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I agree with what has been said. There is absolutely no reason to provide a copy of a return to a third party. Period. Give it to the client either in paper or electronic form (or both). They can then do whatever they wish with it. Our involvement in the process is useless insofar as the loan is concerned, and potentially risky insofar as we are concerned.

I totally GET that! However, I studied and studied HARD for the RTRP; which came to naught. That didn't take away the things I learned. Nobody knew what that test was going to entail. I agonized an entire weekend and traveled 200 miles to take that test. I don't believe the average man on the street; trying to make a few extra bucks is going to go through all that. I have no desire to be an attorney. I have no desire to be a CPA or an EA, because at 75 years of age it would hardly be worth the time and expense. I just don't want to be dumped in the same pot with anybody who suddenly decides it would be a good idea to prepare taxes for money. Also, truthfully, I think the ones who need the most regulation are the HRB and Liberty employees. My assistant "graduated" with 100% from the HRB course. She is no more ready to prepare a tax return on her own than she was before she took the course. She just heard about and learned some things she had never heard of before. As we go forward, we will see how much she retains because all of the tests were open book. On the other hand, I really need her assistance and she will attempt to do whatever I tell her to do. BUT, I have to tell her and this year I will be telling her to "look it up"! There is no substitute for hands-on learning and experience. When I renew my PTIN and my EFIN and take courses to enable me to continue as an AFSP; it means something to me and it should mean something to my clients. And, it should mean something to every person who puts themselves forward as a paid tax preparer.

Both are parties to the return and you can provide a copy of the return to either one of them without choosing sides, and its ultimate disposition is up to them. You could smooth this over with the wife by telling them that the bank will almost certainly require them to sign Form 4506-T as part of the loan application, so the bank will have access to the tax transcript anyway.

I think you're right -- they're coming in the windows. TurboTax has killed off quite a bit of the "easy" short-form traffic -- "free" federal is pretty hard to compete with and thank Allah that AR has a state tax. Too, new franchises pop up quickly. Sometime ago a client from the (now defunct, I think) "MO-MONEY" outfit stopped by asking me to fix his rejected EF; said they couldn't/wouldn't fix it. He wasn't my former client and I didn't have the time to try (more holes in it than a dartboard), but, curious, I asked why he left his previous preparer. Reply: "They gave me a free T-shirt." Go figure. Maybe I need to offer a six-pack with every return......

https://youtu.be/h2caT4q4Nbs

I had a client call and tell me that she went to HRB last year because they gave her sister a ($$$) gift certificate for referring them. She also said that they were totally astonished when they received the bill for their prep. She said, "We will be back to you this year!" I made no comment as I really don't want her back. On the other hand; it is getting more and more difficult to self-prepare. I got two new clients this year who prepared with Turbo Tax and needed the returns amended. Both got large refunds after the amendment. All in all, I stand by my original post. I take ethics seriously. I won't deduct something just because my client knows someone whose preparer said they could deduct some really gray area items. Preparing income tax returns is not a game or a competition. It is a serious business. We NEED to know what we are doing and why. We NEED to have resources that will give us the answers that we don't know for sure. Some of us NEED to have regulated boundaries or get off the ship.

Dangerous article, if read on May 1st.

clients are such a PITA. If only we could do this work without them.

I read this earlier today. Is it not correct that this bill still has to be passed? Is that going to happen and how long is it going to take? Seems like every year we are sitting on this same fence at this same time of the year. As far as making extenders permanent; I often tell my clients that "it is the law now, but who knows what will happen down the road!" I hate that I am becoming such a "Doubting Thomas"!

A short article, whose advice we should all consider. The Onion

I've told some to call his/her divorce lawyer about what to provide, or their lawyer doing the closing on the mortgage about what is required. They seem to listen to the lawyer that they pay more than me!

And it is not 'choosing between the spouses', because either one of them has the right to request a copy of their return.

I would always give them another copy to give to the bank themselves. Never, would I give a client tax return to anyone other than the client.

Don't feel like that! I have an insurance agent friend on FaceBook putting out completely incorrect information about ACA, the penalty, etc. Do you think I'm going to correct him?? Heck, no. Then I'll have eight million non-clients sending ME questions. He's the only one getting paid to understand this crap. I resent so much having to deal with this. Yes, I know, someone will say, "Charge accordingly". Well there's no way, in Small Town, TN, that I can charge enough to cover the time I spend on ACA without losing clients.

