Love Things Like This

[Terry D EA]

New client never heard of deducting medical insurance premiums on Sch A. I questioned this during the review of their 2014 return. No medical expense deductions and the cost of their insurance premiums exceed the 10% floor. 2015 expenses are even higher previous preparer didn't tell them this. So they say. These folks have rental property and don't know what a depreciation schedule is. Depreciation shows on Sch E on 2014 return but they don't know what it is being depreciated. Previous preparer did not provide the depreciation schedule and there is no form 4562 in their return.

Next one, guy comes into my office with a handwritten 2014 return that he prepared himself. Took the wrong education credit and screwed himself out of about 1500.00. Has a kid in school first year so AOC. He leaves happy and I have a 2014 return to amend. All good so far. Same guy calls and says he is preparing return for a friend and doesn't understand the ACA and where or how to input the information (hand written paper return again). I blow him out of the water with all the different ACA calculations, form 8965, 8962 and the formula for determining affordability using the poverty level calculation. Of course, the went through it quick and technical. He says "I think I'm in over my head". Me - Yep you are fixing to blow another hole in your foot. Now he wants to pay me to get his butt out of a jamb with his friend. Yes, I will charge accordingly. But the nerve of some people! (This is a good place for the head banger emoticon)

Edited March 24, 2016 by kcjenkins
added headbanger

[Catherine]

12 hours ago, Terry D said:

This is a good place for the head banger emoticon

 

Here you go.

[RitaB]

Guy called me Friday the 5th, can I drop off Saturday the 6th, no, please wait till next week.

He drops off Saturday the 6th.  I refrain from killing him because I knew he would do that, and my daughter is here in the office studying.  And I love her and don't want her to see a dead body until she gets out of grad school.

He comes in with another form Wednes the 23rd.  No, I hadn't done the return.  I know better with him.

That's right, you better say my hair looks nice.  That's right, you better come to a rolling stop as you lay that gently on my desk and turn around and don't let that door hit...

[GeneInAlabama]

Rita, is your real name Alice?  And do you know someone named Dilbert?

 

[RitaB]

14 minutes ago, GeneInAlabama said:

Rita, is your real name Alice?  And do you know someone named Dilbert?

 

Google tells me I may be Alice Dilbert.  Fist of Death.  Nice.

[joanmcq]

I got in a new client who moved to the area, but wanted a CPA because the guy she went to in LA that her friends went to just didn't seem 'right'. And some of her friends got audited and the guy wouldn't help them. Now this girl is just out of school, and 2015 is only the third tax retune she's ever filed. 

On the 2014 return:

$3000 of cash charitable contributions (she only donated a little bit to goodwill)

lots of employee expenses, including auto insurance, auto payments (she's a nurse, doesn't drive for work) some licensing and courses she did give him receipts for, clothing, shoes

under other misc itemized:

the pension payment shown on her w2, the code DD medical insurance from the w2, $1000 in hobby expenses (no hobby income) and some more stuff. $35000 in itemized deductions in total and she really only has state income tax and her vehicle license fee because the lil bit of legit employee expenses don't exceed the 2% floor.

Oh, oh, and the preparer name was stamped on the return over the 'self prepared' note that turbo tax puts on the bottom of the return , and instead of being signed there's another stamp with an initial. And the PTIN is a stamp too. 

She's going to bring me 2013 too. She wants to bust the guy. I hope he gets jail time. 

 

 

[RitaB]

8 hours ago, joanmcq said:

 

Oh, oh, and the preparer name was stamped on the return over the 'self prepared' note that turbo tax puts on the bottom of the return...

 She wants to bust the guy. I hope he gets jail time. 

 

 

You'd think he would at least spring for a bottle of Wite Out.  I hope he gets busted, too.  It's a shame he hasn't already.  Makes it hard on the rest of us that do professional work and have bills to pay.  Even if we were filthy rich with no bills to pay, those crooks need to be put out of business.

The lack of Wite Out, though.  Wow. 

