BulldogTom

Client has not been a good boy with the IRS or the state of CA. Worked out a payment plan with CA. Working on a payment plan with IRS. Told him to keep his PR Tax payments up. Told him multiple times. He did not listen. CA defaulted his agreement for untimely PR tax payments and swooped in and cleaned out all his bank accounts. No money to pay the mortgage. There is only so much we can do, but damn, this makes me feel bad. Tom Modesto, CA

Well, if you won't ask people to donate, I will. We need to support our board. And if I am not giving enough, let me know and I will up my annual contribution. @Eric is the best and we need to treat him that way. Tom Modesto, CA

Shhhhhh......... the IRS might be trolling this board. They obviously made a mistake. Tom Modesto, CA

Evan, There is a setting on the board that allows you to ignore posts from people you don't like. I have used it on 2 people, one who is no longer active on the board and one who is. I don't even see that person's posts unless someone quotes them in a reply post. It has made my life immensely happier on this board. Some people, no matter what they post, just rub you the wrong way. I suggest you use that feature, even if it means you don't like me and never see my posts again. It is one of the best features Eric has put on this board. Tom Modesto, CA

Penalties are based on tax due. So once you get to the correct tax, you get the correct penalty. Your last sentence is what I meant. Tom Modesto, CA

Good Luck with that one. CA does not abate penalties. They will tell you they do for reasonable cause, but in practice it rarely happens. As far as getting the tax amount correct, they will listen and adjust to the right number if you prove it to them. Let us know how it goes. Tom Modesto, CA

No. Well, let me state that differently, they are not supposed to under the tax law, but they are like a prostitute, they will do anything for a few extra bucks. Seriously, that is why proving domicile is so important. In the OP, if the taxpayer domiciled in CA, and the rental income was in his name, then it is taxable income for CA purposes from the time he established residency (domicile) in CA. But if the taxpayer was a non-resident who did not domicile in CA, then the rental income is not taxable in CA. Tom Modesto, CA

Ditto on this. As well as the semi-new partnership audit rules (at least mention it to them). Tom Modesto, CA

I am not a wizard at this, I only get this kind of return occasionally. It is a pain. At first glance, I have some problems with the numbers you are using. With an AGI of 425K, they went into the 9.3% tax bracket at about 125K taxable in 2014. Assuming they had Itemized deductions and exemptions totaling 100K, they would still have 325K taxable and a tax bill of about 25K. So I don't think the state is taxing all the income. And the 2.3K you came up with on your original filing looks light to me on 132K of CA source income. Is the 12K the state is demanding all tax, or is it loaded up with penalties and interest? Have you gone back and recalculated the CA 540NR and the CA Sch CA 540NR based on the full federal income and then applied the percentages? If so, what did you come up with? ATX is not great at the CA Sch CA 540NR. It is not intuitive. You almost have to run that schedule by hand if it is complicated. I am guessing here, but I think you probably have about a 6K shortfall in the CA taxes that year, and the penalties and interest are driving the bill up to 12K. If you have more specific questions, post away and I will do my best to help out where I can. Just curious, how did you file 2015-2017 for them? Tom Modesto, CA

Thanks for helping out my wife Judy. Appreciate you very much. I was at a software conference and did not have the time or access to do the research for Patty. I told her if she posted here she would get some help. Tom Modesto, CA

This is Patty, Tom is out of town on business. We have a new client to us this year that has K-1 from New Jersey. The K-1 was not received until late Sept. we filed an extension with the IRS and then filed the returns when K-1 were received. The client owed $36 of tax to New Jersey, last year no New Jersey return was filed as the K-1 property only earned $66, therefore no tax due. Now the client received a letter adding a late penalty and interest.

I am special too. Renewed 3 days ago. But then, I got my PTIN when it was first implemented to protect the tax preparer from identity theft (we used to have to put our SSN on the bottom of the tax return). Somehow, a program designed to protect tax preparers SSN has become a tool of discipline for the IRS, since they can take it from you and along with the number, your ability to practice tax preparation. You cannot efile without a PTIN, and efile is a requirement to practice. OK, rant over. Tom Modesto, CA

With no forms, and no instructions from the IRS, I have calculated the federal and CA state tax for my client for 2018 based off their income estimates. And the taxpayer is subject to the QBI phase-out, and I nailed that too. Damn, I can actually do this stuff sometimes when I put my mind to it. This may not be as terrible as I thought it was going to be. Tom Modesto, CA

THE GOLF BALL AND THE SAND WEDGE A woman takes a lover home during the day while her husband is at work. Her 9-year old son comes home unexpectedly, sees them, and hides in the bedroom closet. Then the woman's husband also comes home. She puts her lover in the closet, not realizing that the little boy is in there already. The little boy says, 'Dark in here.' The man says, 'Yes, it is.' Boy - 'I have a golf ball.' Man - 'That's nice.' Boy - 'Want to buy it?' Man - 'No, thanks.' Boy - 'My dad's outside.' Man - 'OK, how much?' Boy - '$250' A few weeks later, it happens again that the boy and the lover are in the closet together. Boy - 'Dark in here.' Man - 'Yes, it is.' Boy - 'I have sand wedge.' The lover, remembering the last time, asks the boy, 'How much?' Boy - '$750' Man - 'Sold.' A few days later, the boy's father says to the boy, 'Grab your sand wedge and golf ball, let's go outside and have some short game practice.' The boy says, 'I can't, I sold my ball and sand wedge dad.' The father says, 'What?! How much did you sell them for?' Boy - '$1,000.' The father says, 'That's terrible to overcharge your friends like that. That is far more than those two things cost. I'm going to take you to church and make you confess.' They go to the church and the father makes the little boy sit in the confession booth and he closes the door. The boy says, 'Dark in here.' The priest says, 'Don't start that shit with me again. You're in my closet now!