Washington, D.C. (December 16, 2015) By Michael Cohn Congressional leaders unveiled a wide-ranging deal on tax extenders, making some items permanent. The Protecting Americans from Tax Hikes Act of 2015 is a culmination of recent work done in both chambers of Congress and renews and makes permanent important tax incentives that support both individuals and job creators. Among the provisions that would be made permanent are the enhanced Child Tax Credit, the enhanced American Opportunity Tax Credit, the enhanced Earned Income Tax Credit, the above-the-line deduction for teachers who buy school supplies, the charitable deduction of contributions of real property for conservation purposes, along with the Research & Development Tax Credit and Section 179 expensing. The permanent R&D Tax Credit provision permanently extends the research & development tax credit and, for the first time, allows for eligible small businesses to claim the credit against the alternative minimum tax liability or against the employer’s payroll tax liability. The Section 179 provision permanently extends the small business expensing limitation and phase-out amounts in effect from 2010 to 2014; and sets a new threshold at $500,000 and $2 million, respectively, from the current amounts of $25,000 and $200,000, respectively. Also made permanent by the legislation are the tax break for mass transit and parking benefits, and the option to claim an itemized deduction for state and local general sales taxes in lieu of a deduction for state and local income taxes. In addition, the legislation suspends the 2.3 percent excise tax on medical devices through 2017. It also phases out bonus depreciation. Another provision permanently extends the exception from subpart F income for active financing income. The legislation also permanently extends the rule reducing to five years (rather than 10 years) the period for which an S corporation must hold its assets following conversion from a C corporation to avoid the tax on built-in gains. Another provision permanently extends the ability of individuals at least 70½ years of age to exclude from gross income qualified charitable distributions from Individual Retirement Accounts (IRAs) of up to $100,000 per taxpayer in any tax year. Congress is expected to vote by the end of the week on the tax legislation along with an omnibus spending bill that was also unveiled late Tuesday night (seeCongress Reaches Deal on Tax Extenders). “Santa came early this year with gifts for almost everyone in the form of numerous tax relief provisions, although the IRS may view its gift as a lump of coal,” said Peter Mills, managing editor of federal taxes for Bloomberg BNA. “Tax planners would gain more certainty because the bill would make permanent many important tax provisions, most notably the research and development credit, the expanded §179 expensing limitations, the enhanced child tax credit, and the earned income tax credit, as well as extending some popular temporary provisions, such as bonus depreciation. Foreign investors would gain advantages in increasing investment in U.S. real estate by increasing their ownership percentage of publicly traded REITs without being taxed on sales of the interests, and by exempting foreign retirement and pension funds from being taxed on sales of REITS holding U.S. real estate. It also would delay some of the taxes associated with the Affordable Care Act. The IRS fares less well under the bill with new restrictions, including a rule providing for the termination of any IRS employee who takes official actions for political purposes. Moreover, the IRS has the burden of processing these changes in time for the upcoming tax season.” The Internal Revenue Service would receive $11.23 billion in fiscal year 2016, an increase of $290 million over the current level, specifically for customer service, identity theft and cybersecurity, according to the National Treasury Employees Union. While that figure is $1.7 billion less than the administration’s request of $12.9 billion, the NTWU noted, the final amount is an improvement over the House proposal to cut the IRS budget by almost $838 million compared to the current level. The bill would make permanent a provision that allows retailers to depreciate remodeling and other improvements to their stores over 15 years rather than the previous standard of 39 years, the National Retail Federation pointed out. The provision, which also applies to restaurants, is important because retailers typically remodel every five to seven years. In addition to helping keep stores attractive to customers and profitable, the remodeling work creates tens of thousands of construction jobs each year. A separate provision that allows 50 percent of the cost of improvements to be written off under “bonus deprecation” would be extended for five years, and would be expanded to cover stores and restaurants that are owned rather than just those that are leased. Section 179 expensing, which determines the amount of an investment a small business is allowed to write off entirely in the first year rather than being depreciated over multiple years, would be made permanent and its level would be increased. The Work Opportunity Tax Credit, which gives retailers a tax incentive to hire the disabled, welfare recipients and other economically challenged individuals, would be renewed for five years. Paul Gevertzman, a tax partner at Anchin, Block & Anchin, sees benefits in having more certainty about the tax provisions. “The most positive aspect of