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There are several measures CPA firms can take to mitigate data risk and manage their security. CPA firms are responsible for tax identification numbers, social security numbers, financial account numbers, and additional data which can threaten the identity and financial security of clients if compromised. http://www.cpapracticeadvisor.com/article/12233937/how-accounting-firms-can-protect-their-data-and-their-clients

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Too bad the student let the cat out of the bag because some other students might consider those "tips" a gift contribution for a starving artist. Student said they were tips so it's income for her. I would do line 21. At least you don't have to worry about this person ever underreporting tips when the real world job is brought to you, unfortunately everyone isn't this honest. Let me know when she gets a job, I need a new hairstylist, mine is never on time and her tattoos scare me.

That was my thought - taxable income but not technically "tips" as defined by the IRS.

Just wondering - if you are not employed, can you receive tips? If you were self-employed, they would not really be tips, just additional income you earned. If you work for an employer, you report your tips to your employer to be included on your W-2. So ir you are not self-employed, and you are not working for someone, is what you receive actually a tip within the definition of the tax code? Are tips defined somewhere? I did not see a definition in Pub 531, and did not take the time to look elsewhere. Of course, even if they are not technically tips, they would still be income since anything not specifically excluded is considered taxable income....

Click on the Fact sheet link above...this is a multi-multi-step process! It should definitely thwart many crooks. (No prepaid phones--phone acct must be in your name.) On the other hand, they have lots of smart people working for them, lots of resources, lots of time. We can only hope that it prevents more id thieves from accessing taxpayer data than it does taxpayers.

C'mon folks, we are talking about a $50 annual PTIN fee here. Most of us make three to five or six times that amount on a single tax return that takes less than an hour of our time. The PTIN does serve a purpose beyond the original one of replacing our SS numbers on signed returns. To some extent it helps the IRS track down dishonest or poorly trained preparers. For example, they now send letters to preparers who have too many errors on EITC, Sch C, and Sch E returns. How do they know who makes too many mistakes? The PTIN. At an IRS liaison meeting the presenter said in routine audits their staff record the PTINs and if the same number keeps popping up they target that preparer's returns. This is how they catch preparers who habitually inflate charitable deductions, employee business expenses, fuel tax credits, education credits, etc. The same unsubstantiated deductions appear on the majority of their returns, which authorities would never have figured out without the PTIN. What will be another plus is that preparers will be able to monitor the number of returns filed under their PTIN. Currently only EAs can do this, but I was told we were chosen because we were the smallest sample to test the process. Preparers have become the target of identity thieves, so at least we will be able to check if someone is filing returns under our PTINs. I will gladly give up one-fifth of my fee on a single tax return for this protection. I'm with Lion that the cost of the PTIN is inconsequential compared with the cost of everything else we need. E&O, tax prep software, Quickbooks, etc. seem to go up at a faster rate than we can raise our fees.

Assuming that the non-resident spouse is not a US citizen, she can file as MFS or HoH, depending on whether she provides a household for a dependent she can claim on her taxes, and only report her income. She can elect to file MFJ and report their worldwide income. But if her husband has no nexus with the US causing him to file a return, it is up to them whether to file together and include his income or file separately and only report her income in the US. At least that is my understanding of the election to file jointly and report world-wide income.