Client ID requirements

[Mr. Pencil]

>>Have you read circular 230 where it says that the tax preparer will do as instructed by the IRS or the office of compliance?<<

No, I have not read that part. Perhaps someone could point me to it.

>>Circular 230 was prepared years ago<<

Circular 230 was published in 2011.

Taxxcpa said, "It looks like the IRS has succeeded in making a lot of tax preparers paranoid. You are guilty until proven innocent." The IRS bears the burden of proof for penalties, so the second part is false. But the first part is true.

[Pacun]

Circular 230 was published in 2011.

Taxxcpa said, "It looks like the IRS has succeeded in making a lot of tax preparers paranoid. You are guilty until proven innocent." The IRS bears the burden of proof for penalties, so the second part is false. But the first part is true.

Yes, that's why I said years ago. 2014-2011= years.

Well, he is correct, you are innocent when the IRS is about to put you in jail. BUT when they are about to fine with $500 per EIC incident, you are guilty until you prove yourself you are innocent.

In May, I will check circular 230 and I will start a new topic.

[Richcpaman]

I could have too much fun with this, but I won't.

Your best defense is to do as Jack says, and do them ALL, or the other direction, and do none. IN the middle of the road gets you crushed.

I don't do that many EIC returns, so I do what I have to do with the 8867.

And the one preparer who neighbor was a preparer and got hit with $8k in fines? Probably had three or four times that in problems, but they only nicked for the easy ones....

Rich

[MAMalody]

>>Circular 230 was prepared years ago<<

Circular 230 was published in 2011.

Try 1966 for the first publication date.

[Jack from Ohio]

Until you have heard Karen Hawkins speak about preparer responsibility, you have no clue how that department is being run and the lengths they will go to in order to "catch" a bad preparer.

However, having heard her, I have compliance audit proofed my operation and office.

As far as an auditor being there when my clients are, I do NOT have to allow them in my office (home) until I am ready unless they arrive with a warrant. Just because they are IRS, does not mean I have to tremble in fear.

[taxtrio]

Some years they may have an EIC other years not.

If I get their documents in my file then I don't have the check from year to year.

[Jack from Ohio]

Some years they may have an EIC other years not.

If I get their documents in my file then I don't have the check from year to year.

Not for identity, but if there are children involved with EIC, documentation for that must be done each year.

[Mr. Pencil]

Until you have heard Karen Hawkins speak about preparer responsibility, you have no clue how that department is being run

I'm surprised a San Francisco liberal has so much credibility! Karen Hawkins can certainly talk up a storm--she made several important arguments fighting the IRS before the Ninth Circuit. Now, can she conquer the bureaucracy?

This site shows how the IRS sees her office.

http://www.irs.gov/Tax-Professionals/Enrolled-Agents/The-Office-of-Professional-Responsibility-(OPR)-At-a-Glance-1

There are three goals, but only one involves enforcing Circular 230. The first one is just PR, and it sounds like she's got that one nailed! The other goal is "Build, train and motivate a cohesive OPR team." Which does give me a clue about how that department is being run.

From there you can link to the Final Agency Decisions. There aren't very many, and they aren't very rigorous. For example, the only one so far this year is an EA who didn't file his own tax returns back in 09, 10 and 11. He got suspended, apparently after getting renewed. It would have been settled sooner (since the scofflaw didn't even contest it) but Ms. Hawkin's office screwed up the paperwork so the judge denied it. Which gives me another clue about how that department is being run.

[GeneInAlabama]

Thank you Mr. Pencil for the information. It's very informative.

[taxtrio]

Of course you have to prove residency for children each year in any case.

[Lion EA]

I think the poster meant the most recent revision/edition/whatever was not that long ago, maybe 2011.

[Mr. Pencil]

Of course you have to prove residency for children each year in any case.

No we DON'T. Here's a link to the IRS due diligence requirements.

http://www.eitc.irs.gov/Tax-Preparer-Toolkit/dd/lawandregs

Note that we only have to comply with what is specifically in the actual regulations. Not what the auditor or even Karen Hawkins herself says. And note that the actual regulations only require us to ask certain questions and record the client's answers. There is NO requirement to document anything or even determine if the client is telling the truth. If I am wrong, please quote the requirement.

[RichRhodesEA]

Karen Hawkins has spoken to us at NAEA a number of times. I never got the impression that she considered all prepares crooks. She does tell us about the people who are convicted. I think that we all would agree that the people who have been convicted deserved to be, they can make us all look bad. She has stated that she realizes that she makes decisions that affect the way people make a living, and she does not appear to take that responsibility lightly.

Now that Loving has prevailed, does OPR have any autority over unlicensed preparers?

Rich

[Jack from Ohio]

Now that Loving has prevailed, does OPR have any autority over unlicensed preparers?

Rich

Circular 230 covers ALL preparers that are paid to prepare a tax return. The revisions in 2011 make that very clear.

[MAMalody]

A quote from The Tax Book message board.

<<<A side issue...for those of you following the Loving case...

The way the Court of Appeals worded their ruling, some professionals are questioning whether IRS has the authority to regulate EAs, CPAs, and Attorneys who only prepare the tax return. If the law only allows IRS to regulate people who "represent" taxpayers, and the act of preparing a tax return is not "representation," per the Court ruling, then preparing a return is not subject to Circular 230, as the IRS has no statutory authority to tell us what we can and cannot do while preparing a return.

Other than the statutory requirement to sign the tax return, give a copy to the client, put our PTIN on it, and not willfully help a client evade taxes, the IRS has no authority to tell us how to prepare a tax return. PERIOD.>>>