kcjenkins

That's ok, I deleted the other one.

Another possibility is that the preparer marked it accrual but, in fact, the business actually does not have any A/R or A/P. Unusual, but not impossible, especially with young small businesses. In which case it's correct either way.

DITTO

I agree with Marco and Wendy, you never know how long even a seemingly simple application may take, so getting the ITIN now makes good sense.

You are welcome.

Washington, D.C. (August 29, 2014) By Michael Cohn The Internal Revenue Service has released a set of long-delayed draft instructions for the forms that companies need to file to comply with the employer mandate in the Affordable Care Act. The draft instructions are available for Form 1095-A, “Health Insurance Marketplace Statement,” Forms 1094-B and 1095-B, “Transmittal of Health Coverage Information Returns” and “Health Coverage,” and Forms 1094-C and 1095-C, “Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns” and Employer-Provided Health Insurance Offer and Coverage.” The IRS also released a notice and request for comments on the draft instructions. Draft versions of the forms were made available last month, but without the instructions (see IRS Releases Draft Forms for Obamacare). While the forms and instructions have been long-awaited by employers, not all lawmakers in Congress were pleased to see them arrive. Rep. Diane Black, R-Tenn., a member of the tax-writing House Ways and Means Committee, issued a statement Thursday in response to the appearance of the IRS’s draft instructions for reporting requirements under the employer mandate. “After two unilateral delays to Obamacare’s employer mandate, the Obama Administration has now waited until the eleventh hour to issue these draft forms and guidance, offering employers little time to understand how to complete their 2013 taxes under this law,” said Black. “The complications stemming from the tax forms simply underscore existing challenges for consumers with the ACA and the health care subsidies.” “Moreover, this guidance confirms that starting next year, employers, for the first time ever, will be forced by the government to report their employees’ personally identifying information every month—including Social Security numbers and date of birth—which will be stored by the IRS,” Black added. “This is deeply troubling given the agency’s recent failures in protecting taxpayer information. For this reason I am working on legislation to protect employees’ privacy and rein in these intrusive reporting requirements.” In contrast, the National Retail Federation, a trade association of retailers across the country, welcomed the draft instructions. “The additional guidance from the administration is welcomed by the employer community and retail industry,” said NRF vice president and employee benefits policy counsel Neil Trautwein in a statement Thursday. “Now that we have the regulations, the forms and the instructions, companies can continue their compliance activities. While the instructions were delayed, they remain helpful. The Affordable Care Act is still a work in progress and additional regulatory provisions and requirements will be forthcoming. Additional delays or changes may follow. The retail industry remains committed to complying with the law and NRF will continue its active dialogue with the administration and its agencies to ease implementation burdens for employers and employees. NRF is hopeful that Congress can continue its productive role in health care implementation.”

And just HOW does this snarky post add anything to the discussion? Perhaps you should remember what I'm sure your mother told you...."If you can't say something nice, or helpful, don't say anything at all." And, yes, of those items they do challenge, business-related driving expenses, especially when they involve local travel, are very high on the list.

STATE [and local if applicable] Income taxes ARE deductible business expenses of a C Corp. Just like payroll taxes, property tax, etc.

Gee, that seems like it should be the FIRST thing they are taught in school, doesn't it?

Those RAC fees amount to a pretty high interest rate on what amounts to getting your refund just days faster and not having to pay the prep fees up front.

I never did RALs, so did not realize they were gone, but since they still do RACs, it's pretty much the same thing.

That may well be behind it, but it's the RALs that really feed them, and that still keeps a lot of business flowing to them.

THIS ONE IS HILARIOUS....

Sorry you did not like it, but I do not accept your characterization that I ever censored anyone's posts. I got plenty of feedback that disagreed with me, and never objected unless the post was abusive. Judy, who is also a mod here, often disagrees with me on politics, but we remain friends because we both value and respect each other.

No "gloves off" here, on ANY forum, professional courtesy is expected here. And general consensus has been that jokes, laugh of the day, etc, are welcome. Easy for any 'grumpy cats' to simply skip.

As long as they are clearly labeled "Unaudited - for Management use only" there should not be a problem.

