IRS Finds Increased Noncompliance by Tax Preparers on EITC Claims

[jshtax]

Can you believe there are preparers who aid and abet these tax cheats? Sometimes they keep filing for about a decade, even though they think the situation is ridiculous. Sometimes they just like the clients, so they aren't going to demand anything from them as proof. For a fee of course.

Such preparers give the whole industry a bad reputation. They're the reason we have Form 8867 in the first place, and the big push to regulate tax preparers. The only alternative would be self-regulation, so it's heart-warming when a preparer is seriously thinking about it.

Based on the form and rules surrounding EITC what is this taxpayer doing that is so wrong?

[Mr. Pencil]

what is this taxpayer doing that is so wrong?

I don't know--maybe nothing. I'm not the one who said the situation is ridiculous, and I'm not the one bad-mouthing the taxpayer.

[MsTabbyKats]

Based on the form and rules surrounding EITC what is this taxpayer doing that is so wrong?

The taxpayer isn't doing anything wrong....based on the rules.

I just don't like the rule that allows this.

If he were ever to be questioned (which is highly unlikely), I would fail the due diligence test.

May I add that this taxpayer lives in a luxury rental building under some sort of subsidized program.......while I pay "full rent" for a smaller apt in an older building one block away.

It's my personal decision......but shouldn't whomever is subsidizing his apt be a detective too? The taxpayer is saving more per month on rent tha his entire EITC credit!

And although some people may feel I'm too lax.....I can differentiate between reality and nonsense.....and I'm sick and tired of the nonsense.

Personal rants over

[MsTabbyKats]

To add and to clarify-

In both cases....the deli worker and the guy with the mortgage:

If the IRS were to question either they would pass with flying colors.

The children are their children.....all born here (all parent's born elsewhere).

They support the children, the pay rent, the kids go to the district schools . The kids go to the doctor. They could get letters on letterhead testifying to this easily.

There is no doubt in my mind that they, on paper, qualify.

And as to this compliance officer that I'm supposed to be afraid of:

I work out of my apt. He can't make a surprise visit. I'd be able to comply before he'd get here on an appointment. No worries here about Karen Hawkins making a house call!

If I were to question either person about how they can support families on such a low income in NYC.....both would tell me about gifts from back home (gifts...non taxable, back home....not their foreign accounts).......and praise the USA....for having a system that gives them Medicaid and food stamps...free education etc......but meanwhile be laughing at those who pay the tax that affords them all their benefits.

Do you see why I'm sick and tired.....even though they technically qualify.

[Guest Taxed]

Thanks jshtax and MrPencil. I was a bit concerned after reading these posts that IRS may have an issue with me accepting a "picture" from an iPhone of the signed 8879. I would much prefer a fax copy or a pdf because the "picture" sometimes is not very clear if they don't take it correctly.

[mcb39]

I don't understand when it became possible for us to ignore an IRS ruling just because we don't like it. EITC aside, There are many IRS rulings that we don't like, disagree with and/or resent. However, our obligation is to prepare tax returns in accordance with the law; practice due diligence and do the best job that we possibly can for each and every client, within the guidelines of the IRS.

If I know and believe that a client is entitled to EITC, I will prepare their returns too. I don't think it is part of our jobs to judge or envy anyone. Some might make much more money than I do, but a whole lot of them make less and deserve the same consideration in the preparation of their tax returns as the wealthy do when we try to find every deduction, etc that we can to lower their tax liability. IMO, every client's return is just as important as my own and will be prepared accordingly.

Wishing all of you a very prosperous and happy New Year.