Will the IRS ever improve its consistency?

[AZ-Tax]

Client who filed for adoption credit recieves a 10 page letter from IRS about denying them their credit and in the letter stating the adoptive child is not a "special needs" child. That is correct IRS, the box "special needs" was NOT checked on form 8839. WTF.

Another client I obtained for tax year 2010 had a business in 2009 and incorrectly depreciated all assets client acquired for the business in 2009 resulting in higher refund for the client but so far the IRS has never sent this client a letter and yes I pointed it out to the client and offered to amend/correct the 2009 tax return.

I remember attending a IRS forum where the IRS guy speaking was hinting around for tax preparers to snitch on their clients. Cant the IRS figure out that our clients will immediately know it was their tax preparer that reported them and most likely we will loose a client not to mention the bad mouthing the client will tell everyone about the tax preparer. .

[kpangelinan]

Client who filed for adoption credit recieves a 10 page letter from IRS about denying them their credit and in the letter stating the adoptive child is not a "special needs" child. That is correct IRS, the box "special needs" was NOT checked on form 8839. WTF.

Another client I obtained for tax year 2010 had a business in 2009 and incorrectly depreciated all assets client acquired for the business in 2009 resulting in higher refund for the client but so far the IRS has never sent this client a letter and yes I pointed it out to the client and offered to amend/correct the 2009 tax return.

I remember attending a IRS forum where the IRS guy speaking was hinting around for tax preparers to snitch on their clients. Cant the IRS figure out that our clients will immediately know it was their tax preparer that reported them and most likely we will loose a client not to mention the bad mouthing the client will tell everyone about the tax preparer. .

1) I thought the child had to be special needs.

2) Had this happen so many times. How in the world would they ever police this? Just like anything else, would have to be caught in a random audit if the client isn't willing to amend.

3) I'd have no problem referring cheating clients, even though there would be some bad press, especially in a small town, but it's been my experience that people in tax trouble do not like letting it known and go through great lengths to conceal it and let all the people around him know he's all compliant with taxes. To complain to another person about someone reporting you for cheating seems a little silly to me, even if they try to lie about the story a little, once the truth came out (I've experienced them having a fear of this as well), it would be more harmful to that person than to me.

[ChEAr$]

Not just limited to those with "special needs", but if this applies, credit is more liberal.

[Burke]

Another client I obtained for tax year 2010 had a business in 2009 and incorrectly depreciated all assets client acquired for the business in 2009 resulting in higher refund for the client but so far the IRS has never sent this client a letter and yes I pointed it out to the client and offered to amend/correct the 2009 tax return. .

How did he incorrectly depreciate the bus assets?

[Jiggers]

[QUOTE=AZ-Tax;124909]
Another client I obtained for tax year 2010 had a business in 2009 and incorrectly depreciated all assets client acquired for the business in 2009 resulting in higher refund for the client but so far the IRS has never sent this client a letter and yes I pointed it out to the client and offered to amend/correct the 2009 tax return.
QUOTE]

The IRS doesn't have a way to check the depreciation calculation on Form 4562. There is no detail of what is being depreciated.

The IRS only catches errors during an audit.

Even calculations for vehicles that are listed on the reverse side of Form 4562 are checked.

[Gary2]

I don't understand the points. If you don't check the "qualifying child for child tax credit" box but still put a dollar amount on the child tax credit line, you're likely to get a letter. Is the issue that the letter happened to mention something you thought was obvious? Or because they couldn't figure out from all the documents that the child was special needs, in spite of forgetting to check the box?

As for the depreciation, they're still sending CP2000s for 2009, and they have another 20 months or so to go, so I wouldn't assume the IRS won't find it. Granted, if it's a math error that they could detect entirely from the 4562 (e.g. having the deduction be half the basis for new 7 year property), they ought to be able to detect it in the initial math check and probably issue a CP11 or similar. But depreciation has such a sordid past, going back to the "you choose the recovery period days", that I wouldn't be surprised if they don't do those as part of the automated system. And, of course, there are many mistakes on the 4562 that simply can't be deduced from the information that's present.