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Sorry to confuse. You have to purchase a rider to your E&O that overs loss/theft of client data. You can buy another rider that covers employee theft of same. Tax refund theft is such a ballooning problem right now it's not a bad idea. Thieves know that tax prep firms have the data they want. If you don't get the insurance, at least invest in an alarm system. I know, during tax season most of us feel like we never leave our offices.......but eventually it will be July.

Tonight's topic at the NY/CT-ATP dinner meeting was Cyber Breach taught by the first CPA in CT to have his system breached. The thief was extradited from Bulgaria and is in a federal prison in NJ, but his colleagues are still in Bulgaria and our tri-state area and continue their trade. Expensive. Scary. One of his tips was to add a cyber breach rider to our insurance. (He had very luckily just changed E&O carriers, and his new policy had $100,000 for cyber breach.) He suggested at least $250,000 plus $1,000,000 "third party" for that client who decides to sue you when they lose that mortgage when the IRS sends their bank the fraudulent return instead of their actual return. The IRS had him give a webinar.

PURINA EMPLOYEE ARRESTED FOR STEALING AND EATING OVER $30,000 OF DOG BISCUITShttp://worldnewsdailyreport.com/purina-employee-arrested-for-stealing-and-eating-over-30000-of-dog-biscuits/

​Yes, in many cases, little or nothing will change. I look at one yesterday and it saves about $300/year, but another lower income client was already getting 100% credit. I can't find any older MD forms but I swear the credit used to be against both state & county taxes, then they changed it about 25 years ago so the county tax would show more prominently on the return.

I'm impressed. One of you guessed correctly and KC confirmed it. I'm not a Van Buren fan ... just think he looks kinda cool!

Another article that explains it a little better. Basically, it's the piggyback add-on by the counties that is the problem. http://www.washingtonpost.com/local/md-politics/supreme-court-rules-maryland-income-tax-law-is-unconstitutional/2015/05/18/1e92ee7a-d16f-11e4-ab77-9646eea6a4c7_story.html

I'd like my PTIN fee and renewals refunded too. Did anyone see this class action suit: http://www.forbes.com/sites/kellyphillipserb/2014/09/08/irs-hit-with-class-action-suit-over-tax-preparer-user-fees/

http://www.irs.gov/Tax-Professionals/Registered-Tax-Return-Preparer-Test-Refunds

​Classic!

If you currently are assigned to a sales rep, no other sales rep can process your order. This I know from 3 week old first hand experience. I was also told that the "handling" fee included the cost for the "free" Master Tax Guide that comes with the MAX package. I get the impression that the sales department at CCH for ATX products is being run by a bunch of political people who write narratives to fit a particular situation instead of having a solid company policy in place and requiring all sales people to dispense the same information. Rant over!!

Lots of food for thought and all of this information underscores the importance of being informed and making the right decision for your practice. Thanks to everyone who chimed in! Have a good weekend.

Sharing this because the initial pricing for ATX ends by May 31, 2015. Maybe you can still do good, after --- But I did not want to worry. Finally called ATX today --- found last years rep apparently not there --- so emails probably "lost in space". However did talk with one of my new rep's team (team member - Robert Duncan at 800-495-4626 x 1231 // rep is Will VanKleef same # dif. ext - 1223) and was pleased about "attitude" (old ATX -- facts and full information and answer any questions, etc..). By the way, worked with Will back a few years and he is straight forward too, just as Robert was today. Bottom line, no discount code added to price shown and as a matter of fact -- new price shown on the site is now listed at regular retail (when code block there that was actually price for already customers). My small package lists (now) at a bit over $100 more than my price (I am simply a 1040 package user). My aggravation over the "extra fee" for shipping, CD's and such (since they do not really ship anyway and I use all downloads, etc.)) was partially alleviated when Robert explained the "fee" was not just shipping, etc. but was for them to do a set-up and migration of data each year along with keeping a "pipe" open to SS and IRS for e-filing, etc.. One thing I loved to hear was that the PRS system was again back to individual pricing (yes, business returns are $54.00 while the 1040 returns are $35.00) and I do not have to buy the PRS system separately to do the few returns outside my package. Good dollar savings for me. If thinking or wondering, call Robert or Will and get the facts --- then decide. Have a Great Memorial Day holiday and rest up for whatever congress and the irs throw at us --- next year.

Jerry, you said it well. Enough, I think. We've certainly covered the original question that Taxman asked. So I'm going to close the thread.

​Not familiar with it, but I can answer this part, you set up a free accountant's account with them, then let them teach you how to transfer a client over. That should be the most common of their FAQs. That should also give you a good feel for whether you want to get involved with them, by how well they help you learn their process.

​Actually, I think that is the ultimate goal - to have everything reported to the IRS, no deductions allowed because we have gone to a fair tax system, and the IRS will just bill you if the withholding doesn't match what you owe. I am not holding my breath for that to happen, but that is what some people are hoping for.

I'm a better safe than sorry guy. I have always had E&O.

