Tax preparers criminally charged - news item

[Burke]

I know they concentrate on percentage of EIC returns in your practice; I am guessing at least 70% of my clients get refunds rather than have to pay, but I have very few if any EIC clients. Once in a while. I guess I need to check to see exactly. Maybe this year will change things with loss of jobs & income..... although the unemployment will be taxable.

[BOB W]

I'm more inclined to think withholding to refund percent... ??? Hummmmm
Kathy was 37% which seems, on average, reasonable.

[Anarchrist]

Likely means # of tax returns with (federal) refunds divided by # of tax returns filed? ?

That's what I thought at first glance but figured most preparers exceed 50% of that calculation. Liberty, H&R, JH, etc probably have 80% of their returns getting refunds. I don't have a way to quickly calculate, but assume my numbers are similar to Kathy's.

[BOB W]

lookout, sell your practice quick!!!!!!!

[kathyc2]

I'm assuming it's this story: https://www.mercurynews.com/2020/04/...ns-of-returns/

Stupid question, but what is "refund rate"? Is it the percent of tax withheld refunded?

I was wondering the same thing. I ran the numbers for my 2018 returns filed and 66% of returns had refunds, 24% had balance due and 11% had neither (zero fed liability). Of the returns with refunds the total refunded amount was 37% of amounts paid in for the year.

[Anarchrist]

I'm assuming it's this story: https://www.mercurynews.com/2020/04/...ns-of-returns/

Stupid question, but what is "refund rate"? Is it the percent of tax withheld refunded?

[Burke]

Unbelievable.

[Rapid Robert]

Saw a story in today's local news. 36 charges of conspiracy to defraud the IRS and filing false tax returns were filed, with a maximum sentence of five years in federal prison, and a $250,000 fine if convicted.

Two things I found interesting.

They were investigated after an IRS computer program flagged their returns as suspicious. The program was designed to flag any tax preparer whose submitted returns for a particular year had a refund rate of more than 50 percent. The returns filed had a refund rate of 70-80% or higher during a three year period.

Second, the preparer would say “it’s your return and I can give you one of those charity things, but once you sign it, it’s you,” Preparer allegedly admitted she sometimes exaggerated a client’s deductibles, adding that she “felt sorry” for people who owed money, stating if a client gives her a $500 amount for expenses, she might add a ‘1’ in front of it. Preparer stated that she knows she is held to a higher standard, but she wants to help her clients,”