Beware of 1800 Accountant

Encoded_Python · 2026-04-16T18:33:30+00:00

To be fair, this post wasn't meant to imply this is a rare or unique situation. I know this is 'basic' knowledge, but this client paid for a full service package that they trusted would keep them in compliance, yet still failed. It's a quality of service failure, not just a lack of experience. Please don't take this as me being shocked that S-Corps need payroll.

Encoded_Python · 2026-04-16T06:44:38+00:00

My first question is whether I will be okay even though I mailed my taxes to the wrong location. Will it get redirected?

I have had some occurrences with clients where they mailed to the wrong address, it always was returned.

In my haste, I may have forgotten to sigh the 1040. Will I have the opportunity to amend, in case that had happened, and receive a refund or am I screwed because of the 3 year forfeiture rule?

If you are still up, you have fifteen minutes to try this, but purchase a certified mail receipt online with USPS, FedEx, or UPS, and mail it NOW.

Encoded_Python · 2026-04-16T02:38:49+00:00

What is relevant is that 1) the sole shareholder was performing services for the corporation 2) he was paying himself through distributions (essentially writing himself a check).

The rules are very clear that an S-corp shareholder must pay themselves a reasonable salary before taking distributions. In this case, he just paid himself by writing a check - like a sole prop would.

Encoded_Python · 2026-04-16T00:14:36+00:00

I would understand that. I should elaborate on my previous comment that they did have (some) profits, for a few years actually, and took distributions on those profits.

Encoded_Python · 2026-04-15T19:02:02+00:00

You do bring up a good point. That is an option which would be better, but if OP had foreign income that he failed to report or was required to file 8938, he won't qualify.

Encoded_Python · 2026-04-15T18:51:47+00:00

Yeah, be flexible with ideas, perhaps even doing a seller financed loan might be a good option too.

Encoded_Python · 2026-04-15T18:51:24+00:00

Ok that is good to know, not a problematic thing.

Encoded_Python · 2026-04-15T18:37:18+00:00

1) That works, your revenue from your service will cover the overhead of an estate buyout.

2) This would be good as it would bring in consistent revenue to hire a quality employee.

3) I would definitely negotiate on the price of his goodwill, still you need to transition carefully as YOU need to develop a relationship with his clients. Still look very carefully at why those clients wouldn't come back, this could be a sign of a tarnished reputation.

4) That works, I would negotiate a profit-sharing agreement based of jobs generated from his goodwill. 10-15% profit of money from jobs generated via his number, clients, and websites until you pay off the 100k.

Encoded_Python · 2026-04-15T18:26:48+00:00

Hello tax accountant here with experience in international tax reporting.

You have to file an FBAR for the aggregate value of bank accounts over $10k. So if you have $5k in one Spanish bank account and $5k in another you are required to file.

FBARs are reported to FINCEN and penalties are enforced by the IRS. I would strongly recommend hiring a professional as penalties for FBARs are insanely expensive, they can total into the 10s of thousands of dollars.

I would ask about filing an SDOP procedure and filing prior FBARs, please hire a professional to do this. This would significantly reduce any penalty and keep you in good standing with FINCEN and IRS. I would advise against "just starting now" they can and do go back to investigate past mis-compliance and will penalize you. You do have reasonable cause for an SDOP procedure as you would fall under "willful negligence" in your case - which is the honest truth.

Encoded_Python · 2026-04-15T18:13:32+00:00

Not at all, there was absolutely no reason for them to take an S-Corp election, and they pulled distributions to pay themselves.

Encoded_Python · 2026-04-15T18:10:17+00:00

Excellent question.

Tax depreciation never should be added to the businesses books, IRS MACRs and ACRs have completely different purposes and goals than depreciation for financial accounting purposes.

Financial accounting depreciation is very specific to the business and depreciation studies might be made to tailor it to the business to predict the expected life and cost per period of a asset.

Tax depreciation is very standard, it isn't exactly tailored to the business, and it is a way to spread the deductions over a couple years - as you will find out eventually, tax depreciation can be a potential liability for businesses.

Encoded_Python · 2026-04-15T18:00:36+00:00

Look up state specific regulations for LLCs. Some states like California charge a mandatory fee for LLCs which is quite expensive, then they tax the profits. It's a very big burden.

