It's everywhere! It's everywhere!

[Black Bart]

Righteous indignation, that is. Hang on AJ; you'll survive but as you've probably doped out by now, "Agree to disagree" simply won't cut it in this millieu. But there's a chilling effect in the air and it's not just here. While we sometimes used to have son/daughter sign for mental-case/nursing-home granny off somewhere, we need papers nowadays.

The boys have got a good point (even if they too may have a few bones rattling around in their closets). While your "By ______, Parent" can be broadly interpreted, the danger's not so much from IRS (they don't care for small potatoes), it's from the dependent for whom the "service" (to borrow the Godfather's terminology) was done. Generational loyalty's getting scarce -- I've heard arguments between KFC-working college students and parents over the exemption saving them $350 and costing Pop $1,500.

About two years ago a woman phoned me pretending to be her daughter (knew all vital statistics). I gave protected info over the phone and daughter called later threatening to turn me in to IRS. I told her to do what she thought best and hung up on her. Wife called her back and smoothed it over, but I believe it was a bogus (for both) EIC claim or I might have been in a jam. Still...I was greatly surprised and astonished because it was such a trivial thing (the data was unimportant), but with such tremendous possible consequences. Now -- I don't take chances with anybody, no matter how inconvenient. It's too dangerous!

P.S. Whatever you do...don't mention electronic filing...

[luke]

To quote

the late, great Ed McMahon - "You are correct sir!"

[Black Bart]

Thanx Luker,

the late, great Ed McMahon - "You are correct sir!"

Say, you're not anywhere near a place called Petersburg, are you? I used to have some relatives up that way.

[Gary2]

For what it's worth, there is a limited exception to the disclosure rules for related parties, which would include parent and child. See regs 301.7216-2. The question there is what does it mean for the parent's interest in the information to be adverse to the child's?

[AJsTax]

All so true, Bart.

Sometimes I will throw things out for argument's sake, but I have some basis for my opinion.
The child filing their own return and doing it wrong is one of my pet peeves. When they take their own exemption they are technically violating Federal tax law. Is that usually a big deal? no, but it sure creates a lot of problems.
There are as many opinions on how to prepare a tax return as there are pages in the code. That has been proven time and again by magazines, etc. that have returns done by several top experts and then compare the results. they never match..

[Gary2]

When they take their own exemption they are technically violating Federal tax law.

Frequently it's the parents in violation, when the student loans are in the student's name, with the parents just as guarantors of the loan.

[luke]

Nope

Say, you're not anywhere near a place called Petersburg, are you? I used to have some relatives up that way.

4 hours away, but I've BEEN to petersburg - nice place..........

[Black Bart]

Speaking of the devil and

...Generational loyalty's getting scarce -- I've heard arguments between KFC-working college students and parents over the exemption saving them $350 and costing Pop $1,500...

quoting myself, a college kid walked into the office this morning asking about HIS exemption and HIS tuiton/fees/education credit. Said all his friends got "a thousand dollars more than me" and why didn't he?

We filed Mom & Kid last week; took dependency/education on her (saved a bundle); Kid got $5,700 duck only and token refund. He's a good kid, appreciates Mom's support/bill-paying, so was okay with it but....hmmm....suppose he HAD NOT been okay with it. The money aside, what could happen then (under current disclosure rules)?

See, Mom brought in his/her papers and we filed per her instructions. Then, under our current "trust no one" policy, we made Kid pick up his return. This is absurd, of course, since she brought all his stuff to us in the first place and we're saying "We can't let you see these papers that you've already seen."

But going a step further -- does she have any right to dictate what's done with Kid's W-2? He IS her dependent and couldn't get the $3,750/ 8863 credits anyway; but he's also 19. Suppose they'd had a tiff and he didn't want her handling his stuff anymore. What could he do (to us - never mind her)?

To defend ourselves; require Mom bring a disclosure form (which she doesn't have) for us to accept his papers? Then contact Kid to see what he wants done? Or would Kid have to bring his stuff in person (which would probably run off about 25 "inconvenienced" clients)?

These are all crazy questions addressing nonsensical regulations which no one with a thimbleful of common sense from yesteryear would ever have implemented in the first place (I probably voted for some of 'em) and yet...here we are.

Thoughts, anyone?

[AJsTax]

You raise some very good

problems and situations we face.
I think one place to start is with Circ 230 and the disclosure rules to relatives that are affected by the other return. We must answer those questions and the parent has the right to know what is going on. I think it is impossible to make a decision on the correct way to file both returns without knowing all the information on both returns. That is why that exemption to disclosure is in the law.
We just had an elderly client raise hell with us because his daughter picked up his return, which he gave to her to bring in and she had a POA in hand. yes it covered the necessary parts for tax returns. He said at that point whike on the phone ranting and raving he was rescinding the POA. After she had picked it up. OH WHAT FUN!!