JohnH

I agree. Get her FEIN online and use it on the W-9. Jack correctly pointed out that the church is misinformed, but I woudn't trust them with her Social Security Number on the W-9. I don't think you have a big mess. The church probably got a mismatch notice on the 1099 because the name and the FEIN don't match. They're worried because there's all this verbiage about backup withholding, etc. The letter is pretty intimidating to an inexperienced reader, especially the stuff about what you can & can't do. They know from the letter that name and FEIN will solve the problem so they're asking for a new W-9. That's probably all they know and they don't have the expertise to investigate further. You could try and educate them, but it would be simpler and faster to just get the FEIN and submit the new W-9 (you're going to have to do that last part anyhow) You've reported her income on Schedule C in her name & SS#, so she's getting proper credit for her earnings. The only issue is the AUR letters for the 1099 forms issued under the husband's FEIN, and that only affects 2009, 2010 and 2011 at the most - everything prior is a closed year. So you may have some correspondence to do if your client gets the AUR notices for any or all of those three years. The same letter will work for all years - just change the dates and amounts. Part of your explanation will be that you've obtained the FEIN in the proper name and a promise that it won't happen again. You're done.

No stress here, but you seem to be wearing yourself out jumping to conclusions on this thread. As a matter of fact I DO only work for the clients I approve of - in that sense I suppose we apparently are not in the same profession. As I said before, good business practice relies on the ability to make distinctions.

You have your wish. No need for the seasonal temp at IRS - you're now the seasonal temp...

...what comes next? What new area will they impose on us? Interesting questions - here's a suggestion: Maybe they will decide that refusing to prepare a return claiming EIC is unprofessional; maybe even write that into Circular 230. What would the penalty be? Well, they always have the option of refusing to renew your PTIN if you don't comply... You may think this is far-fetched, but I don't think so. Not many years ago I would have argued with the idea that IRS could successfully turn the tax preparation community into an uncompensated extension of their auditing function. Yet in the space of just a few years, first they turned you into a pretty good data entry clerk. Now you're doing a pre-audit of every return you prepare. And judging from the comments I read on this forum and others, the primary focus of many preprers is making sure IRS is pleased with their work.

Depends on your objectives. I used these folks to get the job done without leaving my computer. PlatinumProStudies.com

@ Pacun - apparently we think alike on this issue. @ Jack from Ohio - thanks for being there. Somebody's got to do those returns. And who knows, if you ever have an EIC compliance audit, I'm betting IRS will pat you on the head and give you an "attaboy" award.

Sorry if I offended your sensibilities. No need to get miffed. I'd suggest you run your tax business according to your standards and I'll do the same. Too bad our businesses are not located closer together. I'd rather send EIC clients to someone I know rather than to HRB. You jumped to lots of conclusions about my reasons. Most of your leaps are without merit and frankly poorly thought out. I don't assume most EIC claimants are cheats - I just don't want to accept the risks the IRS has placed on tax preparers in this regard. And just for the record, I did turn down all but two of the many FTHB inquiries I received. One was military (no way I'd turn down one of our heroes) and the other was a church member who also used another church member as their agent. I assume your inclusion of the AOC, Adoption Credt, etc was just a matter of piling on or perhaps getting carried away by emotion, since you are smart enough to know that the preparer risks are nowhere near as severe as the special and unique risks of the EIC. Plus those are items much easier to document satisfactorily without the risks and 4 pages of CYA. I run a business, not a social sevices agency or a counseljing service. Its my philosophy that good business practice always relies on the ability to make distinctions.

I think not doing them is the best defense. The only businesslike way I know to balance the risk-reward is to specialize in them. That way you're spreading the risk across a large volume of returns (still with an appropriate surcharge). That's why I keep the HRB phone number handy and I give it to anyone qualifying for EIC, except for a couple of slam dunk situations.

The camel's head keeps coming into the tent...

Makes one question the wisdom of preparing any returns with EIC, unless your practice is geared up for that type of return on a high-volume basis. I've been sending them to HRB or Liberty for several years, with a couple of exceptions that I've known personally for many years.

