Max W

Medlin, I think you have to speak for yourself. I certainly do not all agree that gov't (the state) is a business, and I'm sure others will concur. Of course , the state needs money to operate, but it is the source of that money that it is a major difference. States do not "always" spend just over , or under their budget every year. In fact about one third of the states have continually overspent on their budget and have large unfunded pension and health care accounts. Five states are in deep financial trouble and at least one, Illinois, is on the verge of bankruptcy. Federal Government employees not only make more money in four of five categories, get more benefits, work fewer hours (as do state employees) , get more paid time off and other perks. It is the gov't employee benefits that are pushing cities and states toward bankruptcy. The public employees unions in CA have opposed any measure to modify the system and in fact receive TAXPAYER money to fight any changes.

You said this occurred in 2017, so TCJA has no effect Here is a good article on deferring gain on the excess insurance. There are a lot of variables, so it should be read carefully. http://williamsparker.com/publications/practice-alerts-articles/real-estate/2005/01/03/taxation-of-the-recovery-of-insurance-proceeds

The only solution is to find someone fluent in both languages, preferably a professional interpreter. You said you explained it to him before and he said "yes". You do not know what he understood. When dealing with non-native speaking people you have to ask them what they understand. It also applies to many native speakers of English. You deem him as reading English "reasonably well" . Reasonable well is not going to cut when it comes to reading tax information. I speak from experience as a former translator/interpreter. This might help you out. It is a list of LITP clinics that provide translation services. https://www.irs.gov/pub/irs-pdf/p4134.pdf

The IRS does provide info for 5 languages, Spanish Russian, Chinese, Korean and Vietnamese. If you pull down the language tab on the header line, you can see what they are. There are also English to the other 5 language glossaries. The info available are things like TAS, EITC, Disaster assistance, small biz tax responsibility, Where's my Refund, LITP language service locations, etc . None of the pubs available are related to tax preparation except Pub 17 in Spanish. The are no tax prep forms available except 1040PR in Spanish, but that is only for Puerto Rico. Forms such as W-7, 2848, and other information forms are available in the other languages.

The loss is not added to basis. It is taken on line 22 of Sch E.

The maximum limit is $2085. For tax year 2017, the penalty is 2.5% of your total household adjusted gross income, or $695 per adult and $347.50 per child, up to a maximum of $2,085.

Yes, it is a problem, but it is not due to professionals. it is due to 16 stolen CAF numbers related to 73,000 applications, since Sep 2010, all with the representative refund box checked. In the report ( see page 25), the IRS does not agree fully with the letter recommendation, saying it would be too costly. What they plan to do, is send out a statistically significant sample of letters and from the info gathered develop a third party authorization tool , to be implemented Jun 2019. "Tool" meaning software. Three other recommendations, which concern internal controls, have already been implemented and a fourth is being monitored.

Here is a much more comprehensive web site. https://www.watsoncpagroup.com/section-199a-deduction/

Is this a question from the EA exam? Answer -C. The $5K goes to Sch E.

Pub 17 is available in Spanish. There are some forms W-4, W-7 and a few others also available. There are no other languages provided. There is also a Glossary of English to Spanish tax words and phrases -Pub 850. As a side note - I have a friend who had a tax prep service and had 60 clergy as clients. He said they were the biggest tax cheats.

I have run into this a number of times. What I do is to allocate at least a part of the distribution to Officer Compensation, Line 7, 1120S. Then that amount is entered on the 1040, Line 21 as Officer Compensation. Then an SE form is generated for the SE tax. In 2004, the IRS began auditing S-Corps and at that time issued some guidelines which I can't locate again. They guidelines were less than $10,000 income and more than $50K distribution. These may have changed over the years. The good news is that less than 1% of S-Corp returns are audited and I assume that the small ones, such as this, are on the bottom of the pile.

I used to have a client who received pension money from Canada and it was on a NR4 with tax withheld. The IRS used to have a form 8891 that was used up up until 2014 and then it was discontinued. What would concern me here is the $3K. If it came from dividends, or interest, it might need form 8938 as wells an FBAR requirement.

Federal employees only get 13 days of sick leave a year, which they can use for bereavement. They also get to accumulate the sick leave, so that's most likely what happened. Tom, you can get 20 days for bereavement, if you can get a job at Facebook.

Make sure you write "FIRST TIME ABATE" across the top of form 843.

