BulldogTom

Is that how you get rid of the in-laws tax returns. Note to self, remember this one. Tom Hollister, CA

That is what I thought. Thanks for the confirmation. What if I see the report and they absolutely did not consider the client's true ability to pay and made up numbers like the first go round. Is there anything you can do? Thanks again for responding. Tom Hollister, CA

But this is Appeals, they are handled at Brookhaven as well. Do I have recourse to appeal again? Can I go to Tax Court? Sorry for the basic questions. Tom Hollister, CA

1. They asked for all the documents we sent 2. They asked for them to be faxed 3. They were all summarized with a cover page and detail of what was in each section and corresponded to the requests made by the agent. I bet you would make a good IRS agent. Just ignore the documents that you asked for and say no. I bet you would get promoted quickly. Tom Hollister, CA

Help for a newbie please. I just got a response from the Appeals office in Brookhaven. They said no, which is not surprising to me, but the letter just said in one sentence that they are sustaining the original position. I was hoping for some type of calculation, because both the original agent and the appeals agent told me they were able to make adjustments based on the information we provided. So my real question is, where do I go from here. I strongly suspect that they never really went through the 77 page fax I sent over documenting our position on the offer. I would really like to see their workpapers to determine how they decided to deny the offer. If this were an audit, I could have a conference with the supervisor. Do I have that same right in OIC land? Is there any further right of appeals? Thanks. This is the first time I have gone down the OIC route, so I am learning as I go. Tom Hollister, CA

Is this the case where the ungrateful little brat sued her parents for not spoiling her to the extent that she thought she was entitled? Tom Hollister, CA

That brings up a question I had about AP classes. This is personal for me. My son is taking 7 AP classes this year. Cost us about $700 for the exams. If he successfully passes the exams, they will count for college credit towards his degree. Can they be taken for LLC? They are paid to the College Board, which I have no idea if it is an eligible institution or not. Thanks Tom Hollister, CA

I did not get any error messages. I did two of them the same day, for the same transaction. Two sisters sold a rental property. Two forms from the title company. The other sister got her refund no problem, this one got kicked. I think it is because there was no TIN on the form for this one. I hate talking to the FTB. They are blood suckers who don't know crap. I would rather deal with the idiots at IRS than the blood suckers at FTB. Tom Hollister, CA

I can relate. I don't know how many passwords I have created that say "I hate frikking passwords". Tom Hollister, CA

Bump

So my client sells a rental home. Title company withholds from the proceeds and gives my client a 593 certificate. Efile the return, and the FTB disallows the withholding. Client through away the letter from the FTB, just called me because the refund was less than expected. So I go back and look at the 593 and it is made out in the name of the client's revocable trust and does not have a number in the TIN area. I am guessing, but not sure, if this is the reason for the FTB kicking out the withholding. They probably match the TIN on the tax return to the TIN on the withholding certs and it did not match. Since the Trust is revocable, everything flows to the taxpayer and it is a legitimate claim for refund of withholding on the taxpayer's personal return. How would you proceed? Amend and show proof of withholding or just send a letter asking for the money? I hate calling the FTB, but I think I will have to. Thanks Tom Hollister, CA

A firecracker. Yes, that might be a good description. Something that seems fun to play with but touch a match to it an it explodes and does damage to anything around it. On second thought, dynamite might be a better comparison. You are the bomb too...just a bigger boom. Tom Hollister, CA

Thank you Joan, that is exactly what I was looking for. You have to do the calculation of the excess amount by hand and enter it there, but the software handles it correctly once you enter it on the worksheet for "Scholarships and Grants not included on form W2". You are the bomb. Thanks again. Tom Hollister, CA

Rich, Do you have a court case cite? I would like to look that up. Thanks Tom Hollister, CA

She recieved a Cal Grant B and a Pell Grant. Semester #1 she had approx. 3,200 Cal Grant B and 750 educational expenses at the Community College. Semester #2 she received approx 6,500 Cal Grant B and Pell Grant. She had Approx 3,250 in education expenses. The rest of the money was used for room and board. Her income is approx $9,000 from her summer and part time jobs. Tax difference by not including into income is about $500. Very round numbers here. Tom Hollister, CA

Rich, The client recieved 10K in grants because she is an orphan. But she only had about 4K in tuition, books, fees and related education expenses. Was at a community college for first half of 2013 and then at a State college for the rest of the year. Full time student. Used the rest of the grants for living expenses. I don't think your reference applies as the excess was not used in any way for education. Am I not understanding what you are referencing correctly? Thanks. Tom Hollister, CA

"...why do you want the excess to be taxed?" Pub 970 says if you receive more in grants than you have in eligible expenses, the difference is taxable and goes to line 7 on the 1040. Tom Hollister, CA

So I have a client who got approx. 10K in grants for the school year and her expenses were about 4K. I filled out the 1040 Ed Expense worksheet and it is giving her a refundable AOC credit and not adding the 6K to line 7. Help with the mechanics of making this flow to Line 7 on the 1040 please. Thanks Tom Hollister, CA

Michael, those are all good points. Tom Hollister, CA

Number 2 may be the result of number one? Not sayin' nothin', just sayin'....... Sorry, just could not resist. Tom Hollister, CA

Thanks, I knew about the related party rules. I learned something new today. Tom Hollister, CA

I was on a conference call with the corporate CPA today and he mentioned two things I did not know or hear about. Looking for some help finding out if these items are true, partially true, or "it depends" items. 1. If you are self dealing with your rents (own the building that your corporation rents from you), the income from that activity is NOT subject to the Net Investment Tax. 2. If you accrue bonuses at the end of the year an pay them within the 2 1/2 month window, but your policy is not to pay employees that leave the company before the payment date, none of the accrued bonuses can be deducted. Any of you heard these things? Thanks. Tom Hollister, CA

And when all the girls were wearing Ditto jeans. Loved the way they looked on them cowgirls. Tom Hollister, CA

Love that song. Love that band. Back to the 80's. Tom Hollister, CA

It really should not matter. If the inventory is being correctly accounted for (FIFO LCM) then the beginning inventory plus purchases minus ending inventory will give you COGS. The insurance proceeds (whether insurance paid on value or cost) go in on the revenue side. Should come out correct regardless of the amount of insurance received. I purposely assumed that MAS was going to believe his client, so I did not go into the red flags on this scenario. I just tried to assume that the client's version of the story is the truth and the tax return mechanics was what we were dealing with. Tom Hollister, CA