpayer". Great, but for the most part, they don't resend anything. These responses can add to the client's deception that we don't know what we're doing. Yesterday, I spoke with a very nice and cooperative lady at the NC DOR practitioner priority line, every explanation was "what the system" has done. Also, stated, I see "the system" issued a check in the amount of ****** but not sure why "the system" did that. We finally got to a figure that was owed we agreed upon, took notice the client's 2021 refund was absorbed to cover what was owed and the check was the difference between the refund portion and interest and penalties. Here's the kicker, I said there should be a penalty abatement for aggravation and confusion from the NC DOR, and she said well, "I can eliminate that penalty right now and your client will receive another check in the amount of *****." Now I'm a hero and we all know what my status will change to if none of this is followed through.

If anyone wants to know, the PTIN renewal system is now up and running. I just renewed mine. Beware, the site is horrible slow.

Don't know if this helps or not. I spoke with a long time support agent at Drake this morning. I had a brain fart moment with not getting the partner's information for their capital accounts to show on the K-1. Felt stupid when I was told what to do as I should have known that all along. Anyway, I asked about the changes, they are trying to make sure our support requests get to the right places for better assistance. Normal concerns, they are getting bigger and it is harder to find hep. The normal cry of any business. The support is now attempting to be placed in Tiers. They didn't see anything really happening with Drake heading down the same path as ATX did. We'll see if the price goes up again this year. I guess Mr. Drake still has a lot of input.

Catherine, I know. I had to call again today to try to figure out why a NY 2020 was ready to e-file with a green check box, but the button was grayed out. I have always received excellent support. But today, was a bit scary. The rep had an accent and wouldn't take time to listen to what i had to say before offering an answer. I managed to figure it out on my own which was really weird the way the program acted. I just don't want to go down the old ATX road. Remember the days when you called ATX support and got someone on the other side of the pond named Bob or Susie? Gosh that was horrible.

Congratulations Joel, Enjoy your retirement

Something very discouraging happened today. I called support to verify that form 7203 is not automatically filed with the return. I don't call support very often and usually don't need to. This all was to put my own mind at ease as I have only done a couple of these forms. My call got placed on hold and I was told I my call would be answered between 35 and 40 minutes. Instead of waiting, I attached the pdf as instructed. I hope this is not a sign of things to come. Back in the day, Sabre Pro, ATX was great. CCH bought them out and, well, we all know what happened. Drake support was fabulous and now a merge or whatever they're calling it, has taken place and the very thing their business was built on is beginning to diminish. I did not object to the price increase this year as it had been a long time since Drake increased prices. It will be interesting to see what happens this year. Big conglomerates seem to ruin good companies.

Hmmm, would this possibly qualify for the first-time abatement? What is the reason he filed late?

Judy, Yes, I do look at the additional entries but they, sometimes and in my current case, still don't apply. CA is just plain weird. There is no K-1 input, so you have to know what the code is to manually enter them on the correct forms. I'm not being lazy, but it did take a bit of time to figure out where things on the provided CA K-1 were to be listed. I'm sure if I worked with CA more, it would be easier. BTW- I did call support and by talking it thru, I got it figured out. They were aware of no CA K-1 input and the response was some states have them and others don't. Thanks.

How do all of you Drake users deal with the Drake missing code syndrome on the K-1 forms? I completed a CA return that contained Pass Thru and R&D credits. The code used on the K-1 for CA is not in the list on the federal K-1 input. My only option was to enter the credits on the individual forms. I love my Drake software, however, this is a major short coming. Masny states have their own K-1 input. I know the federal input has a state column but lacks the codes and nothing will flow which makes sense cause the program doesn't know what to do with it.

Thanks for the Tax Advisor Article. After much research, I don't really see an advantage to changing the tax year. If anything at all is the S-Corp making a tax payment that would as you say, defer the taxes for the client. That in and of itself, may eliminate late payment penalties but wouldn't help on the S-Corp end of getting the financials done in a timely manner. I guess it is best to wait and see what affect their proposed changes will have. Thanks to all who responded.

>>>>>>Tell them that they either need to pay you to keep the books up to date, or hire a third-party bookkeeper that you can train and work with. <<<<<< I agree totally and have already been down this road. They are using QB Enterprise, which I would like to see them get rid of but, that's not happening. I'm taking the "I told you so" attitude. Just trying to see if there is any way to help them that is not a crutch.