Pricing out new computers for next year. Looking at Dell. Desktop is an XPS tower with Win 10 Pro, 4 - 256 SSD's and 32 GB Ram. I think I like that combo. I can get it with 64GB ram, but I can also upgrade it to 64 at any time in the future. Laptop is the Inspiron 17.3" with Win 10 Pro, 16GB and a 2 TB 5400 RPM SATA hard drive. Wish it had SSD but I can't seem to find a 17.3 on Dell site with SSD and 32GB. Anyone have a recommendation on the laptop? Price is not the object. These are both in my price range at just over 3K for both, but I am leary of the laptop. I think I am going to be disappointed with it. I have to move this year. 8GB ram is just not cutting it. Tried to open 2 returns in the 2017 software today and it would not do it for lack of resources. @Eric you want to build me what I want? Do you still do that kinda stuff? Tom Modesto, CA

That was my question. I would like to do that one time. Tom Modesto, CA

You mean all the stuff employers want to give to employees (and deduct) without running it through payroll..... Tom Modesto, CA

Low and behold, she called me today. Amazing how useful this board is. I know her ears were burning from us talking about her. Says she had a death in her family the day before our meeting. Just getting back to work. I want a job where I can take 5 weeks bereavement. Tom Modesto, CA

I need some advice. I have been working with a client for a couple of years. Contractor, way behind on 941 payments and 1040 payments. Hundreds of thousands in taxes and hundreds of thousands in penalties owed to IRS. We got all the returns filed about a year ago. I called the IRS to start working on a payment plan. PPS said I had to wait for the service to assign to a Revenue Officer because of the size of the amount due. Waited about 4-5 months for that to happen. RO called me about 4 months ago and left a message saying she was making a business visit that day. Showed up at client's home and no one was there. Left a letter. I responded and got the answering machine. She called me back 2 weeks later saying she did not have my POA? (then why did she call me in the first place?). I sent over my POA. Called an left a message that I sent POA and requesting a phone conference. 3 weeks until a reply. We finally have a conversation that I thought went really well. We discussed why the client could not file an offer (too much equity in the home, but no way to tap that equity because of credit history). She asked for a large amount of documentation and set up a meeting at client's shop. She set the date and time. We faxed over everything she asked for and went to his shop for the meeting. She never showed up. I left 2 messages for her that day, and 2 more over the next two weeks. Nothing. She has gone dark on me for a month. If the IRS shuts down the business, they will lose their home and the IRS will get a decent chunk of money (almost enough to cover the taxes, not the penalties) after the bank forecloses. But my client will be homeless in the Bay Area. Obviously, that is not the outcome that my client hired me to get. Her voice mail has the phone number for her supervisor. I am thinking about calling him, but I am afraid that if I piss off the RO, she will not be cooperative on a payment plan. But she may have gotten sick or something and there is a good reason she has gone dark. But I have never had so much trouble talking to an IRS RO after they take on a case. They are usually good because they want to close the case. I have provided everything she asked for, we just need to talk and move forward with her decision. I have never had this happen before and I don't really know how to proceed. Any advice? TIA Tom Modesto, CA

I believe that even if I thought @RitaB was not correct I would not point it out to her. I saw all the flowers from the fertile ground in her back 40 for myself. But I really think she is correct as well. Tom Modesto, CA

My youngest son graduated from Cal this year. But he still roots for the 'dogs with his old man. Since they don't play each other very often (like every 25 years), it is not an issue for him to support 2 teams. And thanks for the head coach. We love Tedford in the valley. Tom Modesto, CA

We will find out in the next 3 weeks (At Minn, at UCLA, home for Toledo). Idaho is not that good. Fresno tries to schedule a cupcake for the first home game. It got a little out of hand this year. If they score 50+ against Minnesota then we may be able to seriously have a conversation about how good they are. I hope they are this good, but not willing to get excited unless they start the season 4-0. Tom Modesto, CA

Trying not to be political....I just find it really strange that the Tax Pro community used to be the ones looking for loopholes in the tax law for our clients, now the states are getting into that business as well. What the heck is going on in this world. Tom Modesto, CA

Here is my suggestion....Take a look at how much the rental income was from the management company and then send your client a bill for that amount for cleaning up this monumental mess they created. They will fire you, and you will not have to worry about it, or they will pay you and you will be a happy worker. Win - Win baby!!!! Tom Modesto, CA

GGRNY, I agree with what the others have said. I suspect that the payroll department of the company did not set up an employer account with Georgia, and therefore reported all the employee wages on their California tax return. (Just FYI - the Franchise Tax Board collects income taxes, the Employment Development Department collects payroll taxes, just in case you need to ever call again). I think the employer really screwed this up, and the way to fix it is for the employer to amend their DE9 (which is the CA equivalent of the 941). If I am correct, and the employer will not amend the DE9, your nightmare is just beginning. The FTB will have a record of wages earned from the employer DE9. They are going to want a tax return. If you don't file it, they will assess and collect via any means possible. If you do send in a return and it does not match the wages reported on the DE9, you will get a letter and a demand for payment of taxes. If you send them a letter in response, it will not be read. If you want to file a power of attorney to represent, you have to sign up with the state for access to the website, and then it takes a minimum of 30 days for the FTB to approve your POA. Then you get to make the phone call that will probably not be answered. And if you are so lucky as to get through to a live person, they will not be helpful or courteous. They will start by asking for bank account information on your client. Your client needs to get with the payroll department and get this fixed before the end of the year. Sorry to be the bearer of grim news. I have lived and practiced in this state for too long to expect this will come out well for your client. Tom Modesto, CA