BLACK BART

Posted February 7 · Report post ...a PROSPECTIVE CLIENT...Friday. Said he was single; gave me his docs (two W-2s, small pension, bank interest) which I plug in the computer and give him the refund amount. After a pleasant 20 minute chat I told him to come back in three days; he starts to leave, turns around, and says: PC: Oh, it don't really matter, but I guess I'm supposed to tell you - I sold a house last year. BB: Your house? Your personal residence? PC: Naw, my uncle died and left me his old, fallin'-down rent house. It wasn't worth but $10,000. BB: Oh, well, uh; we have to put that down. PC: No, no, it's okay. See, I let this guy have it for just what my uncle owed the bank on it. I put it on a land contract between him and me. BB: Well, we still have to.... PC: No, you don't understand. He cain't pay for it all at once, so I'm helpin' him out. He pays me exactly what the bank payment is ever' month and I turn around and give it to them until the $20,000 note gets paid off. I never get no money to keep and so I don't make nothin' off the deal. (My) Failing to grasp this irrefutable logic exasperated him. He guessed he'd have to go somewhere else where they knew more about taxes. And out the door he went. May 25th PC MYSTERY SOLVED (I THINK) Re: this guy (above) who had the inherited, run-down, under-water rent house – this week a lady I didn’t know stopped in saying her only income was social security and had not filed in years, but asking should she have filed and paid taxes on a $5K life insurance policy her uncle left her. The departed uncle part rang a bell -- turns out she’s the PC’s sister. While glad to hear no tax was due, she complained bitterly about ungrateful Unk leaving his old rent-house to her brother instead of her. Claims she did lotsa stuff for the not-so-dear departed, conniving bro did zilch, and it was a damned outrage she didn’t get the house too. I said she probably got the best of the deal considering the liability (I guess that’s okay to say since he isn’t my client and paid me nothing). She said “What liability? Uncle XXX paid that house off years ago! My brother sold the house to some dope who watches those TV fix-up and re-sell shows and is paying off a big note that my brother owes the bank.” I swear, sometimes I think we independents attract more blowflies than honey. I know (well; I think) he would not have approached HR/JH with this story and I guess they lump us in with the kitchen-table crowd (25 bucks-all comers). Probably thinks that my "EA" means "et already".

Saw a good one the other day out in front of a church: "Fire Insurance Available Here"

Thanks Dan, I think maybe you just saved this case (believe he meets that test) for me since you're a couple of decades more up-to-date than I generally am. Also many thanks to you cbslee for getting me started on the right track and reminding me of stuff I'd forgotten. Nice helpful board, isn't it, folks?

I agree since the only customers are 25 miles away and none will be coming to his house. Yeah, I know. Most are decided on a case by case basis and, as a practical matter, at the auditor's discretion. Still, I just wondered if you had read about a case in which the in-home supply storage was a material factor. I've found some items that suggest he does buy his own supplies and it's likely he keeps them at home. Thanks (and I'll stop bothering you ).

Disregard what I said about the "metro area" rules, etc. - I was thinking about construction workers (most of mine work far off and out of state). Just checked his '15 return and they did do a $500 home office expense form for him. You say "admin-related tasks" which is the bookkeeping I assume. But if he did not furnish and store his own cleaning supplies at home, are you saying that would kill off the home office being viewed as his principal and regular place of business (which allows him to deduct ALL the miles)?

Unless the $80K is a gift from a friend or relative selling the property to him at a below-market price, then it has no effect. I can't imagine why it's even on a closing statement other than to impress on the buyer what a great bargain he's getting. The cost is the cost and the $80K made-up figure is nothing to him (certainly not income-by that reasoning the seller could enter a million dollar sale price less a $780,000 credit and your friend would be in a fix). I'm assuming the buyer is interested in tax basis - here's the IRS Pub. 551 take on that (check out page 2). https://www.irs.gov/pub/irs-pdf/p551.pdf

I think it should be recorded at $220K which is what he actually paid - I don't see how a discount would have any effect on the depreciable basis of an asset.

