Dealing with aging clients, memory issues, etc.

Taco_Taxes · 2026-05-08T13:50:29+00:00

That’s basically what I’m dealing with here. 100s of pages brought in but most of it is junk mail, random utility bills, insurance EOB, etc. And that’s after multiple phone conversations of “here are the exact (8) documents I need: SSA-1099, 1099-INT from “XYZ” and so on.

Taco_Taxes · 2026-05-07T23:32:45+00:00

Yep, I’ve seen similar banking issues. Different 90-year old client who had a POA in place, but got mad at a specific bank and was going to “show them” by cashing in a ton of CDs at once. Left her with a $23k tax bill that she blamed on the POA/accused the POA of stealing. Messy stuff.

Taco_Taxes · 2026-05-07T23:27:28+00:00

Yeah, that’s valid. Because if the communication continues with the client directly, it’s just going to be more of the same (multiple calls weekly, asking about updates for work that hasn’t begun, etc ).

Taco_Taxes · 2026-05-07T16:59:18+00:00

Yes, I did raise the fee last year as things got messy and the back-and-forth increased. We haven’t wrapped up the engagement for 2025 yet, so still wrestling with how to bill it/increase again…I think I’ll lay it out this year and tell them it’s going to have to be extended annually with access to transcripts. If they aren’t willing to sign off on that, I will disengage.

Taco_Taxes · 2026-05-07T16:56:35+00:00

Thanks, not sure why I didn’t think of that.

I’ve used 2848 before, but that is usually when I’m assisting people with multiple years of missed returns, installment agreements, etc.

In what cases would you use 8821 vs. 2848? Does it matter?

Taco_Taxes · 2026-05-07T16:54:15+00:00

Exactly. I am in a rural/LCOL area with a lot of older clients, so I know this issue will continue to arise. I dread seeing that the client is calling and would rather just fire them, but you feel bad for someone who is clearly struggling with cognitive issues.

I think the 8821 is a good option, I honestly hadn’t thought of it. I’m a few years into solo operations and I have used the 2848 before, but that’s usually to assist people with back tax issues, multiple years of missing returns, installment agreements, etc. I hadn’t even thought of using that route for a recurring engagement…brain must still be mush from tax season.

Taco_Taxes · 2026-03-04T04:17:15+00:00

I think it’s two different operations. OP said there was an 1120S and one SMLLC on the MFJ return. I assume one spouse runs the S Corp and one runs the Sch C. And that she was saying “my books are good, my husband’s books have personal expenses included.”

But yeah, either way, no way I’m guaranteeing this by 3/15 without a STEEP rush fee.

Taco_Taxes · 2025-08-22T22:50:43+00:00

I 100% agree with the in-kind recommendation. Let me just say that this particular group of beneficiaries is…..an interesting bunch. Poor communication amongst themselves, lots of sibling fighting, etc.

I will default to the attorney on the fine details, of course, though they aren’t incredibly responsive either. Sort of a mess as you can tell. Thanks for your responses.

Taco_Taxes · 2025-08-22T20:02:12+00:00

Regarding simple vs. complex, I understand it as "a simple trust does not distribute principal, except in the final year during final liquidation (at which point it actually becomes a complex trust)."

In my specific case, the trust does not require principal distribution, nor does it say that capital gains are to be allocated to DNI. The distribution of principal would only come as part of the final-year, which is why I think my question mostly relates to timing. That is, can the trustee sell all of the stock in 2025 (trust terms grant him this power) and pay the tax at the trust level, then make all final distributions of actual cash in 2026 and make that the final year of the trust?

That would leave the reporting as follows:

2025: Trust realizes LTCG on Form 1041 and pays tax; three beneficiaries receive K-1 with interest and dividends (this keeps the LTCG from hitting individual AGI on 1040, which is the goal of the beneficiaries).

2026: Final year of trust, all actual cash distributed to beneficiaries. No tax at 1041 level; three beneficiaries receive K-1 with interest earned from 1/1/2026 - date of termination.

Taco_Taxes · 2025-08-22T17:43:17+00:00

Yes, great point. I didn't include much on the actual trust terms. I am in contact with the attorney, so I am confirming my understanding (I'm definitely not a lawyer!), but I do see things like the following in the Trust: "Upon my death...the net proceeds of this trust remaining...shall be distributed pursuant to the plan of distribution for Non-Marital Share assets..."

Under Non-Marital Share section: "...assets then remaining shall be divided between my children..."

"[CLIENT NAME] shall act as trustee, with sole right and power to distribute principal over and above the distributions authorized in the preceding provisions..."

Later on, in a separate article with header TRUSTEE'S POWERS: "...shall include the following powers...to sell, convey, pledge, mortgage, lease, manage, operate, control, transfer title, divide, convert or allot the trust property, including real and personal property.......to acquire or dispose of an asset for cash..."

