Cp2000

[BHoffman]

Sigh....Client received a CP2000 listing a lot of transactions the he forgot or didn't know about on his 2007 return. Self prepared. Lotsa stock transactions, dividends, a 1099R.

I helped him respond. He owed around $600.

Now, he has another CP2000 for the same year and it sure looks like the IRS goofed up.

Student loan interest miscalculated. Child tax credit miscalculated. Claimed taxpayer only reported basis as proceeds. They want another $600.

I checked my records. That first response was so a child could match it up. I always really try to make sure whoever is processing will clearly see that the errors have been corrected, and the recomputed tax is correct. I think it is correct.

But, now I have to send in a second response that will take time to prepare. I'd like to charge for this and have already been paid for the first response. Feel weirdly conflicted. PO'd big time at the feds for making me do this over again in big block letters or perhaps pictures and a cartoon video. And I want to charge the client but feel like it might be picking nits to do that. Going to take me about 2 hours to prepare the response. In the real world, that's $200.

Grrrrr

[Snaggletoof]

Free Advertising

If you could circulate a picture of the original 2-page 1040 (with your clients' names removed), with red circles around all the line items that were screwed up, plus a blurb that you had to respond to the IRS in two separate audit letters....

...the advertising would be well worth the $200 you are foregoing. Would tell the story of what happens to the do-it-yourself tax return.

A typical result of the DIY crowd. Fifty bucks for software that makes you as smart as a CPA.

I had a CP2000 assessment of $7000 earlier this week. Taxpayer used Turbotax and had failed to report three dividend transactions, a capital gain distribution, and six 1099-B capital gain transactions. Still has to pay $1300 in taxes, but also had to pay me $150 to straighten out his mess. You should hear what he is telling his friends and neighbors about TurboTax. No way I could replace this with $150 in advertising. Fact of the matter, it wasn't the fault of TurboTax at all, but this idea that laymen can do-it-yourself without tax professionals.

[MLINDER42]

Cp2000

Always find it hard to decide what to charge for CP 2000 on DYI returns? How do you decide? Do you charge a minimum?

[Jiggers]

CP2000 for DIY returns

Full fee.

No discount.

[DaveO]

Diy Cp-2000

Is always full price maybe extra becasue I have to do the return correctly to figure what the tax should be. This entails me doing the return to match their version (wrong) and adding the missing information to make it right.

I answer a CP2000 with an item by item explanation and I attach a 1040X with schedules to illustrate the changes. These I mark "Do Not File". Usually I have to amend the state return as well so all this work is necessary for that process.

In the end I can say it's cheaper for me to just do the return.

[BHoffman]

I charged full price for the 1st response, and assembled it in much the same way as DaveO.

Sigh. Maybe I'll charge a token $50.

[AZ-Tax]

Be Happy Your Client Was Truthful...

I had a couple clients over the years forgot documents and blamed me for loosing them that is why next year I will be implementing an inventory of tax documents for which the client and myself will sign off. I created a form in which I will enter the number of W-2's, 1099-R's etc. from different issuer's. If a client brings in a tax document later on, that will be added to the inventory sheet and both of us will sign off and date it. I would eventually like to get to the Tech point where my clients can attach all their tax documents to an email then email to me. That email will serve as to what tax documents the TP gave me or didnt give me.

IRS mistakes, I did a couple of those too. Never charged yet but reserve the right to charge.

[Burke]

I photocopy ALL tax documents that show income, sometimes the 1098's, and other items if I feel I may need them later. I cannot tell you how often I go back and refer to them either for CP2000's or the taxpayer, banks, etc. I reduce all to 65% and can usually get 4 to a page.

[erchess]

IRS Mistakes

When the IRS has in my opinion made a mistake in responding to a return or to a response to a notice for which I was paid to prepare, I differentiate among my clients.

If the client is a good longstanding client then the idea of charging does not even cross my mind. The advertising is worth more than their money.