this extender package is that many of the perennially expiring provisions are either made permanent, or at least pushed off beyond another New Year’s morning expiration,” he said. “What it means for businesses is that they can now plan properly. They can operate with the knowledge that if they follow the prescribed steps they can achieve the anticipated tax result. I had one client tell me just this morning how he’s been sweating it out because they spent $20+ million dollars on equipment purchases in 2015 not knowing for certain how much of that spend could be written off this year. This bill takes the guesswork out of the equation. This certainty allows tax incentives to actually incentivize businesses to spend, rather than to simply provide a benefit to businesses post facto for what they’ve already done.” Speaker of the House Paul Ryan, R-Wis., spoke of the advantages of the tax deal during a press briefing Wednesday. "I cannot tell you how many times I have visited with small businesses and farmers who tell me, ‘Give me some certainty in the tax code, and I can go create jobs.’ We are finally delivering on one of those tax policies we’ve been trying to—for years—to get certainty in the tax code so we can create more jobs," he said. "I think this is one of the biggest steps toward a re-write of our tax code that we’ve made in many years. And it will help us start a pro-growth, bold tax reform agenda in 2016.” The Senate Finance and House Ways and Means Committees have worked on efforts in Congress to overhaul the tax code through working groups, hearings, roundtables, issue papers and markups. "Passing this legislation and making more tax policies permanent will provide significant tax relief for hard-working taxpayers in every walk of American life, from the middle class to military families to the working poor," said Senate Finance Committee chairman Orrin Hatch, R-Utah, in a speech on the Senate floor Wednesday. "It will do the same for businesses and job creators throughout our country, resulting in a healthier U.S. economy, increased growth, and more American jobs,” Hatch said. “Put simply, more permanence in the tax code will be a good thing for our country, and the PATH Act will provide just the kind of permanence we need." Earlier this year, the Senate Finance Committee reported out a bipartisan tax extenders package that extended provisions to help families, individuals and small businesses for two years. The House Ways and Means Committee advanced several tax bills that would make permanent a number of policies, like incentives for innovative research and development, among others. The PATH Act includes a number of bipartisan legislative policies that were advanced by the two tax-writing committees. “It makes absolutely no sense the way America handles its tax code,” said House Ways and Means Committee chairman Kevin Brady, R-Texas, in a statement. “How can families and local businesses count on tax relief each year as long as Congress can't decide what's permanent and what's not? That confusion ends now, and our economy will be stronger for it.” However, the bill will come at a cost of billions of dollars added to annual budget deficit, which may complicate passage in Congress. “This bill highlights clear priorities for reforming our tax system,” said Wyden. “What does that mean? Millions of working families with children will not find themselves suddenly taxed into poverty. Millions of college students won’t have the rug pulled out from under them when the tuition bill arrives. Charities can confidently plan and expand the good work they do. And small business and enterprises on the forefront of innovation now have the economic certainty they deserve. At the same time we are phasing out provisions like bonus depreciation which were always designed to be temporary. But now is not the time for Congress to slow down and pat itself on the back. Today is a down payment on tax reform and our work continues as we strive towards a complete overhaul of our broken tax system.” The tax extenders package also includes a five-year extension of the wind energy production tax credit to lead to a phase-down of the industry-specific tax credit. The wind production tax credit will be 100 percent in 2015 and 2016, 80 percent in 2017, 60 percent in 2018 and 40 percent in 2019. Sen. Chuck Grassley, R-Iowa, had advocated for passage of this provision. “As the father of the first wind energy tax credit in 1992, I can say that the tax credit was never meant to be permanent,” Grassley said in a statement. “I also can say that the wind energy industry is the only energy industry that came forward with a phase-out plan. The oil and nuclear industries have benefited from tax incentives that have been permanently on the books for decades. The five-year extension for wind energy brings about the best possible long-term outcome that provides certainty, predictability and a responsible phase-down of a tax incentive for a renewable energy source.” The tax package includes an extension of the existing biodiesel fuel blenders credit, the small agri-biodiesel producer credit, the tax credit for cellulosic biofuels producers, the alternative fuel vehicle refueling tax credit, and bonus depreciation for cellulosic biofuel facilities. To view a copy of the bill text, http://www.finance.senate.gov/download/?id=13AC9A16-73EC-4B1F-87B6-1072E08C6D22. A section-by-section summary of the legislation can be found here.http://www.finance.senate.gov/download/?id=15AE9623-1151-415D-8A69-D124A446BDC0

