Richcpaman

My whole problem with the "FairTax"? You can not implement it in a day. It will have to be phased in, and most likely, over at least 6-10 years. So, you start with the National Sales tax at say, 5% and that increases every year by 2-3% till they get to the 23% magic number. But the "prebate" checks start immediately. Then you have elections. Several of them, every two years and even a presidential one in there... So you have 3-4 Congress's to "tinker" with the changes and to slow down the tax increase, and to allow the special interests to lobby and pay for their exemptions... Since they will be the last to be shut down, the Social Security and Medicare systems continue and that whole tax collection and payout process is still around. Many of the taxes like estate, inheritance, gift and capital gains that mainly benefit the rich will be repealed first. So what will happen is, the federal income tax will still exist, although the brackets may be broader and the rates lower, a new National Sales tax, capped at 10-15% and SS and MC systems. And you will still be deducting the mortgage interest on your house... So, what have you really accomplished? Creating a new national sales tax.... And we still have the IRS. Really, it is the FULL employment act for us accountants. Rich

Phil: I will go back to your earlier question, as its really a better place to be. I think you need to be more specific about the type of practice that you are in. Item #1, is a model for creating a bunch of returns that are the preparer's clients and they have no relationship with you, the owner of the practice. Item #2 is the model I use. This is the specialization model. Each person has a role to play, and does that specialized job to the best of their ability and gets paid the appropriate amount for that skill level. Whether or not you are getting 400 returns done with 1 person or 1,600 with 4. I had about 2.5 FTE during tax season here to get a little over 300 returns done. But they were not simple 1040's. And many corporate returns. There was me, my full-time staffer as inputter and bookkeeping, my wife PT as an 1040 sorter and inputter and my son as the copy and assemble guy. Each brought different skills to the table. I would love to hire someone and suddenly have 400 returns show up... Is your business model set up to attract a whole bunch of new clients? And what would be the type of return being prepared? And then I see why you asked about item #1. But that requires a much more skilled person and therefore more dollars for that person. Item number #2 sort of allows you to grow the practice and the hours used by the employee's as the practice grows. Rich

Jack: I would rather make sure your CCH stock did poorly... Rich

When I explained to my rep what I was planning on doing, and the second office was going to still be mine, she never mentioned another site license. Only the network version. Phil, I could fax you the server configuration that has been proposed to me. Its rather stiff in price, and I am going to hack away at it on Wednesday. Rich

If the OP (Philip) states that he has up to 6 people using the ATX database, he needs to buy the network license. He stated he had himself, and 3 in his office and two more at the remote office. Otherwise, only three people can use the file at any one time, and with three logins, (Admin, User1 and User2). For the $500 network fee, he could get around a lot of these problems and have all of them working at once, and NOT have two or three dedicated computers to run the remote locations. I am about to set up the same thing. Myself and three other preparers in one office then another in a remote office, using the common ATX database. I need to buy a big dedicated server for all the remote/other functions, and I get to throw $500 to ATX... Rich

The corruption is by design. Someone has to do the job of collecting revenue for the government. Right now, this is the IRS's primary job. Lots of other agencies in the US government collect fines, service fees and other revenue, but its a real small part compared to what the IRS collects. Corruption? If you really believe that the agency is that corrupt and rife with it, then its time to look for a new job, because, by extension, you are supporting it. Because of your efforts to file tax returns on behalf of citizens, you are feeding the beast. But not really, because you would not be doing it if it was that bad. So we separate the evil from the necessary here. And this isn't about the "Living in evil, but the buses run on time..." type of acceptance. Their job is collect the revenues that Congress has directed them to collect. Much of that is routine and rolls in.. (941's and Fed W/H) Its in the administration of the rest of it that we get to see the real problems. Rich

No, but I want to see if it shows up on the survey one day... Rich

KC and Jack. Yes, it does all that. And it does that because CONGRESS Set it up that way. Tasked it with running the largest social welfare program in the country. Tasked it with monitoring the next worst system going forward. And then says it can't have any money... When the IRS budget is cut, it doesn't effect things except those that effect the job I am trying to do on behalf of MY clients. I can't get anyone to read a letter detailing the IRS mistake, but my client still keeps getting the automated notices.... Is the Agency perfect? No. And there are some bad apples. But on a day to day basis, they have a pretty daunting task to perform, and in many respects, they do a pretty good job. When it gets out of alignment, which we as preparers, we get to see a lot of, we CAN'T get the problem fixed in a reasonable amount of time anymore.... And that is because when they suck the money out of the budget, what is left is spent on the priorities set by Congress, and one of those that is NOT a priority is customer service. And that makes me angry. Rich

Stupid. Really, Really Stupid. Rich

Whatever works. The IRS has released information in the past where they reported the AGI in comparison to the occupation listed on the return. Therefore I list for my clients, "Death Eater". Rich

Joan: Don't over think it ok? Did this client just open the gas station? If not, was the prior accountant figuring this out? Probably not. Also, I have done gas stations in the past. We never tracked the CGS on the Midgrade. We only tracked CGS for gas and diesel. Keep the calculation simple, at the beginning on the period, there is X number of gallons of regular and X Number of gallons of premium in the tanks. And you have the wholesale price on that date. There is the beginning inventory, and the ending inventory calc is the same. Do not worry about price changes, there are too many... Then you have the invoices from the supplier for what was delivered and billed. Tell the client that you can figure out what the CGS is for the midgrade, but it will be a guess and expensive to calculate at that. The usual metric tracked is total gallons sold and the mix of those gallons. Hope this helps. Rich

