NOVEMBER 2009 Issue. Palomar Chapter Dinner Meeting. PALOMAR CHAPTER ENROLLED AGENT FORUM California Society of Enrolled Agents. Inside this Issue:

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1 PALOMAR CHAPTER ENROLLED AGENT FORUM California Society of Enrolled Agents NOVEMBER 2009 Issue Palomar Chapter Dinner Meeting Date: November 18, 2009 Inside this Issue: Place: Time: Escondido Country Club 1800 Country Club Lane Escondido, CA 4:30 pm Board Meeting All members Welcome! 5:30 pm Social Time 6:00 pm CSEA President David Shaw, EA from Meyer Shaw Financial Group Discussing Ethics Death/Taxes Dinner Buffet 1 November Chapter Dinner Meeting 1 November Chapter Breakfast Meeting 2 Message from the President 2 Palomar Chapter Upcoming Events 3 CSEA Mission Statement 3 Board Meeting Minutes Summary 3 QuickFinder Reminder 4 Meeting Speakers December 4 Palomar Chapter Officers 4 Chapter Directors Cost: $30.00 Members with Reservations $32.00 Non-members with Reservations $20.00 Guests who are not active EA s or CPA s or CTEC s or Attorney s For Reservations Please call Richard Moore at by Noon Monday November 16 or him at RWMooreInc@aol.com Chapter Breakfast Meeting Place: Denny s Restaurant 1-5 and Carlsbad Village Drive Carlsbad, CA Date: Wednesday, November 25, 2009 Time: 7:30 am Reservations are not required for Breakfast Meetings Be sure to visit our website for details on upcoming events and news of our Chapter If you know of anyone that may enjoy receiving a paper copy of our monthly FORUM, please contact Cheryl Kerber (see page 4). She will be happy to add their name to the list.

2 PRESIDENTS MESSAGE November 2009 Sometimes our best laid plans turn out bad, and so it was at the October Dinner meeting when our speaker did not show. But I found it fun to just start talking about clients that I was worried about and have members tell me what other things I SHOULD be worried about. I made me realize just how valuable to me membership can be. The wealth of knowledge of our members is so wonderful. I want to thank all of you. We have some great programs coming up: November 11 th 5 hours of CPE by our own Miles Lawrence, EA, ESQ. Review of New Federal and California laws on Distressed Real Estate. How many of you have clients in trouble. I just had one on Thursdays who came in with a piece of property she bought in Bull Head City as a rental for $200,000 now worth $140,000. The rental income is falling far short of paying for the nothing down mortgage she has on the property. What should she do? What are her options? December 4 th - 4 hours of CPE Gregory B. McKeen an expert on S Corporations. Now I have clients that should be S Corps and some that are that should not be. What to do? November 18 th - this is our regular monthly meeting with David A Shaw who is the current CSEA president. He will be talking on Ethics and Death and Taxes. I have heard him before and I am looking forward to hearing him again. December 16 th This is our holiday party. All members are free, yes free you can not beat the price. You will have to pay for that someone special, but we have a great time planned. Please wear something with RED AND GREEN. There will be prizes!! Also please bring a wrapped present (in newspaper and twine) to be exchanged. We will be letting you know other fun things we have planned. It is time to let down your hair, and have some fun!! We will be having a piano player and some songs and more fun games. Vivian Doering is working hard to make sure our Holiday Party is fun for everyone. Please support her efforts by putting December 16 th on your calendar of events. Lois Leonard, EA Check us out! Veteran s Day November 11 PALOMAR CHAPTER CALENDAR OF COMING EVENTS November Palomar Chapter Meeting Escondido Country Club Escondido CA 25 Palomar Chapter Breakfast Meeting Denny s at I-5 and Carlsbad Village Drive December Palomar Chapter Meeting Escondido Country Club Escondido CA 30 Palomar Chapter Breakfast Meeting Denny s at I-5 and Carlsbad Village Drive January Palomar Chapter Meeting Escondido Country Club Escondido CA 27 Palomar Chapter Breakfast Meeting Denny s at I-5 and Carlsbad Village Drive February Palomar Chapter Meeting Escondido Country Club Escondido CA 24 Palomar Chapter Breakfast Meeting Denny s at I-5 and Carlsbad Village Drive St Andrew s Day November 30

