Charging for eic and actc

[Justataxguy]

I don't know where ttbtaxes practices, but it is certainly not in the rural south. With the expansion of EIC into the $50,000 income level, some 85% of the population in my town and surrounding countryside is within this income level. Good, solid livable homes can be bought here for less than $80K, and "middle income" is a job between $12 and $15 per hour.

Pretty much the same in my area.

[Rapid Robert]

Yes, but what do you mean by "And Circ. 230 only applies to a select subset of preparers anyway."

thanks

I mean, IRS tried to make Circ. 230 apply to all preparers (RTRP) and was shot down by the courts.

[TAXNJ]

That became no longer true over 2.5 years ago. In general, IRS can only regulate practice before IRS, not return preparation. And Circ. 230 only applies to a select subset of preparers anyway.

From tax update bulletin published by TheTaxBook (TTB). Specifically, they write in summary, (Ridgely, U.S. District Court for the District of Columbia, July 16, 2014):

"The court issued a permanent injunction against IRS for regulating contingent fee arrangements with regard to ordinary refund claims."

Yes, but what do you mean by "And Circ. 230 only applies to a select subset of preparers anyway."

thanks

[Twin Turbo Z]

Over the many years that I have been practicing, I have consciously made a choice to reduce my exposure by excluding the type of clients I take on. That comes with its own cost of less work and therefore less income.

I've run as fast as I could from clients who could potentially "poison the well". People with Schedule Cs that historically have losses and EITC are two I decided not to do to begin with or drop once they met that profile. Where I practice, the income levels cause AMT issues rather than EITC.

We all have our ox to gore.

Must be the blue west coast and east coast Some of us live in the rust belt where the past 8 years has ruined it !! Oh sorry, I was not very PC. Its a joke !!!! or is it ???

[Rapid Robert]

IRS cannot regulate fees

Any preparer fees in any way, shape, or form related to amount of refund (credit) is a seriously large "NO!!"FE

That became no longer true over 2.5 years ago. In general, IRS can only regulate practice before IRS, not return preparation. And Circ. 230 only applies to a select subset of preparers anyway.

From tax update bulletin published by TheTaxBook (TTB). Specifically, they write in summary, (Ridgely, U.S. District Court for the District of Columbia, July 16, 2014):

"The court issued a permanent injunction against IRS for regulating contingent fee arrangements with regard to ordinary refund claims."

[ttbtaxes]

Over the many years that I have been practicing, I have consciously made a choice to reduce my exposure by excluding the type of clients I take on. That comes with its own cost of less work and therefore less income.

I've run as fast as I could from clients who could potentially "poison the well". People with Schedule Cs that historically have losses and EITC are two I decided not to do to begin with or drop once they met that profile. Where I practice, the income levels cause AMT issues rather than EITC.

We all have our ox to gore.

[Snaggletooth]

Geographical Reality Check

For years, I refused to do any return that had an EIC. I did one return last year for a client's daughter. In my opinion, they're not worth it unless you know the person well. A neighbor's child, a client's child, someone who you can have faith in. I won't take in any new client where those credits are involved. No how, no way.

I don't know where ttbtaxes practices, but it is certainly not in the rural south. With the expansion of EIC into the $50,000 income level, some 85% of the population in my town and surrounding countryside is within this income level. Good, solid livable homes can be bought here for less than $80K, and "middle income" is a job between $12 and $15 per hour. I prepare businesses who claim EIC almost every year, and legitimately (as far as I can discern).

[FEDUKE404]

Fees based on refund

I was thinking of charging a % of the credit. Maybe 5% for CTC, 3% for AOTC, and 6% for EIC. With a minimum of $50 for each.

To cover due diligence!

$50 minimum is OK.

Any preparer fees in any way, shape, or form related to amount of refund (credit) is a seriously large "NO!!"

FE

[Twin Turbo Z]

Would be contingency fee. Big no no

[TAXNJ]

I was thinking of charging a % of the credit. Maybe 5% for CTC, 3% for AOTC, and 6% for EIC. With a minimum of $50 for each.

To cover due diligence!

Would that be allowed per Cir. 230? Think you might be kidding.

[DaveO]

I only do EIC returns if I know the client or they are children of a client. I tack on at least $50 for the extra paperwork.

[Jiggers]

I was thinking of charging a % of the credit. Maybe 5% for CTC, 3% for AOTC, and 6% for EIC. With a minimum of $50 for each.

To cover due diligence!

[ttbtaxes]

For years, I refused to do any return that had an EIC. I did one return last year for a client's daughter. In my opinion, they're not worth it unless you know the person well. A neighbor's child, a client's child, someone who you can have faith in.

I won't take in any new client where those credits are involved. No how, no way.

[Snaggletooth]

Twenty-Five Dollars

Normally mine is based on time, but effective last year I added $25 to my fee if there is EIC involved. All the additional questions and risk justifies a separate charge, and the extra fee is more benignly received by the customer because it usually results in thousands of dollars in refunds.

[Burke]

Don't we all, but don't hold your breath. Congress always wants to expand it.....Write Paul Ryan.