[kcjenkins]

I wonder, if the IRS was allowed to have a policy of giving a one time "Directed No Change" to anyone who brings in such a return, where the deductions are clearly bogus, and agrees to testify at the preparer's trial, wouldn't that lead to a huge reduction in this sort of scam?  Right now, the preparer plays the 'audit odds' game knowing that the clients, as co-conspirators in many cases,  will not want to expose him/her.   What do you think?

[Terry D EA]

Well just to add to my original post. Same guy stops by the other day and asks me to review a return that he prepared (again with paper and pencil) and the 2014 return that he again prepared in the same manner. This is NOT his return or information. I did ask him if these folks gave him permission to let me see this information. He said Oh yes no problem. I did ask for these folks phone number. Should I call them before I review this mess? From what he told me, and I tried to ignore everything as I warned him he shouldn't be discussing this with me, he has screwed up these folks return and shorted them money on refunds both years. Again, I am only guessing here as I haven't looked at this stuff yet. What would other do?

Before someone chimes in with "charge him dearly", believe me he will be paying for this one even if it is for wasting my time.

[Jack from Ohio]

9 minutes ago, Terry D said:

Well just to add to my original post. Same guy stops by the other day and asks me to review a return that he prepared (again with paper and pencil) and the 2014 return that he again prepared in the same manner. This is NOT his return or information. I did ask him if these folks gave him permission to let me see this information. He said Oh yes no problem. I did ask for these folks phone number. Should I call them before I review this mess? From what he told me, and I tried to ignore everything as I warned him he shouldn't be discussing this with me, he has screwed up these folks return and shorted them money on refunds both years. Again, I am only guessing here as I haven't looked at this stuff yet. What would other do?

Before someone chimes in with "charge him dearly", believe me he will be paying for this one even if it is for wasting my time.

Send him packing.  If the stuff ever hits the fan, you can be sure YOUR name will be in the middle of it. 

No way I would participate in such shenanigans.

[RitaB]

On ‎3‎/‎22‎/‎2016 at 9:14 PM, Terry D said:

Next one, guy comes into my office with a handwritten 2014 return that he prepared himself. Took the wrong education credit and screwed himself out of about 1500.00. Has a kid in school first year so AOC. He leaves happy and I have a 2014 return to amend. All good so far. Same guy calls and says he is preparing return for a friend and doesn't understand the ACA and where or how to input the information (hand written paper return again). I blow him out of the water with all the different ACA calculations, form 8965, 8962 and the formula for determining affordability using the poverty level calculation. Of course, the went through it quick and technical. He says "I think I'm in over my head". Me - Yep you are fixing to blow another hole in your foot. Now he wants to pay me to get his butt out of a jamb with his friend. Yes, I will charge accordingly. But the nerve of some people!

 

3 hours ago, Terry D said:

Well just to add to my original post. Same guy stops by the other day and asks me to review a return that he prepared (again with paper and pencil) and the 2014 return that he again prepared in the same manner. This is NOT his return or information. I did ask him if these folks gave him permission to let me see this information. He said Oh yes no problem. I did ask for these folks phone number. Should I call them before I review this mess? From what he told me, and I tried to ignore everything as I warned him he shouldn't be discussing this with me, he has screwed up these folks return and shorted them money on refunds both years. Again, I am only guessing here as I haven't looked at this stuff yet. What would other do?

Before someone chimes in with "charge him dearly", believe me he will be paying for this one even if it is for wasting my time.

 

3 hours ago, Jack from Ohio said:

Send him packing.  If the stuff ever hits the fan, you can be sure YOUR name will be in the middle of it. 

So, this guy is preparing returns, I suppose they are being filed, but we're not sure.  Then he is hiring you to review them.  I doubt he would ever tell any taxpayer what he's doing, so I'm not sure how you'd be in trouble. If he can't do them correctly the first time, he wouldn't know how to amend one either.  I bet he's not thought that far ahead.  May not even know we amend returns.  He may think he can just take your work, do the returns over, and everything is peachy. 