3 California Enrolled Agent Magazine Each issue is now posted in the Resources section at Please visit our website It s the best way to keep up on what s happening with the chapter and more is being added all the time. Free 2010 Edition of the QuickFinder Remember-Members who attend chapter dinner and breakfast meetings on a regular basis are rewarded. If you attend eight meetings (November through October) you will receive a FREE Individual or Business QuickFinder of your choice. If you attend seven meetings (November through October) you will receive 50% off a QuickFinder of your choice. Perry Collins $41.00 Income Tax QuickFinder $41.00 Small Business QuickFinder $29.00 QuickFinder CD $72.50 All State Book Call Perry Collins Orders are going in soon! Palomar Chapter Holiday Party December You are invited! Unearth your Holiday Apparel Dress in red and/or green Prizes will be awarded Please bring a wrapped gift, costing no more than $10 (see Note in President s Message) Music Games Dinner Palomar Chapter Board Minutes Summary October 2009 **January IRS Practitioner Seminar Watts updated the Board on the progress for the Seminar. The mailing/ ing will include a save the date and is to target mailing lists from CSTC, CSEA, CPA s, and attorneys. **Watts will complete a Director s Chair summary next week. He updated the Board on the potential for OPR to regulate unlicensed preparers. **Dixon brought the Board up to date on the IRS conference call including an IRS Form 4506-T-EZ for taxpayers needing information for their mortgage lenders. **Steele had questions regarding the early-bird pricing for the December seminar on S-corporations. It was recommended we change the deadline to November 25 th. **Steele updated the Board on progress made with CSEA on enabling attorneys to receive credit for attending CSEA seminars and dinner meetings. Steele motioned and Dixon seconded that our Chapter submit the paperwork, application, and fee to request the appropriate attorney credit hours for our seminars. CSEA Mission Statement The California Society of Enrolled Agents is a progressive, professional association dedicated to serving EAs in California and abroad, enabling them to grow, prosper and lead as The Tax Professionals while serving taxpayers in a dynamic, rapidly changing environment with integrity and trust.

