Only problem I had

[jainen]

Only problem I had with e-file this year--I accidentally transmitted one return (all zeros) instead of an extension. I wonder how that will turn out. I'm prepared to blame it on the IRS but I haven't figured out how. I don't think it's a valid return because it doesn't contain enough information to determine the correct tax.

[OldJack]

I don't e-file so I really know nothing about it. But I wonder how does the IRS and the preparer deal with problems like your mistake? How reliable do you think the IRS is with processing e-file tax returns? Are e-filed returns more likely to be audited as there is no provision to attach additional documents that explain the deduction and thereby avoid the audit? I know when they first started the program there were lots of problems with the IRS losing the info and telling the taxpayer they had not filed. Does that happen now days?

[Chief]

Efiling

Efiling is the way to go. Fewer math errors number errors and credit errors. A lots depends on the software you have. I have two clients who refuse efiling. All of my returns except those two are efiled. I would not have it any other way.

You can't file duplicate returns; they are rejected. Electronic extensions are a breeze.

Returns and extensions you know have been accepted by IRS in a matter of hours. My software has a F10 option that allows me to attachment as many statements as I wish to the efiled return.

[Jesse]

Just curious

What will you do now that the return is actually file? File an amendment?

[LawrenceGR]

My first year

This is the first year I had E-Filed Extensions and I would have to say it went very well. I think next year however I won't wait until the last thing like I did this year. I have not heard any rule that says I have to wait until April 15 of what ever is the last day.

[Black Bart]

there is no provision to attach additional documents that explain the deduction and thereby avoid the audit

You could file form 8453 instead of 8879 and attach documents (church donation letters and such) to the back of it when you mail it.

I haven't had any more audits than usual since I began e-filing (several years ago--long enough for clients to be selected for audit if they were gonna be). Actually, I haven't had any audits at all in about 8-10 years, but don't know if the new commissioner (Everson the Enforcer) will change that run of good luck or not.

I don't have any problems with IRS losing the info; it's always the danged software companies that do that (I've got ATX).

[Chief]

Software

BB you need to switch to Tax Slayer Pro. I have never known them to lose my information. Also when using 8879 I can used F10 to attach documents and explanations to my efiling of returns.

[Black Bart]

Well, that would be

BB you need to switch to Tax Slayer Pro. I have never known them to lose my information. Also when using 8879 I can used F10 to attach documents and explanations to my efiling of returns.

a plus, alright. ATX lost or fouled up my EF stuff about three times this past season. Still, I like the 1040 layout of their software. Seems like I took a look at Taxslayer's demo a few years ago, but there was something I didn't like about the layout. I don't remember what it was, so maybe I should get another and review it. I've read many of your statements about TS and evidently it has performed very well indeed for you and your clients.

What I like about ATX, in addition to the layout, is the price (about $500-600) and it also has an excellent error-checking capability. Although it's not as intuitive as Intuit's Lacerte (pun is intended) and you have to stay on your toes to make sure you're getting all the credits, etc., the error-checker catches every little thing. Also EF and all states are free.

The downside is the lack of knowledgeable support and the numerous EF foul-ups. They offered a "Super-Support" option this year for $110 and I signed up because regular support was terrible last season. Turns out, however, that the SS line routes you straight to India! I couldn't believe it. I complained and got them to credit my account for the $110. As it ended up, the "regular" support was lots better.

Anyway, I'm undecided, but thanks for the suggestions and info.

P. S. About that information document attachment, I was talking about stapling the actual church tithe list that's typed on the church letterhead to the 8453. You couldn't do that electronically, could you? Or, is it possible to scan and send a picture of the actual letter (which seems to me is more convincing than a typed statement)?

Thanks, BB

[oceanlovin'ea]

Always Efile

I really don't ask clients if they want to electronically file. I just say that I can electronically file the return and if they would like to have the refund directly deposited in their checking or savings account they will have their money on "date". I haven't had anyone say no they don't want to electronically file. Sometimes they would prefer to have a check sent. I just tell them the check will be mailed about a week later than the deposit would go in.