I have spent between $500 and $600 per year for Professional Liability Insurance for the last 22 years. About 20 years ago I added Earthquake Insurance to my Homwowners Policy for the same reason. It's risk management, you insure against potential losses that you can't afford. How many of you would stop carrying Homeowners/Fire insurance on your home or stop carrying Liability Insurance on your vehicles ???

My, possible most, E&O insurance is based on risk and income. As my business is pretty small, my insurance is $457 this year. I keep it primarily because I do several trusts and the beneficiaries just might not like the way the numbers turn out. Like others here, I do pay for any errors of mine that cause interest and/or penalties. It's in my engagement letter. If the client omits or provides incorrect information, not my fault. If I do the same (transpose numbers, wrong street address, etc.) and a penalty arises from my error, I pay. But I also point out to the client that it was their responsibility to carefully read everything on the return before approving. So far, my errors in over 20 years have amounted to less than $100 and kept the client happy that I was on their side. In 4 more years, the trusts are closed but I will definitely keep my insurance for a year or so after that. Not that I don't 'trust' the beneficiaries... My homeowner's insurance (additional business and umbrella) covers my equipment and any client issues that may arise from tripping, etc. But I have very few actual client visits. This year a 90 year old who insists on coming struggled up the steps. I told her that next year I will come to her. She knocked over my mailbox backing out 2 years ago and nearly hit the telephone pole so I don't let her back out of the drive any more!

back when I only had insurance for tax work it was less than $500 per year. Now that I have coverage for everything but audits my $2mil of coverage is $120 per month. The scariest part of practicing is E-filing, you put in a wrong a/c number etc and you client has huge penalties. Recently a client called that is $750,000 of tax payments didn't come out of his account and he was already demanding that we pay all interest and penalties. Well luckily he was checking from the wrong account. Imagine the late filing penalties if his extension somehow got messed up. Well worth paying for insurance. The most important part of the insurance isn't them paying your penalties but paying for you lawyer when a client claims malpractice.

I have been practicing since 1973 and have never had E&O insurance due to cost. I do have an additional umbrella policy on the house to cover liability in case of falling on the ice, etc. Any errors over the years I have paid the penalty and interest portion and told the tax payers they had an interest free loan from the IRS for the time it took the IRS to find the error.

This would seem to be good insurance, too. Firing "that" guy. You all know what I mean...​

I do not have E and O insurance, but I do have business liability on my Homeowners policy. I explored the issue and the insurance co didn't seem to know where to put my small practice. As someone else cited, if I make a mistake, I pay for it; and I can only think of one instance over the years where that has happened and since it was partially the client's fault, I fired the client.

A couple of months ago, my wife found a deposit of over $6,000 in her account that appeared to be a tax refund but clearly was not ours. She called the bank and they thanked her for bringing the error to their attention. I am just now beginning to speak to her again.

I have had three returns ready for a "taxpayer" to pick up and mail for three years now. He received 1099-Misc forms all three years and owes for all three years. We've all seen those un-mailed red copies of 1099-Misc forms in the issuers' paperwork, but I think IRS gets most of them. It is dumbfounding to me that so many of these go undetected or un-skeered. Don't know which it is or it's some combination of both.

​I still use QB Pro 2003. I will until I am forced to put it out to pasture. When I got the software, I conned the support rep into giving me the password since at the time, I did not have an internet connection. I can load it as many times as I want. I only load it on my machines, but I have had a lot of machines in the last 12 years. Tom Newark, CA

Last year one of my clients state refund was deposited into an incorrect account. The bank (Wells Fargo) accepted the deposit. When we discovered the problem, we called Wells Fargo and fussed with them and laid it all in their lap, even though the tax return had designated the deposit into the incorrect account. Wells Fargo put the correct amount into my client's account. We never found out how they handled the details on their end. We didn't really care. Mission accomplished!

If the calcs show the person is getting a refund, the IRS doesn't bother to send letters. Why would they?

I don't judge. I am happy for the work, and know that usually the client is relieved to get back on track--even if they owe money. The IRS or other collection agencies are just part of the process. We represent our clients when needed and help where we can to reduce penalties. It's what we do.

I agree that speed of data entry is not the only factor to consider, but surely it should be one factor, and an important one at that as its one of the few variables we have any control over. Not only is the entry process quicker, Drake doesn't require that all the docs be sorted into some particular order to achieve any kind of efficiency. The ability to bounce almost instantaneously from Sch A to Sch C to W2 to whatever and then back to point A, is really nice. Another thing that sets Drake apart: when I started with Sabre back in the olden days, I paid about 25% of what ATX now costs. I got essentially what I'm getting now with Max (fed/state/municipal tax prep software and their Zillion Forms or whatever they called it). In the time they have quadrupled their price Drake has had one price increase...of $100. The pure efficiency of the Drake software is impressive. Opening the software, opening a file, zipping around the program, doing the tax computations all happen at speeds that leave ATX sitting in the dust. It is not without its drawbacks, but for me, when I stacked them up side by side, the clear winner was Drake. As I mentioned in my earlier post, a return that 4 or 5 years ago took an hour now takes an hour and a half. My fees haven't gone up 50%! The net effect is that I'm making 1/3 less per hour now than I was five years ago.. Why did that happen? I think there are three reasons: 1) the software is created by programmers (rather than preparers) and suffers from the bloat that seems to be inherent in programmer driven environments, 2) CCH chose to change the programming language several years ago (gee, wasn't that fun?!?), and 3) their apparently conscious decision to make the data entry process increasingly complicated (again, likely a programmer driven mod). It all adds up to me saying a reluctant goodby to a software package I used to love using.