4 IRS Collection: What Are Your Options? Questions and Answers from the July 15, 2009 National Phone Forum These responses are provided within the context of the information presented during the National Phone Forum and are intended to claify points discussed in the presentation. Due to the public nature of this Q&A, we are able to respond only to general questions relating to the presentation, so some questions were omitted. If you have account questions or client issues, please call the IRS. Other questions were edited for brevity, clarification or to remove specific identifying references. The responses below should not be considered official guidance independent of the presentation. To avoid potential misinterpretation, this document is provided only to those who participated in the forum and should not be otherwise distributed. Thank you for your professional consideration. Offers in Compromise Q1. I have been asked to file returns for a taxpayer who has no assets, little income, and owes many years of taxes. After all tax returns past due are filed, can an OIC immediately submitted or should the OIC be filed after the returns are processed and notices are received by the taxpayer? Also, when filing an OIC, is an estimated tax payment necessary to be considered current if the taxpayer had $3,000 of self employment income during the 2nd quarter of 2009? A. Taxpayers may submit, and the IRS will consider, an offer to compromise taxes due on returns which have been filed but have not yet been assessed. If the offer in compromise is received before the returns are pending or assessed, the offer will be returned. Taxpayers must be up to date with estimated tax payments for the current year at the time the offer is filed and throughout the offer investigation. For individuals the amount of the estimated tax payment due is based on 100% of the prior year's tax or 90% of the current year's tax due at the time the offer in compromise is filed, whichever is less. To figure the current estimated tax due, see Publication 505, Tax Withholding and Estimated Tax, and Publication 334, Tax Guide for Small Business (For Individuals Who Use Schedule C or C-EZ). Q2. What are some other options if an OIC is rejected? A. If an offer in compromise is rejected, the taxpayer has 30 days from the date of the rejection letter to file a formal appeal. If the taxpayer does not wish to appeal the rejection determination, they may speak with the offer investigator about possible alternative resolutions; such as an installment agreement. If the offer investigator is unable to assist the taxpayer with an alternative resolution, they will refer the taxpayer to the appropriate contact. See Publication 594, The IRS Collection Process, for more information about possible collection alternatives available to the taxpayer. Q3. If a self-employed taxpayer submitted an OIC for several years, essentially compromising SE tax (minimal or no income tax), will the taxpayer be credited for social security and medicare taxes for the compromised self employment taxes? A.Yes, the taxpayer will receive credit for the amount reported on their tax return, whether collected or paid. In some instances, the IRS may determine that an adjustment to the assessed liabilities is in order and any changes to the original data will affect the initially reported Social Security and Medicare credits at that point. However, if the offer has already been accepted, those adjustments cannot be made due to the contractual nature of the accepted OIC. Social Security and Medicare records would remain as originally reported. Q4. If a contractor owes more than $75,000 for Form 941 taxes, including penalties and interest, would they be considered a good candidate for an OIC if they could submit $35,000 with their Form 656 and can show they have little or no equity in assets? Or would an installment agreement be a better option? A. IRM states: IRS will accept an offer in compromise when it is unlikely that the tax liability can be collected in full and the amount offered reasonably reflects collection potential. It goes on to say, In cases where an OIC appears to be a viable solution to a tax delinquency The taxpayer will be responsible for initiating the first specific proposal for compromise. The taxpayer must make an adequate compromise proposal consistent with their ability to pay. They will be given the opportunity to increase the OIC amount if the reasonable collection potential is determined to be more than the amount offered. Offers will not be accepted if it is believed that the liability can be paid in full through an installment agreement extending through the remaining statutory period for collection, or other means of collection, unless special circumstances exist. MARK YOUR CALENDAR DECEMBER PALOMAR CHAPTER S HOLIDAY PARTY

5 PALOMAR CHAPTER OFFICERS President: 1st Vice President 2nd Vice President Secretary: Treasurer: Past President: Lois Leonard, EA Dee Hazen, EA Richard Moore, EA Cheryl Kerber, EA Nancy Dixon, EA Ron Watts, EA Chapter Directors Perry Collins, EA Calvin Ellisor, EA John Haggerty, EA Melanie Johnson, EA Miles Lawrence, EA Albert Sanchez, EA Selina Steele, EA Agi Szabo, EA CSEA Director Ron Watts, EA Joseph J Doering, EA jjdoering@aol.com Marine Corp Birthday November November November December Upcoming Chapter Events Distressed Real Estate Taxation Workshop Miles Lawrence, EA ESQ Ethics and Death & Taxes David Shaw, CSEA President S Corporations Gregory B McKeen FORUM EDITOR Cheryl Kerber, EA 7512 Jerez Court Carlsbad, CA Cheryl@cheathamtax.com FORUM is a monthly publication of the Palomar Chapter of the California Society of Enrolled Agents. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is published with the understanding that the publisher is not engaged in rendering legal, accounting or other professional service. If legal or accounting advice or other expert assistance is required, the services of a competent professional should be sought. Items for publication must reach the Editor by the 25th day of the month prior to the publication month. Each Chapter member is expected to furnish material. Rights are reserved to abridge, summarize or excerpt items. The more data submitted, the more valuable the FORUM becomes. Items excess to one issue are retained for following issues. Views expressed in columns, guest editorials, cartoons and articles do not necessarily represent the opinions of the Editor. ENROLLED AGENTS FEDERALLY RECOGNIZED TAX PROFESSIONAL THE TAXPAYERS REPRESENTATIVE.