Scarey Client

[erchess]

I have finished a return for a new client but am deliberating whether to give it to him or give him his stuff back.

Male mid 30s high school graduate and college dropout reports making only around 3K in 09 at two jobs that provided W2s. He wanted to claim his g/f who draws social security disability as a dependent but first I expect the dependency situation is not there and besides he obviously didn't support himself let alone her on 3K. He tells me that he got a lot of financial help from family and friends in 09. He also says he will make 12-15 K in 10, some working for one of the companies he worked for in 09 and some doing casual labor for which he is normally paid in cash but he is keeping track of the cash in writing. He says his G/F is pregnant (didn't say if it was by him) and she is going to let him carry the child and of course get EI and Child Credits.

First of all does this sound like a client who is believable and who I can take on without getting in trouble with the IRS?

Second, am I right in thinking that he needs to marry the mother, adopt the child, or be its biological father in order to get tax benefits from the child?

[DonPriebe]

<description of marginally employed client with pregnant girl friend>

First of all does this sound like a client who is believable and who I can take on without getting in trouble with the IRS?

As long as you file him as single with no dependants to get back his withholding and the EIC without children.

Second, am I right in thinking that he needs to marry the mother, adopt the child, or be its biological father in order to get tax benefits from the child?

Almost correct. If he isn't the bio-dad and doesn't do any of the above, but the g/f and child still live with him the entire year, and he supports them, and the mother doesn't have to file or does file to get back her withholding only, then he can still claim them as qualified relatives. No HoH, CTC, or EIC w/child.

[clr]

Walk away

I have finished a return for a new client but am deliberating whether to give it to him or give him his stuff back.

Do like I do WHEN IN DOUBT walk away.
CLR

[JohnH]

I'd give him the phone number and address of JH, HRB, or Liberty. They have the deep pockets to deal the the fallout if they take his word on all this and then the situation blows up later.

[powerage]

At my JH office I would file him as single and explain the tax rules to him about this subject. It does sound like he is being honest, so I would have no problem doing his return.

[Black Bart]

At my JH office I would file him as single and explain the tax rules to him about this subject. It does sound like he is being honest, so I would have no problem doing his return.

Got to give you J-H guys credit -- there's no such thing as a "scary" client to you .

I used to take lots of customers like this (still have a few), but eventually began turning them away when I could. It's maybe not the best/right policy, but rather simply a desire to avoid pain. While it's possible they'll "straighten out" and become good customers, odds are they'll eventually become a royal PIA. The thing is, such people are usually broke and desperate and when push comes to shove, they'll tell you absolutely anything to get a large refund. And once they get EIC (from that frequently bogus "casual work"), they'll be looking for it in all future years.

Everyone has to decide where to draw the line. My particular tolerance level has been greatly worn down.

[DaveO]

Since we don't do any bank products getting paid is always the issue with the "scary" clients. I'm big on getting a retainer before work is undertaken and certainly before it's turned over for big stuff. There are the EIC types who have to write a post dated check or worse, promise to pay when the refund comes in.

[Davc]

He says his G/F is pregnant (didn't say if it was by him) and she is going to let him carry the child and of course get EI and Child Credits.

I don't think that's possible at the current level of medical technology.

[powerage]

Got to give you J-H guys credit -- there's no such thing as a "scary" client to you .

I used to take lots of customers like this (still have a few), but eventually began turning them away when I could. It's maybe not the best/right policy, but rather simply a desire to avoid pain. While it's possible they'll "straighten out" and become good customers, odds are they'll eventually become a royal PIA. The thing is, such people are usually broke and desperate and when push comes to shove, they'll tell you absolutely anything to get a large refund. And once they get EIC (from that frequently bogus "casual work"), they'll be looking for it in all future years.

Everyone has to decide where to draw the line. My particular tolerance level has been greatly worn down.

Had a married couple last night, at first she had no SS#, and then later said she had one but didn't know the number, among other factors. I'm not touching it.

[taxcraft]

Tax wise

Sounds like this man is tax wise and knows what to say to you to get the maximum in tax benefits. All his evidence comes out of his mouth....and he thinks you cannot verify any of it. The circumstantial evidence betrays him......too many uncheckables from one person.

[gkaiseril]

Explain and show that the IRS is clamping down on EITC payments. And then perform extreme due diligence for the EITC, get girlfriends SSN, 1099-SA, child's SSN, document support and income for all. See if client can even afford housing at the $3,000.00 income year. You might even prove the girlfriend is supporting him so he could not claim himself as a dependent. Also put a signature block at the bottom of the worksheets for him to certify that the above information on the worksheet that he provided is accurate and correct.

I would expect once you start on the girlfriend's information and completing the support worksheet, he will move like greased lighting out of your office with his paper work.

[RitaB]

I get it

I don't think that's possible at the current level of medical technology.

Nice catch! If he can figure out a way to carry that baby, they might come up with a NEW credit! Haha!

[JohnH]

Bet we'd come up with better pain medication as well...

[Gretel]

Bet we'd come up with better pain medication as well...

Ha, now you got caught. Nice admission that the female species is the stronger one.

[JohnH]

I KNOW who's the stronger. No question in my mind - I was there when all 3 of my grandsons were born.