MsTabbyKats

Hmmmm........do you think it has to do with not getting the refund they've been anticipating? It's my business.....if the people don't like my rules....I am not obligated to do the return.

I find the opposite. When I get a client that had one of those returns previously....and I tell them I will not deduct their cruise, or new car, or ring....they get upset. I only remember one time when the client wanted me to amend and do a legit return.

To add and to clarify- In both cases....the deli worker and the guy with the mortgage: If the IRS were to question either they would pass with flying colors. The children are their children.....all born here (all parent's born elsewhere). They support the children, the pay rent, the kids go to the district schools . The kids go to the doctor. They could get letters on letterhead testifying to this easily. There is no doubt in my mind that they, on paper, qualify. And as to this compliance officer that I'm supposed to be afraid of: I work out of my apt. He can't make a surprise visit. I'd be able to comply before he'd get here on an appointment. No worries here about Karen Hawkins making a house call! If I were to question either person about how they can support families on such a low income in NYC.....both would tell me about gifts from back home (gifts...non taxable, back home....not their foreign accounts).......and praise the USA....for having a system that gives them Medicaid and food stamps...free education etc......but meanwhile be laughing at those who pay the tax that affords them all their benefits. Do you see why I'm sick and tired.....even though they technically qualify.

The taxpayer isn't doing anything wrong....based on the rules. I just don't like the rule that allows this. If he were ever to be questioned (which is highly unlikely), I would fail the due diligence test. May I add that this taxpayer lives in a luxury rental building under some sort of subsidized program.......while I pay "full rent" for a smaller apt in an older building one block away. It's my personal decision......but shouldn't whomever is subsidizing his apt be a detective too? The taxpayer is saving more per month on rent tha his entire EITC credit! And although some people may feel I'm too lax.....I can differentiate between reality and nonsense.....and I'm sick and tired of the nonsense. Personal rants over

Let's see....there is this client AND his 4 brothers and his father. All make a low W-2 and all have non- working wives and 2-3 kids. But only one has them has a mtge. The only other ridiculous one is the guy who makes about $15,000 on a W-2 from the deli.....yet has about $250,000 in stock trades (losses). I've been doing all of these for about a decade. I've been seriously thinking of just saying I don't do EITCs anymore. It's not that I'm afraid of Karen Hawkins.....or getting penalties. It's really that I'm sick and tired of people getting $$$ that they are not entitled to......while others who really could use money pay tax and subsidize these deadbeats. I have a few single mothers who are legit......and I'm not going to demand anything from them as proof.

I always tell the people: You should be happy your tax is so high....it means you're making money.

And let's look at our system. The taxpayer pays us.....so we interrogate them...and which implies they are lying....and make them prove that they are telling us the truth. And...if we cannot get the truth out of the taxpayer.....we have to pay a penalty.

Yeah....and I've just illustrated why I might not bother with EITCs anymore. I mean...with this guy specifically....it really makes no sense. (How did he ever get a mtge is my question!!!!) But, technically...the paper work is all legit and bona fide. It's not even like he's doing a Schedule C and adjusting the income to get the max credit. I always thought of myself as "working for the client" because, after all, the client pays me. But the IRS is making as if "I work for them". And I don't. If the IRS cannot put 2 and 2 together.....ugh!

Ok...I'll put him in an interrogation room....with the threat of waterboarding....unless he confesses. The bottom line is that he will tell me what he wants me to know....and nothing more. Privacy rights....I cannot delve into someone's personal business. As others have said....when the IRS pays me to be a detective....I'll be a detective.

What exactly don't you understand? People have told me Karen Hawkins would put me in "tax preparer jail" if I don't get the 8867 signed....although I said that rule is not written anywhere...nor is there a space for signing. I don't know what's true or false....I only know what I am told. Maybe he gets huge gifts from his family (very large family) every year. (I do have clients that get large gifts from abroad.) Don't you think the IRS should do some legwork here? After all...they have a lot more pieces of the puzzle. And I am not allowed to invade his privacy! I don't think this whole scenario makes sense....but I don't know any facts to the contrary....so who am I to judge? And why is determining the truth...beyond the paper that I am given and what I am told....my responsibility? Now...Mr Pencil...do you honestly believe that each and every client of yours tells you the 100% truth? Nobody forgot to tell you about an Ebay sale for $50? Or, interest from a bank for $4.73?

The person in question owns a "fast food place". I don't do his corporate tax return. The corporation issues him a W-2. The W-2 is generally for something like $15,000. I know where he's getting his money....but it's NONE OF MY BUSINESS.....remember...all those privacy issues! Is it my job to interrogate him...and ask him how he feeds & clothes his family? He can tell me they eat scraps left over from his "fast food place"....and take clothing from the Goodwill bins. My job is to take the papers he gives me....and enter them in the program...and come up with a result. If the IRS feels this is ridiculous....let them figure it out. They have his SS#....and can link it to his mtge loan and his corporation. I'll just go over the 8867....and have him sign off. When I signed up for this occupation...a tax preparer was only responsible to enter the data given to her by the taxpayer. They made me take a test....I did. They made me take classes....I did. Then it turned out I didn't need the test or classes. Now...they want me to be their police!!!!! In thinking it over....no way. I'm not following the client around; I'm not asking what he had for dinner yesterday. That's not my job. On paper....he's fine. Period.