Results of Professor’s Bold No Email Policy Enforcement Will Give You Something to Think About Spring-Serenity Duvall, an assistant professor at Salem College, was tired of spending hours and hours sifting through student emails that could be answered by what she had already covered in class, had been asked in class, or had simply already been written into the syllabus. So Duvall came up with a bold policy, one that she was a little nervous to enforce: No emails unless you are scheduling an in-person appointment. Duvall told the InsideHigherEd she experienced “unqualified success.” Students came to class better prepared and were turning in papers that were much higher quality. Her email inbox was less full, and her office hours and one-on-one time spent talking and bonding with students was the highest it had ever been in her academic career. She was, however, “afraid that maybe they were keeping their thoughts to themselves, and they would slam me on the evaluations on how much they hated the policy.” But not the case at all. On the contrary, students rated her availability as “excellent” and overall evaluations were higher than ever before, with many students citing that they felt Duvall genuinely cared for their education. Email is very convenient and fast, but for many situations, there really is nothing like talking things out face-to-face.

I probably would not use but a couple myself, but 4 I find very sensible, especially.

New York (August 27, 2014) By Michael Cohn Thomson Reuters has begun offering a new Checkpoint Learning Tax Research Certificate Program for tax professionals. The program aims to help professionals develop basic tax research knowledge and skills, both filling in knowledge gaps for entry-level tax professionals and for those re-entering the workforce after an extended leave. The program also applies to accounting and audit professionals from various organizations who wish to obtain tax research capabilities. Built around Thomson Reuters’ CPEasy continuing professional education software, the blended learning format includes live instructor-led webinars, an online self-study course, and a written tax research case study to give tax professionals the tools to perform federal and state tax research. The case study is graded manually, with feedback provided to each program participant. “Tax research proficiency is all too often underserved in formal education programs, leaving new accountants missing key skills required to perform effectively,” said Ken Koskay, senior vice president of learning solutions with the Tax & Accounting business of Thomson Reuters, in a statement. “This new Checkpoint Learning certificate program focuses on the development of those key tax research skills and provides assurance of consistent, high-quality training that benefits new graduates, employers, and individual tax professionals,” Candidates who successfully complete the course work and final exam will earn a tax research competency certificate as well as up to 20 hours of continuing education credit. The certificate can be renewed annually by completing eight hours of specially identified CPE credit. For more information, visit checkpointlearning.thomsonreuters.com/GetCertificate.

Unless you’ve flittered away your excess cash on magic beans, you’ve probably got a bank account. With over 500 banks failing between 2008 and today, however, you wouldn’t be crazy to think that your money might actually be better spent invested in magic beans than in your local savings and loan. Of course, banks realize this as well, and as a result, the industry has upped the ante of the incentives it offers customers for opening an account. Gone are the days when a deposit would earn you a balky toaster; today, banks routinely offer “thank you” points–rewards programs in which a customer accumulates redeemable credits that may be exchanged for tangible merchandise, often of considerable value. And while these thank you points can often be swapped for, among other things, a plane ticket, a differentiation must be drawn between the incentives offered by banks and the frequent flyer programs offered by the major airlines. In a frequent flyer program, a customer generally accumulates mileage by traveling on qualifying flights. The customer than redeems the accumulated “miles” for free or reduced fares on additional flights. In summary, the customer earns value in exchange for flying. In a typical thank you program sponsored by a bank, a customer accumulates points for his or her initial deposit, plus additional points for subsequent deposits. The customer can then either convert the accumulated points into cash, or redeem the points for merchandise, including plane tickets. Thus, as opposed to frequent flyer programs, in a bank thank you program, the customer earns value in exchange for letting the bank use his or her money. While the differences between the two programs highlighted above may seem subtle, they are enough to require disparate tax treatment by the IRS. Frequent flier miles are generally tax-free. Miles earned through personal travel are treated as tax-free rebates. And in Announcement 2002-18, the IRS clarified that it will treat miles earned through business travel that are redeemed for personal travel as taxable income, citing the numerous technical and administrative issues relating to these benefits on which no official guidance had been provided. The tax treatment of thank you points offered by a bank, however, has been less clear. We were provided some much-needed, if unfavorable, guidance this week in Shankar v. Commissioner, however, as the Tax Court concluded that thank you points a taxpayer earned for opening a bank account and later converted into a plane ticket worth $668 represented taxable income. In Shankar, the taxpayer received 50,000 thank you points for opening an account with Citibank. During 2009, the taxpayer redeemed the points to purchase a plane ticket. Citibank, in turn, issued the taxpayer a Form 1099 reflecting the value of the plane ticket, or $668, as other income. The Tax Court concluded that the value of the ticket was in fact income, because as opposed to frequent flier programs–where miles are earned through qualifying travel–in the case of points awarded for opening a bank account, the points represent a “premium for making a deposit into, or maintaining a balance in, a bank account…in other words, something given in exchange for the use (deposit) of Mr. Shankar’s money; i.e., something in the nature of interest.” Thus, the receipt of the airline ticket constituted interest income equal to the value of the ticket, or $668. Interestingly, in 2012 Citibank created a bit of a stir when it issued Form 1099s to its customers equal to 2.5 cents for each airline mile customers received for opening an account. This led to some serious backlash, with Senator Sherrod Brown (D-Oh), penning an angry letter to the bank chastising it for what he deemed its incorrect interpretation of the IRS treatment of rewards miles. The Tax Court’s decision in Shankar would seem to indicate that Citibank was right all along in treating miles issued in exchange for bank deposits as taxable interest income, with one small twist. In 2012, Citibank was issuing Forms 1099 even before the customers had redeemed the miles into something of value. This highlights one of the major complaints about Citibank’s handling of those miles: valuation. Using a 2.5 cents-per-mile valuation was arbitrary at best, particularly because if a customer converted the rewards miles into cash, rather than a plane ticket, the value of the cash was often less than 1 cent-per-mile, leading some to question whether Citibank was being a bit generous in its valuation in order to increase its tax deduction. In Shankar, Citibank did not issue the taxpayer a Form 1099 until the thank you points had been converted into a plane ticket with an identifiable value, a much more palatable result. Based on the decision, taxpayers should change their default setting and assume that any rewards miles or thank you points earned in exchange for opening a bank account represent taxable income when converted into any form of tangible merchandise with an identifiable value. Of course, even if you don’t change your default setting, there’s that little matter of the Form 1099 that Citibank will be sending your way to force your hand.

