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In 2011, I posted the request of a client to eliminate some of the deductions on a Sch C to raise the taxpayer's taxable income. I have printed ten pages of replies from these boards telling me to "run for the hills". I refused to amend the return and she was very angry with me. Fast Forward to two weeks ago: I had to appear in court as a witness for the defendant (husband) because they have since divorced and she keeps trying to get more money out of him. I had to testify that she had asked me to alter a prepared return. I also had to show the engagement letter and refer to the fact that I had ten pages of agreement from you, my associates, that I would not agree to commit fraud. Her attorney tried to make me look uneducated and not capable of preparing a Schedule C return. I believe it backfired on her client because I had kept good records. The big issue was really over the 2012 return and the splitting of income for 11 months. It was an extremely difficult return and her attorney tried to make me look incompetent. I doubt that she succeeded. Bear in mind that I was not on trial here; just a witness for the defendant. The point here is that over the years, this couple has collected EIC in bad business years. They had seven rentals, three Sch C, etc. I have always been able to back up the facts; and since the 8867 became required, I have always filed it. You never know when these returns are going to come back to haunt you.

Having handeled three EITC audits for preparers that work for me the last two they only checked returns that had nieces,nephews,brothers ,sisters and grandchild.You had to have copies of birth certificates to prove the status claimed.They also wanted proof that the child lived in the household.They looked at the 8867 and it had to be signed to prove you asked the questions.All three preparers had done more than 150 EITC returns. In talking to other preparers that have been audited all had done over 150 EITC returns.

Yes, if a client could pay it out in 12 months or less, I just advise them to make the first payment, which then generates a follow-up bill, which they then respond to with the next payment, which then generates a follow-up bill, which they then respond to with the next payment, etc.

>>> It's very easy to do a Schedule C for someone claiming to make $17500 as a cleaning lady with 3 kids.....and you don't need to submit any bona fide proof. It's not rocket science. Any tax preparer who participates in that kind of fraud, deserve the wrath of IRS in my opinion.