Monday, November 27, 2017


So, a week ago I finished sitting through the, thankfully, free  4 CPE hours (4 50-minute hours) of webinars that are required as part of my annual registration as a preparer of NY state income tax returns.

FYI - Click here to read my “review” of last year’s required NYS CPE and here to read the “review” of the 2015 CPE.  In both reviews I stated that the 3 1/3 hours I spent were a total waste of my time.

I first “enrolled” in “New York State Updates and Department Messages” –  which were in the past updates of the previous year’s tax filing rules and NOT the upcoming current one (i.e. the information reported last year at this time was for 2015 returns, the returns prepared during the tax filing season that ended in April of 2016, and not for 2016 returns).  Like last year, instead of an actual “webinar” it was a PowerPoint-like series of slides.  At the end of a series of slides I was asked multiple choice questions.  If I answered correctly a check mark appeared.  If I entered a wrong answer I was told so in a box, which also provided the correct answer.  I could then select the correct answer and could proceed to a new section.  As I said in the past, I really do like this method. 

This year I needed to complete three (3) required courses and one (1) course chosen from among 4 optional topics. The required topics were –

1. New York State Updates and Department Messages– 45 minutes
2. Tax Preparer ID Numbers and Permissions – 40 minutes
3. Standards of Conduct and Penalties – 75 minutes (of course the longest was redundant ethics)

For my optional topic I choose NY State Subtraction Modifications scheduled for 40 minutes.

Like the past two years, the entire process was a total waste of my time.  While it appeared the update session may have been about 2017 returns, there was minimal information provided that actually applied to the NYS tax returns I prepare (only IT-201 and IT-203).  There was relevant information on various tax credits, but only one applied to my clients.  It appears that there is nothing new relating to the actual returns I prepare for my clients.  The other 2 required sessions were truly redundant – the same information from last year.  The optional topic was truly basic.  I learned absolutely nothing new by sitting through these sessions.

Some good news.  While I will not tell you the exact amount of my time that was wasted, I will say that it was much less than the “advertised” 200 minutes.  So, thank God for small favors.  I did “satisfactorily” complete all the required CPE, and was able to print certificates for each class.

Every January as part of the NJ chapter of NATP’s “Famous State Tax Seminar” there is a session on New York State tax updates led by NY preparer Kathryn Keane.  It is an excellent presentation, and actually covers what is new for the upcoming tax filing season for NYS tax returns, and allows for questions from participants.  But, of course, this presentation does not satisfy the state requirement

I would much rather pay a fee and attend a live half-day seminar offered by the NY or NJ chapter of NATP, or John Sheeley’s organization, than waste my time with the free NYS offering.

After finishing the CPE, I attempted to pay my annual $100 extortion fee.  I tried multiple times over the past week without luck.  Each time I was told “Our records indicate that you have not completed your mandatory tax preparer education requirements”, despite the fact that I had in hand printed certificates for, and email confirmations that I had completed, each of the 4 required classes.  As of this writing I have still not been able to give NY my $100.  I will call the number provided on Monday morning (the day this post first appears).  What a total pain in the arse!

As I wind down my practice toward retirement (after completing 50 tax filing seasons), I truly look forward to the point where I prepare less than 10 NYS income tax returns (I currently do at least 20), so I do not have to deal with this nonsense every year – neither the CPE time-waste nor the $100 fee.

FYI – I add a special line item charge on the invoice sent to each client for whom I prepare a NY state income tax return for $5.00, which I identify as “NYS Tax Preparer Extortion Fee Surcharge”.

So, do any of you have any comments on the NYS registration process and its CPE and fee requirements?

UPDATE 11/29/2017:

I found out why NYS would not accept my $100 extortion fee payment.  They were apparently correct when they told me in an error message “Our records indicate that you have not completed your mandatory tax preparer education requirements”. 

The state lied – the CPE requirement is NOT 4 CPE hours (4 50-minute hours of 200 minutes). I had to take 230 minutes.  It appears that one must take 1 class each from 2 separate optional groupings.  So, I chose a class titled “Tax Computation Credits and Other Taxes” advertised as 30 minutes. 

I now have a printed “Certificate of Completion” for “successful completion of 2018 Registration Education Requirements”!

I will wait for my completion of the final class to be processed and try to give the state my extortion money later today.  Hopefully they will finally take it and this nonsense will be over for another year.


