No Charge Tax Return

[peggysioux]

I am using TaxSlayer Pro for the first time this year and it is not allowing me to mark returns as non-paid preparer for the few returns that I complete at no charge. My tax software is stating there are only four categories that are acceptable as non-paid preparers - TCE, VITA, IRS Prepared, and IRS Reviewed. My previous tax software allowed me to mark as non-paid of the few returns I did at a no-charge. Any input would be appreciated.

[erchess]

T think that Tax Slayer Pro is right

and your previous software either was wrong or was intended for use both by people like you and me and by the non paid preparers you mentioned, In the latter case, I would be surprised if there was not something you were supposed to do when you set up the old software to keep the nonpaid box from being available to you. I am definitely open to being corrected here. But I think that if you are a person who prepares returns for money, whether you get paid for doing a particular return that you do in your software is irrelevant. If it there is allegation that the return is incorrect, your exposure to penalties from the IRS and to lawsuits by the taxpayer is exactly the same whether you got paid for it or did it as a freebie for one reason or another. Note that if you take the appropriate offseason training you can work at one or more of the programs you mentioned, using their computers and their software, I believe that you would be well protected from liability.

I will add this from my own history. Years ago, when I worked for one of the major storefront chains, I learned that no one cared if I did returns for my friends for free as long as I did not sign them as paid preparer or collect money. I was told that if I were to sign as paid preparer, I would be exposing my employer to liability for the return. When we gave free forms away to the public we were instructed to use a magic marker to remove our company trademark from the forms lest the firm have liability. I do not know whether collecting money would have had the same effect vis a vis liability but of course my employer would have viewed that as competing with them. And I never thought to ask whether a person who has their own shingle out may legally use Turbotax or their hands to write a free return and not sign as paid preparer.

[David1980]

IRS 1040 form instructions page 62:

"Generally, anyone you pay to prepare your return must sign it in the space provided. The preparer must give you a copy of the return for your records. Someone who prepares your return but does not charge you should not sign your return."

Sounds to me as if it would be proper to not sign a "no-charge" return.

[erchess]

My policy

has been to do for free only very simple returns for low income people. Most are dependents of paying clients. I do sign as paid preparer because as I indicated above I believe I am legally required to. I know for a fact that when I sign as paid preparer I expose myself to Preparer Penalties and to Suit by the client. I therefore do these returns only for people I believe to be honest and in very simple situations. I did have a caller this week who lives near me. I do returns in the homes and offices of my clients, so how near she is to me matters. She had no need to file except to get the rebate based on Social Security and I told her that I would do it for free if I could do it pretty much at my convenience but I pointed out that if she could get to the library the next day she could get it done free and that was sooner than I was going to get to her.

[erchess]

Good Heads Up

IRS 1040 form instructions page 62:

"Generally, anyone you pay to prepare your return must sign it in the space provided. The preparer must give you a copy of the return for your records. Someone who prepares your return but does not charge you should not sign your return."

Sounds to me as if it would be proper to not sign a "no-charge" return.

However, I wonder if there is something about using your software that changes this since I know that my former employer thought there was. I definitely want to see more on this thread.

[Earl]

non paid preparer

When using Taxslayer you go to the personal information section. Enter into the other categories box. Within the other categories box you will see the statement "Are you a non-paid preparer"? Mark this line to show yes and your name should not appear on return.

[FEDUKE404]

Another approach

I tend to agree with erchess, and chuckled highly (was it those sickly green emblem folks?) about covering up the company name with the marker "solution" on the forms given to those who asked for a blank form....frequently for their dependent children with one W2 from a summer job. Heck, we later could not even give away the real IRS forms/packets that (at the time) clients had brought in and were in the (pre-shredder days) trash can in front of them. ("Sorry, you gotta go to the Post Office" received many incredulous stares!!)

My business is reasonably small, I do NOT advertise (learned my lesson on that one, word-of-mouth only), so I can do things a bit differently. I prepare several "no-fee" returns each year for various reasons, but still show my name/signature as "paid preparer." If the software is backing you into a corner with the fees, just give a 100% discount/markdown. I do not e-file the returns, unless they request it, as that is a charge to me with my current software scheme and that aspect can be handled differently by any ERO.

While I'm "old school" I have far less problems (none!) with those types of returns than many of my blankety-blank paying clients, but that is a different topic entirely. I do find that frequently those gratis clients, or their friends, eventually return as paying clients so the initial investment on my part can be worthwhile.

Good luck!

FE

[LawrenceGR]

Fe

I think you and I have similar practices. I also have a pretty small practice (200 returns ) and I don't care to take on all comers. I do not advertise, I get most new clients from current clients, do their dependent children at a steeply discounted fee. I once had a guy that wanted to put name on his website for tax services, I politely declined. I don't know about you but I work out of my home. I'm a little reserved about who comes and who doesn't. One thing is for certain I use this board quite a bit, while I don't post that much I read many of the other posts. There is a wealth of knowledge on this board and I'm thankful so many folks, like you, are willing to help out from time to time.

[winnie]

signing return

Here in NC, Don Farmer has a big following and offers excellent CPE courses. He had one on the new penalites in 2008. (How is that for a miracle - already have 4 hours of CE!). Anyway, he reiterated that if you aren't paid you are not a paid preparer and you do not need to sign the return. Even saying that, I end up listing my name anyway, because I don't want to wrestle with my tax software. I used to override and make it blank, but don't bother anymore.
Especially since I efile some.

[oceanlovin'ea]

Few no charge returns

I have a very few people that I don't charge to do their returns.....my children, of course. But I still feel that I am responsible for what is on that return. In the software I just discount the price to zero.
I have 1 or 2 other people that I have done returns for that I don't charge....one is like my daughter.
I have always just signed the returns. IRS doesn't know if I charged for the return or not. Again these have been very simple returns....except for my daughter and son-in-law's return.

Linda F

[Bonnie]

I too am a small size in home preparer and do several free for various reasons (my children and a few for dependent children of customers.) If the children are still in school and making very little income, I don't feel right charging them to do an E-z return that takes 10 min. I also look at it as an investment into future customers. If I do the return when they are young, they will continue to come to me as they get older and need a preparer. I already have several that fit this scenerio. I did a return for a new customer last week who then said they were going home and do the college son's return to mail in. I thought for a minute and volunteered to do it at no charge and efile for him. Since he is in college, it won't be long until he is on his own and needing a tax preparer. Who will he come to then? Probably me. So the small investment for me to do the return now will pay off in the long run. I would never think of not putting my information on the return and signing. I just sign them all, even the free ones.

Bonnie

[fliszt]

I use Intuit ProSeries

and it allows me to enter the "Non-Paid Preparer" on the tax return. Last year for some reason I had difficulity having it show up on the MN return. This year is fine.

[Zee]

What about Drake?

I use Drake. I don't know if there's a way to print Unpaid Preparer, other than maybe setting that up as the name of a preparer. Does another Drake user have a suggestion?

[Holland]

I use Drake. I don't know if there's a way to print Unpaid Preparer, other than maybe setting that up as the name of a preparer. Does another Drake user have a suggestion?

One screen 1, select NONE (self-prepared) or select the blank preparer so nothing prints.