Last Minute Whining

[Golden Rocket]

Just getting too old and ornery to put up with it anymore.

C corp made tons of $$. Shareholders advanced themselves big bucks.

Since close of year C corp has fallen on hard times because of a sensational lawsuit.

Now the C corp can't pay its taxes. Shareholders don't have the money either, although
they lavishly enjoyed big advances.

After ignoring requests that we sit down and review, I finally prepared the 1120 and
sent to them. Return is due October 15th, and now guess who's ringing the phone off
the hook?

Grrrrrrrrrrr.

[ChEAr$]

Just getting too old and ornery to put up with it anymore.

C corp made tons of $$. Shareholders advanced themselves big bucks.

Since close of year C corp has fallen on hard times because of a sensational lawsuit.

Now the C corp can't pay its taxes. Shareholders don't have the money either, although
they lavishly enjoyed big advances.

After ignoring requests that we sit down and review, I finally prepared the 1120 and
sent to them. Return is due October 15th, and now guess who's ringing the phone off
the hook?

Grrrrrrrrrrr.

Just wondering why the corporate bookkeeper didn't keep management informed during the year with monthly P & L's.

[Lion]

Weren't corporations on extension due 15 September?

[spanel]

Weren't corporations on extension due 15 September?

Thats what I was thinking.

Chris

[ChEAr$]

Weren't corporations on extension due 15 September?

Maybe, maybe not. Is there still provision for an additional extension? I'm kinda thinking there isnt'.

[Jiggers]

You are saying that in 2011 the C-Corp made a good profit. Estimates were due in 2011 for the 2011 income, correct? They weren't made?

Nothing was sent in with the extension? What did the extension show, a tax due or zero tax due? If zero tax due, that extension may be voided by the IRS.

Is this a calendar year C-Corp? If so, due date was 9/17/2012.

Shareholders took advances instead of salary? There might be a problem with that, and that is probably why there is a profit.

Hope you got your fee.

[Golden Rocket]

No Extension

Thanks to all who responded, but the last four threads seem to believe this is an extension.

It is actually a C Corp with a fiscal year end of July 31.

[Jiggers]

Thanks to all who responded, but the last four threads seem to believe this is an extension.

It is actually a C Corp with a fiscal year end of July 31.

OK, so, during the year no estimates were sent in as required. Correct?

Were salaries paid to the shareholders? If not, why not?

[taxxcpa]

Salaries?

OK, so, during the year no estimates were sent in as required. Correct?

Were salaries paid to the shareholders? If not, why not?

They probably took "loans" instead of salaries.

[ChEAr$]

With a fiscal year of July 31st, it's proably not too late to accrue reasonable salary with payroll taxes on the books as of 7/31 since payment of such can be now and within the 3rd quarter. Only "penalty" will be if total taxes are over 2500 for the quarter, right?
And those salaries will go on employee officers' w2 for this year, so they won't have to deal with income tax till next april 15th.

[Golden Rocket]

Good Ideas All

Great response, but converting advances to bonus/compensation means payroll taxes.

They don't have the money to pay 15% tax on their income, so neither do they have money to pay 14+% payroll taxes on the same amount.

I think they're just going to have to whine...

[Jiggers]

In just less than 2 months the corporation has gone from prosperity to doom?

I would go with revising the advances as payroll. Taxes are going to be owed in either case. But wouldn't that be better. If you book the payroll as of July 31, 2012, the quarterly payroll reports are not due until October 31, 2012. Of course the taxes should have been paid, but this will buy time for the shareholders to come up with some funds.

And they are the ones that will have to come up with the funds.

By the way, that reminds me, you need the following sign in your office: "Bad planning on your part does not create an emergency on my part!" I read this on another board and printed my own sign and have it in my office.

Your client has made their problem your problem.

Just curious, how much in taxes are you talking about? How much in advances were taken?

[Golden Rocket]

Details not Provided

Intentionally did not provide details to the fate of this corp, thus have left many of your questions unanswered. In short, a sensational lawsuit in their business area has rendered the corp unable to sell any of their products.

Jiggers, appreciate your observations as I believe they are made with the intention of helping their situation.

None of these details detract from the message at hand in the OP.

[erchess]

Corporate Tax Debt

Maybe they should liquidate the corp and walk away from its debts. Is that not a legal option?

GR I feel for you but remember their problems are not your problems.