A couple of years back I went to the annual IRS seminar....and I got so "upset' I was ready to call it quits. Rules...rules....rules.... I wasn't the only one.....everyone I spoke to felt that way. I do what's best. I do what's logical. I follow the rules as best I can. But I can't worry about every return. When that day comes....I'll call it quits. It's a very sad state if the IRS uses resources on someone like me....who does less than 10 EITC returns/year....for anything other than just not allowing the credit. Part of Karen Hawkins job is to scare everyone. She seems to be doing it well.

Wow...I think we're all getting a bit paranoid. Me included.......... I did have a few that were questioned by IRS (a few years ago) and lost the credit....but that was it....they couldn't send proof that the children lived with them (school verifying child's address, or doctors letterhead stating the child was a patient with the child's address)......nobody went to jail, nobody got a fine.....just nobody got the credit. Verify as best you can where the kids officially live...and the relationship. And....if things just don't make sense....and if you feel uncomfortable with the return....don't do it. We aren't the tax police or social services. Most important....the "dishonest people" know very well what they need to tell you for the EITC....people lie. So...get that 8867 signed to CYA. (LOL...my best ever was "a married couple" with a huge refund. The $$$ was going into his account. About 2 minutes after I e-filed....she called me all upset. Seems they weren't really married and she was upset the money was going to his account. Now...should we be asking for marriage certificates too? If they say they're married...I take that at face value.)

You know, I feel the same as you. However, as my husband always points out (he thinks my prices are way too low...and that I should charge as much as those with real overhead)....my clients get very personalized attention. I don't think "the big guys" can do that....I don't think you even get the same preparer at "the big guys" every year. The personalized service should command bigger fees, if anything. I don't know about you....but "my people" contact me year round about "life changes" (new job, new baby etc). I can't imagine calling H&R just to tell them "my wife had a baby!" I've already decided to charge more this year (another thread). What's the worst than can happen....less work but the same income. And with "all these risks", who needs the potential headaches without the additional compensation.

I'm not doubting she will eat me alive.....but, can anyone cite where we are required to get a signature? As the new season approaches.....I have more and more clients I plan to outsource.

Are there written instructions anywhere stating it needs to be signed? My software doesn't mention it....nor is there a signature line.

I completely understand all these variables....however....these people (not specifically anyone....but mine for sure) are still eating. How can one justify...in my #1 case....paying more in mtge interest alone than the entire W-2? Logic is involved (or, as my people say "sechel")....it's impossible.....and leaves too much room for questions. I don't have an issue with people who honestly "have a bad year" and get the credit....but when it goes on for years and years (and is 100% legit on paper)....even I have a breaking point!

If you own rental properties....you are a landlord. This isn't the same occupation as being a real estate broker. I forget the hours you need.....but if you are a full time "anything"....it's unlikely you'd have enough time to devote to your occupation as a "landlord real estate professional". I declined a job once because of this issue. He claimed he was a professional.....I knew he wouldn't qualify. Sure enough....he was audited....and not very happy with the outcome.

Just gave me an idea.....gonna have the client sign/date the 8867....with a handwritten statement by me.....acknowledging the information is correct..... and keep a copy with my files. Thank you............

You mention that they have seven rentals. This would fall under my "EITCs to stay away from". Why? Because in theory people who are landlords have assets. I have 2 (one is a guys whose mtge payments are more than his W-2 income....and he has 2 kids and a non-working spouse........the other one has hundreds of thousands of dollars in stock transactions and has three kids and a non-working spouse....also W-2) who may need a new preparer.

However...if you're doing it according to IRS regulations...you shouldn't get a penalty. You really need to use common sense about this whole EITC thing. The IRS isn't going to question someone claiming $5. That wouldn't be very cost effective on their part. IMHO...it's the questionable returns that we need to focus on....such as Schedule C people. And...people with investment income that get EITCs. I know I'll be "stepping on toes" this year with a few people. But, I'm not risking the fine.

I got my CCH "1040 Express Answers" today. OMG....it's almost a year since I found this board when I was desperately trying to get TRX to work.

Sounds to me like they're trying everything they can to get anyone they can.

The program cannot possibly know that Mr Pencil does a thorough interview to verify that the taxpayer is entitled to this credit. It cannot know that he requires the taxpayer to supply documentation, make copies of these document and verifies that they aren't "false documents". My program also "fills in the boxes"....but at the end....unless it has some human input....showing that I worked on the 8867....the program won't e-file. This is exactly what Mr Pencil would tell me if I posted that I ignored the 8867....and relied on a computer to do my work.

I have to write where/how I obtained the info or my program won't allow me to e-file.7