unauthorized efilers?

[Roberts]

Honestly

Other than their own personal tax avoidance, what is the purpose for doing this? It's easy as pie to get the EFIN, is free and doesn't require any special training. If you are doing 25-50 returns, it isn't all that difficult for a tax preparer to come up with expenses to offset all or almost all of that limited income. Just a hunch but I'm guessing he/she was legally barred from the industry for some reason. Otherwise it seems like more work than benefit on their behalf.

[kaimana]

So, are you going to turn him in? If not, send me a private email with all his information and I will...anuenue@hawaii.rr.com

[FEDUKE404]

Does give pros a bad name

Other than their own personal tax avoidance, what is the purpose for doing this? It's easy as pie to get the EFIN, is free and doesn't require any special training. If you are doing 25-50 returns, it isn't all that difficult for a tax preparer to come up with expenses to offset all or almost all of that limited income. Just a hunch but I'm guessing he/she was legally barred from the industry for some reason. Otherwise it seems like more work than benefit on their behalf.

"Why" is probably not a good question here.

My guesses:

1) Preparer does not wish an income trail
2) Preparer assumes little, if any, responsibility for errors made
3) Accuracy of the returns may be shaky - a little tweaking here/there to raise your refund!
4) Many/most "clients" have no idea where to find this person after tax season
5) Preparer is trashing TOS issues with whatever software is being used
6) Preparer might not have an easy time getting an EFIN!

FE

[tacks]

So, are you going to turn him in? If not, send me a private email with all his information and I will...anuenue@hawaii.rr.com

Kaimana, I fully appreciate and respect your feelings towards this. But no. I will not turn this guy in nor will i forward his info to you. And there are several different reasons why.

I'll send you a PM.

[tacks]

My question was why the IRS does not catch these guys as doing so would be a peice of cake. Multiple returns coming from one IP address not associated with an EFIN -- very easy to detect!

But as this story is arousing curiosity I will elaborate. I've known this guy off and on for some years.

Other than their own personal tax avoidance, what is the purpose for doing this? ... it seems like more work than benefit on their behalf.

He's merely doing this as a side job. He's very small time doing only simple returns in a low income area. He's living check to check. He's probably too small for the IRS to bother with. As i'm writing this i'm remembering him once having significant problems with local police (maybe in his teenage years).

He simply has not considered going to the trouble of doing this legitimately.

Just a hunch but I'm guessing he/she was legally barred from the industry for some reason.

Based on what i posted that would be as good a hunch as any. But based on what this guy has revealed to me in our conversations i'll say that I highly doubt that he was legally barred.

My guesses:

1) Preparer does not wish an income trail
2) Preparer assumes little, if any, responsibility for errors made
3) Accuracy of the returns may be shaky - a little tweaking here/there to raise your refund!

correct

4) Many/most "clients" have no idea where to find this person after tax season

Not so much an issue. This is/was a neighborhood guy -- a young parent.

5) Preparer is trashing TOS issues with whatever software is being used

I'm not sure what you mean. But certainly he would be violating a software agreement.

6) Preparer might not have an easy time getting an EFIN!

I think it's more that he's been able to get on fine without an EFIN (or so he thinks). And therefore does not see a reason for it.

[FEDUKE404]

Side tax job underneath radar

Interesting scenario, tacks.

This guy will probably fly under the radar screen unless/until one of "his" returns hits a major roadblock and the client spills the beans, especially if the client's return ends up with a large balance due.

The IP address is most likely not an issue, as most folks have dynamic IP addresses these days. If this guy is buying/using multiple copes of something like TurboTax and then "maxing out" the freebies for each one for personal e-filing, I doubt if that will arouse any concern with the software folks. OTOH, if pseudo-client is not filing online in any way (the old trick of whiting out the "Self' Prepared" areas of the tax return, and then paper filing), this could go on forever.

One thing does intrigue me: You mentioned work is in "a low income area." It has been my experience that an extremely large amount of taxpayers in such an environment demand/expect "instant money" via RALs and similar, namely the EITC crowd. To actually have to "pay" for preparation of a tax return is unheard of - they want to get the doggone thing filed AND walk out the door very soon with their money. If your acqaintance is "loaning" funds and/or taking (in some way) part of the refunds, his troubles could just be starting.

BUT, as you stated, that is his problem. If the guy is indeed a friend, you might wish to have an informal discussion and offer some alternatives. Otherwise, life goes on.....

FE

[David1980]

My question was why the IRS does not catch these guys as doing so would be a peice of cake. Multiple returns coming from one IP address not associated with an EFIN -- very easy to detect!

If they are bypassing the EFIN requirement by filing through a DIY software or website, they are not transmitting directly to the IRS. They transmit through the filing center of the DIY software/website. So while the IRS would see multiple transmissions from the same IP address, they would expect to. That's normal when everything comes through someone else's filing center.

They could potentially work with the DIY software companies to find that information, but then it's not as simple. With the anti-government security concerns, they would probably need to pass legislation requiring the DIY software companies take it upon themself to watch for multiple transmissions from the same computer.

And then even if you got that, you would have to hope the person didn't just go to starbucks to transmit or use an open WAP. And also hope that the ISP is willing to connect that IP address to a name. It would require several companies to be willing to give over customer data.

[PIGLEE]

I think the "Box" companies share some responsibility. Maybe they could limit the number of uses per box, down to 1 or 2. Also they should share some responsibility, somehow if a person prepares multiple returns. But that will never happen, I think IRS is happy because more and more returns are being filed on line. Then there is the FREE way to do it online without the box. I think, IRS thinks they need to clamp down on someone somewhere. Can they get the box people, NO, they are helping the efile process. Can they clamp down on the DIY's , NO, who are they? Who is left ?????? The E.A's, the unlicensed that comply with the IRS, get EFIN's, sign the returns, and all the ones that try to do everything right. They know who we are, they can take away our privilege to e-file, yes we are the target. And, who are they trying to please? Congress, that is full of DIY's that are tax cheats. My suggestion (and it is not that good) License ALL, and I mean all, tax return preparers, and your return can ONLY be filed by using a licensed preparer. That way all returns have A TAX PREPARER that is RESPONSIBLE for a properly prepared return. Would that solve everything, No, but at least the playing field would be equal. That is my soap box for the day.

[tacks]

If they are bypassing the EFIN requirement by filing through a DIY software or website, they are not transmitting directly to the IRS. They transmit through the filing center of the DIY software/website. So while the IRS would see multiple transmissions from the same IP address, they would expect to. That's normal when everything comes through someone else's filing center.

They could potentially work with the DIY software companies to find that information, but then it's not as simple. With the anti-government security concerns, they would probably need to pass legislation requiring the DIY software companies take it upon themself to watch for multiple transmissions from the same computer.

And then even if you got that, you would have to hope the person didn't just go to starbucks to transmit or use an open WAP. And also hope that the ISP is willing to connect that IP address to a name. It would require several companies to be willing to give over customer data.

Thanks for posting, David. I hadn't considered all that. I still suspect that the companies would want to comply with IRS in searching for bad preparers. But clearly it's really not as easy as I originally thought.