Terry D EA

Thanks Eric and I share your concerns. But no harm no foul as they say. It would be nice if others chimed in to see how they feel as well as what they would want to see.

Eric, Was just wondering if we really need to maintain the TRX discussion forum. Since the software doesn't appear to exist any longer and all of the issues during tax season are over, plus no one is really visiting it, is there really a need to continue it? There are a few other software companies that others are using that we don't get any feedback on. For instance, TaxSlayer Pro is one that is competative and very solid software and this is just my opinion. I used this software this season to get out of the TRX snafu without incidence. However, I know there are some shortcomings and would like to hear from others. I know it would be a bit much to have a place for each software vendor and maybe taking a pole would help indicate which ones folks were most interested in might be a good idea. Maybe there will be some response to this post that may help with that. What say ye everybody?

Hmmmm, it looks like the culprit here is the attempted late filing of the 1040X. As I see it, proof of the filings is always essential. Interesting read.

FYI _ Here is a link to a website that explains related party transactions, what/who is a related party very well. This site helped me understand the relationship between a partnership and corp that has the same owners. http://www.law.cornell.edu/uscode/text/26/267

Yes the owner of both entities are the same. So it sounds like the return needs amending. Thanks Judy

It maybe. The officer and sole shareholder of the S-Corp is a single member/Owner of the LLC that the rent is paid to. This LLC is a disregarded entity and all income and expense pass thru to the single member which I know you know this. Does this consititue a related party? The LLC is not related to the S-corp in any other way.

Doing a bit more diggning, I found some additional info. They have paid a reduced amount of the rent. There is an unpaid rent balance of 20K. In my opinion, the 20K is the amount to be added back to the income for the 2013 year.

This question is in relationship to my post about the S-Corp and officer employee situation. This company is using the accrual method of accounting and is using QuickBooks. The bookkeeper has created bills for rent they have not paid. They have created the expense account and have lumped everything in the accounts payable and have not made a separate "Rents Payable" account. At the end of 2012, there is 50K in the rent expense account. The account is zeroed out (closed) on 12/31. All appears to be fine so far. In my opinion, the accounts payables need to be separated out which is fairly easy to do in QB. Here is the question, if this company liquidates and doesn't pay the rent due and the rent expense of 50K was taken against the gross income for the 2012 tax return, doesn't the amount of unpaid rent have to be included in the gross income for the 2013 tax year? Here is my take, they took an expense deduction for something they didn't and apparently will not pay and in the long run, this overstates the expenses and understates the income. They also want to remove old (four or more years) of unpaid bills that various vendors have not been paid. Doesn't the same apply here?

<<<May we assume the 35K was a bona fide loan and not some variation of deferred compensation?>>> Yes, you may assume this and indeed it was a loan. The loans from the shareholder are recorded properly on the books. I have discovered a few adjustments needed for some recording errors but nothing of any significance. I think the end result is the corp will dissolve. After speaking with her today, she did make comments to that fact. Also, Jainen, by obtaining buyers for the assets she is just advertising them and selling them off. I guess this can still be considered material participation. Your response is the same conversation I had with this shareholder last December when the bottom fell out. Now her bookkeeper is trying to argue the point of the payroll tax issue among other things. The bookkeeper should stick to keeping books.

Yes, a reasonable salary has been taken since 1998 when the company was formed. The company has been profitable over the years with the last few going down hill. The shareholder elected to reduce her salary in an attempt to help save the company. I don't see a problem with removing her from the payroll and I agree with you but still want others to chime in here with some responses to my other questions in the original post. Thanks!

Hey Gene, I had this happen as well but it turned out that my client was a victim of identity theft. Two tax returns for each year for several years were filed with the same SS#. We could never get the return to go electroncially though and had to always mail it in. Took four or five years if I remember correctly to clear this up. This happened about 7 years ago. The guy suffered from alot more than tax woes.

Here is a situation that I am dealing with. I do apologize upfront if this post gets lengthy but it may be necessary. Client is a single S-Corp shareholder that is a production company. All production has stopped as of November 2012. The only source of income is from the sale of the assets. Those funds are being used to repay debts and outstanding loans. So far for 2013, a total of 65,000 has been realized from the sale of the assets. There is a loan balance due the shareholder approximately 35K as well. Some of the loan repayments are going to the shareholder at this time. The company bookkeeper is questioning the need for the shareholder to remain an employee of this company. I can't tell at this time what the bottom line will look like to see if there is any profit or loss at the end of the year. 1. Can the shareholder only take a loan repayment that would indeed not be subject to payroll tax without throwing up a red flag for a shareholder not being on the payroll? BTW- there is no other payroll at all. The bookkeeper is contracted and does meet all of the requirements to be considered a sub contractor and not an employee. 2. Thinking of the ordering rules, can the shareholder do this? 3. Total owed to the shareholder has been reduced by the amount of loss claimed and resulted in a tax refund. Is this correct as well? Logically, there is not income to this S-Corp from any production activities, no inventory left and it makes no sense to have the shareholder on the payroll. The only thing the shareholder is doing is obtaining buyers for the assets. The sale of these assets will at the end of the year, result in a taxable gain but again, it is not income from income producing activities. Am I thinking right that there should be no problem with not having this shareholder listed as an employee and subject to employment taxes. Help me out here please.

