Letters and visits begin soon for preparers filing 2008 returns with EITC errors and identified as “at risk” for errors on 2009 returns. The contacts are primarily educational, aimed at improving accuracy. IRS will monitor 2009 returns and ramp up compliance if improvement isn’t evident. Learn more about tailored compliance treatments.
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EIC recipients get off free
We've had a number of posts in the past about the IRS approach, and again I must emphasize that the preparer has to KNOW about the fraud before he/she can do anything about it. We see how aggressively they plan to assault tax preparers, but I have yet to see any action against a taxpayer who improperly received EIC. IRS is not interested in going after them -- they get off Scott free.
Is abuse of EIC running rampant? No question. Coming after the preparers, however, is the same thing as blaming the firefighters and not prosecuting the arsonist. A convoluted approach when just a little bit of enforcement at the source would stop a drain of billions of dollars. -
Offenders
The really bad offenders probably don't even sign a tax return. They are in the basement preparing returns for cash.
So, we are doing an honest business and grow more and more at risk for scrutiny. We can't be held accountable for our clients' levels of honesty.
Isn't due diligence sufficient? Isn't that why due diligence exists?
geeeez...."I am proud to pay taxes in the United States. The only thing is I could be just as proud for half the money." Arthur GodfreyComment
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This is a result of trying to use tax agencies as a social services provider.
The IRS will be identifying preparers who do not exercise due diligence. Maybe you need to have each EIC and Child Tax Credit claimer complete & sign a questionnaire about their eligibility to receive the credit and keep a copy for your records as well as attach a copy to the client's copy of the return. Once the local EIC cheaters learn of this, they will stay away from your door.
I expect some of the big RAL/RAC operations to monitor their preparers and maybe even hold them responsible for paying the assesed penalties.Comment
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