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I had an accountant before I got into the tax business who was ex IRS CID and thought he knew all of what he could get away with. He padded expenses on numerous returns for several years until a couple of his clients got audited. This led to the IRS to raid his office, ski masks on, guns drawn and hauling off all his records. He and an associate got million dollar fines and 18 months jail sentences. None of the clients were charged.

A former Tax Court judge has been indicted for tax evasion. https://www.justice.gov/opa/pr/former-united-states-tax-court-judge-and-husband-indicted-conspiracy-commit-tax-evasion-and What amazes me is how she and her husband could even think of deducting such expenses on their Sch C, Pilates lessons, Wine club fees, music lessons, and more. Then they tried to cover it up for the audit. You can't make this stuff up, no one would believe anyone could be so stupid.

When you have a successful business, competitors will spring up to try and take a bite out of it. Two of them, Jackson-Hewitt and Liberty were both founded by an ex HRB exec, John Hewitt. There are also the do-it-yourselfers that have also taken a bite as well as non-profit volunteers and the IRS itself who will now assist with returns up to what? $60K, or so. The report says that the loss was mostly in the early part of the season with most of the decline coming in 1040EZ and EITC returns. A large part of this may be due to Liberty's spanish speaking offices "Siempre" and to the demise of the instant refund programs. All companies eventually reach a peak and then decline and level off at some point. What is so remarkable about HRB is that it took so long for it to happen to them, over 60 years, but that is probably due to the lack of any meaningful competition for so long. Some of the layoffs in recent years may be due to overstaffing that happens when you are successful.

I've had a few of those over the years too, but now I have a few people (mostly non-clients) coming by to ask for a blank 1099 or W-2 (I order a few from IRS to give away). Asked if they want a 1096 transmittal to go with it they almost invariably say "No thanks, I don't need that." I'm assuming they either don't know/care what should be done or that they just want to hand somebody an official piece of paper to satisfy them. In any case I'd bet that IRS/SSA never sees the red sheet.

What perplexes me (with Block and other corps that announce big layoffs) is that if they can dismiss 13% or their workforce, does that mean those employees didn't do any work? Why did they have them on payroll in the first place? I surmise that the worker bees were the ones who got pink slips and not a single assistant to the assistant to one of many vice presidents of this and that. Sounds to me like Block's support staff was downsized--the ones who support their thousands of tax offices and develop the training for their zillions of tax preparers. Not a good sign (unless you're a competitor). Successful corporations do a good job balancing the needs of their clients, employees, and shareholders. Seems like Block is only interested in the latter. Sad to see a good company, the one that started the paid tax preparation business and set the standards, lose sight of the big picture.

Either that or she was expecting professional courtesy if audited. Mind boggling seeing the scope and amounts of the deductions. This can relate back to the Italian grandmother tribunal and common sense theories we discussed. They are going to get big hugs and trips to the Leavenworth backyard courtesy of Uncle Sam.

Not a member but I attended the rep boot camp in 2013. I've only done two OICs in my time practicing, but both were accepted!