I'm in a hole

[Davc]

Ask the potential client to sign a release allowing you to contact the employer.

[sea-tax]

Ask the potential client to sign a release allowing you to contact the employer.

No offense DAVC but really are any of us that starved for clients that we must go to these lengths to retain business. I for one when faced with what I deem improper dealings willl kindly disengage my self .

[veritas]

I have read of individuals

who file for an EIN for a totally ficticious company, file bogus 941s and generate W2s. How on earth could you verify that?

I might add if the return address was Folsom prison I would hesitate to use the W2.

[fliszt]

Jainen,

My response before reading all of the replies, (especially Brad's) would have been to call the employer and say something about wanting to verify the W-2. Then I would have mailed the W-2 back to the client stating I would not be able to prepare the return. So I would have been totall wrong in doing that. I HAVE called employers in the past, to advise them of an incorrect code or s/s# or the like, but I have always asked the client if he/she minded if I call. No one has ever refused me. But thanks to all the posts, I will ask the client to call from now on. Thanks very much.

[ChEAr$]

And who do you think

"SECTION 7216. DISCLOSURE OR USE OF INFORMATION BY PREPARERS OF RETURNS


(a) GENERAL RULE

Any person who is engaged in the business of preparing, or providing services
in connection with the preparation of, returns of the tax imposed by chapter 1,
or any person who for compensation prepares any such return for any other
person, and who knowingly or recklessly--

(1) discloses any information furnished to him for, or in connection with,
the preparation of any such return, or

(2) uses any such information for any purpose other than to prepare, or
assist in preparing, any such return,


shall be guilty of a misdemeanor, and, upon conviction thereof, shall be fined
not more than $1,000, or imprisoned not more than 1 year, or both, together
with the costs of prosecution."

is actually going to persecute/prosecute us for calling the employer in this case?
Certainly not IRS, who in fact urges us to report suspicious activity.

In such a case as this, I would, with new client sitting here, as him to bring in his
last pay stub to verify the figures. If he balks at that, I would then suggest that I call
the employer with his permission. if he agrees, no problem. If he balks at that ,
then it's goodby Charlie.

And then after he had left I would notify IRS CID, since I would have already entered
the W2 info in computer.

[Brad Imsdahl]

How about the client suing you for illegally disclosing the information?

Two wrongs don’t make you right.

[taxmandan]

I also would not contact the employer. If something about the client/W2/income level doesn't pass the smell test I would decline to prepare the return and leave it at that.

[ChEAr$]

huh?

How about the client suing you for illegally disclosing the information?

Two wrongs don’t make you right.

Were you asking me that? I explained in my post "with client sitting there."

[jainen]

wasting time with a liar

Thank you all for your wisdom. I went back to that other forum and asked the question again, and they all unanimously affirmed that it is the preparer's obligation to investigate the fraud. (Nobody can cite any authority for that opinion, however.)

The consensus on this board seems to be that it might be nice IF the client agrees, by why bother wasting time with a liar?

[Black Bart]

Irony

I hold this privacy law in just about the same regard as that controversial medical confidentiality law enacted a few years ago -- the one that wouldn't let the hospital tell you if your dad was still alive after a heart attack (who else/what crooks would be interested?)

[QUOTE=Brad Imsdahl
...PREPARERS OF RETURNS...shall be guilty of a misdemeanor, and, upon conviction thereof, shall be fined not more than $1,000, or imprisoned not more than 1 year, or both, together with the costs of prosecution...You just disclosed confidential information to this fake employer[/QUOTE]

How richly ironic is this situation. Crooks are ripping off the system, IRS wants us to "do your duty" and turn them in, but there's a distinct possibility that we could get a fine and jail time if not done "just so." Meanwhile, the "W-2 faker" very likely gets off because of political correctness. Thanks, but no thanks.

[Black Bart]

Tell you what;

I went back to that other forum...and they all unanimously affirmed that it is the preparer's obligation to investigate...

I've never done it and I don't know what all is involved in a CID investigation, but it's a government function (which gives you an idea how tedious it could get) and I'll also bet on two things: (1) the people saying "do it" have never done it before (2) when they get finished with the probably-involved phone calls, discussions, paperwork, time, stress, thought, etc., I'll bet they very much regret having gotten into it over a "short form" and spending time equivalent to that in which they probably could have done a set of corporate books.

[JON]

jainen

is right. Still do not understand if client (you should not have) hands you the W-2 and says he does not work there or he is using it to improve his return. My practice does not take walkins, but if he says it is not his, but has his social security number on it-I will give him the appropriate IRS telephone number. If I think the W-2 is wrong, why the ink is bad the numbers are wrong-I do not calculate those. If you are not comfortable with a client WHY do his work, but you do not call anyone-the client or former client can call all he wants.

[Brad Imsdahl]

I went back to that other forum and asked the question again, and they all unanimously affirmed that it is the preparer's obligation to investigate the fraud. (Nobody can cite any authority for that opinion, however.)

Tax law has nothing to do with common sense. Tax ethics has nothing to do with common sense.

I cited a code section that clearly puts the tax preparer in danger of jail time for acting on common sense. The reason nobody on your other board can cite any authority for their opinion is because their opinion is based on common sense, not tax law.

[sea-tax]

Jainen not that i don't believe you but for sake of arguement could you tell us which forum your on having this discussion. Because I will want to avoid it like the plague if the majority on there think as you have said. Also I know you like to make up certain cases just to get the pot sturring. I like those posts just kinda having a boy cried wolf too many times kinda moment.

[jainen]

all the people I disagree with

>>avoid it like the plague if the majority on there think as you have said<<

If I avoided all the people I disagree with, I would be a hermit!

It's the ATXers Community at www.atxinc.com. The first thread was several days ago called "W2's fake or good?" and I started a new one called "nobody agreed with me."

I told them the consensus here was that you can't or at least shouldn't call the employer. One of their members identified y'all and said I hadn't given you the problem the same way as the original post. That's true--I isolated the ethics question about calling the employer.

Another point I made is that calling the employer might not even work--it would be the worst thing to do if the payroll clerk was in on the scam. I think that's why the IRS just wants you to give them the info and let the professional investigators do the hard stuff.