JohnH

Others may disagree with me, but I'd probably give them their info back (not the returns) and not charge them. It's partly compassion and partly self-interest. ( Ths runs counter to my general contention that this business is all about billable time, but in this case it's mroe important to look ahead than to dwell on the time already expended) This sounds like a situation that whoever prepares the return is letting themselves in for a gaggle of follow-up calls, pleas for help at the eleventh hour, agonizing over dealing with the IRS, and general aggravation, all the while knowing they can't or won't be able to pay. It's probably going to get a lot worse as time goes on, so whoever accepts the first fee is going to be in it for the long haul. And let's not forget that somebody may find themselves dealing with sonny boy once he figures out that his inheritance may be at risk. Sometimes it's best to just ease out of the situation gracefully and let them move on to someone else.

Glad to see you over here. Just proves that ATX did a good thing when they resurrected the Forum - it allows more people to find this one.

Reminds me of the farmer who was asked what he would do if he won a million dollars in the lottery. He replied, "I'd probably just keep on farming 'til I lost it all."

When the mother gifted the property to the wife, did mom retain a life estate? In some states that might make a huge difference concerning the basis. You said they kept the house and 30 acres. What is its value? Are there children (or other relatives) who stand to inherit what's left when this couple dies? If so, they might be inclined to help pay the taxes as a way to get the couple out of debt to the government and protect the value of the inheritance. If this was a loan spread among several people and secured by a mortgage it might be attractive to them.

First of all, tell the person at the IRS you need their instructions in writing, not in a phone call. At least that will force them to look it up before committing anything to paper. Inisiting on correspondence won't guarantee that it will straigten them out (as gfizer has illustrated), but at least you won't be dealing with a "he said/she said/we said" situation. At some point you're going to need documentation if they persist, so you may as well start right now.

Sounds like they may be a candidate for an OIC. I'd get an extension and deal with this one after the 15th when I could think through all the permutations.

Christy: Your client can set up an installment agreement for about $60 per month on the $3K she owes. That's assuming she isn't a candidate for an OIC, but who has time for that under these circumstance? ajuroff: Your situation reminds me of a client I had back in the 1980's who used his truck to haul things. (Cows, pigs, garbage, appliances, furniture, whatever). He would bring me a bag of gas receipts & repair invoices, along with a well-worn calendar on which he had written the name and amount collected for any day he had work. Both the calendar and the receipts carried a mlutitude of aromas. I'd add all this stuff up and charge him $16 or so for the return because he had a lot of pride and didn't want something for nothing. I usually got his return back to him pretty quick because I didn't want the stuff sitting around my office ripening for very long. Most of us will have a few "situations" that just don't fit the mold. I certainly do even to this day. I'd say to both of you that you're doing the right thing for these clients - some of the rewards in this business don't wind up in the checking account.

PTP = Publicly Traded Partnership (5th choice down the list on the K1 Input sheet)

Well, she may be nuts or she may not. After all, if the employer insists that she do this, then what's the chance they will find someone else to do both jobs if she refuses? The employer is probably incorrect in treating it this way, but she isn't responsible for the incorrect treatment. Of course, she could always file the new form for this sort of thing, provided she doesn't value her job very much. As far as the mileage is concerned, I think you're exactly right. It's commuting expense. I have a situation where a retired employee is doing the same job she was doing while an employee and being treated as an independent contractor, but they're paying her 25% more than before. Even after the 7-1/2% net S/E tax haircut, she's still thousands of dollars ahead. Problem is, her boss is telling her she can claim mileage because she's self-employed, while I'm saying it's commuting expense. Several others in the dept are claiming mileage based on the boss's recommendation, and of course they're "getting away with it" because nobody's been audited. Fortunately my client listens to me, but it's an uphill battle. She asks me about this every year "just to be sure nothing has changed." I'm expecting that when the boss retires she will become a hairstylist or mechanic - she already has the requisite tax consutling skills necessary for those two professions.

This string is very interesting to me on several levels. Another point that intrigues me is the one just mentioned - the client who complains about the penalties when it's their fault. I hear lots of preparers get all worked up over this issue, yet when it's the client's fault there really shouldn't be a problem. It's all in how it's explained to the client, IMO. If they were given the estimates and they didn't pay, then they owe the penalty. End of discussion. If the client can't understand that logic, they're free to go elsewhere. Go through this exercise once with a client and the problem will resolve itself. Either they will leave (you won't have to fire them), they will start paying estimates on time, or they will continue to absorb penalties each year. I've experienced and continue to experience all 3 scenarios. I think the key is to separate the client's complaints about the system from possible complaints about me - it's part of my job to make that distinction for them. Some of my chronic compaliners are also excellent paying clients (see below) On the other hand, if they just want to spend some time griping and moaning about it, I'll be glad to commiserate with them as long as they undersand we're doing it on the clock. I have a few complaints of my own about the government and I don't mind sharing them with the client, especially if they're paying me to converse with them. In the final analysis, this tax preparation business isn't really about liking or not liking how someone else manages their money, personal affairs, or emotions - it's about billable time. Distill it down to that fact and it becomes much easier to handle lots of seemingly problematic situations.

