Poll. Did IRS visit your office this past season?

[S T]

Clarification

So it is only if the Schedule C client is receiving EIC on the tax return, that we are required to have "all or as much" of the data as necessary for backup

Well if that is the case, I am not filing any EIC returns, as I AM NOT GOING to scruntize and keep copies of all of that information. I already keep enough other information on my clients.

Sandy

[JG EA]

I totally agree about 'not scruntizing and keeping copies of all of that information' ST. They can take me to jail but I will still file Schedule C and EIC for my clients, because I know they are honest. Oh sure they don't like the low economy and the huge refunds, but you know what - we didn't make up the EIC rules, they did. We do the return accurately, and if it turns out they get EIC well then they get it.Should we be afraid to do what they told us to do . I don't think so.

[Black Bart]

Mlinder

If client receives EIC you must have proof that you asked the questions on the 8867.If you have the client fill out any form with these same qustions and signed it is ok.We just find it easier to have them sign the 8867...

My question is the same as Snaggletooth's -- what regulation says that an 8867 (or homemade equivalent) must be signed? I've never heard of one -- my understanding is we're required to complete it, but that is all that's required (there's no signature line on it).

Did the agent quote a reg or just assert that such is the case? Did he threaten a fine for not having them signed? Were all your 8867s signed?

[Snaggletooth]

Resistance

MLinder's audit should provoke exactly the kind of response that I'm hearing on this thread.

Wonder if there can be organized resistance via NATP or NAEA. Or maybe just several thousand of us absolutely refusing to prepare situations with a combined EIC and Sch C.

I'm not going to buy into this idea of storing client's records for them. The IRS wants to audit these records, they should go to the client, not us. If customer signs 8879 that is good enough. It might be a good idea to have the client countersign an 8867 but IRS has not made this a requirement and as such there should be no ironclad expectation that we do so.

Do I support getting rid of unscrupulous preparers? Sure. But this kind of examination of MLinder's office implies turning all preparers into auditors. We do have NATP and NAEA, and this is the only way we can influence this trend in numbers. There is a need for these professional organizations, but they need to be advocates for their constituency and not just be smiling in press releases with the govt.

Wonder how HRBlock preparers handle this "audit from hell?" I've never heard of IRS trying to push this kind of thing over in an HRB office, and would like to hear from some of their people.

[MLINDER42]

Irs Visit

I do not know the reg number but it came into effect 01/01/2009.It changes the due diligence requirements for EIC. It made the questions on the 8867 not able to have the answers defaulted in the software..It was suggested at a round table @ the IRS seminar in NY that you have some proof that you asked the questions on the 8867.Some preparers said they had clients fill out a a form with the same questions.I just thought that this was easier. We do over 2100 returns 85% are bank products and EIC returns.We are 50 feet from the DC line making us an easy target to audit.This auditor was totally out of his comfort zone.He had been doing corporate audits for 20 years.He did not drive a car and had to have his sister drop him off and pick him up.He was afraid to walk down the street to get a sandwich.Our neighborhood can be a little scary but after 10 years I am used to it and the money is good.

[thomtax]

My question is the same as Snaggletooth's -- what regulation says that an 8867 (or homemade equivalent) must be signed? I've never heard of one -- my understanding is we're required to complete it, but that is all that's required (there's no signature line on it).

Did the agent quote a reg or just assert that such is the case? Did he threaten a fine for not having them signed? Were all your 8867s signed?

BB,
In the Drake software, there are signature lines at the bottom for both filer and preparer.

LT

[Zee]

IRS did a compliance audit on one of my preparers.I am the one that has an office in a liquor store.It was the audit from hell.He knew nothing about bank products wanted to see our receipts for payment. It took an hour to explain bank products.He had us pull 75 returns to see if a copy 8867 was signed by the taxpayer if they received EIC. We then had to pull 33 returns that were Schedule C or CEZ.he then fined the preparer $100.00 per return for not having any backup for the income and expenses claimed.If it was up to me I would fight it but the owner is going to pay the fine for the preparer.We have still not received the bill to pay
The auditor was there nine hours he constantly complained that we did not have an office for him or a phone he could use.We gave him a table and a chair in a store room.We don't have any offices.Also the list of returns he had us pull were not in alphabetical order which made it all the more time consuming.

I'm curious...what was the total fine?

[MLINDER42]

Irs Visit

The fine was $3300.00 $100.00 per return for 33 Schedule C returns with EIC but no backup for income or expenses.We have still never received the bill to pay.

[Snaggletooth]

Recipients

MLinder, my guess is with an average EIC of $2000 for 33 improprieties, the IRS could collect $66000 by going after the taxpayers who received the money.

Is the auditor going after any of taxpayers? My guess is they are not interested.

[MLINDER42]

Irs Visit

I think this audit was to intimadate us and they do not care to audit the tax payer.They want us to audit the tax payer.I now have them fill out a piece of paper with the figures on it.If they wanted to stop it all they would do is to limit EIC to people with W-2s .

[Gretel]

The fine was $3300.00 $100.00 per return for 33 Schedule C returns with EIC but no backup for income or expenses.We have still never received the bill to pay.

If I remember right, the IRS does not have procedures to enforce collection of preparer penalties and I also think they cannot impose penalties and interest. I would not pay this bill before doing more research on this issue. If they indeed cannot enforce, why pay?

[MLINDER42]

irs visit

I will cross that bridge when it comes.As of now I have not received a bill.