Issue efiling NY return for nonpaying family members

[silmarg]

I've used ATX for years.  I e-file several family members returns for no compensation.  Since NYS is a mandatory efile state, I use my ERO to efile, but I don't enter anything in the Paid Preparer section - since I am not being paid.  This year (for the first time) I am getting an error.  It says:

 

"NY will reject any return that does not have a Preparer Name and SSN/PTIN.  If the Paid Preparer is also the ERO, enter the SSN or PTIN on the 'Preparer Manager' on 'Preparers' tab."

 

Is there anyway around this?

[Jack from Ohio]

I've used ATX for years.  I e-file several family members returns for no compensation.  Since NYS is a mandatory efile state, I use my ERO to efile, but I don't enter anything in the Paid Preparer section - since I am not being paid.  This year (for the first time) I am getting an error.  It says:

 

"NY will reject any return that does not have a Preparer Name and SSN/PTIN.  If the Paid Preparer is also the ERO, enter the SSN or PTIN on the 'Preparer Manager' on 'Preparers' tab."

 

Is there anyway around this?

I never understood why preparers are reluctant to put their name on as preparer for a pro bono return.  There are no possible problems that can arise.

 

Can you get around it?  Not likely unless you print it and mail it in.  Get the legislature to change the law?

 

This is another attempt to thwart fraudulent returns and identity theft.

[jklcpa]

I agree with Jack. If you prepared the return, you should enter your name.  If you don't feel comfortable entering your name, you probably shouldn't be involved with the return.

 

I just filed my sister's return that took me longer to print out her copy than it did to prepare the thing, and that was with a n/r PA and out of state credit on DE. It had a W-2 and a 1099R. No way I'd ask her pay me. Some day when she has time off, she'll probably bake some cookies or muffins and share with me. 

[silmarg]

If you prepared the return, you should enter your name.  If you don't feel comfortable entering your name, you probably shouldn't be involved with the return.

 

I don't mind putting my name down as a preparer - I take exception to signing as the PAID preparer.

 

What if the IRS audited you (the tax preparer) after signing all these returns you did pro bono?  What if in the audit they think you underreported your self employment income so they ask for what you charged for each return you signed?  You gonna tell them "oh these returns I charged nothing for".... good luck defending that position. 

[silmarg]

 she'll probably bake some cookies or muffins and share with me. 

IRS will tell you that u should impute those cookies into your income!

[JohnH]

I don't sign returns when I don't charge, because I like to follow the instructions. Page 75 of the 1040 instrructions couldn't be more clear.

" Generally, anyone you pay to prepare your return must sign it and include their Preparer Tax Identification Number (PTIN) 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."

Edited February 9, 2015 by JohnH

[easytax]

I've used ATX for years.  I e-file several family members returns for no compensation.  Since NYS is a mandatory efile state, I use my ERO to efile, but I don't enter anything in the Paid Preparer section - since I am not being paid.  This year (for the first time) I am getting an error.  It says:

 

"NY will reject any return that does not have a Preparer Name and SSN/PTIN.  If the Paid Preparer is also the ERO, enter the SSN or PTIN on the 'Preparer Manager' on 'Preparers' tab."

 

Is there anyway around this?

Here is the URL for NY that speaks a bit about who does not have to register:  http://www.tax.ny.gov/tp/reg/tpregmore.htm

 

Remember they want money when you do (are paid for) ten or more, etc. so they want to track everyone.

[Jack from Ohio]

I don't mind putting my name down as a preparer - I take exception to signing as the PAID preparer.

 

What if the IRS audited you (the tax preparer) after signing all these returns you did pro bono?  What if in the audit they think you underreported your self employment income so they ask for what you charged for each return you signed?  You gonna tell them "oh these returns I charged nothing for".... good luck defending that position. 

The IRS auditor first looks at the deposits in your bank accounts.  If your income claimed on your return is equal or higher, the idea of understated income goes away.  The IRS does not have the capability to look up all the tax returns you signed and ask you how much you charged.

 

This is an irrational fear.

Edited February 9, 2015 by Jack from Ohio

[MsTabbyKats]

Last year I had to indicate that I was the paid preparer on my NY return.

 

My program has a warning system..and it wouldn't let me file without that.

[MAMalody]

<<< The IRS does not have the capability to look up all the tax returns you signed and ask you how much you charged.>>> I think this is done all the time for questionable tax preparers (we are speaking quality here, not illegal).

[Jack from Ohio]

<<< The IRS does not have the capability to look up all the tax returns you signed and ask you how much you charged.>>> I think this is done all the time for questionable tax preparers (we are speaking quality here, not illegal).

Example???

[MAMalody]

Sorry, I have been so busy have not been able to answer.  When I worked for the IRS, when we did an audit and it appeared the preparer was making up law, or doing something seriously wrong and per the audit it appeared this was systemic problem of his, we could and did acquire other tax returns he did to see if there was a problem out there.  We also  had an unofficial QP (questionable practitioner) list, at least in the locale I was in.