Stockpiling returns

[RLymanC]

The IRS has issued a quick alert to inform tax preparers that, as a result of late tax law changes, there are certain tax returns that will not be accepted, either electronically or on paper, until mid to late February. The stockpiling rule does not apply in this situation.

[Jesse]

Stockpiling:

• after official acceptance to participate in IRS e-file, stockpiling refers to waiting more than three calendar days to submit the return to the IRS once the ERO has all necessary information for origination


To be honest I was not aware this rule existed.

So,

1) if I receive all needed information on Monday(yesterday) and have the return ready to efile but can't until Friday, when efiling opens, am I guilty of stockpiling?

Or

2) if I have the return ready to efile, but I am waiting on customer payment, because I want to enforce this as my policy this year, if I wait more than three calendar days am I guilty of stockpiling?

[BOB W]

• after official acceptance to participate in IRS e-file, stockpiling refers to waiting more than three calendar days to submit the return to the IRS once the ERO has all necessary information for origination


To be honest I was not aware this rule existed.

So,

1) if I receive all needed information on Monday(yesterday) and have the return ready to efile but can't until Friday, when efiling opens, am I guilty of stockpiling?

Or

2) if I have the return ready to efile, but I am waiting on customer payment, because I want to enforce this as my policy this year, if I wait more than three calendar days am I guilty of stockpiling?

1= YES> But this is an allowed stockpiling while you are waiting for ELF to open in this delayed circumstances. Any other stockpiling is not allowed, even before January's start date.

2= ?? Probably Yes> But I don't consider a return ready until I get paid in full. GOOD QUESTION though..............

[Jesse]

If they do not sign the form 8879 it's not eligible to be efiled or "ready", so in either situation I should be okay as long as the signature is received inside the three calendar days, correct?

[BOB W]

If they do not sign the form 8879 it's not eligible to be efiled or "ready", so in either situation I should be okay as long as the signature is received inside the three calendar days, correct?

If you are waiting for the 8879 and the state signature forms, nothing is ready to be filed. Therefore the 3 day issue does not start at this point until all signature forms are received, then the 3 day issue starts. Payment for return services???? is up in the air.

Most of my clients pay me when we sit to do the return. The others are required to sign all forms and enclose a check with the signed forms. If the check is not there, I have to call and I tell the I can't file without payment for services. I do not operate a charitiable operation and payment is considered what I call a "completed return". This happens one or two times in a tax season, if that.

[erchess]

My Take

From what I have read here, I don't have the ability to file the return until I collect the signature. So to be safe I won't permit the signature until I am satisfied that the client has met their responsibility to pay me.

Now I have a question. May I stockpile returns that cannot be filed because of the processing delay we are all so ecstatically happy about?

[S T]

IRS Notice

Stockpiling rule does not apply for the delayed electgronic or paper filing for 2010 returns
Per IRS Issue Number 2011-02 Revised - distributed via email 1-11-01

Sandy

[zeros]

Stockpiling - Who Checks Anyhow?

Ever heard of IRS checking on this?

[erchess]

Who Checks

I don't think they do efiling audits of preparers very often but I bet every time they do they look for this on at least a few returns. Also sometimes the least often checked on rules carry the stiffest penalties. Does anyone know the penalty for stockpiling?

[BOB W]

I don't think they do efiling audits of preparers very often but I bet every time they do they look for this on at least a few returns. Also sometimes the least often checked on rules carry the stiffest penalties. Does anyone know the penalty for stockpiling?

You may lose your ability to EFile. But more than likely you will be told not to do it again, depending on how many returns are involved.

[erchess]

The day is coming soon when losing the ability to file electronically is tantamount to losing the ability to prepare Federal Returns for money.

[rjholmes]

What about the returns that are dated the day it is prepared and the preparer and one of the taxpayers sign the 8879 that day, then he/she takes it home to get the other party to sign. We get it faxed or mailed back several days later with the previous date on all signature lines. Do we input the signed date or the date that we actually get it back. I have always used the signed date, but have never been sure if that was correct.

[BOB W]

What about the returns that are dated the day it is prepared and the preparer and one of the taxpayers sign the 8879 that day, then he/she takes it home to get the other party to sign. We get it faxed or mailed back several days later with the previous date on all signature lines. Do we input the signed date or the date that we actually get it back. I have always used the signed date, but have never been sure if that was correct.

I do nothing special because I have some clients that can take a month + to send me the signature forms. I know it is not stockpiling and not my problem.

[Edsel]

Much Ado about Nothing

Who would intentionally "stockpile" anyway? Virtually 100% of my delays are because returns aren't accepted for one reason or another. And of those that are delayed, it is not a miscalculation of tax but a technical problem or failure to check a box somewhere.

If I were in charge of Cir 230 compliance auditing, this would be the LAST thing on my agenda. Who gains? Who loses? Maybe the IRS perceives stockpiling to lead to processing problems or customer disservice, but where would the incentive exist for an ERO to do this?

[BOB W]

Who would intentionally "stockpile" anyway? Virtually 100% of my delays are because returns aren't accepted for one reason or another. And of those that are delayed, it is not a miscalculation of tax but a technical problem or failure to check a box somewhere.

If I were in charge of Cir 230 compliance auditing, this would be the LAST thing on my agenda. Who gains? Who loses? Maybe the IRS perceives stockpiling to lead to processing problems or customer disservice, but where would the incentive exist for an ERO to do this?

You are right, there is no incentive in stockpiling, don't even know why the issue even exits. When my client gets their refund the following Friday I'm the hero.

But I guess lazy/incompetent preparers can drag anything out.