Pacun

If the IRS already got this guy, there is no need to amend and I think 2013 needs to be prepared properly and move on.

Of course not, as a matter of fact they went to their friends and say that you or me didn't know about preparing taxes and that the other lady was able to get big refunds. Referrals were made to that lady because she got big refunds. It is very hard to compete against these preparers. I have one in the area and he has done fraudulent returns for years. Some people don't even speak English and they are claiming the American Opportunity Credit.

I also wonder if the client is willing to pay back the 3 years of refunds instead of the one year that was "audited"?

So you need to see the monthly bills to add them up and then add the HUD's mortgage interest paid and then compare to what it is reported to the 1098, correct?

Besides asking for the mortgage bills from last year, how do we know if Wells Fargo included the taxes charged on the HUD 1 on 1098? Do you check the HUD 1 each time a client buys a house or everything is on the 1098?

Let us know if the IRS contacts you after you report the preparer. It is my understanding that the IRS does little when people complain, specially when it comes from another preparer. Keep in mind that these people are not that innocent as you might think. They go to these places because they know they will get money that they don't reserve. I think you are also going to report the fact that the tax preparer did the same for a number of years on these people's return, correct?

I always had this problem and some of my clients told me that it only took X amount of time and I was charging them a lot. A few years, out of the blue, Mark came to my rescue. Now, I check all the information that the client brings and I ask about his address and then I say, I need to concentrate on the computer so if I have a question I will ask you. I do this because I don't like to lie to my clients. So I deeply concentrate on the computer and start checking my facebook. As a matter of fact I have been on facebook for 20 minutes... oops, my concentration time is over, let me print this guy's return now.

I agree with KC, I don't type "Michael J Smith an adult" on the returns. I take it back... I enter the name exactly the way it is written on the SS card or ITIN. If any of those document reads "an adult" on the full name, I will type it exactly the way it is written.

We are talking about "assembling the return". That's when you say to the client, "you owe $$$" and the client's says, "but my friend who goes to another preparer and makes more money than me is getting a refund"

I am a gambler as long as it is legal so this is how I gamble with these people. I work hard on their return and then if they want to go somewhere else, I return their papers. I know my prices and services are excellent and if they decide to go somewhere else, I let them go. I suggest H and R block because they will charge them triple of what I charge. So I gamble with the fact that I might work without pay but I make it up with the ones that stay with me. So if I have 20 new clients this year and I give back the paper to five of these clients, I feel I am winning because I kept 15 clients. I run my business as a UNIT without subunits. If I make each return a business unit, them of course I will feel bad when I do the math and have these 5 business units with a big loss.

I am surprise how H and R block prepares hard returns while the clients wait. I prepare 70% of my returns face to face. There is always the potential of mistake but my clients don't like to leave their documents. How I do it? You have to understand that most of these returns have 2-4 W-2's, a couple of kids and maybe some unemployement. Some have a house and maybe a 1099. The problem that I have during the peak of tax season (for me is the last week of January and the first 2 weeks of Feb) is that I don't have time to work on the people that left their returns, which are the more complicated ones.

It depends if this person is a first time client or not and also on how busy I am. If this is a first time client and I have time, I would charge $300. This is a very good chance to learn about other states forms. Of course I ask for their paper and a copy of last year return. I would ask them to leave the documents and to give about two weeks to have something ready. If this is an existing client, I would charge about $50 more than last year's because I already have the info in my computer.

You should amend or the IRS might nail them when they withdraw the money.

No. I think you will have to put everything back to mortgage interest. Technically (and without any paperwork), the investment property paid off "its" loan to the personal home. So now the whole loan went to the house. Again, technically, he received the money from the sale and put it on his right pocket, then he pulled out the amount of the outstading loan and paid it to the house. Since he still needed that money, he put it on his left pocket, so now the house is the one using the whole proceeds of the loan. Any other approach?

Enter the info and give it to the client. Remember that the IRS doesn't know that they owned the house or if they lived in the house or the basis for house.

Yes, I agree with you... the IRS should send them a letter. DC audits returns without home mortgage that is above a certain percentage of deduction vs income. This one for sure wouldn't pass DC scrutiny. I was hired to prepare this year's return, not to requestion my client on his previous years expenses.

Johnh All of them want to know disposable income. It is obvious that someone with 27K in job related expenses making 42K will have less disposable income than someone who makes the same amount and uses the standard deduction. That's all they care and I am fine with it.

I asked this question and someone mentioned that notes to the file are forwarded for ever. So if you make a note this year, you will have 10 years later... well provided everything is smoothly and you don't change tax software.

The banks are paying attention to the itemized deductions and to disposable income. They didn't qualify for the loan because the other preparer itemized deductions and in order to make 42K, they spent 27K related to their jobs. So the banks prefer standard deductions. In any event, very few people qualify to itemize without a home, correct?

I have seen returns prepared by other tax preparers that have about 27K is schedule A deductions. Their salary is 42K and they are first time home buyers. So the bank has told them to go to another preparer because too much deductions. I like this type of clients because they say that the banker told them not to use itemized deductions. I have had 3 clients in a very similar situation, so based on my experience, I would love to send a return before filing it because the banker will tell them that I am a good preparer. It is amizing how our clients believe other people but don't believe us.

I think the credit is available until 2016 but it was schedule to die last year.

It seems you are talking about same sex couple based on the use of his or he. If they are not same sex, you said that his wife is a diplomat and you also said that "he does not have to pay taxes per his visa". In any event, you only have two choices, MFJ which will include the both of them GLOBAL income (right there all spouse's income becomes taxable). The other choice (which could the best choice) is to file MFS. Tell the diplomat that as soon as he or she accepts the green card, his/her salary at the embassy becomes taxable. Agree?

It makes sense because if you are deployed to Afghanistan that is not considered earned income, it is considered earned income ONLY for EIC purposes.

I think this is wide spread in my whole computer. I have checked everywhere. I efiled several returns 4 hours ago and it seems they are stocked at ATX. Can you check your efile status for your returns? Normally they get transmitted within minutes to the IRS.

What was going to blow up the economy in MD is that fact that they were or are giving EIC credit to people with fake social security numbers. This is how they are getting this EIC from MD, they file as Jose Juarez with social 578133443 who happens to have a W-2 for 12K and claim 3 dependents, MD used to just send refunds. I still believe they are doing it. Of course these returns are paper filed. I remember before 1990 when the IRS didn't require SS number for dependents. Everybody was claiming 2 dependents who were enjoying the beaches in Central and South America and other nice places.