jainen

>>How much interest would a large refund draw if put into Ironically, that's the same argument often used for UNDER withholding--the so-called penalty is simply a low interest rate that may (in appropriate circumstances) be too small to matter. I don't think "the vast majority of people" is a very useful guideline for individual tax planning. And the original post reminds us that interest paid or earned is not the only consequence of tax planning decisions.

>>paid in full<< The picture says it all. That there's foreign currency. Always a problem for accountants..

>>The IRS keeps making it more difficult for us to practise and at the same time withdraws assistance to those of us who comply.<< I think that's unfair (not that the IRS needs me to defend it). The government has given us fabulously useful tools, including the one in the title to this thread. It is not an all-purpose tool, but it's real good when we use it correctly. IRS has stood up to vicious criticism while raising our ethical standards and simplifying filing procedures. The IRS web site is a wonderful resource for fast research, almost unbelievable in a government agency. The problem is a particular political party, the one that wants to hobble government powers. So now things take longer than they used to, are done out of chronological order, or have other time issues. Or even quality control issues with training and other staff reductions, which is one of the principal ways we are paying for that political party's tax cuts. You don't know the reason for this delay, but that does not mean there is no reason. Maybe someone already used your client's SSN, or they are investigating a complaint of unknown validity. Or maybe there is a random audit hit. Well, it doesn't matter anyway. Re-read Jack's posts above, and get on with your life. And don't forget, it has long been an axiom of our profession that a refund suggests our own failure to properly advise the client.

>>he loves and lives to fish<< Yeah, that's what I meant--this whole scenario sounds fishy. In my experience, fisherman never tell you everything. They almost never tell you anything.

>>who the owner of the LLC is<< Simple joint ownership does not necessarily create a partnership. If only one spouse is active in the business, it is still a sole proprietorship. That's only federal--the LLC has state filing requirements as well.

>>strict all-sales-final policy<< Maybe that depends on who you buy it from. I looked at the refund policy on the CCH site. As far as I know, every software publisher and seller allows you to review the product and license terms before you make your final decision. With tax software, you can't even get a genuine trial until at least January.

>>I thought we got BOTH. 10% off AND deferred payment.<< Take the 10% unless you have to carry it on a credit card for more than a couple of months, or if you have temporary cash flow problems. You can get a full refund through next February if you change your mind.

>>Nothing unusual about this return<< You don't really know that for sure now, do you? Sometimes when the IRS takes a closer look it's because the client neglected to tell you something.

>>On hold for 23 minutes<< In half that time you could have submitted the entire matter through e-services. It's a couple of days wait, but isn't time used more important than time elapsed on such a routine non-emergency?

>>If wife has taken nothing out of the S-corp, she does not have to take a salary.<< That's not the way I read Section 1366(e). "If an individual who is a member of the family... of one or more shareholders of an S corporation renders services for the corporation... " In other words, if the wife works there she MUST get a reasonable wage, period. Otherwise hubby could take a little salary and a great big dividend or max out FICA, etc.

>>how is the income to wife reported<< On Form W-2.

>>it states this intangible (IF that is what a single client is) is subject to the 15 year amortization<< No it doesn't. Get out your magnifying glass and see the itty bitty #1 there, with the footnote below. It doesn't matter whether it becomes a substantial part of her business, because she is not acquiring a business in this transaction. Oh, I suppose you could do some research on this point, but as John points out it couldn't possibly be cost effective. Intangibles can be disposed of in all the same ways as tangible assets--sell, or trade, convert to personal, suffer a casualty loss, make a gift or donate to charity, abandon as worthless, etc. Generally a disposition involves an identifiable event that can be documented in support of the tax treatment.

>>It isn't a client list<< It doesn't matter what you call it--account, relationship, access--it is a customer-based intangible asset. However, I regret to inform you that these are not (N-O-T) amortizable unless they are part of acquiring an entire business. Since that isn't your scenario, the $3165 must stay on the books unrecovered until the asset is disposed of.

>>amend the 2010 tax return<< You could only have used an amended return for the first two years after starting depreciation. After that you must file Form 3115. As you note, this particular situation is not eligible for automatic consent procedures, and it seems too late for advance consent. Looks like you need a Private Letter Ruling. Back it with thorough accounting and legal research. But first, call your E&O agent.

>>Lines of the highlighted(?) text are not parallel<< Of course, and not even the same font. They are both Courier, a fixed-width typeface that makes it easy to count. But the insert looks like thinner letters. In fact it fits 70 characters in the line that reaches to the (apparently trimmed) margin, while the original only fits 69. Also, since we're whining about grammar and usage in another thread, note that the insert has a blatant punctuation error with a comma outside the quotes. Stupid, but still funny!

>>it didn't make sense to me<< "When I use a word," Humpty Dumpty said, in rather a scornful tone, "it means just what I choose it to mean — neither more nor less." "The question is," said Alice, "whether you can make words mean so many different things." "The question is," said Humpty Dumpty, "which is to be master — that's all."

>>been there, done that<< Photoshop is such a great program!

>>Your thoughts/comments<< Same advice you would give your own clients--don't represent yourself. Call your insurance agent and lawyer, and find a qualified tax professional to handle this audit. It sounds ominous.

>>how do i know<< You know if the employee tells you. What I left out of my reference to Pub 15 is that it only matters if the employee tells you before you accept it. Or, as you mention, if the IRS tells you.

>>he needs to go back to his attorney<< Assuming he is correct about paying off the mortgage (which of course we can NOT assume), he may not want to go back to the same attorney who botched the deal. A wild guess is that he has lousy records so the best the lawyer could do was browbeat the lender into giving up. Anyway, this is a tax matter now, so the client needs a tax professional. Be sure to disclose 1099 non-conformity with Form 8275 so that, in case you lose, he doesn't get substantial underpayment penalty and you don't get preparer penalty. >>the mortgage company would have to prove to the IRS it is valid<< Interesting concept. But no, the mortgage company doesn't have to do anything. The burden of proof is on your client. (If you are VERY careful and thorough you can switch the burden of proof on to the IRS when you go to Tax Court.)

>>Check the IRS employer publications<< The employee is not allowed to claim more than the number of allowances determined on the W-4 worksheet. This uses filing status, number of allowed exemptions on the actual tax return, number of jobs subject to withholding, and expected deductions and credits. Genuine numbers only. According to Pub 15, the employer can not accept the W-4 if the employee "indicates in any way it is false." If the employee refuses to submit a valid W-4, the employer must withhold at single-zero.

>>Just wondering<< Tell your client to get busy reconstructing his time sheet. Kiplinger includes this in the Dirty Dozen audit red flags this year. http://www.kiplinger.com/features/archives/12-audit-red-flags-the-irs-looks-for.html

>>I wonder if other states have similar taxes<< In my state the minimum tax is $800.

>>she is not "in the business"<< That's the whole issue--since it is not a business, her expenses are only deductible as miscellaneous on Schedule A (to the extent of income, subject to the 2% threshhold). And then only legal fees whose primary purpose was to secure taxable income--costs to establish the guardianship and place the patient are not deductible at all.