I have been preparing 1040s since 1972. Over the years I have developed a collection of forms, schedules and worksheets that have proven very helpful in my practice. 

Some of my forms are given to clients to help them provide me with the information I need to properly prepare their returns. Some are used as “memos” to the client’s copy and my office file copy to back-up items reported on the returns. Others are used as attachments to the returns.

I offer this compilation to you for only $7.95!

Click below for more information-

Wednesday, November 22, 2017


A recent discussion in the Spacebook group for tax professionals that I host touched upon the idea of a national sales tax and the Fair Tax proposal.

While I do not support the proposed Fair Tax Act, my concerns are more with the practical implantation of the plan than with the actual concept of a national sales tax.  The national rate would need to be very high to replace all other forms of taxation, and there is no way to easily or properly provide an equivalent to the “standard deduction”.

Besides, if we are going to replace the federal income tax with a national sales tax I would want to wait until I have retired from preparing 1040s.

Yet there is much to be said for the concept of a national sales tax, as I originally pointed out in an early post at a young THE WANDERING TAX PRO many years ago -

1) A national sales tax would be relatively easy to administer.  Almost all of the 50 states already have a state sales tax, with all the appropriate collection and auditing functions in place. The national sales tax could be incorporated into the collection and compliance process of the various state sales taxes, with the states receiving a ‘commission’ from the federal government.

2) A national sales tax (with exemptions for food and clothing purchases) would eliminate the problem of the “underground economy”, which escapes taxation under the present system. Everyone, regardless of the source of their income, would pay sales tax at the point of purchase.

3) A national sales tax would encourage saving and investing.  As the tax is assessed on retail purchases only, income from investing activities would not be subject to tax.

4) If under the national sales tax system corporate and business income taxes are abolished, along with the need for expense compliance costs, the savings could be passed along to consumers in the form of reduced prices and to stockholders in the form of increased dividends.

5) States like New Jersey have had much more success raising revenue from sales tax audits than from audits of income tax returns.

So, what do you think?


Monday, November 20, 2017


Every year for as long as I can remember the National Association of Tax Professionals has offered a 2-day year-end tax update program during November and December – the first day devoted to updates for the upcoming tax filing season (The Essential 1040) and the second day a more detailed discussion of specific tax topics (Beyond the 1040).

And every year for as long as I can remember (I have been a member for 30 years) I have attended at least one of the two days.  I have often attended the offering in Atlantic City.  This year I signed up for day one only – I was not interested enough in the day two topics (tax reporting requirements for occupations such as clergy members, truckers, cannabis farmers, gamblers, barbers and beauticians, home flippers, Airbnb operators, and foreign-sourced income) to pay the additional fee – held last Friday at the Holiday Inn Parsippany located conveniently on Route 46.

I stayed overnight at the Holiday Inn this year, considering I was coming from PA.  The hotel was, as expected, clean and comfortable, with an excellent complimentary breakfast buffet.  The “spread” in the conference room, however, for those who did not stay at the hotel, was truly pitifully “skimpy” – and certainly not “diabetes-friendly”, a common complaint of all CPE workshops and not limited to NATP offerings.

As for lunch – thankfully there was a WENDY’s across the highway as an alternative to the only “in-house” option – a Cuban restaurant.  The hotel should have offered to sell box lunches to participants, as I have seen done at other locations.

The workshop leader for the two days was Helen O’Planick, an EA and a CSA (Certified Senior Advisor) from Manchester PA.  I do believe this is the first time I have “had” Helen.  While obviously some NATP workshop and seminar leaders are better than others, all are good and I have never been disappointed with any.  Helen was a good leader with some good anecdotes from her life and practice.

As is the case with this workshop each and every year since the Enron scandal, I paid for a full 8 50-minute hours of tax education, but got only 6 – thanks to the annual redundant ethics preaching, which I neither want nor need.  As I have said time and again, if I’m not “ethical” by now after preparing tax returns for 45 years, being forced to sit through 2 hours ain’t going to perform a miracle!  Of course, I did not sit through it – thankfully it was the last topic of the day, so I just walked out.

If the workshop is to be truly an “update”, any discussion of “ethics” should be limited to true “new developments” – new legislatively-required due diligence, new IRS rules and regulations, and related recent Tax Court decisions.

