BulldogTom

Are you trying to do this in some software for the books, or just on the tax return? The retained earnings account is normally adjusted when the year is closed. Your software will do this for you. If you go back and open the year and make the debit to accumulated depreciation and the credit to depreciation expense and re-close the year, the adjustment will be made to retained earnings automatically. Then do the same thing for the next year. Everything will roll forward. If you are just doing this for the 2008 year on the tax return, ajdust your beginning retained earnings and beginning accumulated depreciation and you are good to go. I am not sure that this is what you needed. If not, post again and I will try to explain better. Tom Lodi, CA

Actually, writing a tax court petition is the part of my job I love the most. I have only done it 3 times, but I love doing the research. When you know for certain you are absolutely correct in your application of the tax law, and you write it out with all the code sections, regulations, case law, and rev. rulings that support your position, there is a great feeling of accomplishment. BTW, the client won on all three. Beating the IRS is fun. Tom Lodi, CA

I know you know this, but just as a reminder - the only way to go to tax court without paying the tax up front is to file the petition within the statutory period. It is hard and fast. Your client (even though it is not your fault they are in this mess) will not be happy if they have to cough up 50K before they can go to court. Protect yourself and make sure you file the petition a week before the due date CERTIFIED RETURN RECEIPT. Just my 2 cents. Tom Lodi, CA

Duane, Sorry that offended you. I just meant it to be funny - it was not pointed at anyone in particular. I know it is a tough job, and I would not do it myself. Too much hostility and public interaction for me. I appologize. Tom Lodi, CA

The church can give all it wants to any person in any amount. Not taxable to the recipient. HOWEVER, they should be very careful that the recipient is not a pastor or staff member of the church, as any gift to an employee is presumed to be taxable wages unless it falls under the de minimus exception. Hope this helps. Tom Lodi, CA

>>how do you tell the difference between a U.S. Census worker and a con artist?<< Well, I am not David Letterman, but here is my top 10 ways to know if it really is a census worker: 10. You can't understand their broken english 9. They show up in the middle of the day when you are at work 8. They ask to borrow a pencil because they didn't get one issued and the handheld doesn't work 7. While standing at your door with the number on the side of the house, they ask for your address 6. They show up at dinner time and demand that your dinner wait while they talk to you 5. They tell you they used to be community organizers in Chicago 4. The woman shows up with a baby in tow and starts breastfeeding while you answer the questions 3. It takes them 3 days to go to every home on your cul - de - sac. Con artists would have it done in 2 hours. 2. They drive up in a nice car, but can't afford deodorant And the number one way you can tell if it is a census worker and not a con artist, They tell you it is their first day on the job and you are the first person they have contacted. They promptly trip on your threshhold and ask for your homeowners insurance information to file a claim. I hope I don't offend anyone, but I am bored right now. If this is not funny to you, please try to do better. I know we have some very creative minds on this board. Tom Lodi, CA

Thanks for the heads up KC. Interesting.

I got mine. Did it saturday. The salesman told me that they did the math, and if every car dealer participated, they could each sell 12 cars under the program. The dealer I bought from did 60. Another dealer I looked at had 40 done before the program became fully active on July 23. If the numbers are correct, the 1 billion will fund about 250K car sales. The US is on a pace to sell 9-10 million cars this year (down from the 15 million average). At 9.5 million sales, the car companies are selling about 183K cars a week. That means this program spurred 1-2 weeks of additional sales. That should clean up some inventory, but it won't be enough to add another shift at the car manufacturer's plants. The news last night said the government would honor every sale that was consumated by midnight last night. What I thought was really interesting was that the Obama administration was signalling that they would extend the program. How are they going to do this when the CONSTITUTION says only Congress may authorize the spending of money. This guy needs to figure out that he is not a ruler, but a servant to the people. He can't do what ever he wants just because he sits in the White House. Tom Lodi, CA

Personally, I would not have given these audits away. (It sounds like you already have). Number one is more troublesome, but if you can get documents, it should be something you can accomplish. Number two is easier, as you prepared the returns except the oldest ones. You seem to be overly concerned about the final results. While you can screw this up, I don't think you will. Your concern for the clients will lead you to do the best you can. Any anything less than the proposed amounts on the letter is a win for your client. #2 specifically, if all the returs that you prepared are correct, it shows a pattern of compliance, even if late. Since the client seems to agree with the taxes and is willing to pay when the home sells, you don't have a lot to negotiate over on those years except for the payment. Perhaps you can offer the IRS a lien on the property to be paid from the sale (that will probalby not sit well with the ex, but hey, they aren't sleeping together any more anyway). And from what I am reading in your post, most of what you know about 2003 sounds legitimate on the surface. As an attorney, you can represent before the IRS. Good luck. Tom Lodi, CA

Sorry JRS - you got most of it wrong - <<First, no one wants to work in the fields.>> Wrong - there are thousands of workers lining up at the border to take these jobs. You should have said " No one who can get government social services money will take those jobs". <<Second, they can't get any water. >> The Farmer must have water in the fields at all times. We got fined by OSHA one time for running out of paper cups. The water was there, but the cups were backordered from our supplier. They came in the next day. Too bad - $1000 fine. <<Why don't they put air conditioning on their harvesters>> The tractor driver does have AC. <<flush toilets>> Close but not quite. They are porta-pots, but they have mens and womens and are required to have a hand wash station and must be cleaned 2X per day. <<catering trucks show up for the breaks and lunches>> They show up like clock work. Breakfast and lunch and dinner. I believe this was done by OSHA in response to the 16 year old illegal immigrant who died in the cherry orchard last year. She falsified her documents to get a job, was working right next to her boyfriend and family, and no one noticed she was suffering from heat exhaustion. They never took her to the hospital and she died that night. The family blamed the farmer for not having enough shade in the orchard - It was a cherry orchard with fully grown cherry trees!!! There was shade everywhere!!!! Tom Lodi, CA

