Day care won't give ID#

[erchess]

I wonder

California also has a Child Care Credit form which requires the same information as the 2441 - PLUS it requires the phone number of the provider and the FTB uses it to verify the claimed expenses.

how the FTB proves to the provider that they are with the FTB. If I were the day care provider I would want more information about me and my business than could be obtained from any advertising I did and the payment receipts and year end statements I gave out. I have a feeling I would tell the FTB to contact me by mail or stop by with a sheriff's deputy and a warrant, and I also have a feeling I could get in trouble for that.

This is neither here nor there but I don't like doing business over the phone and I particularly don't like saying over the phone anything I would mind reading in the next day's newspaper.

[JohnH]

I learned something from W-10

Over the years, I've seen a couple of times that clients received letters for missing ID numbers for providers on the 2441. Neither was recent, and both were paper filed. Both times the refund was held up until the info was provided. Maybe IRS spot checks this info.

In looking over the W-10, I see that tax exempt organizations are required to furnish their address, but can enter "Tax Exempt" in the TIN box. I didn't know that.

I have our church financial secretary to furnish a year-end detailed summary for each child in our child development center, including the TIN, as a courtesy to the parents. I'll continue having that done, including the TIN, but I find it interesting that it isn't required. From those instructions, I assume that it follows that it's OK to enter "Tax Exempt" in the TIN space on the 2441 when that's appropriate.

[Black Bart]

This is exactly right

I always point out to the client that their provider is not reporting the income and will get in trouble with the IRS if the client claims the credit. I also point out that they are paying less for their childcare than they would pay to someone who is reporting their income properly and I point out that the provider may suddenly fire them after being contacted by the IRS. But I do believe that the final decision must be left up to the client.

and this is exactly what happens. I also disagree with 3D -- I don't see that your position constitutes "skirting the law." Advising clients as to what will happen if they follow a certain course of action (right or wrong) is one of the reasons they're in your office in the first place.

Half the time the sitter's their mom and half the time the income isn't reported. Sometimes they can persuade mom to turn it in and sometimes they can't, but they don't have a lot of leverage anyway -- day care centers charge an arm and a leg for babysitting nowadays.

Whatever the case, it's not the preparer's place to push it -- unless you're prepared to say "I advise you to turn your mom in to the IRS."