Good catch Pacun. :)

If I did the math right, the individual was paid $2,700. Using Employer's FICA/MED of just under 8% and an unemployment tax rate of 3-4%, the payroll taxes are about $270 - $300. So if the tax preparer "goes to bat" for client, the most the client is going to save is $240-$300 minus the fee to do the work. Anybody willing to take this on for less than $200, knowing that once the paperwork blizzard starts you could easily run up another $200 - $300 in fees, and once you start the process you can't stop it? I don't even see the logic of fighting this even if you add another 10% for workers comp cost. (Unless the tax preparer were the one who made the mistake of advising the client to do this in the first place, in which case you're probably going to have to do the work for free).

I don't even mention the form to anybody. I think one or two have asked over the years and I just offered to give them the blank and let them fill it in & mail it themselves. Nobody ever took me up on that. I'm just not interested in getting involved in their personal bookkeeping. Guess I'm not very understanding about people's need to grow up & take some responsibilty for their finances. I appreciate what others have said, but I still don't like it and am not going to do anything to encourage people to use it. The small benefit derived by a few isn't worth the larger issue of the potential for abuse or error. Too bad the iRS had to waste man-hours and some of our taxpayer funds figuring that out - I'd have gladly told them for free.

I've never understood the logic behind splitting refunds between different bank accounts anyhow. If I don't have the financial acumen to have my refund sent to a single account and then transfer whatever amount I want to move into my savings account, etc, how is this going to help? Does the IRS have some magical ability to make me a better money manager by offering this option? Somebody help me out here in figuring out this wisdom of this split-refund nonsense. I've always thought the split-refund option is a silly waste of resources, and of course it opens up the opprtunity of another avenue for abuse, either through simple misunderstanding or ignorance. They needed a study to figure this out?

Be patient. It will be fixed in due time.

I started seeing this yesterday as well. I'm assuming Eric will deal with it when he notices it.

I hadn't seen this site before, but I got a good laugh out of several of the articles. Many of them are even funnier if you've served in the military and have been either the perpetrator or the victim of some good-natured "barracks humor" from time-to-time. I laughed out loud at the "Taliban Proposes a "Call Ahead" Night Raid Policy", especially the last line from the excerpt below" The Taliban has enthusiastically offered a “Call Ahead” program as an olive branch gesture to U.S. forces. Taliban spokesman Zabiullah Mujahid explains: “We are trying to do our part in the peace process. You ask an Afghan court 72 hours before getting a warrant to knock down our door, we’re only asking 24 hours, tops, as a common courtesy. We’ll even put my cousin Mutassa on the computer in case you email. Either way, we think this is more than reasonable for a head start…to peace.” Afghan President Hamid Karzai was optimistic about a deal being reached. “I think this is a great idea,” said Karzai, as he text-messaged the location of a high-level U.S. Diplomat to an insurgent leader. “It provides the Taliban a good compromise, and frankly, saves my government resources from being wasted by having to call them ourselves.”

If you're not sure, seems to me it would be wise to back up the electronic filing with a (gasp!) paper return, maybe with a note attached about the lack of an ack. If filed by the 10th of Nov it's still considered timely and there's really no harm in taking that course of action.

Memo to the yahoo who stuck a political sign in my yard. I understand that you legally placed the sign on the right-of-way and I respect your right to express yourself. But I can't stand the thought that some of my neighbrs might see it and think I voted for the loser you are supporting. So I'm sorry to tell you I tore it up and tossed it in the garbage.

No real interest here but I'll bite. Speaking only for myself - if I had any interest in doing the government's job for them, I'd hustle on down to the IRS and apply for a job.

Thanks KC. That was an interesting Ted Talk. One reason I'm a fan of the Drudge Report is the variety of links it provides to columnists across the political spectrum. D/R makes no pretense about its Conservative bias, but that doesn't extend to the links it provides down the center column. I know of no other online or print source which offers this much variety.

You're welcome. I take it you haven't done anything yet. If you had started the process I described on Monday, you'd be a third of the way through by now (regardless of whether anyone else responds or not).

Shouldn't that be (qualifying child) / (qualifying relative), or are the parentheses just assumed?

If the ownership in both proposed corporations is the same, I'd think twice about splitting into multiple entities. Assuming the corp charter uses a general statement of purpose, I think there should be other reasons for multiple corps. Different business activities wouldn't be the standard I'd use. If one business has much greater potential liability exposure, regulatory issues, or other such influences, that might change the decision. Or if there might be some tax advantage to using different accounting methods for each separate corp. But if the current accounting system is working fine and none of the above factors are a problem, why complictate things?

I think that was the point of the exercise.