"The Lord Works In Mysterious Ways." I had everything planned and had told my wife I would not be going to church with her on Sunday. My wife reminded me that Sunday was the Sabbath Day and hunting a trophy buck should not be part of the Sabbath. 1. I scouted the area all summer. 2. I searched out the best location for my tree-stand. 3. I set it all up a month ahead of time. 4. I trailed the herd. 5. I picked out a trophy buck. 6. Two days before opening day I rechecked every aspect of the hunt. 7. Everything was in place. 8. Sunday morning, I woke up at 2 am. 9. I put on my camo, loaded my pack, set out for my stand. 10. This was destined to be an epic hunt. 11. As I approached my deer stand......I found this! I called my wife and told her I had decided not to hunt on the Sabbath and would meet her at church. The Sunday sermon was entitled "The Lord Works In Mysterious Ways".

Love it.

Rosemont, Ill. (August 28, 2014) By Daniel Hood Adding a set of simple sentences to your firm’s engagement letters could go a long way to making your firm safer from lawsuits, a legal expert told accountants at the Midwest Accounting Show. In a session on “Protecting Your Practice from Internal and External Perils,” Michael Ripani, counsel at law firm Seyfarth Shaw, laid out the case for a strong engagement letter, To start, he noted that the American Institute of CPAs’ standards require a written engagement letter. They should describe the nature and scope of the work, the standards involved, the services you are providing (“Don’t just say ‘Accounting services,’” Ripani cautioned. “Be specific.”), and your procedures and testing. The letter should also include these liability-limiting statements: Limitation of damages. Include a short sentence to the effect that your errors & omissions liability will not exceed fees collected. A judge may overrule this, Ripani noted, but it may make a client think twice about suing. Modification of statute of limitations. The period within which a client can decide to sue you varies from state to state, but you can attempt to limit it with a sentence that says the client must take action within a certain period. “A lot of courts have considered one year to be a reasonable time,” Ripani said. In Illinois, which has a two-year statute of limitations, “That could cut your risk in half.” Alternative dispute resolution. Include a sentence that keeps disputes out of court by requiring either mediation (which is non-binding) or arbitration (which is binding). Among other things, you’ll avoid the public record of your firm having been sued for malpractice. Client lack of cooperation. Include a sentence to the effect that a client not living up to their responsibilities -- delivering source documents, meeting deadlines, etc. -- constitutes a violation of your agreement and gives you the right to withdraw from the engagement. At the very least, Ripani said, “This will scare the clients a little,” and make them more cooperative Attorney fee-shifting provisions. These require that the unsuccessful party in a lawsuit has to pay their opponent’s legal fees. It can be an effective deterrent -- but it also leaves you open to unreasonable fees from your client’s lawyer if you lose. Indemnification. This would reimburse you for any expenses you may incur if you’re dragged into a dispute your client has with a third party -- if you’re subpoenaed by the third party, for instance. “You don’t want to have to pay out of your pocket because of a dispute your client got into,” Ripani said. Ripani suggested keeping these to one sentence each, and to keep your overall engagement letter short, so clients don’t balk at reading and signing them. He also noted that if you have clients for whom you don’t have engagement letters, it’s never too late to create one. He told a story about an accountant who sent out engagement letters with all of his longstanding clients’ tax returns, and got 60 percent of them to sign. In the end, Ripani said, “Having engagement letters won’t prevent you from getting sued. The hope is that before an issue blows up into a lawsuit, the client will think twice.”

