Make sure ur valuation of the client list is reasonable. I had a client get flagged for audit because they tried to assign too much value to assets with shorter amortization periods and minimize the goodwill portion. IRS saw right thru it.

Great discussion here! I went through a similar S-Corp acquisition last year and wanted to add a few practical points from my experience. First, document everything about your valuation process. The IRS loves to see that you made a good faith effort to properly allocate the purchase price. We hired an independent appraiser to value the client relationships separately from goodwill, which gave us solid backup documentation. Second, don't forget about the monthly amortization entries on your books. With a substantial purchase, you'll want to set up automatic journal entries so you don't miss recording the amortization each month. The annual amount divided by 12 should hit your amortization expense account consistently. Also, keep in mind that if you ever sell the business, any remaining unamortized goodwill will be treated as a capital asset, so there are long-term planning considerations beyond just the current tax deduction. One last tip - make sure your purchase agreement specifically identifies what intangible assets you're acquiring. The clearer the language, the easier it will be to defend your allocation if questioned later.

I want to echo what others have said about avoiding the rental route - it's absolutely not worth the risk. As someone who works in tax compliance, I've seen the IRS come down hard on these arrangements, and the penalties can be career-ending. However, I do want to offer some hope for your timeline. The IRS has actually streamlined their EFIN processing significantly for the 2025 season. If you submit a complete, error-free application now, you're looking at closer to 4-5 weeks rather than the traditional 6-8 weeks. The key is making sure everything is perfect the first time - any errors or missing documents will reset your timeline. For the PTIN, definitely apply today. It's straightforward and you'll have it immediately. In the meantime, consider reaching out to local tax preparation offices, enrolled agents, or CPAs who might need seasonal help. Many are actually looking for qualified preparers right now and would be open to a legitimate subcontractor arrangement. This gives you income, experience, and a legal way to prepare returns while your own credentials process. The temporary partnership route that others mentioned is really your best bet. It's completely legal, gives you practical experience, and positions you well for when your own EFIN comes through. Don't let impatience derail what could be a successful long-term career!

As someone who just went through the EFIN application process myself, I want to add that the IRS has also improved their communication this year. You'll actually get email updates at key stages of your application review, which helps eliminate the guesswork about timing. One thing I learned the hard way - when gathering your business documentation, make sure your business address on your state registration exactly matches what you put on the EFIN application. I had to resubmit because my state filing used "Street" while my EFIN application used "St" and that small difference caused a delay. Also, if you're planning to work from home initially, the IRS now accepts a simple business use statement for your home office rather than requiring complex documentation. This has streamlined things significantly for solo practitioners. The partnership route everyone's suggesting really is the way to go. I reached out to about 6 local preparers and 4 were interested in some kind of arrangement. Most were looking for 70/30 or 60/40 splits depending on who provides the software and handles the administrative work. It's actually a win-win since many established preparers want help during busy season but don't want permanent employees. Don't give up on starting this season - there's definitely still time to do this properly!

You're absolutely right to be thinking about the installment method for your S Corp stock sale - it can be a great tax planning strategy. Since your S Corporation is privately held and not traded on any established market, you should indeed be eligible to use the installment method under Section 453. One thing I'd recommend is getting a professional valuation of your business before structuring the sale, especially since you mentioned the buyer is interested in eventually taking over completely. This will help establish a defensible sales price and ensure you're maximizing the benefit of spreading the gain over multiple years. Also, make sure your installment agreement includes appropriate interest provisions - the IRS requires imputed interest on deferred payments, so you'll want to use at least the applicable federal rate to avoid any complications. Since this is a significant transaction representing 30% of your business, I'd strongly suggest consulting with a tax professional who has experience with installment sales of closely-held business interests. They can help you navigate any potential complications and ensure all the documentation is properly structured.

Val, you're correct that private S Corporation stock should qualify for installment sale treatment since it's not traded on an established market. However, I'd recommend getting clarification on a few key points before proceeding: 1. **Basis calculation** - Make sure you have clear documentation of your adjusted basis in the S Corp stock, including any loans you've made to the company that might affect your basis. 2. **Payment structure** - The installment agreement needs to specify the total sales price, payment schedule, and interest rate (at least the applicable federal rate). Even though payments are deferred, the total consideration must be determinable. 3. **S Corp elections** - Verify that selling 30% won't inadvertently terminate your S election due to ownership restrictions, especially if the buyer isn't eligible to be an S Corp shareholder. 4. **State tax implications** - Some states don't conform to federal installment sale treatment, so you might face different timing for state taxes. Given the complexity and significant tax implications you mentioned, I'd strongly suggest consulting with a tax professional experienced in S Corp transactions before finalizing the structure. The potential tax savings from proper planning could far exceed the cost of professional guidance.

