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More Oversight Again ?


Lee B

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Copied from Accounting Today:

"The Trump administration’s fiscal year 2019 budget proposal includes increasing oversight of paid tax preparers along with more authority for the Internal Revenue Service.

The budget proposes $11.1 billion in base funding for the IRS, including $2.3 billion for running key tax filing and compliance IT applications and $110 million for IT modernization efforts. The budget also requests additional funds for new and continuing investments to expand and strengthen the enforcement of the tax laws.

“Taxpayers are increasingly turning to paid tax return preparers to assist them in meeting their tax filing obligations,” said the budget document. “Ensuring that these preparers understand the tax code would help taxpayers get higher quality service and prevent unscrupulous tax preparers from exploiting the system and vulnerable taxpayers"

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I do my best to provide my clients with top rate service.  As a CPA (similar to other licenses, such as EA's), I follow a set of rules, obligations, and ethical standards.  I'm comfortable knowing that I do my best to prepare client returns with the utmost integrity.  I'm not suggesting I always get it right, but the client knows I'm not going to break any rules/laws.  With that said, enforcement does not concern me because I have nothing to hide.  Let's hope if they do implement new oversight, that's its reasonable.  Time will tell.   

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As long as they're going after these 'Taxes 'R Us' places first, I'm all for it. But we all know a few CPAs or EAs who prepare shit returns. One went to jail near me awhile ago. I learned of him when one of his clients was being audited and came to me for assistance. I passed their story on to the IRS agent handling the audit.

Plot twist: his daughter was married to my cousin (did not know this at the time). My aunt was defending this preparer one day at a family gathering, and I gently explained how what he was doing was fraud and he deserved some jail time.

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The problem isn't the regulation, it's the interpretation of it by the regulator in your office and mission creep. Look at how much documentation goes into the EIC and apply that to pretty much every form (consider a Schedule C or 1120S for a minute). When I started in the securities industry a new account form was a single page. 27 years later it is an 18 page document with 13 pages of legal wording and we are required to update it every 3 years with new signatures. If I sell a client an individual muni bond the regulatory and documentation burden on that is 5x that if I sold them a mutual fund that invested in the same thing.

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2 hours ago, Roberts said:

The problem isn't the regulation, it's the interpretation of it by the regulator in your office and mission creep. Look at how much documentation goes into the EIC and apply that to pretty much every form (consider a Schedule C or 1120S for a minute).

The IRS wants us to do their job for them.   They think of us a free labor.   If they want us to do this work, prices will have to rise substantially, first to cover our time, and second to cover our liability for preparing the return.    I have no problem with the oversight on me via circular 230 related to my EA license.   But when regulation over me becomes a revenue raiser item in the federal budget, it has gone too far.

Tom
Modesto, CA

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If they would audit tax-in-a-box, VITA, free military prep services, and every single DIY'er, I'd be good with it. But to line us up and use us as free auditors, well... it goes all over me. I can't tell you how many clients we all have lost because TT allows them to click a button saying health care was unaffordable, and totally dish off the penalty. Rental property, depreciation, on and on... DIY'ers. They are making a killing.

I truly believe that after this year, if a client goes away for a year, I am not taking them back. I've taken back at least 6 clients and the thrill is gone. When trust is broken, I am not taking them back anymore. It's trouble, and it's no fun.

Sorry, I got off topic.

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In the new tax "reform" bill, what got killed?

Increased Standard Deduction, Eliminate exemptions, Eliminate Misc 2% deductions and 2nd mortgages, increased diligence on EIC/AOTC/ACC

Seems that someone from the IRS was sitting in the room when this law was getting drafted.  They were at least being listened too...

They blew up all the area's that you could "play". 

Not saying that you can't "play" on a $14.5k Schedule "C" cleaning "biz", or a Sch E but...

Those folks are not here on this forum. 

Rich  

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1 hour ago, Richcpaman said:

In the new tax "reform" bill, what got killed?

Increased Standard Deduction, Eliminate exemptions, Eliminate Misc 2% deductions and 2nd mortgages, increased diligence on EIC/AOTC/ACC

Seems that someone from the IRS was sitting in the room when this law was getting drafted.  They were at least being listened too...

They blew up all the area's that you could "play". 

Not saying that you can't "play" on a $14.5k Schedule "C" cleaning "biz", or a Sch E but...

Those folks are not here on this forum. 

Rich  

I'm doing the Dorito Dance over those 2% deductions, ISTG.

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Tom, Rich, and Possi are absolutely right.  They keep upping the freebie EIC/CTC while piling on regulations, audits-in-disguise,  and draconian penalties to stave off public  complaints about the outrageous fraudulent amounts given away.  All this while branding us as their "partners" (which I strongly resent) and touting "FreeFile" to slice into our income right along with TT and every other Tomas, Diklah, and Hariq (I'm keeping up with social change :rolleyes:) who owns a kitchen table and calculator. 

At this rate they may eventually let us deduct black helicopters and nothing else.

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