BulldogTom

May God bless him and keep him safe. It is cool to see young men answering the call of God and country at the same time. Was he really the inspiration for that Chris Farley skit. That was one hillarious joke. I never imagined there could really be someone behind that. Tom Lodi, CA

Thanks for the info KC, but the fact that the IRS has to work harder is not my issue. I have to protect my clients best interest, and I don't feel that an updated schedule D is the proper way to reflect the correct tax that should be paid by the taxpayer. I will trust the IRS to do the right thing when I can see the back of my neck (thanks again Jerry). Look at me, I am getting old and cranky, and I am still a young man. Tom Lodi, CA

OK, I will compromise. I will send the info to the correspondence office, but it will include an amended return. I need to send CA an amended return also. I will also have the taxpayer include the check for the difference. Tom Lodi, CA

I am really bored this morning. I actually read the entire 10 pages of a CP2000 of a new client. I found out something new. I have always approached an amended return the same way. It did not matter if it was a client seeing an error or the IRS telling them there was an error. Always file with the center where the original return was filed. If there is a CP 2000 or other correspondence involved, I take a POA and call the service to let them know I will be filing the amended return and give them a timetable on when I think it will be completed. It has always worked in the past. But the CP 2000 has instructions on where to file if you are filing an amended return. I never saw that before. But then again, I have never read all 10 pages of the CP 2000 before either. Is this new? I am a little antsy about sending an amended return to an examiner location rather than the service center. Should I just ignore the instructions on the CP 2000 or should I follow them. BTW - it is a simple issue. TP had his Son In Law prepare the 2007 return on turbo and the S-I-L did not enter the 1099B. So the IRS wants taxes on total proceeds of the stock transactions ignoring basis. They want tax on 27K, but it comes out to only 2K in LTCG, $200 in taxes. Tom Lodi, CA

Your client screwed this up. Make sure you charge them a TON of cash to teach them a lesson. You need to be paid for your headache. Tom Lodi, CA

It is not real easy, but the rules are fairly straightforward. You will have to allocate his income between the two states. Make sure you fill in all the dates in ATX for days in CA and make sure you have all the W2's coded for the correct states. Is there anything really complicated about the return? Tom Lodi, CA

My first thought is SS8. You want to have some fun and drag the military and the IRS into a fight over his status as an employee? I would, just for the fun of it. Then I would write a diary of everything that happens in the process, and give the diary to a newspaper reporter in the client's hometown. But, that is just me. Tom Lodi, CA

I am still unclear on one point. Did the spouse (your taxpayer) recieve any of the money? If she has constructively recieved the cash, I think the penalty is valid. If all the funds went to the incarcerated spouse or his attorney, then I think you have a good case for relief. Tom Lodi, CA

Check the community property laws in your state. If this was in CA, it would be a non-issue, because community ends when the couple separates with no intention of reconciling. So, if this client was in CA instead of WI, the income would go to the husband only. I don't know the laws in WI, but you should check out when community ends in your state. Tom Lodi, CA

That is not a silly question, it gets to the heart of the matter. Did he pay the partnership? Tom Lodi, CA

Terry, A really nice letter explaining that due to the state of the economy, you have noticed that many clients are slow paying their invoices. Due to the nature of your services, you will now require payment in advance. Also, you are so sorry to have to raise your fees to cover the cost of all these collection activities that take time away from your core business activities. Send it like it is a form letter to all your clients, but just mail it to them. IF they stay, you have an advance pay customer who is paying more. If they leave, good. Just my 2 cents. Tom Lodi, CA

My personal return is the first one I start every year, even though I am always waiting for statements or documents to complete it. I use it as a test return to get used to the software and any tax law changes, as my return is very similar to many of my clients returns. I will be in the FAFSA boat next year. FAFSA stands for Free Application for Federal Student Aid. It is required of every college student who applies for scholarships, grants, student loans, or need based financial aid. The parent's tax return is part of the application. Tom Lodi, CA

Yes, it is more complicated this year. Yes, the clients are more demanding. Jainen is working hard on his taxes and does not have time to post as much. Send him a private message through this board and let him know you miss him. You can sweet talk him into posting at least once or twice a week if you are nice. Tom Lodi, CA

This took me a couple of minutes to figure out. On the 8283, go to the last tab on the bottom "Contrib Type". The description of the property that you entered on the form should be there. Under the heading of Property type you need to pick "Capital Gain". It will flow to the Sched A from there. Hope this helps. Tom Lodi, CA

agree with jasdlm. It is a property settlement and not reported. Tom Lodi, CA

Last night I saw on the news the State Controller say that all refunds should be caught up in about 2 to 3 weeks. That is good. I am waiting for my refund in that mess. So now I claim married 12 on my CA withholding. I am thinking about moving it to married 20 to see what happens. Tom Lodi, CA

Linda, You may want to rethink the split on this. You can save them some money because the income limit on SS is being hit by the business, but when you split it, you are paying on all of it. If she (or he, it does not matter) have enough quarters of credit for SS and Medicare purposes, and especially if she has another job, you may want to make her an employee and put all of it on his so you only pay SE tax up to the limit for one person. Pay her a small salary that she has to pay SS and he has to match, but keep a large chunk of it out of the 12.4% SE tax. You have probably already told them this, but if the marriage is as strong as you say, there are thousands of dollars of tax savings available to them. Tom Lodi, CA

Warning : Dumb Blonde Joke Follows. Do not read if offended. A blonde receptionist gets a phone call from someone she doesn't know. The lady on the other end of the line explains that she recieved a fax from the Blonde's company that was not intended for her. The fax went to the wrong number. The blonde responds "Sorry about that, would you please fax it back?" Tom Lodi, CA

At our company, each state the employee works in generates a W2. I don't know why the payroll service requires this. We have to set them up under a different ID when they work in a different state. Could this be what happened? Tom Lodi, CA

Still using QB 2003. I have a spreadsheet for my payroll. Don't plan on upgrading "Until I can see the back of my neck" as someone on this board used to say. Tom Lodi, CA

This may not be the "right way" to do it, but I would enter two separate 1099G's. The first one with the UI he was paid and the Federal withholding. The second one with just the repayment. It should all flow to the right places - netting out the UI on the front of the 1040 and adding the Fed W/H to the rest of his payments on the second page. Just my thought. Tom Lodi, CA

That sounds like standard practice, even before TARP. I would not worry about it. Most of us signed one of those when we got mortgages on our homes. I know I did. Tom Lodi, CA

Thanks John. Tom Lodi, CA

Form 8919. Tom Lodi, CA

Client has small trucking company. 3rd year in business. Always pays her taxes with the 941. Had one quarter where taxes exceeded 2,500. IRS sent a penalty notice for failure to make deposits. She called the IRS and they abated the penalty. Now she thinks she is going to exceed 2,500 for the first quarter of 09. She does not like the idea of becoming a monthly depositor. In looking at the rules, it seems to me that everyone is a monthly depositor unless they are required to deposit sooner. The 2,500 per quarter is an exception only. Am I reading this correctly? If she actually exceeds the 2,500 limit in Q1 of 09, even if she makes the deposit for Jan and Feb by March 16th, she will still get a penalty for failure to deposit on time? Correct? I don't prepare her payroll, just her 1040. Tom Lodi, CA