It is just like your kids - don't give them a choice if you want them to do a specific thing.

Linda F

[S T]

Other Software

Bart,
I know that Billy likes Tax Slayer Pro, something about it a couple of years ago on demo I didn't like either, but I can't remember what it was.

I also was not enamoured with ATX, and I demo'd that as well. And on the demo ,customer support was not good either, even tho the pricing was good.

I changed from LaCerte in 2003 to Tax Works. So maybe take a look. Still missing a few bells and whistles, but so far have been satisfied. Pricing is what your needs are. Tech support has been awesome, I have no complaints and very little wait time, and I do not get sent to India.

I have enough "sent to India" problem on enough other items, like my DSL and some other software tech support, I certainly don't care to go there on the tax software!

Just another viewpoint,

Sandy

[oceanlovin'ea]

"Sent to India"

I had to call HP about my all-in-one machine. The first time I talked to someone was fine. They told me the options about service or upgrading the machine. Since it is owned by one of my clients and he lets me use it, I had to call him. When I called back, it was disaster. I paid for next day shipping and didn't get it. Called UPS or Fed EX, and found out they never scheduled the pickup. Three times I had to call and I always got someone in India. I got so FRUSTRATED!!!!!!!

I told the man I wanted to talk to someone in the same side of the world that I was on. I think the problem is that they (the people in India) know English but they don't comprehend English. They can read what is written in their scripts, but when you ask questions, I don't think they understand what you are asking and so just keep giving you a standard response. I put all this in the HP survey they sent me and asked for someone in authority in the US to call me. No one ever did.

I can't imagine outsourcing tax returns to India (which I know is done). They would never understand the complexity of the returns.

Linda F

[Black Bart]

Jack and the E-Talk

I don't e-file so I really know nothing about it. But I wonder how does the IRS and the preparer deal with problems like your mistake? How reliable do you think the IRS is with processing e-file tax returns? Are e-filed returns more likely to be audited as there is no provision to attach additional documents that explain the deduction and thereby avoid the audit? I know when they first started the program there were lots of problems with the IRS losing the info and telling the taxpayer they had not filed. Does that happen now days?

Some answers:

Q. How does the IRS deal with problems like your mistake?
A. Dunno; never did an EF extension (keep readin' this thread, I guess).

Q. How reliable do you think the IRS is with processing e-file tax returns?
A. I think they're pretty good. I've been doing it for a few years now and they give me a toll-free number to call for problems. The clerks aren't mental giants or anything, but they are very efficient. As soon as I can tell them the source of the error (usually a client has given me a wrong name or SSN), they fix it right away. I have no complaints at all about their service.

Q. Are e-filed returns more likely to be audited as there is no provision to attach additional documents that explain the deduction and thereby avoid the audit?
A. I've done several hundred over the past several years and haven't had a single audit. I worried about the "attachment" issue too (see above post about the 8453). Don't know if you can scan them--maybe Chief will clue us in.

Q. ...when first started...lots of problems...IRS losing the info...(etc). Does that happen nowadays?
A. I haven't had any returns lost. I really can't tell any difference at all about the processing except that it's faster and people get their refunds in half the time as paper.

Now, I get to pontificate (blow) a bit.

I read something to the effect that the new Circular 230 rules don't mandate electronic filing, but they give IRS that option. I believe they will do it as soon as possible. It's just so easy for them to process EF as opposed to paper. Twenty years ago in a CPE tour of the Memphis center, I saw how they handled the paper. A clerk sat at a large, half-circular table surrounded by double-decker wooden bins for the forms. As you know, returns are much thicker now (credits, etc.) and 20-30-40 page returns aren't uncommon. It's a very, very slow and laborious process--even back then they were almost literally swamped with a sea of paper. It's not hard to see why they'd take any viable way out. EF is that way.