To be fair to NATP, I do understand its reasons for including ethics redundancy in this workshop each year.  The fault for this nonsense lies not with NATP or other CPE providers, but with the idiots in government and regulatory agencies who create these requirements and regulations.

The true value to this workshop, at least to me, lies in the level of “new developments” in tax law and regulation.  This offering does include a detailed review of the new COLA and inflation adjusted numbers that will affect tax returns prepared during the upcoming filing season, and this is important for many tax preparers – but I literally “write the book” on these changes each year in the form of my annual “What’s New For” compilation, and am made well aware of them when they are first released in October of the previous year.  There was really not much new of any consequence that will affect 2017 returns, and most were covered in the NATP National Conference and NATP Tax Forums I attended earlier in the year. 

So, this was not an especially informative workshop for me, although I do always learn one or two new things and am reminded of or review other things at every session.  NATP, as usual, did a good job of what there was, and certainly continue to deserve kudos.

Do any fellow participants have anything to add?


Wednesday, November 15, 2017


New Jersey Chapter of NATP

The New Jersey chapter of NATP’s “Famous NJ State Tax Seminar” – and it is truly famous – is scheduled for Saturday, January 13, 2018 from 8:00 AM - 4:50 PM at the APA Hotel Woodbridge in Iselin.  Registration begins at 7:15 AM.  

As I say each year, this is a “must attend” for all tax professionals who prepare NJ state income, payroll and sales tax returns and reports.  I have attended almost every one since the first, missing only one or two because of excessive snowfall, and have never been disappointed.

The cost $225 for an NATP member and $275 for a non-member if your registration is received by January 6, 2018, and $245 or $300 thereafter.  A breakfast buffet (beginning at 7:15 AM), buffet luncheon, and coffee break is included in the price.

The day’s itinerary includes -

Overview of NJ Taxation – John Ficara, NJ Acting Director

NJ Tax Current Updates – Jacob Foy, NJ Division of Taxation
NJ Resident Credit – Robert Skala, NJ Division of Taxation
NJ Property Tax Relief - Alexis Reid, NJ Division of Taxation
NJ Inheritance Tax - Michael Rosen, Chief of Audit Activity
NJ Sales and Use Tax – Alexis Reid, NJ Division of Taxation
NY Taxation and Federal Updates – Kathryn Keane, EA

No time wasted on redundant ethics preaching!

Click here to print a registration form. 

FYI - click here to read my "review" of the January 2017 seminar.


Tuesday, November 14, 2017


In light of the revelation of the dueling GOP tax Acts I have created my own Flach Tax Plan and a new, much simpler Form 1040.

My new simpler Form 1040 that follows was not created from an economic point of view – how much tax is collected – but from the point of view of simplicity and fairness.

I have actually incorporated some of the GOP proposals in my plan.  But it also contains some unique concepts –

* There is only one tax rate schedule for all taxpayers, regardless of filing status.  The Head of Household filing status is gone.  Married taxpayers can elect to file separately on one return or to file separately on separate returns – and a married person filing separately is treated exactly the same as a Single filer.  The method for calculating the tax liability of married couples filing a joint return does away with the marriage penalty.

* No deduction would be allowed for any business activity on any tax return for the depreciation of real estate or capital improvements thereto.

* The delivery of government social welfare and other program benefits are totally removed from the Tax Code.  There is no Earned Income Credit, refundable Child Tax Credit, deductions or credits for qualified post-secondary education expenses, or Premium Tax Credit on my new Form 1040.  I have not done away with these benefits; they are distributed via more “normal” methods.

* I replace IRA, HSA, MSA, ESA, and Section 529 accounts with an all-inclusive USA (Universal Savings Account).  All taxpayers, without exception, can contribute up to $10,000 per year. 

Distributions made before age 62 for education and medical expenses or to purchase a first home (only one first home per lifetime) would be considered to be qualified withdrawals.  There would be no penalty on non-qualified withdrawals after age 59½, but earnings would be taxed.  All withdrawals after age 62 would be considered to be qualified.  
I also replace all employer and self-employed retirement plans with a RSA (Retirement Savings Account).  Employers can elect to contribute up to 25% of wages annually, all employees can elect contribute up to $20,000 of wages annually.  There would be no requirements for either to contribute.  Self-employed taxpayers can contribute, and deduct, up to 20% of adjusted net self-employment income.