Yes it is funny how different we all operate. Speaking of operating, professionalism, and the like, how would you feel if you were about to have surgery and your doctor walked into the room bleary eyed and complaining about the other patients he needed to cut on today because he needs to get all his 25 surgeries done by next Tuesday? Plus he's been working around the clock for the past 3 days because everybody waited until the last minute to get their tumor diagnosed. I know what we do isn't brain surgery, but it also doesn't need to be done under ridiculous pressure. There's this mentality of doing it at the last minute and the culture surrounding it that seems to energize some clients and tax preparers, but I think it's risky behavior or everybody's part. Knowing what I know about tax preparation, if I walked into a tax office at this late date with anything other than a basic return and the preparer didn't tell me we need an extension, I'd walk right back out.

She may have a bad debt deduction for any money advanced as a loan and/or out of pocket expenses, provided she can document the expenditures and show that there was no chance of recovery after having made reasonable efforts to collect. The foregone salary is a wash - no income reported and therefore no deduction allowed.

No doubt the IRS wants to eliminate unreported income, but where exactly is it stated that failure to prepare a 1099 invalidates an otherwise legitimate deduction?

Unfortunately the exclusion for the H&U allowance for a retired minister does not extend to the widow. I wish it did, as I prepare returns for several widows of retired ministers and when the husband died they effectively saw a decrease in income and an increase in tax liability simultaneously. If you or anyone else should turn up anything to the contrary, I'd be grateful to learn about it.

I follow the first rule of procrastination: Never put off until tomorrow what you can put off until the day after tomorrow.

You might try their investor relations dept. http://www.firstdata.com/contact/invrel.htm

Extensions are the way to control your work flow (and your cash flow). If they don't have the money, file an extension and give them a chance to come back when they can produce the cash. Laywers do it with continuances all the time, and it works great for them.

This won't help you much right not, but one thing you can do going forward to relieve some of the stress from phone calls is to get the clients' email addresses and then send them an email. People are often too lazy to type your email address, but if they can capture it from an email you send them they will do it. Once they have your email address in their address book they will be much more likely to email questions to you, which you can answer at your convienience. Not all clients will do follow this practice, but many of them will automatically fall into the habit once they have your email address handy. I can guarantee enough of them will do so that you'll wonder why you didn't start this years ago. This recommendation even applies for older clients - for the most part only the ones over 75 won't have some familiarity with email (unless you live in an area that's still poorly served with internet connectivity). Incidentally, it's much more client-freindly to tell them you'll email them the stimulus payment link to the IRS web site than to just tell them to go look it up, IMHO. http://www.irs.ustreas.gov/newsroom/articl...=177937,00.html I typically get the email address at the first contact and then send them a question asking for clarification of something on the return. I also email a single-page checklist to my clients with my newsletter at the beginning of each year (followed up by the same info via snail mail).

Excellent points, but we'd need more info. Did he also pay for the gun & bullets? I think weapons & ammo can be counted toward support. And if he were my kid he might not be able to claim himself as a dependent this year since if I get my way the state will be paying for much of his room & board. I'm guessing he won't even be able to count his legal fees as a part of his own support, unless there's some sort of exception for obtaining the services of a public defender.

The fact that he stole her car, stole her credit cards, and shot out the windows but she hasn't already had the jerk arrested probably tells you all you need to know. He needs to spend more than a few nights in the slammer (or detox) to help him get his mind right. Her worries over the accusation are the least of her concerns since there's a good chance she's enabling this behavior by her passiveness. He didn't just suddenly turn 18 and simulatenously begin behaving like this. You'd be well advised to stay out of this since mommy isn't able or willing to take any definitive action.

So he earns in the high 80's if I'm reading your post correctly. I'd give him the options in writing and point out the risks in BOLD PRINT.

If you recommend this course of action, be sure you are prepared to explain to him why it was a good idea to get fired over an $800 tax savings. It might be a hard sell.

I had a foreign national bring his info to me today (actually through a relative) and before I give his info back to him I'd like to ask if anyone on this forum can offer some advice. He moved to the US from the UK on 6/10/07 and began working in the US on 11/8/07. So he lived in the US for 205 days in 2007 and has never lived in the US in the past. US earnings were only about $1,800, all legal, according to him. He got his green card in Feb 2008. I don't prepare returns for foreign nationals and don't intend to start learning, even if it's a simple task. I'd just like to know if there is any reason he can't file a 4868 and get an extension in the same manner as any other taxpayer. All I want to do is give him a way to get past April 15 and out of my hair so he can have someone do his work who knows and/or cares about this stuff. Anyone have any advice on whether there are any special rules that would prevent him from filing the extension?

Remember you're emailing a document with a Social Security number. It should either be password protected or I would blank out the SS# in some manner.

The absolute smartest thing you can do is keep your clients out of your office. It's the single most important productivity enhancer you can implement. (But getting them to use email for routine questions is a close second) Incidentally, I don't deal with pick-ups either. I'll gladly pay the $4.00 postage to keep them out of my hair.