If this is the first year I have helped the client and especially if they came to me with a notice stemming from a self prepared return, then I may charge depending on my sense of how likely they are to stay with me for the long haul. I have even been known to make a handshake deal that they will come back to me for their next return if I do the erroneous notice for free. Again, the advertising is worth more than the money is.

I learned somewhere that the average person who thinks you are great tells two people and the average person who thinks you are a bum tells ten people.

[ChEAr$]

What to charge

Knowing what or when, or how to charge in extraordinary cases is an art, not a science.

For a CP2000 requiring time to document and answer and compute the new tax plus
interest with explanation why client is NOT paying any penalty (it always works),
it's standard hourly fee.

Today, however, client has sold half of her inherited stock, so with the figures I figured the
extra state tax due (no federal, since capital gain at zero rate) and when asked, said
"no charge". So she said she'll probably sell the rest of it later this year and she'll be in
and bring me one of her prize awarded moist lemon cakes. yumyum!

Sure is nice not to have ugly clients.

[BHoffman]

Let them eat cake.

This client brought his cranky 2 year old to my house for his appointment. "Oh, it's his nap time." Then the guy proceeds to try to talk the kid out of banging on my piano and yanking at my drapes. I'm no expert, but have found the direct hands-on approach works better for weary little folks.

So, I grab the kid and hold him close and pat his tired little back and bounce him on my knee and pretty soon he's fast asleep, drooling on my shoulder and leaking from his diaper. A happy camper.

Bringing a little child to a tax appointment and then spending a half hour yelling at him to stop that, sit down, come here, blah, blah, blah is dumb. I decided then and there to charge this guy without mercy. Well, the sleeping baby in my arms caused me to relent a little. It was, after all, his money too and none of his fault that his parents are idiots.

[AZ-Tax]

I believe we probably all make copies but what protects you...

I photocopy ALL tax documents that show income, sometimes the 1098's, and other items if I feel I may need them later. I cannot tell you how often I go back and refer to them either for CP2000's or the taxpayer, banks, etc. I reduce all to 65% and can usually get 4 to a page.

from the client saying "hey buddy, I just know I gave you that tax document" so I am NOT responsible for any interest and penalties. Its basically your word aganist your client's.

[ChEAr$]

Yep

This client brought his cranky 2 year old to my house for his appointment. "Oh, it's his nap time." Then the guy proceeds to try to talk the kid out of banging on my piano and yanking at my drapes. I'm no expert, but have found the direct hands-on approach works better for weary little folks.

So, I grab the kid and hold him close and pat his tired little back and bounce him on my knee and pretty soon he's fast asleep, drooling on my shoulder and leaking from his diaper. A happy camper.

Bringing a little child to a tax appointment and then spending a half hour yelling at him to stop that, sit down, come here, blah, blah, blah is dumb. I decided then and there to charge this guy without mercy. Well, the sleeping baby in my arms caused me to relent a little. It was, after all, his money too and none of his fault that his parents are idiots.

I knew you were a softee.! grin

[joanmcq]

B Hoffman, are you sure this isn't the response to the original CP2000? If the AGI changed, the CTC and amount of deductible student loan proceeds could change. The response usually looks like the original CP2000 but the computed tax is changed. Actually, it sounds to me as though they agreed with your response and are also agreeing the tax due is now $600.

What's the problem?

[BHoffman]

Hi Joan - problem as I see it is that they want another $600. Mostly, they seem to be stating that the TP reported only the cost basis as the sale proceeds on the stock. They also are saying that he did not report the 1099R (did so, did so!). The calculation for student loan interest and child tax credit do not agree with my what my software computed. I even checked my software's math, and it is (not surprisingly) correct.

So, it looks like I have to start from scratch again and point out their mistake because it appears that they took the cost basis and somehow put it in the wrong column or something.

Might be able to resolve it with a fax machine the TP Practitioner hotline. They try awfully hard to resolve issues with that one phone call.

It just P's me O that I have to readdress this thing.