Long time home buyer altering dates

[Ross]

A few days ago I posted this:

"I have another long time client who bought a house on a land contract. He recently had a foreclosure so he didn't qualify for the 1st time home buyer credit but was aware of the long time home buyer credit. I recall him telling me about the house last tax season. He called and said he should get this credit. I told him it had to be purchased after 11/6/09. He said it was closed on 12/6/09. He was only renting earlier in the year. I said I would need a copy of the land contract. He obviously changed the date on the land contract. It didn't even line up correctly! He even missed changing one of the dates! On the second page it reads "The sum of $202, or more, on or before the 1st day of March, 2009"!!!

Just to confirm that it was done earlier in the year, I called the attorney's office who prepared it. Yes, it was executed on March 1, 2009. I imagine there are smarter people than this that alter their documents. I can see why the IRS is putting a great effort into auditing these home buyer credits."
__________________________________________________ ______________________

The client called to check on his return and I told him he could not take the credit due to the actual date being 3/1/09. A few days later (I was still waiting on some property tax info) he called and give me some BS about not e-filing his return, he can do it for free at the University where he is taking classes. Someone is helping him w/ his financial aid and they will e-file it. He said he will pay my fee, he just wants hard copies of the return I prepared. I suspect he is going to do a better job altering the dates on the land contract, use my return as a guide and take the home buyer credit.

Should I warn him of the consequences of filing a fraudulent return? Of course I'm not signing the return, so I probably should just give him his hard copies and let him go on his way. However, I feel that I should alert the IRS to look into his return if he takes the credit. Possibly send them his SS# and copies of his land contract with the March 1, 2009 date. Or I could tell him that they are extensively auditing these credits and they will check w/ the preparer of the closing statement/land contract to confirm dates. What would you do?

[ChEAr$]

Should I warn him of the consequences of filing a fraudulent return? Of course I'm not signing the return, so I probably should just give him his hard copies and let him go on his way. However, I feel that I should alert the IRS to look into his return if he takes the credit. Possibly send them his SS# and copies of his land contract with the March 1, 2009 date. Or I could tell him that they are extensively auditing these credits and they will check w/ the preparer of the closing statement/land contract to confirm dates. What would you do?

This one fits my definition of "ugly" in my tag line below.

here's what I would do. Since he has said he would pay your fee, bill him maybe
1/2 or 1/3 of usual fee for "consultation" and return his documents to him.
When meeting him when he comes in to pick everything up, IF the chemistry is right, then you can gently warn him about the consequences, but forget about informing on him.

[BHoffman]

Ross - my two cents - either

1. take the fee and sign the return as the "paid preparer" and give him the hard copy. If you do take the fee and you do give him the hard copy, then I think you might be obligated to sign that return.

2. don't take the fee and don't give this client the hard copy of the return you prepared.

I think I'd probably be running for Door number 2.

[Koss]

Agree...

I agree with the comments made by Chear$ and by BHoffman.

If you collect a fee, you can't give the client a completed tax return without signing it.

If you do not give the client a completed tax return, you can still charge a consultation fee, as suggested by Harlan.

I think it is an extremely bad idea to provide any information to the IRS.

This is an unstable, developing area of the law, but doing that might be a violation of Section 7216--especially if you are not signing a completed tax return in your capacity as the preparer.

BMK

[BHoffman]

http://www.taxalmanac.org/index.php/Internal_Revenue_Code:Sec._7216._Disclosure_or_use_of_information_by_preparers_of_returns

Here's a link to that section.

[veritas]

Years ago

I prepared a return for a married couple both federal employees. I don't remember the details exactly but they came back to see me sometime later. With them was a copy of the return I prepared signed by me. Every income item had been whited out and zeros inserted instead. They had become tax protesters and had bought into some silly scheme where wages could not be taxed.

I wouldn't sign that flake's return

[taxea]

explain the error and consequences of his ways. Include that the reason efiling cannot be done when claiming this credit is because the IRS is checking them for fraud.,
Bill for services rendered-consultation only
Turn him in. There is no confidentiality between the preparer and the IRS only between the preparer and any third party

[BHoffman]

If you are a CPA or an attorney, AICPA Rule 301 applies. They teach us in school that this rule means:

Thou Shalt Not Turn In Thy Client.

http://www.nysscpa.org/prof_library/ethics/Rules/coderespon.htm

[geekgirldany]

I would give him his papers back with no tax return. Geez no telling what the dude may do. I also would not turn someone in. The way things are going these days.....

[taxea]

don't prepare his return, give him back his docs and explain why you can't take him as a client....problem solved!.

[JohnH]

Another toxic client. I'd give him back his documents and nothing else, not even my business card. No charge for anything and be sure the door doesn't hit his backside on his way out. I certainly wouldnt contact the IRS about him under any circumstances - I don't believe in buying problems. And I'd never consider doing business with him or discussing any tax matter with him in the future, although I'd keep a written record in my files of what I'd seen and discussed in the likely event that the IRS comes asking ME about him..

[ChEAr$]

If you are a CPA or an attorney, AICPA Rule 301 applies. They teach us in school that this rule means:

Thou Shalt Not Turn In Thy Client.

http://www.nysscpa.org/prof_library/...coderespon.htm

AMEN, sis!

And this applies whether or not i have taken a consultation fee only.