Having said all that, the reason I wouldn't review returns he's done for others is that I'd be training him to take business away from me.

[Terry D EA]

Rita, you hit it head on! He is going to pay me to do the review which doesn't mean I am preparing the return. I will point out the errors and then offer to prepare the return at my normal fees (well maybe a PITA fee is in order here). Exactly as you said, I am not educating him on how to prepare returns and take business from me.

[RitaB]

28 minutes ago, Terry D said:

Rita, you hit it head on! He is going to pay me to do the review which doesn't mean I am preparing the return. I will point out the errors and then offer to prepare the return at my normal fees (well maybe a PITA fee is in order here). Exactly as you said, I am not educating him on how to prepare returns and take business from me.

You are way smarter than me, Terry.  The way I review a return is ATX and I do the return.  LOL. 

[Terry D EA]

No Rita, I am not smarter than you. This guy's mistakes are so obvious it doesn't take much to spot them. I just finished amending his 2014 where he claimed the wrong education credits and added in the qualified dividends with gross income. I just told him that "you just blew a hole in your foot and wallet by not knowing which education credit to claim". After a few more hints, he had me prepare the amendment. Same with these other folks return, the errors are obvious so the ball is in their court as to what they want me to do. I always tell them that I may find other things as I do prepare the return. Now it is their choice as to what they want me to do.

[Terry D EA]

Here's another one. I had a highly educated individual ask me why the HRB software online was telling him that he used up his education credits and no longer qualified for them. Well, we both know he didn't repeat this exactly or didn't understand what it was telling him. I told him it was probably referring to the AOC credit as his doctorate work doesn't qualify for that particular credit. I also told him that if his income exceeded 130K then no tuition and fees deduction. That he laughed at so is he going to hire me??? Nope, gonna struggle this week to see if he can figure it out on his own. I told him that when he was ready to wave the surrender flag I would prepare his return for him. A doctorial candidate and using HRB free online software. Hmm  so much for higher education.

[RitaB]

3 minutes ago, Terry D said:

Here's another one. I had a highly educated individual ask me why the HRB software online was telling him that he used up his education credits and no longer qualified for them. Well, we both know he didn't repeat this exactly or didn't understand what it was telling him. I told him it was probably referring to the AOC credit as his doctorate work doesn't qualify for that particular credit. I also told him that if his income exceeded 130K then no tuition and fees deduction. That he laughed at so is he going to hire me??? Nope, gonna struggle this week to see if he can figure it out on his own. I told him that when he was ready to wave the surrender flag I would prepare his return for him. A doctorial candidate and using HRB free online software. Hmm  so much for higher education.

Well, the commercials and lack of IRS audits mean everybody with a computer is a tax professional.  Shoot, your guy here is a professional with just a pencil.  This is killing us.  Other professionals can charge what they want because people can't do their own lawyering or doctoring or tooth pulling or insert your own example here.  You can charge based on the problem you solve.  If there's no problem with preparing an incorrect tax return, they don't need us.

[GeneInAlabama]

On 3/26/2016 at 9:32 AM, RitaB said:

Well, the commercials and lack of IRS audits mean everybody with a computer is a tax professional.  Shoot, your guy here is a professional with just a pencil.  This is killing us.  Other professionals can charge what they want because people can't do their own lawyering or doctoring or tooth pulling or insert your own example here.  You can charge based on the problem you solve.  If there's no problem with preparing an incorrect tax return, they don't need us.

Rita, I sure am glad you added that comma.

[Catherine]

4 hours ago, GeneInAlabama said:

Rita, I sure am glad you added that comma.

Grammar saves lives!