Joan I was simply trying to respond to the notice as was indicated in the e-services EAR section. I was hoping this would serve as a timely response even though we are well within the time frame. I didn't expect a resolution as I was pretty sure they would not take my word on anything and ask for the documents. I didn't expect to get directed to use another method. So, as you and John has suggested, the fax is the cheapest and maybe the best way and yes, I will call the priority line to follow-up as well.

FYI - I did get a response from the e-services for my client that I posted earlier regarding the bogus claims on a CP2000 notice. The response was a waste of time. They said: "If you do not agree with the CP2000 notice, you should send in the response section with your supporting documentation." What the heck did I waste my time for? something told me all along to just send the stuff in to begin with. I guess I will just fax it, but then again, I won't have any type of receipt that is date stamped or proof of delivery. Oh well. off to the post office it is.

Most software companies release their first working versions mid to late December.

I don't think so. I tried to file an S-Corp and no luck. Give it a try, after all, you can't loose anything for trying.

You have stated there was no estate. But, what I think Jainen is saying that because she inherited whatever assets he had, those assets can be seized towards the tax debt he owed and any cash received may have to be surrenderd to satisfy any portion of the debt as well. I totally agree that there is no question regarding her joint liability. No injured spouse necessary as I see it.

Yeah I got the same e-mail regarding the retirement of e-services. I guess I will see how it works for this situation.

I am on the fence with some of the software companies. I am beta testing TaxSlayer Pro and so far, I don't see the changes that I would like to. But, it is early. Also, I signed up to beta test ATX. I have been with them for numerous years in the past and would like to see if there are any improvments over the problems experienced by some last year. ATX offers forms that I use that TaxSlayer does not yet. I will not go with OltPro or OneDesk as I tried it, they insisted a trust return Sch D calcualted correctly and filled in correctly when it did not. Therefore, can't use incompetent software.

I decided to use the e-services in an attempt to resolve the problems that I posted under "More IRS Incompetency". I have used this in the past with some luck but not recently. I hope in doing so, I haven't created any additional heart ache. Seemed simply enough to identify the notice and make a response. Got a tracking number, printed all the stuff, and now fingers are crossed. Supposed to hear in (3) days. Anyone else use the e-services for a fairly simple account resolutions? Before anyone asks, I did complete the POA using the e-services as well.

Thanks KC. There was another item on the proposal of a dividend received from a company that my client states they have no idea who that company is and to back that up, I have not seen any documents from that company for this client for the last five or so years that I have been helping them. I guess a cover letter itemizing these things out would suffice?

Client of mine received a CP2000 adjusting their return and proposing a tax due of 4465.00. All and I mean virtually all of the items the notice states were not included in the return were indeed included in the original return. To make matters worse, this return was later amended due to the client receiving a very late (middle of summer) K-1 from an S-Corp that wasn't even mentioned in the notice. I have read where others indicate the CP2000 is almost always computer generated. If so, then the computer is seriously skewed. My plan is to disagree with all of the changes, include a copy of the original and amended return and wait to see what happens from there Any other suggestions will be appreciated. Don't know why this posted twice. Sorry, noticed subject line is spelled wrong too.

Thanks KC for your kind comments. You are correct I don't get here much and I do try to catch up on some of the issues with taxation that apply to the areas I deal with. I will admit to responding in an unfriendly manner at times and I have admitted this to Taxed in another post. I don't like having to weed through numerous responses that I personally feel are off point to get to see a good answer. That is my personal hangup and I cannot speak for how others feel regarding this situation. Your advice to ignore some comments is something all of us should practice. Thanks,

<<<What's your problem Terry? Did you catch Rabies from Bulldog too?>>> Maybe so. As I will agree wth Tom that you need to read your posts and responses. One cannot know everything as it is impossible but your attempts are somewhat less than irritating. Now, I will give credit where credit it due, some of your posts are good and right on point but they are few and far in between. This is a professional board and your comments like the one above, and maybe some of mine as well, are unecessary and unprofessional. We all have to rant at some time and it is good there are folks here that we can unload on. But continually beating this dead horse with TRX certainly isn't going gain anything for anyone. I am sorry and genuinely fell bad that Crank didn't get a refund of some kind and there is no way that I can say or do anything to help him. What I can say is, he hasn't pounded this thing in the ground like you have.

Well I guess you make the rules now regarding the time lines of posting as well. Notice, I didn't try to answer the question I just commented on your posts. As I said, read read read