That's what sports cars are all about. Your butt scraping the pavement and the adrenaline rush of high speed. Hmm! Only 90 mph? Must of needed a tune up! My college roommate had a Facel-Vega. They stopped making them in 1964, but the sporty coupe model had a 354 Chrysler hemi motor that was rated at 325 HP. That was a lot of HP for a small car. The first time out my friend took it up one of SF's steeper hills, it went up so fast I though we were going to shoot off into space.

"Special rules allow an employee to exclude certain achievement awards from their wages if the awards are tangible personal property. An employer also may deduct awards that are tangible personal property, subject to certain deduction limits. " The key is those "certain deduction limits" ? Will 5 carat diamond rings, Rolex watches, Lamborghini's be allowed? Don't think my clients will be so lucky.

Fortunately, I don't get too many. One was from a very persistent solar panel company, that kept calling on the home land line, even after it was blocked. So, I answered and played along with the caller and dragged the call out. Finally, I said I didn't own the house (lie). The guy hung up and that was the last call I ever got from them.

you can elect (Sec 266) to deduct or to capitalize carrying charges, such as interest and taxes, that you pay to own property, except carrying charges that must be capitalized under the uniform capitalization rules. Pub 551. It can be done on a year to year basis. Under TCJA , in some cases capitalization may be the only way to get any benefit from these expenses. The lesson here - read the fine print, or better yet, spend a few bucks and take it to a RE lawyer.

Whoa! when I Googled "surrogate" all I got were links to surrogate mothers. It must be a hot topic. If it is the mother's natural child, it would be a Custodial acct. (Thanks, Judy). If the mother was appointed guardian of a someone elses child, and the mother was legally appointed guardian, it would usually be a guardian account. However, it seems that in some states, they use "Surrogate" for both custodial and guardian accounts. Maybe PA is one of them. It may be that the child is adopted and the account was opened between the time the mother was appointed guardian and before any adoption was finalized. Yardley, I would simply tell the mother that it does not matter what the account is called, it is the SSN on the account is all that matters and any interest over $0.50 has to be reported.

I have learned over the years, and especially nowadays, NEVER assume anything. It is sometimes hard to do because every once in a while you slip up.

There are two suggestions, so far, and both might be worth pursuing. RO's do get sick, get transferred, have accidents, go on leave, retire and some even die. However, I suspect that she has a large case load and is jumping from one case to the other and that me why she talked OIC. That would get you out of her hair. John's approach is what I usually use. In this case, where there have been multiple lapses, I would definitely contact the supervisor. You could also request that a different RO be assigned to your case, but you seem to like her, so maybe you don't want to do that. As for closing down the business, that only happens when taxpayers are continually uncooperative, try to hide money, or keep defaulting on installment agreements. If you don't get any results from the supervisor, then, by all means, call TPAS. Be sure to tell them it is URGENT, otherwise you will wait for weeks to hear back from then.

They can not be legal fees. because he is not an attorney-at-law. A POA makes someone an Attorney-in-Fact. The payments can be for management fees, consulting fees and fees for other services performed. One possible way to avoid the SE tax would be for the parents set up some sort of trust with the son as trustee. Since he is not a professional trustee, the payments to the son would would be ordinary income, Line 21.

Cash isn't a problem. Gross was over $180K. As for the auditor accepting the deduction and opening a new audit, the IRS doesn't work that way. The auditor only has so much leeway. Everything has to pass by the supervisor. Audits are not initiated by the auditors. Besides, the 1099's ranged between $3 -$5K, hardly worth auditing. There were other issues that the client came out favorably on.

I am going to rehash this. I can see that this seems incredulous to some, as it was to me. It was the first time after having done many, many audits that it has occurred, which is why I posted it, so that everyone could be aware of this. The client paid Cash, not checks, to various subs. Properly filed 1099's were issued. In the initial audit 5 of 6 were rejected as an expense without additional proof. The reason the auditor gave was the the recipients had not filed returns showing that income. The auditor was not auditing the other returns, but that information can be requested through the supervisor. Later, the auditor called me and only one now remained unverified. To prove payment, either receipts, or a signed statement by the recipient would suffice. Unfortunately, there were no receipts and the sub had skipped town and could not be located. Thank you all for chipping in.

If your clients report payments on a 1099-MISC, this may not be sufficient proof to satisfy an audit, even though the 1099 was properly filed. If the recipient of the payments did not report that income on their tax return, other proof is needed. This happened in a recent audit to a client of mine who made cash payments to subs. The proof could receipts, or a written statement from the recipient that the money was received.