Tax Preparation Ad As Part of W-2 Set

[JohnH]

Every year I see this & every year it puzzles me. A client comes in with a fancy W-2, computer generated in one of those fancy & expensive sealed sets that open sort of like the SSA-1099 form. When you open it up, one part of the page is a discount coupon for a national tax preparation chain. I assume they either pay for the advertising or maybe the pay for preparing the W-2 forms.

Anyhow, I've always thought this was against the rules. Yet, this is a very large grocery chain with enough lawyers on staff and retainer to prevent them from breaking the law or doing anything to get on the wrong side of IRS. As I'm shredding the coupon, it always puzzles me how they are getting away with this.

[Pacun]

It is against circular 230.

[JohnH]

I know. But this is not a fly-by-night operation. It is a large company with plenty of legal advice, and so is the tax preparation firm. Doesn't really matter to me insofar as my business is concerned, but it arouses my curiosity that they have figured out a way around the rules that everyone else must follow. As a matter of fact, I'm surprised that if they can get away with it, there aren't other large companies doing the same.

[jklcpa]

This topic posted by last year is the same discussion and has some links about the rules and how to report it.

[Lion EA]

My bank includes a Turbo Tax coupon.  I actually called a manager one year to vent.

[kcjenkins]

A bank or credit union can give them away, and often do, but not included with a W-2 mailing.  

[JohnH]

I stumbled across a possible answer to this question.

Seems outlandish, but just might be true.

The rules prohibit any advertising ON the W-2 form itself. They also prohibit putting a business card or coupon in the ENVELOPE containing the W-2. All the ones I've seen have been the tear-apart forms with serrated edges all around that you burst open to get at the W-2. In the process of doing all that folding & tearing, this coupon is the inside part of one of the outer protective "pages". It was suggested that this isn't an envelope in the traditional meaning of the word. So it technically complies with the rules because it isn't in an envelope.

If that really is the explanation, then I have to hand it to some slick lawyer somewhere for the most creative reading of a rule I've seen in a long time.

Edited February 25, 2015 by JohnH

[Jack from Ohio]

Even if you report it, nothing will be done.  Sad but true.

[SaraEA]

We see a bunch of these coupons every year. Since no one in the office has the time to work on their own returns, we're tempted to use them ourselves. Or maybe bring a PIA return to them and let them do the work at a discount, bring it back to the office and charge the client full price. Or hand them to PIA clients and tell them that place can do their return cheaper. Whatever you do don't shred them....the possibilities are endless.

[JohnH]

Oh, I like that idea.

Give the coupon to a PIA and say "We've arranged to get you a discount."

[Cathy]

This is from memory as I don't have my software installed on my laptop and my "Go To My PC" isn't accessible as my office computer is off.  I was really disgusted when I saw Wal-Mart's name on the E-File Info sheet in my ATX software.

 

Wal-Mart is competing with ATX's clients and we all have paid them well for their product. "We'll prepare your return and give you a $50 gift card instantly" per tv ads and billboards outside Wal-Mart.  And ATX expects us to even suggest to our clients that they receive their refund on a Wal-Mart card (by memory again)!!??!!

 

CCH needs marketing personnel with some common sense desperately!