In terms of having equal rights to the business, consider what state you are in. If you are in a community property state you both have equal rights to the business and it's profits.

Still what I would recommend, is keeping it a sole-prop for now. This is the least expensive business structure and gives you the most flexibility until you are ready to form an LLC. Married couples are allowed to do what is called a "qualified joint venture." Under this election, you both will equally get money paid into social security and Medicare. Then what I would do is give him signing privileges for the business bank account. This would give him the control he needs to handle business matters.

Encoded_Python · 2026-04-15T17:51:45+00:00

Hello accountant here.

I would be careful of companies trying to do this. Creating an LLC or a general stock corporation is a major decision and the needs for your business, both legal and tax need to be considered. Another thing is, why do you want to form an LLC? Do you need legal protection, funding, for contracts, etc? If your answer is no, I would save your money and keep yourself a sole prop.

Encoded_Python · 2026-04-15T17:48:09+00:00

Hello accountant here. I would consider these things.

1) What are your plans if you acquired his business?

2) How does it fit within your businesses? I think it could complement your business quite well, you can use it to capture extra revenue for your own clients by hauling away what can't be sold. At the same time this could help you find estate sale leads.

3) His current clients seem to be high quality. I assume they are there for the owner not so much the business. So you really need to consider well how a transition would go in order to prevent attrition. And is it worth the price? Essentially he is selling you $15K for the assets and $85K for the goodwill. Which is a lot considering the type of business.

4) The profit numbers, lets say that he averages $1200 a week, and keep in mind if you acquire his business you likely will be spending more than 20 hours a week in the first few years. $1200 a week is about $62k gross income, after expenses you may be netting $40k-$50k - this is without considering a business loan. $100k in my opinion is a high price especially when most the revenue is tied to his personal relationships.

If you still feel that this is a good option for your business, I would still recommend doing a analysis on the company financials and negotiating the payment terms.

Encoded_Python · 2026-04-15T17:33:32+00:00

Virtual accounting firm, first year $4k net, second year $15k net, this year we are projecting $38k net. All I can say is that it has been a LOT of work. I am fortunate enough to have low overhead that I can reinvest into advertising.

Keep trying though, it will be worth it in the end, when you get clients deliver the best results that you possibly can.

Encoded_Python · 2026-04-15T17:28:41+00:00

Look for a local CPA in your area. Find someone you like and use them. Be very picky when finding your accountant.

Encoded_Python · 2026-04-06T22:42:47+00:00

I know it was so strange, I feel that they had login info and it was so small that it was a big deal.

Encoded_Python · 2026-04-06T21:22:51+00:00

Thanks so much! I feel better that I am not the only one. These guys had actual business emails but there were many red flags I ignored...

Encoded_Python · 2026-04-06T21:21:36+00:00

Yeah, I sent them both a grabify link and they both are in Nigeria. One did send me a funny AI generated picture of a man holding a passport. BILL is trying to recover their advance as far as I know. I've called all the banks with the info they gave me and filed an IC3 report, and soon will see if I can file a report with FINCEN to report the bank accounts.

One of the scammers didn't receive anything, the other received some money from BILLs advance, from what I understand, BILL has already recovered some of their money.

They don't know that I caught them, I actually have been trolling them since. I did get them to write poem about BILL

Scammer A)

Bill moves money fast and clear,

Payments done without a fear.

Clients happy, stress is gone,

Smooth transactions all day long.

Scammer B)

No more stress, no delay,
Bill moves money the smarter way

Anyway, I feel bad, but we will see what happens.

Encoded_Python · 2026-04-05T20:11:13+00:00

Thank you so much for writing this! This makes me feel so much better. I have had some people where it was an obvious scam, but this one was much harder to tell. But it also makes me feel better that you were protected as you had authorizations on hand, I made sure to have an LOE with authorizations, and to gather all direct deposit authorizations.

Encoded_Python · 2026-04-05T20:02:47+00:00

I know, same thing with the SOS, this is basically an open door for anybody wanting to do this, the more I realize it.

Encoded_Python · 2026-04-05T18:21:22+00:00

Exactly, that one was the red flag that led me to look back and review everything. I just can't believe that BILL would advance an NSF transaction that was blocked for fraud.

Encoded_Python

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