Tax Education in Spring 2008
As tax professionals we are continuing taking education to enhance our skills.
From time to time we are asked about what classes we take. Recently at a 3-day
seminar we took the following classes:
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Estate and Financial Planning for the Older Client (4 hours)
The range of elder planning problems is vast. This session takes a fresh look at the problems you may encounter in providing estate and financial planning services for your older clients. The following topic areas will be discussed thoroughly in the session: Medical planning issues of the older client (including Medicare, Medigap, Medicaid/MediCal, and long-term care insurance); life insurance issues specific to the elder insured; Social Security issues; and complex estate/financial planning issues specific to the older client (including charitable planning techniques).
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S Corporations: “S” Means SAFE not SORRY! (4 hours)
Since this entity type is the target of current audit projects, a masterful understanding of S Corporations has never been more necessary. Once an S election is made, the tax professional must track shareholder basis, AAA accounts and shareholder loan accounts. This requires a working awareness that there are three sets of ordering rules for proper treatment of pass-through items on shareholder K-1s, as well as the calculation of non-AAA taxable dividends. Sometimes viewed as a “flawed” form, the 1120S K-1 has an inherent deficiency. Since the K-1 only provides current year basis adjustments, the 1040 preparer is abandoned to the almost impossible task of determining the taxability of distributions and loan repayments as well as applying the three levels of loss limitation, because the K-1 is NOT a W-2! Converting a C Corporation to an S Corporation requires competency in calculating any built-in gains tax and the tax on excess net passive income. Reasonable salary, health benefit concerns, tax accounting years and the post-termination transition period are additional topics that will be addressed. This advanced class will serve as serious guide for the preparation of the 1120S as well as the corresponding 1040 returns for the shareholders with an emphasis on basis issues.
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Opening the Piggy Bank – Pension & IRA Distributions (2 hours)
Reporting retirement distributions is not always easy. There are penalties for taking them too soon and penalties for forgetting to take them at all. Being familiar with the variety of “gotchas” one may encounter can save your client lots of money. This session will help you identify opportunities for your clients to avoid penalties and make informed decisions about taking their distributions.
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Advanced IRS Collection Concepts (2 hours)
During fiscal 2007 we saw a dramatic jump in IRS enforced collection actions. This session will discuss the methods the IRS is using in this new enforcement environment. Because of increased IRS enforcement, representatives need a wide array of skills to protect their clients. This session is for the experienced IRS collection representative. You will learn the following: new IRS collection priorities and procedures, advanced concepts in liens: subordination, subrogation, discharge and non-filing of liens, representing taxpayers with employment tax liabilities and the trust fund recovery penalty issues for officers of delinquent companies, the latest ways to conquer IRS barriers to offers in compromise, and the newest IRS initiatives and the best way to protect your client.
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Form 1040 - A Deeper Look at Schedules A, B and E (2 hours)
Schedules A/B are the most used attachments to the basic 1040. How recently have you looked at changes that affect the medical, taxes, interest and charity sections? Taxable interest income and ordinary dividends go on Schedule B, but what about municipal interest and qualifying dividends? Where do they go? Schedule E is for Supplemental income and loss such as Rental real estate and royalties, entities producing K-1 forms and more. This session will look into these three forms with a practical eye to the day to day questions about the entries that go on these schedules. This session can be an adjunct to Sessions 4 or 8 or a stand alone presentation.
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Standards of Practice – Risks & Rewards (2 hours)
Each year more than half of all filed returns are prepared by tax preparers. This session will look at responsibilities we take on when we agree to preparer tax returns, the confidence level we must reach before we place an item on a return, and the variety of preparer penalties we attempt to avoid. Suggestions will focus on managing the risk while building a rewarding practice.
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e-Interactions - Electronic IRS (1 hour)
IRS sponsored session will cover the latest with e-File (including most common errors and how to resolve them), future plans for e-filing, e-Payments, e-Services, online services at www.irs.gov, and the Issue Management Resolution System.
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Representation Basics: A Primer on IRS Examinations and Collection (4 hours)
Over the past several years the IRS has dramatically increased its enforcement efforts. As a result more clients need your services during audit and collection disputes with the IRS. This session is directed to practitioners who do not regularly represent taxpayers before the IRS in collection and examination matters. During this session you will learn about the following: IRS examination procedures, audit priorities, the best ways to settle IRS examinations, IRS collection procedures, negotiation for extensions and installment agreements, cases appropriate for offer in compromise, and best bargaining strategies. At the end of this session you will be better able to represent your client before the IRS.
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My Very First 1041, & My Second, & My Third (4 hours)
Fiduciary tax returns are very confusing because the same form is used by a number of different types of entities. For each type of entity there are a number of options that can be applied. In addition, the rules governing the tax reporting can be altered in the document that created the entity. We will demystify Form 1041 by using extremely simple examples and then showing step by step how to get your computer program to produce the return you want. The novice will learn where to start and what questions to ask, while the experienced preparer will see how to use tools that are often hidden in their computer software. The IRS has announced its intention to significantly increase the number of 1041 audits. You need to be prepared and you need to be confident.