ILLMAS, check out pub 4681. I put a link here if you want to use it. Seems that page 4 & 6 may be of help to you. 2021 Publication 4681 (irs.gov)

I have a single shareholder S-Corp that each year cannot get the books done on time to get me the P&L and balance sheets. Thus, extensions are filed each year, and then the shareholder extension gets filed as well. They usually don't want to pay any estimated taxes and do not pay anything at all with the extension which results in penalties and interest. In some years, due to large income, the penalties are significant. Yes, I have been trying to get them to do things differently without much success. it took a number of years of paying late filing penalties to get the S-Corp done in a timely manner whether extension or not. 2K each year was beginning to hurt so now the S-Corp usually files by Sept 15th. All's well in the neighborhood except the individual shareholder return. So, I am looking at the possibility of changing tax years. If this S-Corp elects, let's say June 30th as a fiscal tax year. how does this change affect the shareholder? Does his tax year change as well, is there a process to go thru requiring IRS approval? Looking at form 1128, understanding the short year; etc, nothing says how the shareholder's tax year is affected. During a conversation this morning with the shareholder, I tried my best to stress the importance of getting me the S-Corp financials as early as possible and to make it a priority. Does this sound like a reasonable idea or not?

Found this below. My thinking was exactly as yours but I thought there were either limits or ordering rules "Yes, but there are limits. Losses on your investments are first used to offset capital gains of the same type. So, short-term losses are first deducted against short-term gains, and long-term losses are deducted against long-term gains. Net losses of either type can then be deducted against the other kind of gain."

No, I have not. After discussing this, the bonus is solely based on reaching on the job goals and profit goals.

Yes, this is for 2021 and thanks for verifying my thinking.

S-Corp contractor paid supervisors a bonus for meeting production goals. No problem so far. The S-Corp paid the bonus as a 1099NEC. This should have been included in each supervisor's W-2. When I questioned the S-Corp, they said they knew this and made each of supervisor's aware that moving forward, any bonus pay would be included in their respective W-2 forms. Isn't the employer required to do catch up/backup with holdings and adjust their payroll liabilities and pay the employer's portion of the payroll taxes? My thoughts are yes. Opinions please.

My client passed away Aug 31, 2021. A revocable trust was created in 2015. My client never informed me they had a trust. While I know this trust is considered a Grantor Trust and does not pay any tax. I have asked the fiduciary/trustee if an EIN was applied for. If it wasn't, it appears things become fairly simple. I can only assume (dangerous thing) that the Option 1 filing method has been used each year. If an EIN was not applied for or granted for the trust, does the trust just automatically terminate and no filing is required? I know the trust itself becomes irrevocable upon death. Should the trustee apply for an EIN, file a final zero 1041? I don't have any information regarding which assets are or were placed in the trust or even if it matters at this point. I did tell the trustee(s) to contact the law office that created the trust for their guidance. I am just now getting the documentation to file the decedent's personal return which no extension was filed. The trustee(s) contacted me in January, and we spoke regarding what needed to be done but I heard nothing and assumed they had taken care of this through other means. Of course, I was wrong. I don't think any of this will have an impact on the decedent's final return. Any advice is appreciated.

Ya know, I try to do this but not boast about it. For the longest time, I did not increase prices and when I did, no one complained. I have taken on a couple of resolution cases and no complaints about the retainer. This upcoming season will be one where prices will increase maybe by 10% across the board. Like all of us, everything has increased. Drake increased the software this year and with the basic budget for basic office needs, to start preparing returns for 2022, I'm close to 5K to open the door. If I have a client that wants to whine about my fees, or a few dollars increase they can move on.

I have been looking to see the status of the proposal to raise the EA renewal fee from $67.00 to $140.00. I checked the docket on the Federal Register and from what I see, it is assumed there has not been a final ruling. If this proposal becomes final, the cost to maintain the EA license, like everything else, will have gone up significantly. I enrolled in the third year of the renewal cycle for my SS# and have to renew by January 2023. $140.00 renewal $35.00 PTIN On the above two fees, I am wondering what do we really get for $175.00? Just the right to practice and be held accountable? $600.00 (Average 100 hours CE Package give or take) Yes, you have to stay updated and it seems it is never ending. I wonder how folks that are seasonal do this without performing some type of work or study all year. My practice started years ago with the idea to work four months in my retirement years and cruise on the beach the rest. That idea was a great plan but, I am now year round and try to only work from 9 till 1 each day M-F. $386.00 NAEA membership & Two states (This is me personally, while some find this as not helpful, I have found it to be very useful for now. I do like their discussion board, but the ATX Community has been the best for me for over 20 years. Other resources such as verifyle and others from the NAEA are useful as well) So, for me, $1,161.00 is the magic number to maintain my EA status. I'm not complaining but I sure hope my clients are appreciative of the additional cost that will cause my fees to increase.

Thanks Judy for doing this. I didn't know if it would be a good thing or not. Quite a bit to read but not tremendously bad either.