Jack, I'd advise you to start baby-stepping into this thing as soon as possible. I'm like you, I'm an old head who (as my unlettered, Unregistered, stock-selling colleague pointed out) doesn't want to change. The only reason I did it (five or six years ago, I think) was my wife kept pushing me. I thought, probably like you, "what's the point? I like it the old way fine, it works for me, and who's in a big hurry for the money anyway?" I felt that most of my clients were solid middle-classers who weren't in any rush. Block's EF/RR program disabused me of that notion and a number of people will ask about it just because IRS keeps pushing the idea in the media. You don't have to do RALs if you don't want to because a majority of people will be satisfied with the 10-14 days refund time of EF direct deposit. But still, I'd say the time is coming when IRS will tell preparers to file that way or don't file at all.

If you don't want to jump in with both feet, try this (I did): mail a form 8633 to IRS and they'll send you an EFIN (Electronic Filing Identification Number). Then, do some extensions by EF. It won't tie up the main part of your business and you can get your feet wet enough that, if you are later forced to walk-the-plank, you'll have a life-jacket. It's not as simple or care-free as paper--you have to type in every scrap of info off the W-2--if it doesn't show up at the bank, they'll call and want to know what the hey--you'll have to call IRS EF center and get it straightened out--or maybe IRS just decided to delay refunds that week, etc., etc.--just the usual wranglin'; nothin' you cayn't handle.

The nice thing about paper is you give 'em the envelope, they mail it, and your problems are generally over. But, those days are drawing to a close (what was it that "Gordon Gecko"-aka Michael Douglas-said in the movie Wall Street? "Somewhere, there was a company that made the last buggy whip.") More and more, indidividual states are mandating EF for the same labor/economy features. IRS can't be far behind. Our buggy whips are on the way out.

With all those years of experience and knowledge; it's hard to think they'd shut us down. But, it's either lose us or lose the money. And the answer to that is the same one that a lawyer gets when he asks his client who's committed tax fraud: "You can 'fess up and do 18 months in the federal pen or we can blame the accountant. Which will it be?"

[oceanlovin'ea]

Benefits of Efiling

One of the biggest benefits of electronic filing is that it is more accurate than filing paper returns. If you know that you have done the return right and electronically file the return, it goes directly into IRS computer system. No middle person to keypunch the return into the system.
One of the first IRS forums that I attended told statistics of the number of returns that a processor handles during a day. Now remember these are just keypunch operators with no speciifc knowledge of tax returns. If I can remember correctly they process about 50 returns per hour which means that they spend just a little over a minute on each return. They told how many keystrokes are on an average return but I can't remember. But just multiply 50 returns by 8 hours times the number of keystrokes on a return. Then calculate the margin of error.
Now our returns are computer generated so that should make them easier to read and might mean less mistakes. But think about the ones that are handwritten and not clearly legible. If a operator is doing 50 returns an hour, how much time to you think they spend trying to figure out if that is a 4 or a 9.

Thus the beauty of electronic filing. It goes directly to their computer. NO human is looking at the return. The system spits out their refund check.

That information sold me on electronic filing.

Besides, you know that you give them the return to mail and the envelope and the voucher if they owe and then they forget to send it. Their first excuse will be you didn't tell me that I had to mail all that in.

Linda F

[ecb34691]

And yes the IRS admits to at least a 22% data entry error rate. Can you see the additional work required in error resolution? Are you aware that Congress has mandated that 80% of ALL returns (includes Corp, etc.) should be e-filed by 2008? Now that IRS is beginning some work on the CADE system (the new & better system), there were direct deposit refunds coming out 3 days after acceptence, much better than the current 8-15 days. e-filing is the only way to go. Personally, I wish I could e-file 1040X's. I'm battling IRS on my own return from a couple of years ago as I haven't had credit/check for a refund and guess I'll have to resubmit. Never got it, lost in the pipeline, fell off the conveyor belt, etc.

[Unregistered]

romans51

Electronic filing save you time and money. You are no longer printing out returns to be filed. Just one form 8879 which clients sign and you keep on hand. The letters from the IRS and state are almost eliminated. It's a no-brainer. By the way increase your prices a little to cover transmission charges and little extra for yourself. Charge the same price for electronic or paper. Better yet charge more for paper cuz it costs u more.