mcb39 Posted November 3, 2012 Report Share Posted November 3, 2012 And that brings up another subject........the free services that are out there. However well-meaning they are for the low income folks, they can be a disaster. I had a client who left me last year for the local Technical College students free preparers. When I asked to see it, she brought it in because she hadn't gotten her refund. For beginners, the preparer had generously "given" them over $4,000 in interest income, which should have been a Sch A Mtg Int deduction. There was so much wrong and they had failed to e-file which is why the taxpayer hadn't gotten a refund. We started over from scratch with both Fed and WI and I was able to e-file even though it was after April 17. Then about the same time (after the due date) the Tech mailed in the return that they had prepared. You don't want to know how many months it took me to straighten this one out. The State gave them the refund I had calculated; then received the other return and kept asking them to refund the difference. Because we had filed POAs, the State ended up calling me and asking if I knew what was going on. I explained it to the agent and she said, "I hope they come right to you next year!" This is another whole can of worms and nobody is doing anything illegal because they don't charge. The Commission on Aging also prepares returns free for the elderly. Generally these are mostly Wi Homestead Credit claims, but nevertheless, you have to have some tax education to prepare a proper and correct tax return. Quote Link to comment Share on other sites More sharing options...
Edward Posted November 4, 2012 Report Share Posted November 4, 2012 Most of the "ghost" preparers operate from their homes, and have signs outside that state this fact. Old Jack is totally correct. Since IRS will do nothing, maybe they should designate a limited number of the CPAs and EAs out in the field to perform unannounced limited audits on those that operate from their homes. If they have signs stating they prepare taxes, then the designated CPAs/EAs would ask to see copies of the preparers tax returns to determine if they have reported income on a Sch C. If they happen to have client file copies on hand, and they are not signing those returns, they would be subject to a 50.00 penalty per return. Details of the audit would be provided to IRS for further action. Lets face it, since IRS wont do anything, I believe its up to the preparer industry to make a move like I've suggested. I received two "self-prepared" tax returns this year in which the ghost preparers charged a substantial fee. Both returns were a total mess as they involved depreciation and business travel. One of the preparers did the return four different ways and then selected the one that gave the client the greatest refund. I didn't even want to deal with it and recommended they go to H&R Block. Don't you think IRS would go along with this - if there was major support I believe they would agree. Altho I'm certain most of the preparers reading this recommendation will think this to be a STUPID approach????? Any comments Quote Link to comment Share on other sites More sharing options...
mlinderEA Posted November 4, 2012 Report Share Posted November 4, 2012 Did you turn in the person who did the return?Last year I turned in three people one person twice.The client went back to the preparer who called me and begged me not to turn her in.I told her ir was already done.She worked ror the treasury dept and was afraid she would lose her job.I never heard any thing further.If we all keep turning them in it may do some good. Quote Link to comment Share on other sites More sharing options...
joanmcq Posted November 5, 2012 Report Share Posted November 5, 2012 Worked for Treasury? Yeah, she lost her job. Heck, I have a client that works as customer service for Treasury, and he can't even file an extension without it being reviewed. All tax prep software already has an embeded code in it; the IRS can flag copies (including and especially TurboTax) from which unusually large amounts of 'self-prepared' returns are generated. This is how the ghost preparers are being targeted. I wouldn't turn in a preparer myself, but would encourage the client that previously had their returns done there to do so. Quote Link to comment Share on other sites More sharing options...
mlinderEA Posted November 5, 2012 Report Share Posted November 5, 2012 Why would you not turn in a preparer that was breaking the law?What is the difference between that or being a witness in a car crash or a robbery? Quote Link to comment Share on other sites More sharing options...
Edward Posted November 5, 2012 Report Share Posted November 5, 2012 I'm not getting any feed back on my suggestion of IRS designating a limited number of CPA's/EA's within the tax preparation indiustry to perform limited audits on "Home Preparers" in an effort to identify those Ghost Preparers.?? I was certain this would generate some interest, but? Quote Link to comment Share on other sites More sharing options...
MAMalody Posted November 5, 2012 Report Share Posted November 5, 2012 If the OP situation was in effect when I operated from my home, I would not have produced or cooperated with them in any way. If the IRS wanted to reveiw what I did, let them. I did have one IRS office review about 15 years ago. I think it was for e-file purposes, but don't really remember, and it was during fiing season. They sampled 10 returns, tried to indicate that I was under Cir 230 rules when, at the time, I was not. They finally figured this out. The took a list of returns I had prepared, left and that was the last I heard. Quote Link to comment Share on other sites More sharing options...
taxxcpa Posted November 5, 2012 Report Share Posted November 5, 2012 I'm not getting any feed back on my suggestion of IRS designating a limited number of CPA's/EA's within the tax preparation indiustry to perform limited audits on "Home Preparers" in an effort to identify those Ghost Preparers.?? I was certain this would generate some interest, but? What would be the arrangement for this? Would the CPA/EAs be paid for these audits? Would we be "deputized" or just barge in and say "I want to audit you?" Would I have to have a peer review by my State Board if I did these audits? I believe what you suggest would be a way to identify the "ghost" preparers, but very few CPAs or EAs would want to do this sort of thing. It would be very unpleasant having to deal with these "ghosts" and you could be sticking your neck out if your audit was "substandard" and did not catch something that later showed up. Once I performed an audit and thought everything was OK. Later the same company came up for audit again, and I was assigned again. This time I found all kinds of errors, but had somehow selected a sample on the first audit that was error-free. If someone else had done the second audit, it would have been hard for me to say it was just the luck of the draw. If I hadn't felt pretty secure in my job, I might have been tempted to cover it up, but I let the chips fall where they fell and reported all of the errors. Quote Link to comment Share on other sites More sharing options...
JohnH Posted November 5, 2012 Report Share Posted November 5, 2012 I'm not getting any feed back on my suggestion of IRS designating a limited number of CPA's/EA's within the tax preparation indiustry to perform limited audits on "Home Preparers" in an effort to identify those Ghost Preparers.?? I was certain this would generate some interest, but? 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. 1 Quote Link to comment Share on other sites More sharing options...
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