Richcpaman

I look at it this way. Jack is right, we are the unpaid auditors for the IRS. We get paid by our clients. Has ANYONE on this board ever been subject to one of these compliance audits? I believe the answer is NO. Why? Because, we do the returns right. Our returns are not getting kicked out by the boat load with bad AOTC, CTC, EITC or other issues on a regular basis. I do my due diligence, and I send away those that do not meet my criteria to be my clients. Sorry, if you have all those above things, and I do not have any idea who you are and you just walked in off the street, you are walking back out. That is my defense. I do not believe that the IRS is going to go after a preparer with one bad return. They are looking for patterns, and if you have a number of stinky ones, then you are much more likely to get the visit. IF, for some reason the IRS shows up at my door to do a compliance audit on this issue, I should be in very good shape. And any issues that might arise? I pick up the phone and call the client and here comes the missing info. Rich

Develop your own "Protection Plus" For $50, you will protect them in case of an audit by the IRS or State, free of charge. It's like free money. If 10% buy it, and only 1% may ever get it... You are way ahead. Rich

Joe: Actually... It was before the split refund form was created. I got burned early. Rich

I used to think that the proper course was to prepare the returns of divorcing couples so that the lowest tax was the result. (Why should the IRS benefit from your marital issues???) Then the spouse who didn't have any withholding took the refund that should have gone to the other spouse. Even after agreeing not too.... So now, Its one spouse or the other for me. Rich

Johnny: I Presume that you did have the clients in your file before the update, correct? Usually, it is just the link to the actual database that gets scrambled. Close 2016, open 2015, and then reopen 2016. Sometimes, that might help. if not, you have call customer support. Rich

Have the "S"-Corporation write a check for $1 per share to buy out the kids interest. There is no "gift". He sold the shares. He would have a LTCL and Passive Loss to offset the other gain. Rich

Actually: The intent is to eventually tax the amounts in the IRA's at some point, From the IRS's POV, the sooner the better. Therefore, you have the RMD Rules. I like the stretch IRA rules. I think they are a good rule. The Money stays invested, but the feds start to get some money from the funds. Abolishing the stretch rules, which have only existed for 15-18 years, would be a real bad idea. If you get $500k from a parent who dies, your effective tax rate on that, right now, excluding state tax, could be 44%. That is HUGE money grab by the government. The whole ROTH Rules are being driven by investment lobby. The money is invested, but it is taxed up front, The government likes that. IF they restrict ROTH, which I expect them to do anyway, and they also blow up the "stretch" rule's, the government is in for a bonanza. There is supposed to be 10 trillion or so in assets moving from the baby-boomers to the next generation. A big chunk is in pension funds, IRA's and 401(k)'s Rich

Well, its that time for the QB Accountant's edition for 2017. I used to go to Staples and buy 2 or 3 copies with CD's in the box, and load them on my various computers. Don't want to pay $349 x 7...) Now, you can only buy a copy on line? Any thoughts or deals? I want the Accountant's edition so that I can open two files. Don't care about Pro-Advisor status, but they are throwing that in as well. Rich

Looks like that is the "Hit Mitt Romney Hard" Bill. If it passed the Senate, what happened in the house? We have a new Senate and House being sworn in, so doesn't all legislation die? Rich

The building isn't just $534 in depreciation, because you can section 179 Restaurant improvements. And this would qualify under that section. And then we have next years income that we would like to offset... That is why I have the questions. The kitchen equipment is easy, and then I have a building, that I can use the kitchen area, but not the rest of it. So I can place a building in service over several periods. IF I get a segment analysis done by a architect, then I have costs associated with different areas of the building, and then I can have them placed in service as the permits allow. Some in 2016, and some in 2017. Rich

A few days in Dec? Have 600k in income that could use a little Sec 179 against it... This is restaurant number 2. 150k in Equipment, and 1million in Building. Only a portion of the building? Place in service the kitchen area, but not the dining, restrooms or parking?

I have a client that is about to open a restaurant. The kitchen is ready to go, and has an operating permit. But the building can not get its permit, due to issues in the parking lot. And they can not get that cleaned up till Jan 2017. The client has already lined up significant catering sales from now till the end of the year, and is using the kitchen to do these services. (Don't need the parking lot...) Can the client place in service the kitchen equipment in 2016, even though they can not place in service the building that it is located in? What are your thoughts? Rich

Jack: I do as Rita and others on this thread have stated. Many larger corporations, with many folks working for them as sub-contractors, want you to be personally liable for any act detrimental to the firm, Like Mary Kay. So they put the $$$ on a 1099, and will not allow you substitute report to a EIN Corporate entity. Currently, I have one with a 1099-Misc for over $350k a year. He bought a Corp from a retired broker, and the Broker Dealer refuses to report the income to an EIN entity. I do not understand why these big Corp's are so stupid about this, and allow you to substitute reporting. Rich

You did well on that one! Rich

When I logged in, and the site gave me the notification that I had been quoted by Rita, I was glad to know she wasn't hugging me... Rita: That was very sweet of you to say the above. Some days, its nice to know that it appears to others that I have a clue. And these folks? The *knew* what they were getting. They needed to make a change because there are some other major changes coming in their world, and they needed better representation. They were actually embarrassed to give me the return... I give them credit for that. Ya'all have a happy holiday season, OK?

