Sounds like you have answered your own question by saying you won't prepare an inaccurate return. As far as giving the person a reason and how to put it, just use your own words. She might be upset, lots of times people are when someone doesn't do what is in that person's self interest. Someone being upset for that reason is not the worst thing in the world, especially if they were not a friend anyway.
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In the past, I've turned down two potential clients because it was so very obvious they were cheating. They knew they were cheating. All I said (calmly) was, "I don't wanna do the tax return." Neither asked why. Because they knew why.
Your EIC gal already knows you are friends with her parents. She already knows you are aware she is lying to get the EIC.Comment
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If you can get away with that explanation. (I couldn't think of a good out for you, however.) If I told any of my clients that, I would lose half of them. Since they are all referrals, half of them are related to somebody else I do.Comment
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I think the easiest thing to do is tell the truth. Tell the mom you and the grandparents have been friends for twenty years and you talk about everything. Tell mom the grandparents mentioned in passing that the kids lived there all year long last year. This is not a breach of client confidentiality since the conversation had nothing to do with taxes.
Tell her that because you know this information that you will be unable to prepare the return as she is expecting and as you have done in the past, but you will be glad to help her prepare an accurate return.
If the grandparents are the kind of people you say they are, then they will respect you for maintaining your ethics in a very tough and awkward situation.
You will learn a lot about mom and the way she reacts to this news.
Would all agree that this conversation would not be considered a breach of client confidence?Comment
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I sure wouldn't want to refer her to any of my peers that I know. I guess I would just suggest that she go to Block or Liberty. Meaning nothing bad about either place. She will go in and tell them the same thing she told me and they will file her return and she will get her refund. I couldn't send her to someone that I know because I couldn't tell them the situation and I wouldn't want them to end up with fines if it gets checked on. OH, I HATE dealing with issues like this.
Think I will advise grandparents that if the children are with them all year and they have guardianship papers, they need to file the children on their return. Then let the chips fall where they may.
Linda, EAComment
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The best thing is to make no suggestions. As in "I'm sorry, but I really can't make any recommendations."Originally posted by oceanlovin'ea View Post
As for the grandparents, they don't need to file the children on their return. There's no requirement that you claim all the dependents that you can, and there are times when it's beneficial not to. In this case, it sounds like there's no benefit to them, and family downside if they do claim them. All that needs to be said (to the grandparents) is that they're allowed to claim them because the grandkids lived with them.Comment
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Thank you
I want to thank all of you who gave me suggestions and advice on this issue. I am really not good at handling confrontations at all. All of this will be over the phone anyway. I haven't seen her in years.
You just give me confidence to do the right thing or the thing I know I have to do.
Linda, EAComment
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I understand about the confrontation part... I am not really good at it either. I was in a similar situation to yours except my clients daughter, the husband, and child was all living under the same roof... absences from family disagreements that may have added up to six months. They did not work or provide for the child at all. It was being done by the grandparents. One year the son in law decides to work for awhile just enough to get EIC. They wanted to come to me to do it. I had to tell them no because I knew of the situation. I am also close friends with the family so I knew a little more than most would. I told them to go to a major chain store to get it prepared and that I could not risk the penalties. I believe the daughter did get mad at me because when I see her out she doesn't speak. Which is fine with me.Originally posted by oceanlovin'ea View PostLast edited by geekgirldany; 03-22-2015, 05:35 AM.Comment
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Yes, son in law is the husband... nothing stopping them from claiming EIC according to the IRS other than my suspicions. I was trying not to go into much more detail... but according to my clients the daughter and husband had left multiple times due to family arguments and whatever else. They either left the child with the grandparents and took off.... or took the child with them.
My better judgement was telling me that this is a family thing and not to do the return. I believe that support should be included for qualifying child for EIC. Basically my gut was telling me not to do the return.Comment
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There is no support test for EITC. That doesn't mean it should be ignored if it leads to other questions, but by itself, a child who is self-supporting but meets the other QC tests can still be qualifying for EITC.Comment
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Why don't the grandparents claim them?
Why don't the grandparents claim them?Comment
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I don't believe that there's any reason you can't do the daughters return but without listing the kids as her dependents. You know and have every reason to believe that the daughter doesn't live with the biological mother. After all, along with legal guardianship comes the right to claim them as dependents for the grandparents.
I would give the mother the questionnaire and ask for supporting documents (health care, schooling, etc.). She won't be able to come up with it. And if there's anything else in conflict with what you have, you can use that to tell her she isn't eligible. She can withdraw and go somewhere else (and fool the other guy who doesn't know and will likely rely on the lease) or let you prepare the return without the Head of Household status.
I have clients who have a granddaughter residing with them all the time and going to local schools. The biological mother has died. And the biological father lives in another state. During the first couple of years I did the returns, I kept asking why they wouldn't let me place the granddaughter on their return but they didn't want to upset the apple cart because the dad did claim her. As in this case, he didn't really provide any support but was probably getting the benefit of the EITC and dependent exemption (return not prepared by me).
In another case, I did a return for a woman who had an adult son she kept telling me had been receiving Social Security disability payments and lived with her. When I found out differently, I refused to do her return.Comment
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Steve
She faxed me a copy of her lease agreement which does list the children on it. She couldn't produce school or doctors records because they would have the grandparents address on them.
Then she called and I told her I had to ask some questions from a questionaire that IRS required us to do now. When I asked if the children lived in the household with her more than 6 months she said YES. When I asked if anyone else had the right to claim the children, she said NO. So she told me a bold faced lie. She actually said I could ask the landlord about the kids living with her. Maybe I should do that. Although he might lie for her.
I have to call her now. I haven't done it yet. I really don't like this.
Linda, EAComment
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