New guy's former preparer retired/ got extension-came to me/ has contract labor janitor service (1099s from all)/ drives pickup truck 25 miles from home every day/ goes to about four or five different business locations/ services each one/ drives to another (several miles apart) until all are finished/ drives back home. Former tax prepper gave him 100% of many thousands of miles (home to biz/ biz to biz/ biz to home). What about the commuting? I once read that IRS argues the job has to be 85 miles away from home to be considered "out of (what is it?) your metropolitan area" and thus eligible to deduct the mileage to the jobs. I also read that one audit case bargained them down to 35 miles. I'm thinking an agent would allow him the biz to biz travel, but would kill him on audit by disallowing commuting from home (also claimed 100% business truck use-has no other vehicles). Sometimes we allow the mileage to construction guys who work lots of places without prying too much into where the work was done because they move around so much, but this case is pretty well nailed down to just one town and that's that. I know I'm not doing 100% business use (75% generally), but about the rest, metro area, home drive, etc. what do you think and what would you do? Opinions, please. P.S. I'm thinking about giving it back 'cause they'll scream loudly (standard miles are the biggest deduction). They're audit-bait as it stands and you know who gets the blame for that no matter who does it now/what was done in the past. On the other hand, there's a very good fee and I might get away with it (they've probably been doing it for years - doesn't that set a precedent ).

Just thinking about it and that's right - it does get processed eventually. At first I was thinking it's incompetence, but maybe instead it's just that they have a mountain of stuff to do and since their staff keeps getting reduced, it takes a long time to get around to each person in turn. I remember once looking at TIGTA's (IRS oversight outfit - Treasury Inspector General for Tax Administration) website and got into a message board there. Actual IRS employees were taking suggestions from tax preparers and taxpayers. One back-and-forth was especially interesting; an agent was replying to somebody and said he thought their idea was a really good suggestion. He said he was going to put it into the system, but not to expect a quick result because it generally took two years for them to implement a change.

That's a great post, FDNY.

I can't think of anything, but why not just wait and see if IRS sends him anything else or bills him? At least you'll know where you stand if/when they do. I once had a client do something similar and IRS sent a letter on it. Neither of us had any bright ideas, so I suggested we wait and see what happens. He never heard anything else from them again. I think sometimes if they don't have your response to work with then they're too busy with other stuff to follow up on such things. Caveat: My guy was not a worrier -- some clients can't stand the suspense.

You're a card and a wit, Rita. That answer reminds me of a Chinese café operator who once called me about payroll. The interview ended when I said they'd owe a lot - he kept saying "no tax-no tax" over and over. Wife said he spoke "a little English" but I'm not so sure. She had two tax deposit coupon books we used at the time - one for Wang's (something like that) Inc. and one for Wang Partners. Apparently they filed for two different EINs on their own (no other accountants were involved). Anyway I asked... BB: Did you file any incorporation papers with the state or IRS? He: No. BB: Do you have any partners? He: No. BB: Are you saying you're a corporation or are you saying you're a partnership? He: Yes.

BLACK BART - Posted 3-27 ...IRS sent me a letter. To recap; back on October 15th I filed & sent in my tax due check (stop laughing - it's normal for carpenters to live in shacks and auto mechanics/body repairmen to drive unpainted junk cars; why should we be any different?). Anyway IRS cashed my check the next week (got a bank copy), but one month later sent a letter demanding I pay them that same amount again.. Abby Normal advised ignore and it will go away (said they don't need any more mail), however nothing would do me except to speed things up - I sent a full explanation. Result: Nov - Ist IRS letter (we need 45 days to check this out)/ Jan - 2nd letter (need 45 more days)/ Mar - 3rd letter (need another 45 days). To be continued... ___________________________________________________________________________________________________________________________________________________ CONTINUED: APRIL -- 4th IRS letter : "Thank you for your correspondence dated October 27, 2016. Our records show that your Form 1040 account for the following tax periods is paid in full at this time: December 31, 2015." FIVE MONTHS AND TEN DAYS TO VERIFY THEY HAD CASHED A CHECK. Anybody with a serious tax problem is probably looking at a year.

While I suspect most of us are meticulous, I feel sorry for the perfectionist who wakes up at 1-3 A.M. every night worrying about returns. While I'm not quite there (yet).....ten years ago I had a client who'd show up at the last minute with a large boxful of checks, bills, receipts, deposit slips,100s of wadded-up tickets (gas, cafés, Wal-Mart), and occasionally a dried-up sandwich. The other night I dreamt he left his stuff and for some reason (probably money) I had to get it done over the weekend but couldn't find his box. An assistant brought several large sandwiches to tide us over: a whole raw salmon sliced in half with eyes intact (I attribute it to a recent sushi restaurant visit-granddaughter loves it/I despise it - just give me a steak and potato); it took me all next morning to stop tasting raw fish). Anyway I was going nuts wondering how am I possibly going to get all this stuff done by Monday without his (usually) incomplete/incorrect/unavailable/non-existent information. Then; if it's possible to come awake in the middle of a dream, I did. Suddenly I realized that Sam **** died years ago -- I didn't have to do the job after all. It sounds stupid I know, but it was a great relief. At the nightly rate blogger Dineson's worrying he should see a shrink before he joins Sam (probably me too, but I don't have the time - I'm too busy dreaming).