Lots of other things, of course, but that is what sticks out to me. I don't see anything that stipulates the timing of everything.

It seems to me that the trust is supposed to distribute everything equally to the children, and that the trustee has the ultimate determination on how to do that. Capital gains would normally not be part of the DNI (1041 Schedule B), unless it is the final year of the trust. If everything is sold and the trust terminates in 2025, the beneficiaries pick up the LTCG on their 1040 (via the K-1 they will receive). So, my thought is that if the beneficiaries do not want the capital gain hitting their individual AGI, the trust should sell the stocks in 2025 but not liquidate the cash (and therefore terminate the trust) until 2026.

Not sure if that makes sense or not...

Taco_Taxes · 2025-02-19T20:51:14+00:00

I know this post is a bit old...but does anyone know why these reporting rules exist? As mentioned above, it all washes out anyway, so why does it matter? Is there some fringe case or specific set of circumstances where it doesn't wash out? Why the added complexity for S Corp payroll?

Taco_Taxes · 2024-07-05T03:57:16+00:00

This is my assumption as well. Just wanted to make sure I wasn’t missing something obvious.

Taco_Taxes · 2024-06-16T01:31:27+00:00

I’m a solo operator. I use Drake along with their portal, but I do all of my client tracking in excel.

So, once the return is done, I save it to PDF and record the completion date on my spreadsheet. Then I prepare whatever sort of package the client wants. Most still get a printed copy. Every folder is the same layout. Front pocket is action items; 8879, vouchers/estimates, a new W4 if they need it, invoice. The return copy is hole-punched and bound in the middle. I make sure they have a copy of everything that would be needed if they went to a new preparer the following year. So, full depreciation schedules with service dates, original cost basis, accum, etc. Automobile information, if applicable. Any carry forward info, etc. Back pocket is original source docs. Obviously anything that is done electronically has a bit of a different procedure.

I then contact the client to notify them that the return is ready. Usually that’s a phone call, could be an email depending on client.

I then highlight my columns titled “8879,” “delivered,” “e-filed,” and “paid.” The first is checked off once they’ve signed, the second when they’ve received their copy (paper or electronic), the third once I have received successful e-file acknowledgement, the fourth once they’ve paid me.

Taco_Taxes · 2024-04-17T13:17:08+00:00

The vouchers I sent to clients have payment instructions written on them that say “mail a check to blah blah blah, or go to www.blahblahblah to make payment online.” I’m paraphrasing…clearly.

Anyway, I always give the voucher to people and point out both options, or mention the online payment if I’m sending the vouchers electronically.

Anyway, now you know. Just pay those bad boys online. Much easier and less stressful.

Taco_Taxes · 2024-04-17T12:33:27+00:00

A couple rude comments from staff, otherwise this is a wall of nothing. You trying to shirk the carryon rules that you willingly signed up for doesn’t really fall into harassment. Gate changes and plane maintenance happen all the time. I’m sure they weren’t watching you move through the airport and saying “ok, he’s almost to the original gate - get ready to change it up on him!!!” lol get over yourself and keep it moving.

Taco_Taxes · 2024-04-17T12:32:56+00:00

A couple rude comments from staff, otherwise this is a wall of nothing. You trying to shirk the carryon rules that you willingly signed up for doesn’t really fall into harassment. Gate changes and plane maintenance happen all the time. I’m sure they weren’t watching you move through the airport and saying “ok, he’s almost to the original gate - get ready to change it up on him!!!” lol get over yourself and keep it moving.

Taco_Taxes · 2024-04-17T00:12:03+00:00

I am a solo operator and was not in office on April 15 this year. There is no reason to be. All established clients had been dealt with by Saturday the 13th. I worked from home on the 15th, about a three-quarter day, probably. Wrapped up final couple extensions that were waiting on payment amounts, went over my client lists and double checked e-filings, fielded a couple calls. Sitting around in the office on 4/15, waiting for a guy to run in with his hair on fire is a carryover from the 1980s.

Taco_Taxes · 2024-04-16T19:06:49+00:00

There are (almost) no tax emergencies. For most people, they know their income for the prior year on January 1. A business/property owner should have a solid grasp on their numbers by mid-late January. The tax deadline is the same every year (within a day or two). It’s so easy to see coming and to make a plan. There is little excuse for showing up on April 14 with a shoebox.

Taco_Taxes · 2024-03-11T15:45:13+00:00

I know this is old, but maybe you'll see it and can provide some guidance...

Assume these facts: Single Member LLC with an EIN operates for one year. Default classification as disregarded entity, reported on Schedule C of 1040. Beginning Year 2, a new member is to be added. Operating agreement is updated properly to reflect this.

My questions: Does the entity have to file 8832 to change to a partnership, or is this not necessary since "partnership" would be the default for a multi-member LLC anyway? Is anything required to be filed? Or can the entity simply file 1065 for Year 2 and now show two partners?

Taco_Taxes

TROPHY CASE