What would others have done?

[DaveO]

I have a few (too few) of these clients

It's always a joy to see them come in. I take the time to talk with them and about their families. Often I'm doing returns for their children and grand children. I see if they qualify for the Homestead tax exemption and if so I prepare it. I will charge a nominal fee for the return. The filing of the return is a ritual for them and makes them take stock at least once a year of their financial health. It's also a chance for some human contact and a chance to make sure someone isn't taking advantage of their finances.

Oh and yes the ethics thing that was the focus of your post. However well meaning your intentions were it was a violation of their privacy. If they feel better filing a return then it's their right to do so as long as they wish.

I had an elderly client come in and announce, "I turned 87 this year, what do I get for that?" I replied, "The chance to turn 88." We had a good laugh and then did his return.

[Gretel]

The others are all right, but I think you knew about your ethical responsibilities before you posted.

I don't know what I would have done. I had a client who insisted on making estimated payments each year, even so he was far below filing requirement. He just was very scared the IRS would want something from him. It still was his choice to follow his fears for which he is responsible and I respected that choice. Nevertheless I had compassion with him and charged him considerable less.

I have compassion with you too, I, myself, am often enough torn between helping and just respecting someone's choice, which you could have done, but it's no easy thing to do.

[jainen]

On a different issue

On a different issue, I think you were wrong to disobey your employer, which put them at risk. If you are not able to accept the company's policies, ethics requires that you resign.

[Luis Mopeo]

You did violate Circular 230 rules, and also most association's rules of professional conduct. Just remember that ethics and professional responsibility are not about being a good decent person or trying to do the thing that's morally right.

You're not supposed to disclose personal information about clients to anyone except under a lawful request by an IRS employee or other enforcement agency, unless you have permission in writing from that person. What you did was kind and you tried to be careful and discreet by talking to the pastor, but you were taking a risk.

One thing that scares me about these situations with elderly clients is how often the family starts acting like angry pit bulls before the old folks are even expired. Remember, you're only seeing one little aspect of the life of these folks, and you don't know 99% of what their life is about. You could be reaching into a lion's den without knowing it.

Unless someone has been judged incompetent by a court to manage their own affairs, you shouldn't take it upon yourself to declare that they need protection from their own decisions. I know there are some who think I act very strange sometimes too. I hope if I get judged incompetent, it's by a qualified person in the mental health field, not by a tax preparer no matter how good their intentions..

[Zee]

You breached confidentiality ethics

When I was working for a major storefront firm, I inherited from my mentor a wonderful elderly couple. My mentor told me that in a couple of years they would get correspondence from the IRS advising them that they did not need to file. My mentor said that he had tried to convince them of this himself. After doing two more returns for the couple and being told that there had been no IRS letter, I found out that ever since being told by my mentor that they did not need to file, they had been taking the returns home and sticking them in a drawer in case the IRS should ever question their failure to file. I pleaded with them to let me write a letter explaining why they did not need to file. Since they were long time clients of the firm, I could have done this at no charge to them. My pleas fell on deaf ears. I did something that could have got me in trouble. I went behind their back and rang up their Pastor. They had told me much over the years about what a good kind and smart man he was. It took some explaining to get him to grasp that I wanted him to help me get them to NOT spend money with me. Apparently pastors are often asked to get church members TO spend money with someone. I finally got him to understand that one of the core commitments of my faith is not oppressing the poor and another is not taking anyone's money without returning fair value in goods or services. Anyway, I suggested that the couple could increase their giving to the Church by the money they stopped spending with Block. The pastor indicated that they already gave enough to the church and they should spend the money on something special for themselves. But he did talk to them for me and they did go along with my plan. When I moved out of town I turned them over to another Preparer who I felt would take good care of them.

I have since been told that I broke the rules in approaching the pastor without their permission. I got by with it, and I wonder what else I could have done beyond the obvious step of asking for permission. (Sometimes it is easier to ask for forgiveness than permission but I know that sometimes it isn't.) I was an unenrolled preparer at that time and had never heard of Treasury Circular Thirty. I did know that my employer did not like for me to reveal the identities of clients to anyone.

I'll be the "devils advocate". In my opinion, once you explained clearly to the clients they weren't required to file a tax return and they acknowledged an understanding, you fully satisfied your responsibility. Calling the pastor and discussing your client's tax situation without their knowledge was well-meaning, but highly unethical. Would you also call or write the IRS and "turn-in" those with questionable returns even though they satisfied your due-diligence requirements?

[gkaiseril]

Enrolled or not, this is a privacy issue and all prepares should respect their clients right to privacy. This extends to securing any copies of their returns you keep and the secure destruction and disposal of those returns. One also has to be careful not to throw out any confidential or identity information in the circular file container or file 13 container. The federal and state identity theft laws may also come into play.

IRS does disclose:
http://www.irs.gov/govt/fslg/article...158487,00.html

The problem with older taxpayers not meeting a federal filing requirement one year does mean they will not be required to file in a future year. Then there are also state filing requirements, which could result in having to file a state return but not a federal return. Sometimes it is just easier to have the taxpayer(s) come in and review their information.

This year, this couple can get a refund even if they do not have to file a federal or state income tax returns.

[erchess]

When I was working for a major storefront firm, I inherited from my mentor a wonderful elderly couple. My mentor told me that in a couple of years they would get correspondence from the IRS advising them that they did not need to file. My mentor said that he had tried to convince them of this himself. After doing two more returns for the couple and being told that there had been no IRS letter, I found out that ever since being told by my mentor that they did not need to file, they had been taking the returns home and sticking them in a drawer in case the IRS should ever question their failure to file. I pleaded with them to let me write a letter explaining why they did not need to file. Since they were long time clients of the firm, I could have done this at no charge to them. My pleas fell on deaf ears. I did something that could have got me in trouble. I went behind their back and rang up their Pastor. They had told me much over the years about what a good kind and smart man he was. It took some explaining to get him to grasp that I wanted him to help me get them to NOT spend money with me. Apparently pastors are often asked to get church members TO spend money with someone. I finally got him to understand that one of the core commitments of my faith is not oppressing the poor and another is not taking anyone's money without returning fair value in goods or services. Anyway, I suggested that the couple could increase their giving to the Church by the money they stopped spending with Block. The pastor indicated that they already gave enough to the church and they should spend the money on something special for themselves. But he did talk to them for me and they did go along with my plan. When I moved out of town I turned them over to another Preparer who I felt would take good care of them.

I have since been told that I broke the rules in approaching the pastor without their permission. I got by with it, and I wonder what else I could have done beyond the obvious step of asking for permission. (Sometimes it is easier to ask for forgiveness than permission but I know that sometimes it isn't.) I was an unenrolled preparer at that time and had never heard of Treasury Circular Thirty. I did know that my employer did not like for me to reveal the identities of clients to anyone.