[SaraEA]

Terry D, we had a young woman appear this year who is a child of one of our clients so we charged her half price. I didn't do her return but was called over to answer her questions because the preparer was with other clients.  Our return showed a $2k+ refund, but she did it in TurboTax and was getting over $4k and wanted to know why.  So I actually interviewed her (the original preparer never even met her) and discovered that although she had a child, she was under age 24, a full-time student, lived with her parents, and no way did she supply over half of her own support.  Her refund changed to $19.  She started to cry and said that if she couldn't claim herself she would lose her FREE state medical insurance, her financial aid for school, should she change her address to her boyfriend's, blah blah blah.  She ended up paying us for our work but asked that we not file the return.  I am certain she went back to TT and got that $4k, free medical insurance, a big grant for college.  Her parents make more than I ever did.  And as a taxpayer, I am the one paying for that insurance and college and great big EITC.  What is wrong with this system?

As to helping a fellow preparer with questions on a return, it's a wonderful thing.  We do it on this board all the time, and I get calls from preparers in other firms for help quite often.  (I find CPAs are not so willing to help, as they see it as taking away business or something.)  I think we realize none of us can ever know every kink and turn of our convoluted tax code and therefore are willing to share what we have mastered.  I am not worried about someone taking away business.  We have more clients than we can handle and either have to cull our client list and/or hire more help.  That said, the person asking your assistance is clearly not a fellow professional, he only thinks he is.  You made him realize he is indeed in over his head, and maybe he'll give up the endeavor when you point out tax code intricacies he doesn't understand.  I'd let him swim.

[RitaB]

13 hours ago, SaraEA said:

As to helping a fellow preparer with questions on a return, it's a wonderful thing.  We do it on this board all the time...That said, the person asking your assistance is clearly not a fellow professional, he only thinks he is.  You made him realize he is indeed in over his head, and maybe he'll give up the endeavor when you point out tax code intricacies he doesn't understand.  I'd let him swim.

I agree 100%.

[kcjenkins]

On 3/26/2016 at 5:33 PM, Terry D said:

Well just to add to my original post. Same guy stops by the other day and asks me to review a return that he prepared (again with paper and pencil) and the 2014 return that he again prepared in the same manner. This is NOT his return or information. I did ask him if these folks gave him permission to let me see this information. He said Oh yes no problem. I did ask for these folks phone number. Should I call them before I review this mess? From what he told me, and I tried to ignore everything as I warned him he shouldn't be discussing this with me, he has screwed up these folks return and shorted them money on refunds both years. Again, I am only guessing here as I haven't looked at this stuff yet. What would other do?

Before someone chimes in with "charge him dearly", believe me he will be paying for this one even if it is for wasting my time.

Terry, no way would I touch those returns without talking to the people involved.  Those are not HIS returns to make decisions about, just because he prepared them.  HE does not have a legal right to show them to you, or anyone else.   

[Terry D EA]

Thanks to all who replied. I took KC's advice and my own instincts and called the folks before ever looking at their information. I explained to them why I was calling and that it was for their protection for me to do so. They were more than happy to give me permission to review their material and prepare or fix any errors that I found. They were also appreciative of my desire to protect their sensitive information.

I did find errors in both 2014 and 2015 that has an increase in a refund. I now will have another happy client added to my client base.

[Richcpaman]

I think your preparer "friend" has the right to show you a return from someone else.

If I was given return information by one of my clients and wanted to review a complex issue with someone who might have a special knowledge of that area, I think I am well within the requirements.  That is what is happening with Terry.  His "friend" has someone to run things by.  It might be low end stuff or easy returns, but at least he is trying.

Terry's "friend" doesn't know how to prepare a return.  Doesn't mean that will stop him from preparing them.  The system is designed to get returned filed, not that they are to be "correct".  That would be a much more rigid system.  Think about a 1099 for EVERYTHING.

Rich

[kcjenkins]

No, Rich, you know that you do not have the right to show anyone's return to me or anyone.  You can ask questions about an issue, even use actual NUMBERS, but you can not use anything that identifies the taxpayer.   

[Terry D EA]

I agree with KC. I have reviewed these returns and found errors but did not do so until I had the client's approval which I think I put this info in a previous reply. All is well. I agree that no one has the right to show a return to another preparer or other person without express written authorization.