Tax Prep Discount Coupon on W-2

[JohnH]

First one of these I've seen in maybe a couple of years. An employee's W-2 form has a tear-off coupon offering them a discount on their tax preparation fees at a national chain. It's actually a part of the W-2.

I suppose the tax prep firm is paying all or part of the cost for preparing the W-2 forms in exchange for the advertising. It offers them $30 off their tax prep fee or $50 off whatever they paid last year if they switch from another firm. Interesting marketing ploy - I guess I'm surprised there aren't more of these.

[HV Ken]

I recall seeing something last season that this is a violation to some IRS regulation to do that.

Here's the reference:

http://www.accountingtoday.com/news/IRS-Advertise-Services-W2-Form-65965-1.html?ET=webcpa:e6788:210568a:&st=email

You need to be a registered user to view it. but it is free to do so.

Here is the contents of that article:

The Internal Revenue Service reminded practitioners that they should not include advertisements for their services when sending out W-2 forms.

“A recent inquiry sent to the Issue Management Resolution System concerned restrictions on including practitioner advertising with Forms W-2 and other information returns,” the IRS said in an email to payroll professionals Wednesday. “As a reminder, no additional enclosures, advertising, promotional material, or a quarterly or annual report are permitted.”

The IRS then linked to IMRS Issue 12-0001531 for more information.

“Even a sentence or two on the year-end statement describing new services offered by the payer is not permitted,” the IRS noted. “Logos, slogans and advertising may be used on any permissible enclosure such as a check or account statement, other than information returns and payee copies. See the general instructions of the information return for a list of permissible enclosures.”

[JohnH]

That is interesting. This W-2 is from a large company with thousand of employees. I'm surprised their legal dept would let this get by them unless it is permissible. It appears that the company produces the W-2's (not the tax prep company), but for some reason the company agrees to provide the tear-off.

[NECPA in NEBRASKA]

I've had two of them this year with coupons from national firms. If either one of the coupons was used by the clients that received them, they would have a heart attack when they got the bill. They both get discounted returns from me because they are so easy and have both suffered from job loss and illness.

[joanmcq]

If it's a large company, are they using a payroll provider?

[kcjenkins]

A copy should be sent to the IRS, with a reference to http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/IMRS-Monthly-Overview-October-2012

[JohnH]

In looking at the forms, I'm thinking the W2's are prepared in-house. There's nothing to identify an outside payroll provider.

I'm not really into turning people or companies in, unless there's some egregious illegal act going on. I don't see where anyone is being harmed by this, even though it may not be permissible.

[Janitor Bob]

I have seen several of these adverstisements on client's W-2s this year....usually for one of the chain prep firms (Jackson-Hewitt, Liberty, etc), and its always on W-2s prepared by an outside payroll company. I'm guessing the employer has no part in it its just an agreement between big box prep firm and payroll providor....probably some fine print that employer signed that allowed it.

[HV Ken]

I don't see where anyone is being harmed by this, even though it may not be permissible.

My business is harmed by this practice. I prepare W2s and am not allowed to include a coupon, so they have an unfair competitive edge.

[JohnH]

I don't think IRS cares about whether you are harmed (or whether I am).

[kcjenkins]

Since their own rules say it is not allowed, the IRS should care.

[JohnH]

True KC, but I think they're too busy worrying about whether tax preparers dotted every "i" and crossed every "t" on a return claiming EIC (and fining them when they don't) rather than busying themselves with this sort of stuff. I'll bet if someone sent this in to IRS, it would wind up in the trash can.

[taxxcpa]

I notice that K-1s from MLPs tell you that you can import the K-1 information into Turbo Tax. Apparently this is something Tax Act and other DIY software does not do.

This is somewhat similar to including advertisements with W-2s. It would tend to make you less likely to buy anything other than Turbo Tax.

[HV Ken]

I don't think IRS cares about whether you are harmed (or whether I am).

Your original quote was "I don't see where anyone is being harmed by this, even though it may not be permissible." which is what I was replying to. I would agree that they don't care whether I am being harmed, but if they have a regulation on this, they should either enforce it across the board or drop it so everyone can swim in the same pool.

[JohnH]

Yes, I understand. I was just commenting on the IRS - not on your point, which was a valid one.

[HV Ken]

True KC, but I think they're too busy worrying about whether tax preparers dotted every "i" and crossed every "t" on a return claiming EIC (and fining them when they don't) rather than busying themselves with this sort of stuff. I'll bet if someone sent this in to IRS, it would wind up in the trash can.

I sent a complaint in last year when the same day I read that article I posted I received a client's W2 that had a HRB coupon attached. Bet you can guess the response I got....

[Jack from Ohio]

I sent a complaint in last year when the same day I read that article I posted I received a client's W2 that had a HRB coupon attached. Bet you can guess the response I got....

"cricket noise?"