There would be “traditional” (for the USA fully deductible and no tax on earnings for qualitied withdrawals and for the RSA employee contributions would be “pre-tax” on the W-2) and ROTH (contributions non-deductible – qualified withdrawals totally tax free) options for both accounts.

* Contributions to an RSA by a self-employed taxpayer and the deduction for the health insurance premiums paid by a self-employed taxpayer would reduce the net earnings from self-employment that is subject to the self-employment tax.

* Social Security and equivalent Railroad Retirement benefits would be taxed the same as regular employer pensions.  Employee contributions would be recovered by amortizing them over the taxpayer’s life using the, what else, “Simplified Method” to determine the taxable amount of the benefits received.  

* And perhaps most controversial - no charitable deduction would be allowed for contributions to a church or religious organization for religious activity.  Non-religious social and community action programs (soup kitchens, homeless and domestic violence victim shelters, youth centers, day care centers, etc) run by individual churches and religious groups would need to separately organize and request non-profit status to allow contributions to be deductible.  Permitting a deduction for contributions to churches and religious organizations for religious activity results in the government in effect subsidizing religious activity, which, in my opinion, is a violation of the separation of Church and State.


As always, your thoughts and comments on my new Form 1040 are welcomed.  And you are welcome to share the link with, or download and copy the report to distribute to, friends, family, co-workers, and colleagues.


Monday, November 13, 2017


It is widely thought, within and without the industry, that continued and constantly added complexity in the US Tax Code is good for our business.  I remember that the Tax Reform Act of 1986 was referred to by many as “The Accountant’s Full Employment Act”.

I strongly disagree.  Complexity is bad for business.  While it may drive clients to use tax professionals, and certainly generates more billable hours, the real result is additional aggravation, agita and anxiety for tax professionals as well as the increased potential for error and preparer penalties.  It creates more work – but more unnecessary and wasteful work. 

There are only so many hours in the tax season.  I would much rather prepare more returns that are simple for lower fees, with less agita and error potential, than less returns that are complicated but generate higher fees.

I have said for years that I would make more money, experience less agita, make less errors, and substantially reduce the number of GD extensions needed each year if I did nothing but 1040As all day during the tax filing season.

I firmly believe my clients would not decide to do their own returns if the tax system was simplified; they would continue to come to me.  Most taxpayers who use a tax professional simply don’t want to be bothered with the task of preparing their tax return, and want to make sure they do not miss anything.  And even with a more simplified tax system there would still be a need to complete Schedules C, D, E, F, SE and related forms.

Less complication also reduces my cost – for paper and ink and for CPE.  The less complicated the tax return the less additional forms, schedules and worksheets it generates and the less continuing education I need to keep up-to-date and educated on the complexities. 

The current proposed tax law changes resulting from the belief by the Republicans in both houses of Congress that “pass-through” business income should be taxed at a lower rate on the 1040, a truly stupid idea to begin with, is a good example of unnecessary complexity. 

Much of the complexity forced upon tax professionals comes from the continued erroneous and inappropriate practice by the idiots of both parties in Congress of distributing government social welfare and other benefit programs via the Tax Code, and in the process making the IRS and tax preparers become social workers.  Not only the complexity of the tax law, but the added excessive due diligence requirements, wastes our time and resources. 

And another bad result – the additional work that should generate additional fees, especially when it comes to the Earned Income Credit, the refundable Child Tax Credit, and the Premium Tax Credit and penalties of the Obamacare individual mandate, applies to low income clients who can least afford the additional fees – and are more often than not charged less than appropriate additional fees, or no additional fees, by tax preparers,

Tax professionals should champion the cause of tax reform that produces true tax simplification. 


Your thoughts?


Monday, November 6, 2017


Many years ago, before I was “gifted” my mentor’s tax practice at the end of the last millennium, I had only about 100 of my own 1040 clients.  In December I would send each client on my list a tax-themed Christmas card, usually purchased from an accountant supply house, and, as I did with all my Christmas cards, included an annual “year-in-travel” newsletter.

Many families include in their Christmas card a newsletter talking about what the family has been up to during the year, often with emphasis on their kids’ achievements.  My uncle, a confirmed bachelor, was a world traveler and would each year compose a Christmas newsletter that outlined his many travels that year.  We occasionally travelled together.  I followed in his footsteps, both in travelling (I am, after all, known as the “wandering” tax pro) and in writing an annual Christmas letter highlighting my travels for the year.

