jainen

>>it would be nicer to hear for sure!<< At least I can tell you that I am safe. My house is in a direct line with Samoa, plus half a block. We suffered an extra two feet of high tide, but my elevation is 12 so all is well. On behalf of my roses (who don't like salty water), thanks to all the micro-diatoms or whatever they were who died millions of years ago to form this little ocean bluff I'm on.

>>He says his accountant is too busy<< Hey, being busy is how accountants earn their living. "Too busy" can only mean this client wants services outside billable hours. And it's also worth noting that he blames his accountant for cheating the employees in violation of IRS rules. So what was your question, Ed? Oh that's right--you didn't ask one.

>>IRS is giving out e-mail addresses<< Selling them. Contact information for all e-file providers is public information and posted on the IRS web site. No doubt the IRS also makes it available in a comprehensive database. I wouldn't call the offer a scam. It seems refreshingly honest -- "The mission of this project is to collect valuable data regarding your tax business." And the website is called taxmarketing something, so it is obviously a business development thing. (Since I would rather develop my own business than theirs, I just deleted the message.)

>>no increase in tax liability<< Sure, and then issue our refunds in the form of I.O.U.s again like they did this year. Balance the budget by stealing from the working class--but at least they can say they aren't raising taxes!

>>no parole with out filed returns<< That's my point. What got those returns filed was not the incarceration, but the parole.

>>I would think the fine and jail time would be longer ! << Well, it's federal prison, not jail. And the system isn't doing that good a job with terrorists and criminals who destroy other people's lives, so I can't see how locking up victimless capitalists will accomplish much at all. Strip him of his ill-gotten gains, of course, but then structure a probation plan that gets his skills back on course. I mean, we got some big problems, and this two-count, cooperative cheater is not worth a lot of judicial resources. Vengeance is a luxury we simply can't afford.

>>He is asking if I have in front of me the 2008 return<< I'm not sure I agree with you on this. Your phone rep obviously did understood about fiscal years, but for some reason thought you were asking about the tax year ending 11/08, which is probably the most likely to be under review at this time. You seem to include being on hold for 15 minutes as part of the matter, which would certainly frustrate the rep who has no control over that. Closing near the end of the calendar year is confusing anyway, because some 2008 returns would use 2007 forms. That confusion is evident in Diane's response, for example, in which she refers to a 2006 return filed on 2005 forms as "a 2005 return." Your phone rep was trying to make sure what exactly you were looking at. It was a reasonable question, and when you apparently couldn't make sense of it and gave a non-responsive reply, he gave up. That's not acceptable customer service, to be sure. But just like good communication, poor communication has two ends.

>>the context of what Congress is really doing<< According to the article itself, the problem dates back to the way the previous administration treated small business. Yes, it is going to take some time to undo all that mess. Until then I don't trust the IRS to be fair in assessing penalties. For your example of health reform, strict liability is one of the few ways to protect it from the huge financial power of the medical and insurance lobbies.

>>that was an $8,000 mistake<< I can't call it a mistake except that their legal advice was kind of a self-help thing. It is entirely possible that with qualified planning there would be perfectly good reasons for what they did. We usually advise people to follow the law as it exists at the time, and in 2008 they would have expected to repay such a credit.

>>the house "really" belongs to the parents<< I hope you don't say that to your clients, because it is wrong. They could have avoided probate by putting the house into a living trust. Instead, they chose to make their son a co-owner.

>>will the IRS ever catch up with it? << Naw, probably not. I'm sure the whole worker reclassification thing is just some bureaucrat's idea for impressing Congress. The IRS isn't serious about it. Of course, if the IRS does figure out that they have already made a ruling against your client, he will be PERSONALLY liable for paying the bill even if the employee already paid. And by the way, better treat that employee pretty nice now, because he can cause a whole lot more hurt by something as simple as a phone call to the unemployment insurance office. Your client is an idiot. He's already been nailed for violating the employment tax laws, which is pretty much the sacred heart of the system. He still doesn't feel any obligation to comply so he'll probably blame somebody else, like you. Tell him to get lost.

