Spouse In Jail, Wants tax filed

[anu31402]

I have a client who was arrested in December and now in jail. He called and wanted me to file his tax. The wife brought the w-2 yesterday. They always file MFJ.

From what I saw, they will be getting Fed & State refunds. Please, do I need him to get the POA for his signature? How do I go about this as this is my first.

Kay, NY

[BOB W]

Treat it just like only one spouse showed up for the appointment and she later returns after the spouse has signed the elf form. Jail is a non issue. She will go to the jail and have him sign it.

[Uncle Sam]

Spouse in Jail

Agree with BobW.
Two years ago - I had a situation where during the tax year, husband and wife split up - but were STILL married as of 12/31. Wife took son and moved out of the area.
At end of year husband went to jail, but when tax appointment came, I got a court approved rep to be the go-between to send me the tax information, send the completed tax papers to, and get the e-file authorization signatures sent back to me. I also had no hassle with getting paid.

[Nashville]

Form 8879

Guy walks in and I prepare his return. He says he is married, and I see a W-2 with his wife's name and matching address. They have a refund, and he wants the money back in 10 days via e-file. Guy's wife is at work, 35 miles away.

How would you handle the signature on the 8879?

a. Cannot e-file before his wife shows up to countersign the 8879.
b. Have guy sign both names, and initial her signature with his initials.
c. Let guy sign for himself, take the form to her, and get her signature before e-filing.

[Koss]

Signature

I'm responding to Nashville's post. As to the original post from anu31402, I agree with Bob W's response.

Can't let one spouse sign for the other in the situation you describe. I think that's a significant violation of the IRS e-file rules.

Even with a POA, there are only certain circumstances under which one spouse can sign for the other. Examples include serious illness and deployment in the military.

With that being said, my understanding is that the tax pro is not required to witness the signing of Form 8879. The tax pro is also not required to see identification for either spouse. I know many tax pros that do the entire return through password protected e-mail, or by fax. The tax pro sends the client the Form 8879 by fax or by e-mail, and the client sends the signed form back to the tax pro by regular US mail. Yes, these are usually returning clients, and the tax pro probably met the client in person a few years back, when he did the return for the first time.

But the fact is the IRS does not require us to view identification or to witness the signatures. Taxpayers who file online on their own are expected to send Form 8453-OL to the IRS, and the IRS does not require any type of authentication for this process, either.

So to answer your original question, I would allow the client to take the form to his wife for her signature, and bring it back.

At some point, common sense has to take over. If you have reasonable grounds to believe that the guy is signing his wife's name without her knowledge, then you are facilitating a fraud. You should either insist on meeting the spouse in person in your office, or at least call her and talk to her about the tax return. And that means calling her by looking up her employer's phone number in the phone book--not using a cell phone number provided by the husband who might be lying to you.

One final observation:

Bank products require identification from the client. Anyone who offers bank products probably knows this. When you deduct the tax pro's fee from the refund, you are actually opening a bank account for the client, to collect the refund by direct deposit. This brings with it all the baggage of the Patriot Act. Each bank has its own compliance program, but I think you pretty much have to see ID from each spouse, and you may be required to witness the signatures on the bank's documents.

BMK

[Nashville]

Patriot Act

Thanks for your reply, Burton.

Yes, what a wonderful thing that was -- the Patriot Act. Boy that really stopped illegals from getting into our banking system, didn't it...

Obviously the Patriot Act was not about protecting our banking system, our borders, our commerce or anything else Patriotic. You've got to wonder whether it was a way to track down law-abiding citizens for future abuses by the state...

[Bees Knees]

Form 8879

I don't want to witness them sign the Form 8879. I always send the client away and tell them to review their return, then sign Form 8879, then bring it back or mail it to me before I efile their return.

The reason is this:

My information letter telling them to sign Form 8879 says to review the return first, then sign and return Form 8879 to me before I efile it.

That places the burden of responsibility on them to check the return for accuracy. They can't later say I missed something obvious, because if it was so obvious, they should have caught the error before signing the 8879.