NAEA and NATP

[MLINDER42]

NATPand NAEA

Sorry for taking offense.I have been here for ten years and it never fails to amaze me the make up of the neighborhood.Marriage is not important men are replaceable.The term "babies daddy" drives me crazy they want children but do not want husbands.

[JoshinNC]

I assume you are responding to me

I take offense to the post about my practice.I charge less than the big boxes and I do several representation cases a year free of charge for people that have no money.I am the only tax office in my area open 12 months a year.I handle CP2000 for people that are not my clients free if it is no big thing.We all pick how we make our money but I would not be able to do those things if I had to worry about making money in the off season.I do taxes only taxes and representation.You could not live in the DC area with out making a good living.

I was talking more about your clientele then your practice. I'm sure you are diligent, as you have stated here in this forum, but your clientele is one that seems very odd to me. More than 70% of your clients are 20-something females with less than $25k in income, two or more children and no husband. I realize the Federal government has replaced the responsible father in many homes, but this just seems totally ridiculous to me.

[MLINDER42]

NAEA and NATP

I take offense to the post about my practice.I charge less than the big boxes and I do several representation cases a year free of charge for people that have no money.I am the only tax office in my area open 12 months a year.I handle CP2000 for people that are not my clients free if it is no big thing.We all pick how we make our money but I would not be able to do those things if I had to worry about making money in the off season.I do taxes only taxes and representation.You could not live in the DC area with out making a good living.

[Edward]

dtlee - well stated. This squeeze that IRS has on us leads me to the point where I am going to refuse ALL future EITC clients - its just not worth it.

[dtlee]

This is a "no win" situation

This is solely my opinion.....

The majority of Tax Preparers are unfamiliar with the enormous (was going to say "ridiculous") due diligence requirements for EIC. I have tried to enlighten peers at seminars and gotten responses like "My software has a three page form I can print out and have the client sign to take care of this" or "My software won't let me e-file the return unless I check off a box that says the income and expenses look right, so I'm covered."

I have cited some of the horror stories I've learned where fines were assessed because the preparer did not know a detail which would not have impacted EIC at all but indicated that the preparer did not perform due diligence. I have cited scenarios where the student was a student (no disputing that), but the preparer lacked a copy of any school records in the file. The EIC was never challenged, but the preparer was fined.

Until more preparers (or perhaps the "right" preparers) are hit with these fines, the organizations will be very slow to act. These EIC audits have been going on for at least three years and are so lucrative that they increased the fines.

The downside of some of the comments in these threads is that we, as the new enforcement arm of the IRS in these matters, will become the bad guys. We will antagonize the clients with questions about who lives where and why. We will get the negative feedback on the internet and elsewhere. ("Do you believe that this guy asked me for a copy of my lease!?") If we increase fees to account for the fines or the added responsibilities, I can even imagine "News" reports saying, "Preparers in the area are price-gouging low income taxpayers to cash in on their federal income tax credits. Tune in at 11." I can hear the interviewed client saying, "I take home less than $20,000 a year to feed my family and they wanted $1,000 of that to prepare my taxes because I'm poor."

I think the IRS is almost too happy with having us in the middle of this mess.

[joanmcq]

The one who said they asked the client to fill out a form listing income and expenses, sounds to me like they did it right there and then.

With numbers from the ceiling? Or did they have the requisite calendar, receipt books, or ANYTHING that shows the client didn't make up numbers on the spot?

I can see this not being determinative of due diligence.

[okie1tax]

Low Income

What I really hate about it is that I haven't seen a single paycheck from the Treasury Department!

[JoshinNC]

I'd have a different name for this type of "practice"

Low income is average return single female making under 25,000 with two children. 85% of returns have EIC .70% take bank products and only 20% are MFJ.That is the break down of my over 2000 returns in 2012 down 150 from year before because we refused to do some returns any more.

but it might get me permanently banned from this forum, so I will refrain.

[JohnH]

I run a low income practice, but I'm not referring to my clients...


--> So, the client now qualifies for EIC, do I have to bring the client back in and give him the 3rd degree asking for additional information that I don't normally require? Hinting to the client that I don't believe him or trust his information? <---

That one's easy. Just tell the client:
"It isn't that I don't trust you. The problem is the IRS doesn't trust either of us."

[MLINDER42]

NAEA and NATP

Low income is average return single female making under 25,000 with two children. 85% of returns have EIC .70% take bank products and only 20% are MFJ.That is the break down of my over 2000 returns in 2012 down 150 from year before because we refused to do some returns any more.

[Will]

Before I say whether I do or do not run one, I'd like to know what one is

One that does a lot of EIC returns.

[JoshinNC]

What's a &quot;low income practice&quot;

Part of the problem is the majority of EA's do not do a lot of EIC returns so they do not see this as a problem.I am never met an EA who runs a low income practice like I do.If you do under 100 EIC returns they will never audit you.I was told this by both auditors.

Before I say whether I do or do not run one, I'd like to know what one is

[MLINDER42]

NAEA and NATP

Part of the problem is the majority of EA's do not do a lot of EIC returns so they do not see this as a problem.I am never met an EA who runs a low income practice like I do.If you do under 100 EIC returns they will never audit you.I was told this by both auditors.

[Golden Rocket]

Jiggers I agree

Yes, the thread started out by exploring the energization of our professional organizations to become pro-active in getting something done about this disturbing trend, and the only responses have been continued discussion about the penalties.

NATP does a good job on reporting - their recent article is a perfect example. But as far as being an organization to help influence policy? All I hear is that they get invited to be part of an audience somewhere to sound out the latest and greatest thing that IRS wants to do.

It may not be fair to expect more from them, but we do know that other professional organizations with a base of 50,000 - 100,000 can make their presence felt. It's a shame when my 89-yr old mother can call her congressman and get more accountability from the IRS than an organization with this many people.

[Jiggers]

My first EIC audit was self employed individuals.Due diligence with self employed(getting EIC)you must have copies of receipts,calendar,or something that shows how they kept track of the money they earned.These people have no bank account, no business license,work from their homes.Irs wants some proof that this business exists.We will not due EIC self employed with out some proof of having done the work.If you do not deal with this type of return you can not understand the reasons they want some proof.I refused over 100 of these returns this year and my earnings reflect it.

The problem I see with this is that we are having to audit taxpayer information in some cases and in other cases we don't have to.

For the very few clients that accidently qualified for EIC, I didn't know that until I prepared the return using their standard information. I do not prepare returns with the client present, my policy and procedure.

So, the client now qualifies for EIC, do I have to bring the client back in and give him the 3rd degree asking for additional information that I don't normally require? Hinting to the client that I don't believe him or trust his information?

Come one NATP, NAEA, and the CPA organizations, how about some assistance with this issue?