Business Model

[erchess]

Would this idea fly legally and would it fly commercially?

I will help self preparers prepare and electronically file their returns.

I can sell them the necessary software at a discount because I will buy in bulk, and I will install it on their computer and show them how to use it and be available later to answer questions.

I can answer questions about tax law.

I cannot press any button on their computer while their return is active on it but I can demonstrate on my laptop with a dummy return. I cannot sign the return because I am not the paid preparer but if they later want representation I can provide it.

1. Could I offer this service (except of course the later representation) even if I were suspended or disbarred from practice before the IRS?

2. Assuming I am an EA in good standing, can I offer this service alongside my preparation. efiling and representation bussinesses?

[JAinNC]

Without stopping to look up the Cir 203 rules agsin - I would say their is a problem with (2. Assuming you are an EA in good standing.)
If you are paid to do this (assisting in preparing) you are not okaying someone's signature.

I don't remember anything saying you can't do this ... There are occasional people you may come in for a consult on handling a complex matter in their own self prepared tax return (I have 2 or 3 a year and I charge for my time but no promises of representation because I usually don't see the entire return). Why would anyone want to do this?

[Luis Mopeo]

Circular 230, section 10.24:

"A practitioner may not, knowingly and directly or indirectly: (a) Accept assistance from or assist any person who is under disbarment or suspension from practice before the Internal Revenue Service if the assistance relates to a matter or matters constituting practice before the Internal Revenue Service."

Not much wiggle room there.

[Joe Btfsplk]

Selling and demonstrating software.

Circular 230, section 10.24:

"A practitioner may not, knowingly and directly or indirectly: (a) Accept assistance from or assist any person who is under disbarment or suspension from practice before the Internal Revenue Service if the assistance relates to a matter or matters constituting practice before the Internal Revenue Service."

Not much wiggle room there.

Selling and demonstrating software would not necessarily constitute assisting a person in preparing his return. However, doing much more than that would lbe a violation.

[erchess]

The reason I toyed with doing this is

that I was looking for a way to make more money. The thing I would be up against is that self preparers are tightwads who by definition do not value my training and experience.

[Corduroy Frog]

Economics

Erchess, I won't comment on whether this is legal, or in compliance with cir 230, but rather economics.

Economically, you are chasing a dead-end market. The TurboTax customers (or Tax Act) are those who don't want to make a tax appointment, don't think your expertise is worth the money, etc. If they buy a $59.99 package at the store, you might be able to offer it in bulk for $49.99, and even that would depend on Intuit.

I think you could pick up a few customers, but they would be one-year customers only. If they already fashion themselves as computer gurus, and now tax gurus (that's what the commercials tell them), then why would they ask you back next year??

Congrats for thinking of new ways to make money. Nothing wrong with that. But this particular thinking is really sleeping with the enemy. Our market is being invaded by the idea among growing millions that tax preparation is nothing more than keypunching. IRS is behind them 100% because it enhances revenue -- denying these taxpayers access to real expertise.

Our ultimate victory would be going behind these software packages and saving them money. I have customers where this has happened, and they will NEVER go back to doing their own taxes.