Provide Depreciation Detail

[Jiggers]

Large discussion in recent thread on providing information to client or new preparer.

Do you provide the depreciation detail, as generated by your software, with the taxpayer's copy of the return (not the copy going to the IRS)?

Or, do you provide just the Form 4562?

I would put this in the form of a poll, but "ain't that smart"!!! If someone wants to do that, just fine with me.

[jimmcg]

Only the client's copy of Form 4562. Anything else is avaiable to the client if they request it.

[OldJack]

Same post as I just made on the other thread

I make copies of "all" documents given me and return to the client all original documents with a copy of the tax return at completion. I never keep anything belonging to the client.

As a practice policy, I attach a (software printed) copy of the detail depreciation schedule to the client's copy and the IRS's copy of all type paper tax returns (1120,1065,1040,Sch-C,Sch-E, Sch-F, etc) even though I know the IRS does not want the copy. I have done this for more than 35 years. I do not efile as my clients are business clients that don't need or care about efile.

I expect this depreciation practice has resulted in my not having many audits that I might have had otherwise for several reason, one which shows that the taxpayer is doing proper accounting/bookkeeping. This practice also avoids the request for such information from an ex-client's new tax preparer.

[Safire]

I try to remember to give them a copy of the depreciation detail listing with their return copy. Sometimes I forget to print it, but I would always give it to a client if requested.

[Joe Btfsplk]

Depr schedule to client

I always give a copy of the depr schedule with the client's copy of the tax return, but I do not include it with the IRS copy. Only once has the IRS asked for the depr schedule and that was in connection with an audit of a guy who had a large business loss which offset a large salary increase for his wife. The auditor seemed surprised that the depr was OK. I said I didn't know how it could be incorrectly calculated using a computer tax program (assuming the correct asset life was used). He said he often found errors in depr.

[taxea]

provide depreciation detail

I give the client all documents they provided to me and a copy of the return as filed with the irs. I do not provide,automatically on on request, any worksheets (work product).
The IRS is very computerized these days. They do not want excess paper. If a return is manually filed (on paper) the IRS takes up to 12 weeks to input it into their computer. When IRS personnel looks at the "return" they are looking only at required forms.In reality...audits are computer generated for the most part.
If a client receives correspondence from the IRS, the IRS does not pull the "paper copy" to research worksheets.
Providing all of the worksheets to the IRS is useless and to the client only makes it easier for another preparer to take the client from you.
sorry to be the bearer of bad news...taxea

[Joe Btfsplk]

Making it easier for someone to take a client.

If a client wants to change accountants, I have no objection. My obligation is to the client for the work he has paid me to do, which would include providing him a depr schedule in case I drop dead or if he changes accountants for any reason that may arise.

If another accountant can 'steal' my client, that means the client thinks the other accountant is better, cheaper, or some other reason, logical or illogical.. I've had clients switch then switch back for various reasons. Some switch due to a friend's recommendation, then discover the friend's accountant is not all that great. Some may switch because they think I am not that great--and I don't want a client who doesn't trust my ability.

[OldJack]

>>If a client wants to change accountants, I have no objection.<<

Agree. What Joe said is true.

[OldJack]

Providing all of the worksheets to the IRS is useless ....
sorry to be the bearer of bad news...taxea

Not true. Paper returns are sometimes looked at in the selection process which is one of the reasons it take up to 12 weeks to process. Also Its good news when the audit agent see the IRS has had the info before he came to visit even if he has not.

[sea-tax]

I generally provide the client copies of most schedules and attachments with the filing of a specific return. They get one copy included. Now if it is a existing client that needs an additional copy no problem. Client is leaving and wants additional copies of work done assuming all is paid up I will give copies with an additional copy charge. My feeling is I already gave them one copy with original return that they paid for . They want another then they have to pay for a copy, employees cost money.

[thomtax]

Provide Depr Detail

I provide a copy of the depreciation detail to the customer - It is part of what he paid for. Also, prior to the following year, I ask him to go through and mark any equipment that he got rid of during the year. In addition, heaven forbid, if something drastic should happen to me, such as my wife eliminating me , the client needs this info for future filing.

I do not send the detail to the IRS.

[OldJack]

They want another then they have to pay for a copy, employees cost money.

The cost of copies are insignificant to your business cost and it is well worth the goodwill with a departing client to not charge them. It cost you a lot more if the x-client goes around town bad mouthing you because you charged them ten bucks for copies. Your profit should be high enough from that client that an occasional ten bucks is not worth the trouble of having an angry person because of ten bucks. Obviously, that would be different if you were talking about volumes of papers to copy that consumes hours of time to copy.

[fliszt]

I too

give the client a copy of depreciation schedule plus copies of my worksheets. When I obtain a new client and must call the former preparer for schedules, they have always been kind enough to fax to me immediately.
Larry M

[sea-tax]

The cost of copies are insignificant to your business cost and it is well worth the goodwill with a departing client to not charge them. It cost you a lot more if the x-client goes around town bad mouthing you because you charged them ten bucks for copies. Your profit should be high enough from that client that an occasional ten bucks is not worth the trouble of having an angry person because of ten bucks. Obviously, that would be different if you were talking about volumes of papers to copy that consumes hours of time to copy.

I agree Old Jack that it can create illwill and for the one page copy I usually do not charge but when they want copies of p&l's , tax returns, payroll reports and all other info for a whole year. I charge for it. It is time consuming and also I already provided them copies when the work was originally completed.

[Black Bart]

Jack -- Copy for IRS and copy for taxpayer

I make copies of "all" documents given me and return to the client all original documents...I never keep anything belonging to the client....I attach a...detail depreciation schedule to...client's...and...IRS's copy...even though I know the IRS does not want the copy...I expect this..has resulted in my not having many audits...shows...proper accounting/bookkeeping..avoids the request for,,,information from,,,new tax preparer.

My procedures are the same: copy all documents, keep nothing belonging to client (returning all originals to them), put depreciation schedule with IRS copy and client copy.

My thinking on furnishing IRS a copy is the same as yours -- I believe it prevents audits. I've been told that even though computers pull returns out of the pipeline, after that human beings look at the returns to see if they think one needs to be sent on to the auditors. And it stands to reason if that person sees a properly detailed schedule to back up the 4562 figure, then they'd tend to think you have good records and there wouldn't be much point in going further.

The client gets a copy because (1) he paid for it (2) if he wants to leave, he or the new preparer won't have to call and ask for it (those conversations are strained at best). Usually I just make the client get it for me.