As my travels used to include attending both the NATP Annual Conference and the NSTP National Convention each year at various cities throughout the US, many of which I would not have visited were it not for the tax CPE, these trips were reported in my letter, as were trips to Atlantic City and other locations for year-end tax update classes.  I found this a subtle but effective way of reminding my clients of my extensive continuing professional education throughout the year to keep up with the ever-changing 1040.

When I took over my mentor’s practice my client list expanded from 100 to well over 300.  It became too expensive to send each client a Christmas card.  But I continued to send out the Christmas travel letter as part of my annual January informational mailing to clients.

Over the years I have had more favorable comments on this annual Christmas travel letter than any other mailing sent to clients.  Many clients, to this day, tell me they look forward to reading it each year.

Do you have a unique idea that has worked in your tax practice?  Email me at with TAX PRACTICE TIP in the “subject line”.


I have been preparing 1040s since 1972. Over the years I have developed a collection of forms, schedules and worksheets that have proven very helpful in my practice. 

Some of my forms are given to clients to help them provide me with the information I need to properly prepare their returns. Some are used as “memos” to the client’s copy and my office file copy to back-up items reported on the returns. Others are used as attachments to the returns.

I offer this compilation to you for only $7.95!

Click below for more information-

Wednesday, November 1, 2017


Still waiting for responses to my Meet and Greet interview form – so here is a special Wednesday post.

Back when the Northeast presentation of the IRS Nationwide Tax Forums was held in New York City (and before that Atlantic City) I would attend each year.  I stopped when the location was moved to the National Harbor in Maryland.

The IRS Forums were, at least initially, very reasonably priced.  Perhaps more important to me, you learned the IRS perspective on many relevant tax topics and issues.  The “keynote” presentation was usually by a top-ranking IRS official.  And you got to hear from instructors who were not only IRS employees, including usually Nina Olsen, but also actual tax professionals from NATP, NSTP, and other tax preparer membership organizations.

While the NATP “replacement” of the Forum in more conveniently located Atlantic City provides good education, it lacks the IRS perspective.

My major complaints with the IRS Forums were (1) the sessions were limited to 50 minutes, clearly not long enough to properly cover some topics, and (2) there were no tables in the rooms, so it was difficult to take notes.  The same criticisms apply to the NATP Forum, although the individual sessions were this year 1 hour 40 minutes – 2 50-minute CPE hours each. 
If you, like me, did not attend any of the 2017 IRS Nationwide Tax Forums you may “audit” some of the individual sessions online - watch a video of the session with of the presentation and the power point slides without receiving CPE credit - for free. 

If you want CPE credit you must pay $49.00 per session.

I was interested in these sessions -  

This seminar will focus on issues surrounding rental real estate, including conversion to and from personal use, tax deferred exchanges (IRC 1031), involuntary conversions (IRC 1033), and interest tracing requirement (IRC 163). In addition, this presentation discusses the IRC 280A tax considerations for property that is rented and used personally, including the use of a principal residence in the shared economy.

By the end of this presentation, you will be able to:

Determine the meaning of "Interest Tracing"
Identify when deferred deductions are applicable
Differentiate between personal and business property
Identify deferred gains opportunities
List and Identify foreign real estate property expenses that are deductible

This seminar will focus on numerous tax implications of renting a personal residence from vacation property to rooms with AirBNB. The presentation will also discuss related issues such as disposition, passive loss and personal residence exclusion along with a review of relevant court cases.

By the end of this presentation, you will be able to:

List examples of personal use
Determine allocation of deductible vs. non-deductible expenses
Identify deduction limitations
Determine the tax impact of disposed property
List aspects that determine the definition of dwelling

This seminar will discuss the major tax law changes for 2017, including how they affect tax forms and publications.

By the end of this presentation, you will be able to:

Identify expired tax provisions
Determine changes to qualifying widow(er) status
Identify new forms for oil and gas credits
List changes to forms for education credits
Identify new partnership audit rules

There were also sessions on IRS Notices, Dealing with IRS Appeals, and due-diligence topics.
In addition to watching the seminar recordings you can print out the transcript and Power Point slides for each presentation.