I heard this on the radio this morning. A major tomato farming operation of several thousand acres was shut down in Solono County in California Tuesday. The CAL OSHA inspector said there was not enough shade for the workers. So he shut down the harvest. If you are not familiar with tomato farms, they don't let trees grow in them because they tend to get in the way of the tractors and the sunlight the tomatoes need to grow. And the harvest needs to happen before the tomatoes get too ripe or they will not last in shipping. So this farmer, who has invested hundreds of thousands of dollars in his crop cannot pick it until he puts up shades all over his fields at a cost of tens of thousands of dollars. This is what happens when government decides to run businesses. Tom Lodi, CA

Actually, the District Schedule A-1 appears to be out of date. I ended up doing the return by hand anyways. I could not find an updated district tax schedule in the software. With all the changes to the sales tax rates and new district taxes, this was the most complicated Quarterly Sales Tax return I have ever done. Trying to coordinate the increases in our accounting software with the changes in the sales tax return was a bear. Even though we have one contract that was in place prior to April 1, I could not find a way to adjust the Sales Tax, and the instructions were no help. It was only a few dollars and I just paid the difference rather than pick a fight with the state. Ahhhh, the joys of living in paradise. IOU's, disfunctional government, overbearing employer regulations. Paradise. Tom Lodi, CA

Never mind - it is a new form, not an update. You have to add the new form to the return. My bad. Tom Lodi, cA

If you use ATX to complete the Quarterly Sales Tax Forms, the rates have not been updated for the April 1 changes. Keep your forms from the state, you will need them. Tom Lodi, CA

Choice of entity is a very important decision for the owner. Taxes are important, but liability protection must also be taken into consideration. Agree that final 1065 should be filed if the partners left. Short year return for "new" entity. Owner should contact an attorney to get the state filings and articles in order. I would recommend a new EIN for the new entity if the old one has not been used. Tom Lodi, CA

My guess is those CC are personally guaranteed. If he can't pay them, they will be able to come after his personal assets. If her business is in a corporation or LLC, there may be some protection from credit card companies. This is the time for a lawyer. You should not be giving this kind of advice. Limit your work to bookkeeping and taxes. You did not acquire the debt, it is not your issue to get them out of it. Tom Lodi, CA

Thanks Eric. It is the little things like this that make you special. Tom Lodi, CA

http://www.irs.gov/businesses/small/articl...=207042,00.html This was posted in the general chit chat forum by KC. It is the last post on the bottom of the front page and titled "Of General Interest" Tom Lodi, CA

I got it in under a minute. pretty simple actually. Not an engineer, just a taxman. Tom Lodi, CA

Nope - I will not. The website says it has to be under 18 MPG to trade in. My pickup hasn't gotten 18MPG since about 2001. The website says it is rated at 18MPG, right at the amount to qualify. I was looking at getting a new car anyways ( I was really hoping GM or Chrysler would have to auction off some cars to avoid bankruptcy, but that didn't happen). So why not get a small piece of the government stimulus money. Hell, I will be paying for it in taxes for the rest of my life. Why let the bankers and wall street get it all? Anyways, the reason I posted the site was so that you could have a resource if your clients asked you about the law, and if it would be taxable money. Tom Lodi, CA

Eric, KC posted a really good article on cancellation of debt. Is it possible that the site can handle an archive where these types of articles can be placed for future reference? I know you already do a lot for us, and if this is too much, just say so. I would put it on my computer, but I would forget where I put it. I was thinking the moderators could be the only ones to put these articles in, and the members would only be able to read them so it does not get clogged with a bunch of junk. Thanks for all you do. Tom Lodi, CA

That is a good artilcle. Thanks KC.

FYI The NHTSA has a new website for the Clunker trade in law. The whole text of the law is on the site. The trade in is not taxable income according to the law. Here is the website. It is pretty good. http://www.cars.gov/ Watch for the .gov or else you will get a commercial site. I am pretty sure I will take advantage of this free money. I have an old pickup with 245K on it that is worth about 1200. 4500 trade in for it on a new gas sipper sounds good to me. Tom Lodi, CA

I admit I don't know exactly what the code will say on this issue, or if this scenario is even contemplated in the code. However, I can see the IRS taking the position that the taxpayer had the tax benefit of home ownership. It may not be right, but the burden of proving the eligibility of the credit lies with the taxpayer. Why am I playing devil's (IRS's) advocate here? That is your job Jainen. BTW - I am glad to see you are back on the board. I missed you when you took your hiatus. Tom Lodi, CA

Sorry this is late, but I would be careful advising that she is eligible. Did they file a joint return in any of the years that they were married and if so, was any mortgage interest or property tax deductions taken? The IRS will have all the amunition they need to disallow the credit if there is a prior year tax return within 3 years showing mortgage interest or property taxes. Just my 2 cents. Sorry to be a wet blanket. Tom Lodi, CA