>>can't find a job<< Probably the best lesson she can get from them is that she can make up her own job just like they did. These seminars are generally legit, whatever that means. Sometimes they don't bother to get licensed to operate in every state. The quality might not be very good; $700 doesn't buy much education these days. Although they usually claim to have some insider knowledge ("37 years as head of personnel in Washington"), all their information is public domain and available from other sources. They bring it all together in a usable package and put it in perspective. That can be very valuable, but only if she follows through on everything they say. For example, she should take her new job hunt skills back to her alumni services office to get some genuine referrals. And she has to take a volunteer position in her field, this weekend. She must recognize that public sector job openings are rare these days. Even in good times she would just get on a whole lot of lists and wait up to a year to be called. She should hammer the instructors for information about state and local applications. They often have special issues to pursue (or avoid) such as bi-lingual or on-call requirements.

>>not a joke, but the truth<< Maybe so -- but I find it hard to believe his name is really Mark.

>>what do we do now?<< I doubt that the OIC unit even knows the check didn't clear. Just apologize and replace it with a valid check. It's no big deal.

>>Get ready for these<< I've been preparing for years by setting up my Schedule C clients with all sorts of questionable deductions. But sometimes I do feel guilty to see others are doing so much more to ensure the IRS continues to support a healthy demand for our services.

>>be certified by a gemologist<< Would the appraisal happen before or after he pays his "friend"? If after, he's a fool. If before, he's a fence and why he would want to attract attention from Al Capone's nemesis is a mystery to me.

>>They are paying some additional Unemployment taxes this way, but they said they don't care<< I'm always uncomfortable about this kind of client. Why DON'T they care about running their business in the right way? They appear to be building UIB and SSA eligibility that they may not be entitled to under the law. Even worse, they aren't maintaining the correct form of separation between themselves as partnership owners and the LLC as a liability shield. Sure, it usually works out. But when it gets messed up it can REALLY get messed up. So the way to ask the question is not what business risks there are, but what business advantages. What makes it worth even low risks? To me it just sounds stupid.

Thanks. I've been on a bender for a few weeks celebrating, but now I've sobered up enough to play the 6-string banjo I bought myself for a birthday present. I asked some friends how old they thunk I were, and they said, "in the forties." "That's right!" I agreed, because I was born in the forties.

>>you may have a good argument<< She may have an unassailable argument with unquestionable documentation, but to whom can she make that argument in the next eleven days? And frankly I don't think she has much of an argument figured out yet and little or no supporting records, because the original post gave a strong impression that she didn't know where to begin even back when there was time. And I also don't understand how you, after quoting an article that says the decision is only made case-by-case, can find hope for a favorable decision from the fact that IRS is seeking "a broad view of the many different fact patterns" to develop outreach and educational products to ensure compliance. Do you think the compliance they want is that too many people are paying SE tax when they don't have to?

>>send a letter with the notice and amended return back to IRS. << Since a notice of deficiency has already been issued, the normal response should be to petition the tax court. The IRS would most likely ignore an amended return until after the assessment is final on August 31. But whether you go to court or find someone at IRS to listen to you, there is still the problem of how to document your position. It sounds to me like the taxpayer intended to get paid a regular fee for taking care of the kids.

>>additional incentive for aliens to enter, reside and work in the U.S.<< These guys who come here to work are making it tough for us natural-born American lazy bums. And you say they are complying with the tax code too--man, that hurts.

>>get an immediate "stay of execution"<< Actually, the stay of execution is already in place--IRS isn't allowed to take any action until 8/31. On the other hand, almost nothing the IRS agrees to can change that date, at which time the assessment (including penalty and interest) is pretty much locked in. So keep an eye on that date, and if you can't get it rescinded in writing you must file with the court. That will kick the whole thing back to the Appeals Office, which will probably not put up much of a fight, at least about P&I. The problem is that the IRS position, backed with decades of court and other rulings, is that personal services constitute a "trade or business" when they are performed in a regular and ongoing manner and paid under a formal arrangement at market rates. What evidence do you have to refute this in your client's particular case?

>>how do you tell the difference between a U.S. Census worker and a con artist?<< Ahh, the fundamental dilemma about Big Government! So the answer is "they will have a badge, a handheld device, a Census Bureau canvas bag, and a confidentiality notice." In other words, cops.

>>My husband is working in Iraq, not in the military, but for the military on a marine base<< Foreign earned income exclusion does not apply to civilian employees of the military.

>>for the first time the IRS is not checking for income to tax<< If you believe that taxation should not be used for purposes other than revenue, that's a legitimate political opinion. But don't pretend that this is the first time or that it's never been done for public health issues before.