Washington, D.C. (August 26, 2014) By Michael Cohn The Internal Revenue Service recovered $576 million in erroneously issued tax refunds last year thanks to outside tips provided by financial institutions and other sources such as tax preparers, more than double the amount from three years ago. A new report from the Treasury Inspector General for Tax Administration examined the IRS’s External Leads Program, which receives leads about questionable tax refunds identified by a variety of organizations, including financial institutions, brokerage firms, government and law enforcement agencies, state agencies and tax preparers. The questionable tax refunds include Treasury checks, direct deposits and prepaid debit cards. The program helps the IRS to recover erroneous tax refunds and save money, but the TIGTA report noted that improvements are needed to ensure that the IRS verifies the leads on a timely basis. The External Leads Program has grown from 10 partner financial institutions returning $233 million in calendar year 2010 to 258 partner financial institutions and partner organizations returning more than $576 million in calendar year 2013, the report noted. “The IRS’s External Leads Program has more than doubled the amount of questionable refunds returned over the past three years, thus saving tax dollars,” said TIGTA Inspector General J. Russell George in a statement. “However, opportunities exist to improve the program.” Since taking over the External Leads Program in January 2010, the IRS’s Wage and Investment Division has performed outreach in an effort to continuously increase the number of organizations participating in this program. Participation and the number of questionable refunds returned and the dollars associated with them have grown significantly. However, the IRS is not always verifying leads in a timely manner, and the verification time frame goals differ significantly based on the lead type, according to the report. The goals do not take into consideration the burden on legitimate taxpayers whose refunds are being held until verification is completed. In addition, the IRS inconsistently tracked the leads in multiple inventory systems, and the inventory systems did not provide key information such as how the lead was resolved, that is, whether the refund was confirmed as erroneously issued or legitimate. TIGTA recommended that the IRS establish more consistent time frames to verify the leads it receives based on an analysis of the current and historical lead verification data and, once established, communicate the verification time frames with its external partners. The report also suggested the IRS develop a process to ensure that leads are verified within established time frames. The IRS should also consolidate the current four lead inventory tracking systems into a single tracking system and ensure that key information is captured as to how each lead is resolved, according to the report. The IRS agreed with TIGTA’s recommendations. The IRS said it is evaluating the treatment streams and work processes associated with the various types of referrals received in the External Leads Program to identify appropriate time frames. The agency is also completing other systemic and procedural enhancements to improve the effectiveness of existing reporting capabilities in evaluating program quality and timeliness. In addition, the IRS is evaluating the feasibility and potential benefits of consolidating the four independent inventory tracking databases into one system. “The IRS is committed to the proactive detection of fraudulent refund claims and preventing their payment from occurring,” wrote Debra Holland, commissioner of the IRS’s Wage and Investment Division, in response to the report. “Unfortunately, those individuals who commit fraud against the U.S. taxpayers continually modify their tactics to evade or avoid detection, which sometimes results in the issuance of erroneous refunds. Since 2010, the IRS has reached out to financial institutions, government entities, federal agencies, software providers and other stakeholders to develop processes whereby those partners may alert the IRS to suspected refund fraud, and return those funds to the Treasury when the suspected fraud is confirmed.”

Sorry, Judy, but I do think this article does enhance our knowledge of how the IRS has changed, and whether we can trust what they tell us. It's a vastly different agency from what they were like when I started tax work. I really do think we need to be active in working to add our voices to efforts to restore the agency to the honesty and integrity it used to have. "We" being "tax professionals". The number of times that have been documented in which perjury has been committed, a crime, in the IRS investigation is too long to list. We now find out that in the IRS targeting investigation not only is there a backup of Lerner's computer but IRS lawyers admitted to the intentional destruction of the data on her BlackBerry after the investigation began. For you or I that would immediately result in an obstruction of justice felony charge leveled against everyone involved - including Lerner herself. Well, where is it?