Just had a new client drop off their return from the prior preparer. Who had been paid $100 to prepare a return with a $260k gross Schedule C (truck driver) and Avon Sch C for the spouse. Office in Home, Sch A and EITC! There is no depreciation for the over the road truck, but $145k in truck expenses. The Sch C's netted out to about $14k. The Office in home form? 6.25% use of home, but all the entries went into the "Direct Expense" column and not the "Indirect Expense". That generated a 12k OIH deduction, instead of the actual $750. Between the mortgage, the MIP and the RE Taxes, the client paid about $23k to just live in the house. Good thing they got over $5k back in EITC. Had to buy the food for the two kiddos somehow.. During the initial interview, the said they needed $10-12K a month in cash to live their "lifestyle". And now, the old return.... Sheesh. Rich

NECPA: I Would keep it simple. Thanks, but no thanks, and refer the taxpayer to someone who can handle that work. Rich

Naveen: When I bought a practice a few years back, I had to teach the new employee how to use the new tax software. I had her reinput the returns into the new software. During this process, a couple of errors were found. In one case, about a $12k refund to one client. (PAL Issue and incorrect prior year coding...) When you find an issue with one of your new clients, you just let them know what you found and how you found it. We would have never found the above listed error except by redoing the return completely. Offer to amend for free, welcome to the NEW firm for example. Try not to smear the former preparer to bad. I was pretty explicit with any clients I spoke about with issues that I found. "I do not think I would like someone to go thru *each* of my returns from scratch like I just did to former preparers returns, which I used as a training exercise, and then find various issues." I believe I have fairly good protocols to make sure that the right numbers get into the right places. But we ain't perfect. Rich

At one of the "Gear-Up" Seminars, the instructor was from California. He said he was finally getting to the "perfect" practice. He spent all tax season in Lake Tahoe at his condo, all returns were dropped off at his office in LA, and other employee's scanned in the info, and inputted the returns, then he reviewed them. He wanted 1,000 like this, and he charged a very large fee. To each his own. If you turn your tax practice into a commodity, then your clients will treat it that way as well. I was just at one of the spin-off's from "Gear-Up", Bob Jennings seminar, and he said to raise your fees 30% and clear out the chaff. That will get rid of the commodity returns, the ones that have revenue but are not helping you in the long run. If I meet with someone for half an hour, and I get $250 for that return, and I meet with someone else, for half an hour, and get $500 for that return, why am I meeting with the one for $250? My idea for 2017 is this, as I am doing all my tax season planning, you pay more to meet with me. If you want to drop off the return, the starting rate is $280. If you want to meet with me, the rate starts at $375. If you want to meet with the CPA exam qualified person on my staff, you can meet with them for $300. Or some combination of fees that make sense for what I have traditionally charged them in the past, and what rate I want to charge them in the future. In my new office? I can not see who comes into the office. They do not walk by my front door anymore. It cuts down on the "drop-in's" considerably. Rich

First off, I *like* meeting with my clients. Yes, its a PITA, but I like to say hello, how are you, how are the kids, and what happened last year. I do encourage drop-offs, it does save me time, but I feel that it turns the tax return into to much of a commodity if there isn't that personal face time. So, I set the appointments and mail them the Organizer with the appointment date and time on the *outside* of the envelope, as well as on the inside. Most of my clients show up. Those that do not, get a phone call from a staff member to reschedule. I also use YouCanBookMe and find it to work great, I have the link in my email signature line. I tell folks to follow the link in the email, and they are good with it. Rich

Bulldog: I am with you. I am tired of being beat up by an organization that does not pay me, but treats me like the enemy. And does so very little to actually try to find the folks who are committing all the fraud. There are 10-15 businesses, maybe 30, that are efiling with the IRS. CCH, Intuit, etc. Instead of placing a mandate that ALL of us preparers go thru a stupid process to provide to these 30 firms the info, why not just let these firms know that these are acceptable EFIN's? Not on the list? You get a letter from the IRS, or CCH blocks you when you file. No, that would make sense. And 14 bureaucrats spend time tracking down pointless letters instead of responding to CP-2000 notices, or stopping fraud. Rich

Naveen: Are you going to have employee's coming over from the acquired firm? Even just one? If so, I would recommend that you teach them how to use ATX by reinputting the 2015 returns into ATX 2015. Then you rollover into 2016. If ATX has a conversion software of Taxwise to ATX, you gotta ask them. Rich

I have a flat $40 "Electronic Filing and other Administrative Costs" line item that I add to every invoice for a return that I prepare. But I hate being nickled and dimed. Rich

That is the law. Its a good decision. Rich

I am going to resurrect this thread. Just renewed ATX for 2016. Does anyone use PortalSafe as available from ATX? Rates? What is the client experience like? Can I create the PDF at the same time that I print (Paper-client/PDF-Rich's File) the client's return? 20-30 clients a year ask for copies of their returns... it really isn't that big of a hassle for me to send them a copy. What else? Rich