Them's the rules. Depreciation is taken or assumed taken when it is suppose to be taken. Your over the road truck has a three year depreciable life. If he placed it in service six years ago, you are out of luck. His basis is zero. Hopefully this was not your client six years ago and this can be a teaching moment for you. And you can show him how tax smart you are. Of course, none of that will lessen the sting. But at least he will respect you.

You have to have a license to drive a car,...Don't mean every one knows how... I believe that if there were still blacksmiths.....They'd try to license them....After all, you don't want your horse to look funny with bad shoes.

Beautiful scenery..

Even MORE dangerous if read on April1st as all the last-minute details come pouring in.

#1. Absolutely. #2. Double absolutely! #3. Yeah, but: I would rather see them spend the money on an aggressive public-education campaign coupled with very aggressive prosecution of crooked preparers. Anyone with the intent to commit tax fraud will have no quibbles about lying on exams, giving the "right" answers on ethics CPE tests without any intention of acting ethically, and generally being cheaters and criminals. Those people need to be forcibly removed from the profession (and possibly society, by incarceration), and anyone needing a little bit of a goose to tread the straight and narrow will fear prosecution more than some one-time licensing exam.

Beautiful and bittersweet.

Yes, beautiful. Thanks for sharing that, KC.

LOL, Tom !

Details needed. You say 'his' properties, does he own them free and clear, or are there loans outstanding on them? You say 'dual membered LLC', who is the other member? What is his goal?

Yeah, I upload to FileShare.

File share portal for me. If they want paper, it's a $30 up-front charge to print and mail to the client and NO ONE ELSE. Once the client has it, for all I care they can make paper airplanes with it or burn it to send smoke signals. It's theirs.

I totally agree with both Elrod and Catherine. You put yourself in huge exposure to liability if you send information to a third party. We do NOT send taxpayer information to anyone except the taxpayer(s). They are then responsible for anything after that. Read Circular 230 again... Charge for extra copies!!

Putting rentals in an LLC doesn't change the rental loss laws.

That's why I feel at home here! I'm a one person office and try hard to keep up on things but ever so often miss what should be obvious. Ironically I have a great insurance agent and we talk through out the year when we have questions about the ACA. Best advice he gave me was when I was thinking of going through the exchange for my insurance. I have a grandfathered plan and the cost through the exchange with the subsidy would be about the same in monthly premiums but coverage looked a little better so I thought. He told me keep my old policy as long as it's available. Not many doctors in my area are provers. Sure enough last year I maxed out my deductible and was told by my doctors that had I had Covered California they would not have taken my insurance. Same thing again this year (summers are beginning to suck for me). So when it comes to questions on taxes I have everyone here and insurance I have Larry who is serious about his job! Thanks again for your help and encouragement!

For those that like DWS, can you imagine this song being danced too. https://youtu.be/GEdXagVh-Rs

Rita is correct. Don't feel like that, and please continue to ask questions because that is what the forum is here for. This is a new area of law for us with a lot of complexity, and of course we have many definitions of MAGI in the tax code depending on what limitation we are working with. It's very understandable what happened with your calcs.

Assets in a Partnership can have outside basis and inside basis which are not the same, so the basis of asset in the hands of a partner can easily be different from the Partnership's Book Basis.

With more people losing jobs every day; there are many who are looking for a way to produce income another way. I know that a lot of them are taking the HRB course with the thought in mind of putting themselves forth as tax preparers. I KNOW this because my assistant is taking that course and it is difficult. They are cramming a lot into their heads in a very short period of time. She came in yesterday to do a couple practice returns on my software. Now, my assistant is a smart cookie and has been studying diligently. She also attended the tax seminar in November with me. However, she is no more ready to prepare a complicated tax return on her own than I was forty years ago. This is one of the things that frightens me. I know my gal will be OK because she will be working with me; but honestly, they are throwing a lot of tough examples at these students. She had never in her life heard of most of them. Of course, they are dwelling on the credits that are available for the clientele that HRB feeds on. Yes, we have to know these things. We also have to know much, much more. I do believe that paid preparers should be tested and licensed to some degree. That is why I took and passed the (now extinct) RTRP test and continue to keep my AFSP credentials current. I want my clients to be able to trust me. More importantly, I want to be able to trust myself. If there is the slightest doubt in our minds that something we did on a return might not be exactly correct; we NEED to look it up. We have to do everything we can to prepare a complete and correct return. In closing, I thank this board for everything that I learn here. And I have learned a LOT! I subscribe to several other reference materials as well. I hope that you all have a profitable and successful tax season and a very Blessed Holiday Season.