gfizer

I did the returns for the decedent prior to her death and also returns for the estate until the time it was closed. I do not do, and never have done, the individual returns for any of the 5 partners. When they didn't contact us to do the partnership return in the 1st year after settling the estate we assumed that one of their preparers was doing the returns. According to the daughter who dropped off the info there is no reason behind her sudden decision to file the returns other than the desire to get everything straight. Next question. I'm thinking that this is something I may not even want to become involved in. My practice is very small and it's simply not worth the headache to me (and I already know they won't be willing to adequately compensate me since she asked if I thought I could do everything for under $1,000). I can't advise them to pick up with the current year and pretend the previous years didn't exist or to simply begin reporting their share of the income/loss on their own individual returns. How do I extricate myself from this situation and cover my rear end? And do I have any responsibility to report the non-filing, etc.?

The answer to that question is a resounding NO. The income has never been reported by any of the partners. So far I've done the returns for 2003 and 2004 and they both had small losses. I shudder to think what the penalties could be on this deal.

While it's true you won't have a 1098 or similar interest statement from the lender, the client will have cancelled checks and/or bank receipts showing that he and not the son actually paid the interest. Just a thought, and I haven't done any research on it, but is there any way the son could do something like a 1099 nominee to his father?

Back in 2001 our office (I work for an attorney) handled the estate of a local farmer who left her farm to her 5 children. We closed the estate in 2002 and the kids decided to take over the operation of the farm as a farm partnership. We did all the necessary paperwork and wished them well. Fast forward to December 2009.....one of the children of the deceased lady drops off a spiral bound notebook and leaves a message with a secretary to tell me that "we need to file taxes for mom." Turns out they have not filed the first partnership return. The daughter says she knows she should have been but she just never got around to getting it done and now she just wants to get everything straightened up. I've warned her about possible penalties and advised her that all the partners will need to file amended returns for all open past years to include the partnership income/loss. My question is this...do I file partnership returns for every year beginning with 2003 even though some of the years are now closed years? Is there anything else I should be aware of in this situation that you all can think of that I am overlooking?

I LOVE farmville! Like you I find it to be a great break and I can always use more neighbors!

No. They were installed during construction but were first used when the taxpayers occupied the home on 12/3/09.

Taxpayers built a new home which they occupied for the first time on 12/3/09. They lived in their previous home for 30+ years. As I see it they clearly qualify for the $6500 long time resident credit. As a part of this new construction they installed windows, doors, and a geothermal system which qualify for the residential energy property credits. I searched the archives and found where someone posted that residential energy credits couldn't be taken on new construction but the IRS instructions for Form 5695 state: Who Can Take the Credits: You may be able to take the credits if you made energy saving improvements to your home located in the United States in 2009. For credit purposes, costs are treated as being paid when the original installation of the item is completed, or in the case of costs connected with the construction or reconstruction of your home, when your original use of the constructed or reconstructed home begins. I've looked at the instructions and other information for both of these credits and can't find any guidance on this subject. Can my taxpayer take both the $6500 long time resident homebuyer credit and the residential energy property credits for windows, doors and geothermal system on their 2009 return? Thanks for your input!

My taxpayer lived in a 1970's model single wide mobile home which was located on a farm which he and his dad bought as partners 6 years ago. The single wide mobile home was not titled in my taxpayers name, but he lived there rent free and was responsible for one-half of the mortgage payment on the underlying real estate. My guy has since married and this year purchased a new doublewide home which he had setup on the same piece of jointly owned farmland. Question 1: Would he qualify for first time homebuyer credit or long time resident credit? Question #2: The doublewide cost $40,000 but he also paid another $30,000 in setup expenses. Would only the cost of the home itself be considered for the credit or the total with setup expenses? Thanks for your help.

Children ages 12 and 15 were removed from their natural mother's home by Department for Families and Children and were placed as foster children with my taxpayers because their natural father (divorced from their mother) was deemed unfit at the time as well. The children remained with my clients for 8 months of the year and then they were placed in the custody of their father in November of 2009. I attempted to e-file my client's return allowing them to claim the exemptions for their foster children but got a reject saying that they had already been claimed on another return (I assume their fathers). Who is actually entitled to the exemption and how do we rectify this? Should I just paper file the returns and let the IRS straighten it out or what? Thanks for your input.

Anyone know how I notify the IRS that my business address has changed for purposes of my ERO status? I'm trying to be proactive and avoid any problems when the time comes to start efiling returns. Thanks for your help! Gina

Thank you for your quick response! Now I can officially say I'm finished!

I have a client who was a college student in 2008 and worked in Indiana but is a resident of Kentucky. I am in the process of preparing the IT-40RNR. Client had three part time jobs in 3 different Indiana counties during the year. How do I handle this since there is only a box to list 1 county on the face of the form. Do I have to file a separate return for each county? Thanks for your help!

BUMP. I really need your guys input. Thanks!

I have been asked to prepare a return for a trust. This is a trust established pursuant to a will. The decedent directed that all of her residuary estate be placed in trust and that the income from the trust be used to provide college scholarships for local high school seniors. The trust receives no funding from any other source. I believe that this trust is a Section 4947(a)(1) non-exempt charitable trust and should be treated as a private foundation and file a Form 990-PF. My problem is this: The trust has been in existence for three years now and the two previous years’ returns were filed on Form 1041 for a complex trust (which has cost the trust thousands of dollars in taxes that could have gone toward its charitable purpose). If I don’t file a 1041 this year and instead file on Form 990-PF is this going to cause a problem and is there anything I can or should do to prevent problems. Or does anyone know of some reason why I can’t file 990-PF? I know it’s late in the season and you guys are all covered over right now so I apologize in advance for adding an extra burden but I respect and trust your advice and opinions. Thanks!