​Deep sigh. What we are talking about is not a fundamental spiritual belief. We are discussing the meaning of a section of tax law. I do share your belief in absolutes and also share your concern that society is blurring those lines. I applaud you for your concern for and commitment to being absolutely faithful to immutable scriptural/spiritual truth--a commitment I share. But this ain't that! In this instance, you are (IMO arbitrarily) placing a much higher burden on the taxpayer than does the IRS. The government does not ask for a declaration that the person is fundamentally opposed to accepting ANY government benefit. They ask only for a declaration that the person is fundamentally opposed to accepting a government sponsored benefit that is linked to their service as a clergy person. Benefits not linked to that service are NOT included in the declaration. Here is the actual statement that the clergy person must certify on Form 4361 (highlights are mine): I certify that I am conscientiously opposed to, or because of my religious principles I am opposed to, the acceptance (for services I perform as a minister, member of a religious order not under a vow of poverty, or Christian Science practitioner) of any public insurance that makes payments in the event of death, disability, old age, or retirement; or that makes payments toward the cost of, or provides services for, medical care. (Public insurance includes insurance systems established by the Social Security Act.) I certify that as a duly ordained, commissioned, or licensed minister of a church or a member of a religious order not under a vow of poverty, I have informed the ordaining, commissioning, or licensing body of my church or order that I am conscientiously opposed to, or because of religious principles I am opposed to, the acceptance (for services I perform as a minister or as a member of a religious order) of any public insurance that makes payments in the event of death, disability, old age, or retirement; or that makes payments toward the cost of, or provides services for, medical care, including the benefits of any insurance system established by the Social Security Act. I certify that I have never filed Form 2031 to revoke a previous exemption from social security coverage on earnings as a minister, member of a religious order not under a vow of poverty, or Christian Science practitioner. I request to be exempted from paying self-employment tax on my earnings from services as a minister, member of a religious order not under a vow of poverty, or Christian Science practitioner, under section 1402(e) of the Internal Revenue Code. I understand that the exemption, if granted, will apply only to these earnings. Under penalties of perjury, I declare that I have examined this application and to the best of my knowledge and belief, it is true and correct. There is nothing there about forever swearing off any and all public insurance benefits--only those that are directly associated with clergy service. Further, there is a clear acknowledgement that the applicant must continue to pay into the public insurance system (via FICA or SECA tax) on non-clergy earnings. The reason for that is that it is the clear intention of the underlying law that the exemption is restricted only to those benefits directly associated with clergy earnings/activities, and that secular earnings are still subject to tax, and that the person is not voluntarily forfeiting any benefits so-earned. Well garsh. This has gotten to be a rather long thread and has deviated somewhat from its original intent. I do enjoy a spirited debate, but I don't think I have anything further useful to add. Therefore, I'll not be commenting on it any further.

Pacun, Your client would be able to use his HSA in either case for his child's qualified medical expenses whether or not the child was claimed as his dependent. See Pub 969 and pay attention to the "TIP" under the explanation of Qualified Medical Expenses.

Client must go to bank with wrong account number and check and see what they did with the money.Happens a couple times a year with my clients takes about six weeks to receive the check.

Going back to my OP: I just informed my rep that I'm switching to Drake next season for the reasons stated above. He replied that he was sorry to see me go but completely understood my reasoning. I was somewhat surprised by his understanding response and the tacit agreement it implied. You'd think with all the grief they've caught over the past couple years CCH would try to do something about speed/bloat issues.

Jack, with all due respect, I think you are still missing the point. I respect your opinion, but your view does not take into account a complete perspective of the law at question. I agree that 'yes' must be yes and 'no' must be no. That is not at issue. What is at issue is what we are saying yes or no to. It is not what you seem to think it is. If it were, I would agree with your point ... but it is not. I would reiterate what others have said: when they opt out, Form 4361 does NOT require that clergy persons certify they are fundamentally opposed to receiving ANY/ALL guvment benefits. What they must certify is that they have a deeply held religious conviction (i.e., a fundamental belief) that it is not appropriate to receive a government benefit that is exclusively related to their service as a clergy person. The underlying rationale is that they do not think it is appropriate for the government to compensate them (even in an indirect way through a future insurance benefit) for their clergy service. To recap, this has nothing to do with whether they can accept any government benefit. It is based exclusively on whether a clergy person can (in good conscience) accept a government benefit that is directly related to performing a clergy service. That is a huge distinction. And that is the ONLY thing they are opting out of.

I think JJ laid it out very well. I personally take a different approach to many of my church and ministry-related financial decisions when compared to my business decisions, and I can understand how a person engaged in full-time or bivocational mministry might make similar distinctions. Over-simplification of life decisions and proof-texting really don't address some complex issues related to lliving under a secular government and at the same time applying one's faith in a meaningful way.