As a small business owner who just went through this exact situation, I can definitely confirm what everyone is saying - this is actually PROTECTIVE, not punitive! I saw this same message about 8 months ago and immediately thought I was in serious trouble. In my case, it appeared after I had called the IRS to report a change in my business address. What I didn't realize is that any time you make changes to your account information, they often place this block while they verify and update their systems. The whole process took about 6 weeks, and during that time I was completely protected from any automated collection actions. The most frustrating part is that nowhere in their system do they explain that this is actually a GOOD thing. It's like getting a notification that says "Your account is temporarily shielded from automated enforcement" but instead they use language that makes it sound like you're about to be audited by a SWAT team! What I learned is that this block is essentially the IRS saying "a human is handling your case right now, so we've turned off all the scary robot collection systems." Once everything was processed and updated, the message just disappeared on its own. This thread should honestly be required reading for anyone dealing with IRS account messages. The community knowledge here is so much more helpful than their official documentation!

This thread has been incredibly reassuring to read! I just noticed this exact same message on my account this afternoon and immediately went into panic mode thinking I'd somehow triggered aggressive collection actions. Reading through everyone's experiences has completely changed my perspective - it's amazing how consistently we all have the same fear response to what is actually protective language. What really strikes me is how the IRS has managed to turn what should be reassuring news into something that sounds absolutely terrifying. "Blocked from automated levy program" immediately makes you think of asset seizures and bank freezes, when it actually means they've PREVENTED those very things while working on your case. In my situation, I had submitted a request to adjust my quarterly payment schedule about 10 weeks ago after some unexpected business expenses, and I've been wondering why I hadn't heard back. Seeing this message made me think they had rejected my request and were preparing enforcement actions, but now I understand it's actually confirmation that they're actively reviewing my case while protecting me from automated collections. This community wisdom is genuinely more valuable than anything I could find on the official IRS website. Everyone's real-world experiences provide the clarity that government publications completely fail to deliver. Thank you to everyone who shared their stories - you've saved me from what would have been a very stressful evening trying to figure out what went wrong!

Great question! As others have mentioned, yes - lottery tickets absolutely qualify as gambling losses under IRS rules. But here's a critical detail that hasn't been fully addressed: you need to be extremely careful about HOW you calculate your losses. Many people make the mistake of just adding up all their losing tickets, but the IRS wants you to calculate losses on a "session" basis. For lottery tickets, each drawing is typically considered a separate session. So if you bought 10 tickets for the same Powerball drawing, that's one session where you either won something or lost the total amount spent on all 10 tickets. Also, don't forget that even small winnings count! If you won $5 on a scratch-off but spent $20 on tickets that day, your net loss for that session is $15, not $20. A lot of people overlook small wins and end up over-reporting their losses. Keep those tickets organized by drawing date and type of game - it'll make your life much easier come tax time. And remember, you'll report gambling losses on Schedule A, line 16 under "Other Itemized Deductions.

One thing I haven't seen mentioned yet is the importance of understanding what happens if you have gambling winnings from multiple sources. For example, if you won $300 from lottery tickets but also lost $500 at a casino, you can deduct up to $300 total in gambling losses - not $300 in lottery losses AND $300 in casino losses. The IRS looks at ALL your gambling activities combined for the year. So your total gambling losses deduction is limited to your total gambling winnings across all types of gambling, not per category. Also, make sure you're reporting any winnings correctly first! If you had any winning tickets over $600, you should have received tax forms (like W-2G) that you need to report as income. Only after you've properly reported all gambling income can you then deduct losses up to that amount. I'd strongly recommend creating a simple spreadsheet tracking all gambling activities - wins AND losses - throughout the year. It makes tax preparation so much easier and gives you a clear picture of whether itemizing for gambling losses even makes sense compared to taking the standard deduction.