One of the local churches received a payment that has been reported to it on Form 1099-MISC. The payer apparently did not have the church's federal id number so they withheld federal income tax from the payment. The church is not required to file a tax return so how do I go about getting a refund of the federal tax withholding? Do I write a letter to the IRS explaining the situation and request a refund or is there a form that should be filled out? It's only $74.29 but hey, it belongs to the church and not the IRS. Thanks for your input.

I do payroll for three different companies and prepare the payroll checks for one of those. Like you I needed a simple program without a big investment. I have been using a program called TKT Payroll for about 5 years. It's very simple and supports as many companies as you want. I order my check stock from NEBS. You can find it on the net by doing a web search of the sofware name. It's sold by a company called TKT Enterprises and costs $11.95 for a download of the full version and $5.95 for the upgrade each year. It works great for what I do at a very affordable price.

First some background: My computer crashed a couple of months ago. I was able to back up my hard drive onto another computer before reformatting but now for some reason I can't get the other computer to power up either. Now my problem: I needed to efile the only return I had on extension today. I transmitted the efile and its status now shows duplicated. I never thought about it before I transmitted the return but I assume this is because my DCN counter started over at 1 since I had to do a fresh install of my software. What action does the duplicated status require? I have no idea what my DCN counter was up to before the crash. Is there any way I can find that out, or is there some other way around this? Thanks in advance for your help!

I've been efiling with ATX for several years now and this is the first year I have ever encountered this problem. This is the latest I have ever had to be in the office on April 15th and I'm not very happy about it but as of a few minutes ago I FINALLY got all my returns transmitted and they all show "Validated by EFC" so I hope that's a good sign. I am outa' here! Hope everyone enjoys their evening!

Is it just my clients or is anyone else getting calls about Federal estimated tax vouchers not arriving in the mail. I bet I've had thirty calls in the past week from clients stating that they never received their vouchers. Anyone know what the deal is? I've come to the conclusion that maybe they are coming up with the economic stimulus rebate money out of funds saved on printing and mailing the vouchers!

Thanks to all. I was pretty much leaning that way myself. I'll make sure they have copies of their last two or three years returns, depreciation reports, and the info they brought in and I'll wish them well and send them on their way. I must admit I'm a little relieved to be out of the middle of this mix. Thanks again.

Well, I guess this situation is no longer my problem. My secretary just took a phone call from the wife stating that she would be here Monday morning to pick up their stuff so they could take it to someone else and IF they owed me anything I could let them know on Monday. How would you guys handle this situation? Just hand their info back to them and walk away or give them the prepared returns along with the billing invoice or something else? Also would you have them sign something summarizing my involvement to date and acknowledging their decision to take them somewhere else? Thanks for your input. This whole situation has just really been bearing on my mind and my heart. It's nice to have a group of professionals to talk to and bounce things off of.

Thanks everyone for your input and ideas. In answer to some of your questions....no, there was no mortgage against the property whenever it was gifted to the wife. The debt against the property was acquired later. A lot of the money was used for improvements/maintenance to the farm buildings used in the dairy operation. Unfortunately all of these buildings/improvements lie on the land that was retained by the taxpayers and not on the land that was sold. There were some expenditures for fencing (which is all now fully depreciated) and surveying (which I've included in their very minute cost basis). I felt so sorry for them when I told them what they were facing yesterday afternoon. They believed they were doing the right thing by selling it and getting rid of the debt before they were foreclosed on. I sent them home and asked them to review their information to see if there is anything they've missed. I will advise them that we need to file the return in order to avoid late filing penalties, ask for an installment agreement ($50 a month from now to the end of time) and then deal with the collection process as it comes. Anyone else have any better suggestions?

I know where you're coming from and it's true that the fact of the matter is that they owed the debt against the farm. In answer to your question, no they haven't been living high. From what I can gather much of the debt against the farm was generated by a combination of poor management of the farm by the couple's son and attempts to bail him out of his financial mess. They just kept getting in deeper and deeper with farm operating loans and the like and by the time they realized they couldn't get out of the hole by digging out the bottom it was too late to salvage anything. I know it's not my fault but it is just so sad. I just can't imagine working all your life and having nothing to show for it. Especially when your deadbeat kid helped get you there. I hope I'm not $300,000 in debt when I'm their age. And if I am I know it won't be because of my kids. I love them to death but I believe there comes a time when you gotta' cut em loose and let them clean up their own messes.

The mother did not retain a life estate in the property. The house and remaining acreage is valued at around $70,000-$80,000. They have a son who has had his own share of financial difficulty and has recently filed bankruptcy so I doubt he would be able to come up with the funds. If I decide to do an OIC should I wait until I start receiving hate mail from the IRS seeking payment or should I file it immediately? Thanks for your input.

To my knowledge a fiscal year return is filed on the form for the year in which the fiscal year began and not the year in which it ended. I have never had this problem with a corp but have dealt with it for returns filed by fiscal year farmers. I had three who got letters all in the same year basically stating the same thing you are talking about. We did a lot of correspondence and talking on the phone and someone at the IRS finally admitted they didn't know what they were doing and changed everything in the system to show that everything had been timely filed. Good luck!