joanmcq

Just got a response that she stopped using QB so the software development costs are correct, but the A/R weren't sold. She just sold the website, blog articles, & graphic art files. So we are back to basis calculations from what I've got.

Take a Xanax Try not to type, "can't you frikkin read a damn notice!" in my answer. I've gotten unrelated items fixed along with the issues addressed by the CP2000 sometimes. It depends on what it is and whether it's something the AUR unit has the authority to fix.

I have an issue with the gift shop owner quoted. Now of course sales tax would be included in the gross of the merchant card payments, but not in gross receipts. BUT she's trying to say she didn't have $6532 of cash sales in nearly $250K revenue? Gimme a break! If someone is solely web-based, then I could see no cash sales. Or a frikkin new car dealer. But a gift shop? Another non-scandal. IMHO it shows how much the media is trying to create a scandal where there is none. This one is just a lot more apparent to us tax folks.

I have documentation of the loan. The balance was considered a gift per the lender (bank of dad). Old Jack, my comment that the loan wasn't booked was just an aside, as a comment on the completeness of the records. I'm doing a journal entry, at least in my calculations, to add the loan to fix the balance sheet. The income/loss on the Sch C is not an issue either. I sent a question to the client regarding the A/R on the balance sheet, as well as the asset 'software development costs'-which may be startup costs. It doesn't appear startup costs were amortized. Might be easier just to get the QB file from the client and see what's in there.

That's one of the reasons I cringe every time I see someone post that they've responded to a CP2000 with an amended return.

I've received a balance sheet, such as there is, but the loan wasn't booked (of course!). I've asked if there was and 8594; the balance sheet lists A/R, as well as 'software development' as an asset, but I haven't seen any startup costs amortized. The prior year returns were done by hand.

The $22,000 was a loan. $15,000 was repaid from the sale proceeds.

the AUR unit addresses the CP2000. I never send a 1040X, just send a response to the CP2000. Did you mail or fax? Faxing expedites the response. I've found mail gets lost. Give the number on the notice a call, if you have a POA and see if you can get it straightened out.

If you didn't address the issue with the AUR unit, that's where your mistake was made. Did you send the amended return to the address on the cp2000 or as an amended return?

Yes, mine were not for CP2000s or anything. I was just surprised when saying I had the checkbox (which I always check 'yes') and the agent respected it. Usually I'm dealing with way old years, but this year I have one client whose refund was delayed because it went through ID verify, and she still doesn't have it, even though she went through the verification process in mid-May.

Thanks all. I requested a balance sheet so that I could see if there was any OE left. I'll take a look at Pub 544 & Sec 195. I just realized I haven't had any clients actually sell a Sch C biz before. Usually they just close the doors.

I've actually used the checkbox a few times this year on calls regarding the current year return, AND THE IRS TALKED TO ME!! I couldn't believe it worked.

FUTILE!!!!!

No inventory, no depreciable assets. It was an internet sales biz, but didn't hold inventory.

New client sold a biz in 2012. Investment was $22,000; losses taken for several years and then sold the biz for $15,000. I don't have a balance sheet. Basis calculation: $22,000 - losses ------------- basis Yes? No? I just asked for a balance sheet. Biz was a Sch C.

He may have wanted the kids to get the money now rather than after his wife's death. You really don't know. Taxes aren't necessarily the reason why people make financial decisions. The article is a bit weak though; Wesley Snipes didn't just fail to file tax returns, he filed amended returns changing his income to zero under one of those tax protester schemes. He actually got off light with a 3 year jail sentence. He claimed he was duped by bad advice, but if you read the testimony, he was promoting the scheme to his employees, and telling them he wouldn't withhold.

I'm a bit confused that you gave the notice back to the client to mail. I fax all responses into the AUR unit. Mailing is time consuming and can get lost much easier. Since Kea is not an EA or CPA, she can't rep the client in appeals. Please correct me if I'm wrong. For what it's worth though, I've had good luck with audit recon for clients who've ignored CP notices all the way to the 'we are going to levy certain assets' point.

This client is as scattered as they come. I'm sure the income is computated as: what do I have in my pocket, what amount do I need to pay the few bills I have, so that's about what I'm getting per month. I'll try to have him give estimates as to what was musician vs. construction work, vs tips. I can't wait until he gets his nursing license back & he has a steady paycheck!

I know about the Cohan rule, but it can't be used for mileage, although maybe I'll see if he has expenses for guitar strings or whatnot. I literally have to get a wage & income transcript to see what he might have as far as W2s goes. Thank god he lives in TX, so I don't have to try to dig up state withholding! Let me rephrase that; I hope he lived in TX all year; for a few years he bounced between TX & CA. But CA has withholding available online, so that at least would be ok.

Yeah, I hear you! Hopefully at some point I'll get there. Right now it's a lot of vacations: a week for a music festival, two weeks back east, two weeks for Burning Man, and later, two weeks in the UK. Damn, I better get working, gotta pay for the UK still!

Old friend (this is the explanation of why I even try to do this return) who is also a client works multiple odd jobs to keep afloat. This is the description of his income: "ave. $1700-1800/month and how it's paid "roofing labor...paid in cash...music...paid in cash....waiting tables...2.13/hour...plus cash tips(no w2's since last time I filed)" Even though he claims no W-2s, usually I find a few on eservices. So do I just put down the income on a Sch C as musician/odd jobs with no expenses at approx. $1750/month after deducting out any W-2 wages I find or..... Yes, he is being rigorously honest. Most people in this situation wouldn't report anything. Since he's single w/out kids, EIC isn't an issue.

Yeah, I'm getting ready to travel too; but Black Rock City has spotty wifi & cell service, so I just tell people I'm off the grid for two weeks. Everywhere else, I have my iPad & phone at least to keep in touch. I'm leery of the 'cloud' but it sure would make working from a resort easier!

There is a little known 30 day lag on the due date of the CP2000 & the notice of deficiency being sent. That said, the NOD may be in the pipeline, and you should advise your client to keep an eye out for it.

Kea, I hope you answered the CP2000, and didn't just amend the return. Amended returns go to a completely different place than the AUR units. The CP2000 response has to be sent to the AUR unit on the notice.

If the mother had not taken her RMD before death, the bene has to take it, and it's not IRD, it's the bene's income.