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Avoiding Ethical Violations (2 hours)
We all try to do the right thing but many of us have busy practices and those pressures may cause us to inadvertently face an ethical problem. Circular 230 has recently been revised and it has imposed new duties and responsibilities upon practitioners who represent taxpayers before the IRS. Anyone who practices before the IRS must comply with these requirements. This session is designed to help you avoid violating your ethical duties. Topics include the following: new standards and penalties for tax preparers, new Circular 230 duties, potential conflicts of interest, correction of taxpayer mistakes, what fees are unconscionable, return of client records, and what taxpayer confidences you may disclose to the IRS. Every practitioner needs to understand his/her duties to the tax system and to his/her client. This session will assist you in balancing those duties.
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When a Trust wants to be an Estate (2 hours)
IRC Section 645 allows the trustee of a qualified revocable trust (QRT) and the executor of the grantor’s estate to elect to treat the trust as a part of the estate rather than as a separate trust. There are a number of income tax advantages to being classified as an estate, rather than as a trust, and a few disadvantages to making the election. This session will give you the tools to evaluate this alternative with your clients.
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Working from Home & Deducting the Home Office (2 hours)
This session explores the basics for claiming home office, but includes areas not often discussed (except by our clients!). Learn about how to allocate business-use percentage, define “principal place of business”, and get updated on recent court cases covering home offices and commuting expenses. In addition, we’ll discuss what happens when the home is sold and integrate Section 121 and 1031 for maximum tax savings.
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Online Tax Research (2 hours)
The secret to finding quick, correct answers to tax questions is to know how to frame the question you are attempting to answer and to know where to look. This session will identify the types of resources that constitute tax authority, and show attendees where to find them online and (mostly) free.
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Estate Administration (or What to do When a Client Dies) (4 hours)
You are informed of the death of a client. How should you respond? In what ways can you help? During this session we will examine the role the Enrolled Agent can assume in the family’s hour of need. No one is better prepared to collect the information needed by everyone, including the lawyer, the insurance companies, and the taxing authorities. What you need are tools to determine what to collect and tools to assist you in organizing the data. What do I need to know? When do I need to know it? What format should I use? Whom do I need to inform? The answers are the easy part; the questions are the hard part.
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The Rise and Fall of the Real Estate Empire (4 hours)
What goes up must come down. If you didn’t believe it could ever happen in the real estate market, you and your clients have had a rude awakening in the last couple of years. To compound the pain of a declining market, a number of unforeseen tax events may occur as well. As the real estate market has turned sour, there are events which we don’t always see in “normal” markets. This session will present the tax ramifications of short sales, foreclosures, cancellation of debt, seller financing, repossessions, failed exchanges, installments and other real estate based tax issues.
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Who Gets Audited? Schedule C Filers. Why? Let’s Talk! (2 hours)
Income tax returns that include a Schedule C are audited more than any other individual tax return. In fact, in 2006, Schedule C filers were FOUR TIMES more likely to be audited than all other individual filers combined. Yet, because we prepare them so often, many of us may take Schedule C for granted. This session will review Schedule C in detail, focusing on the areas that are likely to trigger the most IRS scrutiny. We will also review recent court cases and IRS rulings to highlight the areas the IRS is most concerned about. Some hot buttons that will be discussed are: hobby vs. business – always an IRS issue item; the new rules for joint Schedule Cs – not just for community property states anymore; the IRS underreported income formula – what is the secret here?; auto expenses and other listed property – even cell phones are becoming an audit issue; accounting methods – cash (I hope!) or accrual (I hope not!), there have been so many changes what are the current rules; travel away from home – huge audit exposure area; interest expense – only business interest here, but what if the debt is used for more than one purpose?; and several other hot topic areas having to do with Schedule C.
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Is the C Corporation Dead as an Entity Choice or Should It Be? (2 hours)
S Corporations and Limited Liability Companies have had the spotlight for the past several years. But the C Corporation has been an entity choice for a long time and for some it is the right choice. This session will review who should and shouldn’t be a C Corporation. For many of our clients the choice to be a C Corporation was made years or decades before we came into the picture. For those clients, we’ll discuss closing down, selling or converting the C Corporation. For the clients where the C Corporation is the best or only choice, we’ll discuss the operational issues of the C Corporation including reasonable compensation, dividends, shareholder loans and fringe benefits.
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Schedule A – Miscellaneous Itemized Deductions (2 hours)
Make sure you consider every possible deduction to which your clients are entitled. This session looks at the three categories of items: a) deductible employee expenses that appear on Form 2106; b) deductible expenses for producing or collecting income; c) other expenses. These categories are further divided into those subject to a "2% of adjusted gross income" limit and those that are not.
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The Darth Vader of Taxes – AMT (2 hours)
You already know the AMT ABCs – taxes paid, too many children, and miscellaneous itemized deductions. This session explores advanced AMT concepts and takes a more in-depth look at the workings of this “Darth Vader” of taxes. Learn how multiple-year planning strategies can affect the impact in future years and study the interaction of capital gains and the AMT. In addition, we’ll demystify the Form 8801 and look at ways to ensure your clients get the most of their Minimum Tax Credit.
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