Were you fried rare, medium, or well-done?

I think it's an occupational hazard - every accountant I know does. I took my granddaughter to a big Office Max store to get needed things every time she came home on college break. We both liked to browse around for an hour or more (there's so much interesting stuff to look at even if you don't need it).

This kind of mirrors my experience (where was everybody in February?) and outlook. While I still have some fun, it's just not as much. But, as actor E. O'Brien said in Peckinpah's movie "The Wild Bunch": "It's not like the old days, but it'll do." I stopped going to seminars a few years ago (correspondence/online CPE now). At the last one I asked "Where's (old acquaintance) Jack So-and-So?" and somebody said "Oh, I went to his funeral last summer." The audience (dwindling each year) was gray and (mostly) white heads -- makes me wonder who's going to be doing taxes in a few more years. If it's Turbo Tax, the government will likely either go broke from handing out so much improper/fraudulent EIC or make a killing from so many balance due mistakes and erase the national debt. Oh well; chin up I suppose. What else can we do?

I know! I know! My clients are constantly asking me about these things...(although occasionally preceded by "How much is my refund?")

Rich - My quote is exactly the same as Margaret's ($1,421) and dated 4-1-17 (like yours); mine is for the "ATX MAX Package" (I assume hers is too). Your quote is for the "ATX ADVANTAGE Package" and it has numerous features mine doesn't. Those I don't have are (as listed on your invoice): User Guide PDF, Tax Prep Partner 1041, Tax Prep Partner Standard Bundle, Practical Tax Expert, Complete Tax Library, Practical Tax Bulletin, Paperless PLUS, Advanced Calculation and Compliance, Conversion Services, Concierge Care (Sounds like American Express), Enhanced Asset Management, 6 Concurrent User Licenses (Mine has 3). Then too, of course, there's the "Add 5 User Licenses" (nice discount: Retail price-$299/ Your price-$299). I'm just doing 1040s and suppose you're doing lots more, but, as you know, sometimes those sales reps throw in the kitchen sink whether you need it or not.

Much obliged for the good thoughts guys, and Catherine - I'm not going to try discussing thermos (dynamics or coffee either one) 'cause last time I injected some all-Greek math in a post, you easily translated it and threw in a schooling on Planck lengths (quite interesting) to boot . But...since I'm already here, what the heck does PV-nRT (forever or a day) mean?

BLACK BART Posted April 19 Put up a sign outside saying we're gone 'til sometime next month-same for voicemail. It's every taxpayer for himself. Beat/dead - it's gonna take some dayyys to lie prostrate & unstress, Can't remember when's the last time I got zonked-out, but thinking about popping the cork on that fifth of the grape somebody Xmased me last year (it's white and I like red, but what the hey-nothing else went my way this year). May 5th - The dayyys referred to above are, unfortunately, almost over (re-opening Wednesday). And about that wine; well, it HAD been a long time and hangovers are not one bit more fun now than they were in days of yore/youth (should have ODed on heavily-caffeinated Mt. Dew instead). Well anyway, two bits of good news: (1) granddaughter is graduating from college tomorrow after four years of bread (mine/her part-time jobs/AR scholarship), sweat (hers), and tears (ours). (2) grad school this fall but meantime she's getting a summer job (doubtless J.C.Penney's cosmetics counter needs a good dose of thermodynamics). Gosh, I didn't realize how much I missed this board 'til just now. It's nice to be back. Hope everyone's doing okay. Regards to all, BB.

Put up a sign outside saying we're gone 'til sometime next month-same for voicemail. It's every taxpayer for himself. Beat/dead - it's gonna take some dayyys to lie prostrate & unstress, Can't remember when's the last time I got zonked-out, but thinking about popping the cork on that fifth of the grape somebody Xmased me last year (it's white and I like red, but what the hey-nothing else went my way this year).

Well, I think its against the law or some credit-reporting something-or-another rule to tell the truth nowadays, isn't it? Nevertheless, if I was still mad, I might try to find some subtle, non-litigable way to pass on my impression. Not "That no-good S.O.B still owes me $250 from 2013," but maybe "He's okay, but I'd count my silverware."

P.S. Just noticed, but the DCN has been replaced by an SID (Submission Identification Number), however each return's got some oddball numbers and symbols after each one so maybe it will still work.

I think this will work. Although we're only sending efiles from one computer now; several years ago for some reason I wanted to also send in returns at the same time on our second computer. So, I just (as you say) jumped the beginning number up about 500 numbers or so and everything went through just fine.