The tax season has just started and I have a EITC single mom case already. I am really nervous about it to tell you the truth. Off my head, I will ask her some questions about whether she is married or not. If married before, I will ask her when she has divorced and I think I will ask for the divorce paper too. And I will also ask her a lot of questions about the father of the two children. I will ask for birth certificate and social security cards of the children. I will also ask for documentation to prove that the children lived with her in 2012. I will ask her questions about her income and expenses and, if necessary, how her income is enough to support herself and the children. Other than these, what other questions I should ask her? Please share your ideas.
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Lots of info and client scenarios here:
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All is well.
Your candor's admirable, but take a Valium and don't worry about it so much. You've got a collection of due diligence evidence here that would impress O.J.'s defense team. Besides, look at it like this; your overly-documented gal's just one of millions running through the chute and they'll be looking for the easiest ones ("no documents" box checked) to clip.Originally posted by AccTaxMan View Post
You overlooked: favorite ice cream flavor / color of drawers.Originally posted by AccTaxMan
Just kidding, AccTaxMan; your 747-flight checklist of proof leaves no room for doubt -- besides, we have it on good authority from an erstwhile board colleague that IRS is not doing EIC audits of tax preppers doing less that 125 EIC returns.
Myself, I'm requesting a school secretary's letter listing kids' names and addresses. Here's something else; a customer I asked for the letter could not get it, but instead brought report cards listing name, address, and semester grades (pretty good paper -- I never thought of that).
Then I'm asking for social security cards and birth dates. While the SS cards don't have addresses on them, I figure that if the DOB is right and nobody else is claiming then they won't be rejected when efiled and it's proof (of sorts) that they belong to this John Doe.
So anyway, I'm running the gauntlet with two pieces of paper and a couple of smarter-than-me guys here are going with none, so your wall-to-wall paper should serve you well.
Good luck / BBLast edited by Black Bart; 01-24-2013, 12:03 AM.Comment
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I gotta better idear
AccTaxGuy - you're gonna drive yourself bonkers. Agree with Bart, of reknown dogpatch-style advice. Not only are you going overboard, you're gonna chase away any customer who resents being interrogated under a heat lamp.
I think you can make a reasonable assessment of the 8867 answers to the questions, and if there is no evidence of inconsistent or false remarks, then your client wins.
I gotta better idear. I live in a rural county with small enough population that most everyone knows each other. I'll guarantee if the IRS sent out only 4-5 audits to ascertain EIC status, the fakers would be trembling in their boots for 10 years. Far more effective than endless Pub 1230 revisions and people like us having to walk a tightrope with mealy-mouthed questions.Comment
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If there is reason to have some doubt, just ask appropriate questions and document the answers. We are not police or private investigators. Personally I would be pretty upset, if you were preparing my tax return and asked me all the questions and for all the proof you indicate in your post.Comment
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After all those questions, you'd better be careful if you ask for her phone number - she might get the wrong idea about your motives.Originally posted by AccTaxMan View Post"The only function of economic forecasting is to make astrology look respectful" - John Kenneth GalbraithComment
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I do about five EIC returns a year. Most have been coming to me for years but I am still getting some docs from them.
I've made a sheet to print out the documents I need and getting copies of SSNs.
Not sure I am taking any new EIC clients as it is just a hassle unless I charge $500 for the return.Comment
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EIC Fraud
Here are areas to be focused on...
Income. Since EIC is so closely tied to earned income, make sure their Sch C is legit. I've asked for documentation regarding income in some cases.
Marital Status. Start with previous year's return. Some married couples have caught on and "separate" around tax time.
Qualifying children, work through the questions in your software. Obviously 6+ months of living in the home is the big one. Most commonly,
a non-custodial parent may try to claim this.
It doesn't take a rocket scientist to sniff out the frauds. The less time you waste with them the better.Todd Fogelberg, EAComment
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I do lots of returns for very close friends and family and people I go to church with. Even pick up one boy and drive him to church every week so I do know where he lives. Was wondering if I still need documents in my file for those I know personally. Seems silly to ask my son for documents proving my grandkids who I know actually live in his home. I'm talking about a lot of people I've known for years, went to the baby shower when the kids were born. Just wondering if my notes are good enough or if I need documents in all cases even for my own grandkids?Comment
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Opinions are "all over the board" (literally and rhetorically) on getting some/none/lots of documents. I complained here recently (excerpt below) about 8867's daunting page 4 laundry list and the impact on my long-time client who, like you, I know well.Originally posted by Bonnie View Post
I got this reasonably thought-out reply which soothed the troubled waters somewhat:Originally posted by Black Bart
But...some other posters have said they're rounding up several documents and/or are answering "yes" to 24 and 25 (which may be right). The water's muddy so maybe we'll all rise/sink to our own personal safety & comfort level.Originally posted by David1980Last edited by Black Bart; 01-25-2013, 12:44 AM.Comment
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Well, one of the EIC returns I do is for one of my tenants. He voluntarily gave me the kid's SSN cards last year, so I have them on file. I went over there to check on a repair, and sure enough, there were two kids and his girlfriend in the house. I have the rental contract on file.
Ya think I should ask for a paternity test? They aren't married yet.
I am soooo glad I am not a storefront!Comment
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Originally posted by Bonnie View Post
Excerpt from the 8867 instructions, which are here:
"information the taxpayer has given you appears to be incorrect, incomplete, or inconsistent with the taxpayer's eligibility to claim the EIC, you must ask the taxpayer reasonable questions to get information that is correct, consistent, and complete. You must document the questions you asked and the answers you received"
Key words: Incorrect, incomplete, inconsistent. If the info you get from your client doesn't pass these tests, then ask and document the Qs & As.
There's not just a ton of EIC info on the IRS website, there's two tons. Many specifics are addressed there.Comment
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