Taxmann: This line: "It's like watching a train wreck. Horrible situation, but fascinating to watch." Actually, you can be the dispatcher and stop the train wreck from happening... $170K sounds like a lot of money, but if you made $75k each year on 1099's for three years and you were SFR'ed, you could get there pretty quick with penalties and interest. The main issue is dollars to pay you. If you do the work, you should get paid. That is where you are the conductor. First you would get the transcripts for the years in question, then you would prepare amended or original returns for filing with the best info you could get from the guy, then move on to the later years with new transcripts and new returns for the other years. Then you do the OIC when all the years are filed and the IRS Agent is talking to you. Nothing that difficult about this case. Lack of dollars make it easy to make the OIC deal. Finding a way to get paid is important, but a monthly retainer would be a good place to start. The OIC and all the processing time can have you collecting $100-200 a month for several years... There is LOTS of business like this if you are interested. If not, find someone local who is interested in these cases and do the referral. Bankruptcy would not save him. The SOL has not started to run yet because he hasn't filed so nothing is dischargeable. If he had filed in the past, it could show some cause the IRS that things are bad for him... Be the dispatcher and direct this guy away from the train wreck. HE might not listen. That would not be my problem. I would do what *I* would feel is the right thing and let go of the outcome. Rich

MrRichMan: The employer does NOT know what he is doing, and ADP doesn't either. And ADP doesn't care whether the W-2's are right or not, and they are "off the hook" as far as they are concerned. Read ADP's/Paychex/any other payroll prep firm contract, it is ALL on the employers..." The paystub is wrong. *IF* the employer has all the Sec 105 stuff in order, and the employee's plan is fully ACA compliant, *maybe* he is in good shape. Not very likely. Also, your employer has to file form 720 and pay the $2 an employee PORCARI tax since the sec 105 plan is now considered an employer plan and subject to the tax. Rich

If there are no related parties "renting" property #1, then yes, your T/P won't have any problem. Rich

Is this credit coming from another entity, like and S Corp or 1065? If so, delete the form created in the 1040 for that credit. I have this problem with the Small Business Health Credit. I created the form 88-61 (whatever it was) and then I get the errors. I delete the form, and the errors go away. Rich

Wish I lived in a State that liked Tax Cuts... Rich

I have a client that received a notice from South Carolina about a problem with the return. Yep, I screwed up. Client sent a letter asking for abatement, and they replied, that they are still applying the penalty. Taxpayer no longer lives in SC. Owns no property. But I would like to retry the abatement request. Any thoughts? Or where to address it? Rich

KC: These are two different types of cases. One is under the "Escheat" laws, and one is under the "Civil Forfeiture" laws. What happened to the folks in MI was a criminal act on behalf of the government. The fourth amendment has been blown out of the water with the newer "forfeiture" laws.... If the police can show that even a portion of the funds may have come from some sort of criminal enterprise, they can take your property.... Under the "escheat" laws, if an account has no activity for three years (in the Peoples State of Maryland), the account agent (Bank, Broker, etc) is to turn over the account to the state.... Here is the Peoples State of Maryland site for reclaiming the property: http://comptroller.marylandtaxes.com/Public_Services/Unclaimed_Property/ I can tell you that I got a phone call about a savings account at my local bank. It was attached to our personal checking account, it comes on the same statement and we used the checking account all the time, but I had $250 in the savings account and never did anything with it... They called and asked me "Are you going to use the account or should we close it, before we send the funds to the state?" I told them they were crazy... We USE the checking account, and we have 4 other accounts with you... Crazy. But, and I recommend this for all of you on this site, go to your states "Unclaimed Property" website with your clients, especially your older clients. I had one client find $11,000 from an insurance policy from his father, and another that had an investment account that had about $9k in it. One other client had his 16 and 18 year old daughters final paychecks from an employer on the site... Rich

Sara: That is why I will have the new employee (too me) reinput the 2013 returns into ATX, so that the carryovers are dealt with in some way or form. Rich

Actually, if the new employee doesn't stick around, then yes, I will have to convert. But I was going to have her reinput the returns into ATX as a training process. Trying to cover all the bases. Rich

Sara: Thank you for that. I have not used UT, but have used ATX for over 10 years, and used Lacerte before that. I will have 60 clients (new) in UT with one employee trained in UT, and myself and 4-5 other employee's trained in ATX and over 450 clients. So we are moving the new clients and employee to ATX. And the new client mix is easier returns in general. Rich

I am buying a tax practice, and it currently uses UltraTax. Has anyone been thru the conversion process from UT to ATX? Did it work? Rich

There would be no gift tax on the $50 between the selling price and the assessed value. Is the Government buying the property?

MCB: But the issues are here, and there are some options that may help defer the gain. And the timeframes can be critical. And he may be able to get condemnation proceedings from the state/county. Lots of things to do, and maybe help your client out. What is the sale price on the remaining land?

I thought there was a special rule for folks receiving SS benefits and making an IRA contribution. How old are your taxpayers? Rich