Tax Prep by Deb Posted May 30, 2007 Report Share Posted May 30, 2007 I have a client whose wife works at a local restaurant and received a W-2 issued in her name with a social security number that doesn't belong to her. She has applied for and received a ITIN number and I have prepared her and her husbands tax return. In the past we were not able to e-file these types of returns because of the social security number issue, not matching ect.... But I understood that starting this year we could. I had a similar situation earlier in the year, and when I attempted to e-file the return it kept rejecting due to social security name mismatch. What I did is on the 1040 I used her ITIN number and on the W-2 field I used the social security number that was on the W-2. Did I do this correctly? Am I missing something? I could not get the other one through at all, even though I had a copy of her ITIN document and spelled her name exactly as on that document. I'm to the point that I need to send this new one through, but if I'm missing something I would like to correct it before I do. Any thoughts anyone! Thanks in advance, (p.s. I'm sooooooo glad that we still have a wonderful board as I really felt lost when ATX dropped us) Quote Link to comment Share on other sites More sharing options...
Pacun Posted May 30, 2007 Report Share Posted May 30, 2007 During 2004 and 2005 tax seasons, I efiled in situations where the ITIN didn't match the W-2s. I never got any letter from the IRS but this year, I didn't efile if the ITIN person had W-2s because I read that you should not efile if the numbers do not match. The only time I had problems was when the ITIN was relative new and the IRS didn't have them in the SS master file. Lately, I have noticed that the IRS add them to the SS master file as soon as they issue the letter with the ITIN. (How do I know that?) I have efiled the state jointly when the wife didn't have any income and the ITIN was just issued. In previous years, I got rejections when the ITIN didn't match the ss master file when efiling state returns. Quote Link to comment Share on other sites More sharing options...
Jack from Ohio Posted June 4, 2007 Report Share Posted June 4, 2007 I have a client whose wife works at a local restaurant and received a W-2 issued in her name with a social security number that doesn't belong to her. She has applied for and received a ITIN number and I have prepared her and her husbands tax return. In the past we were not able to e-file these types of returns because of the social security number issue, not matching ect.... But I understood that starting this year we could. I had a similar situation earlier in the year, and when I attempted to e-file the return it kept rejecting due to social security name mismatch. What I did is on the 1040 I used her ITIN number and on the W-2 field I used the social security number that was on the W-2. Did I do this correctly? Am I missing something? I could not get the other one through at all, even though I had a copy of her ITIN document and spelled her name exactly as on that document. I'm to the point that I need to send this new one through, but if I'm missing something I would like to correct it before I do. Any thoughts anyone! Thanks in advance, (p.s. I'm sooooooo glad that we still have a wonderful board as I really felt lost when ATX dropped us) I guess maybe I missed something about due diligence... Please correct me if I am off base here... If I prepare a return KNOWING that the SS# on the return does not belong to the filer, have I not just been an accessory to fraud?? Am I not required to be certain of the identity of all the taxpayers I prepare returns for? I would not, will not do as you have described. Call me a "Goodie Two Shoes" if you wish. Quote Link to comment Share on other sites More sharing options...
Julie Posted June 4, 2007 Report Share Posted June 4, 2007 I haven't done an illegal alien return in a while, but that seems to be how to do it. I have a client whose wife works at a local restaurant and received a W-2 issued in her name with a social security number that doesn't belong to her. She has applied for and received a ITIN number and I have prepared her and her husbands tax return. In the past we were not able to e-file these types of returns because of the social security number issue, not matching ect.... But I understood that starting this year we could. I had a similar situation earlier in the year, and when I attempted to e-file the return it kept rejecting due to social security name mismatch. What I did is on the 1040 I used her ITIN number and on the W-2 field I used the social security number that was on the W-2. Did I do this correctly? Am I missing something? I could not get the other one through at all, even though I had a copy of her ITIN document and spelled her name exactly as on that document. I'm to the point that I need to send this new one through, but if I'm missing something I would like to correct it before I do. Any thoughts anyone! Thanks in advance, (p.s. I'm sooooooo glad that we still have a wonderful board as I really felt lost when ATX dropped us) Quote Link to comment Share on other sites More sharing options...
Don in Upstate NY Posted June 4, 2007 Report Share Posted June 4, 2007 I guess maybe I missed something about due diligence... Please correct me if I am off base here... If I prepare a return KNOWING that the SS# on the return does not belong to the filer, have I not just been an accessory to fraud?? Am I not required to be certain of the identity of all the taxpayers I prepare returns for? I would not, will not do as you have described. I don't see any fraud in preparing a return accurately reporting that a person properly identified by an ITIN earned wages that were improperly reported to a incorrect or false SSN. You are not assisting in a fraud -- the illegal act (if any) has already been committed by the employer/employee. Our obligations in a case like this is to accurately report what happened. See http://www.irs.gov/businesses/small/articl...=167635,00.html Quote Link to comment Share on other sites More sharing options...
Pacun Posted June 4, 2007 Report Share Posted June 4, 2007 It is ilegal to hire an illegal alien but it is not illegal to be hired by an illegal alien. As long as you properly prepare the return, you should be OK. Remember that people with ITIN do not get Earn Income Credit. I just prepared 1999, 2000, and amended 2001 for a client. This client was using a fake social security number for those years but now he has his own social security number. His immigration attorney calls me and wants that all documentation to reflect his correct number. I said "that's wishful thinking. I cannot correct any W-2 that the client brings to me. My responsibility is to accurately prepare the 1040 returns for 1999, 2000, and 2001, and I have done that". I went on and said, even if you find the account that correctly prepared his 1999 W-2, based on the information at hand at that time, s/he cannot change that W-2 because the social security already has a copy of it and it is ilegal to do so". Quote Link to comment Share on other sites More sharing options...
Jack from Ohio Posted June 5, 2007 Report Share Posted June 5, 2007 I don't see any fraud in preparing a return accurately reporting that a person properly identified by an ITIN earned wages that were improperly reported to a incorrect or false SSN. You are not assisting in a fraud -- the illegal act (if any) has already been committed by the employer/employee. Our obligations in a case like this is to accurately report what happened. See http://www.irs.gov/businesses/small/articl...=167635,00.html I have a client... ...In the past we were not able to e-file these types of returns because of the social security number issue, not matching ect.... But I understood that starting this year we could. I had a similar situation earlier in the year, and when I attempted to e-file the return it kept rejecting due to social security name mismatch...[/quote] These actions do NOT adhere to the article you referenced. I choose NOT to do returns for anyone that has INTENTIONALLY been submitting FALSE information to circumvent the laws of our country. One wrong (illegal act) does not excuse another. Quote Link to comment Share on other sites More sharing options...
Tax Prep by Deb Posted June 5, 2007 Author Report Share Posted June 5, 2007 Actually my decesion to file this type of return comes after a very lengthy discussion with one more than one IRS agent who pointed out that the ITIN was set up for this exact situation. The problem in the past as I stated was the name mismatch. The person who posted the reference does relate specifically to my situation. As was stated, I am not the one committing the fraud, it was already done, I am simply submitting the facts as presented to me. I do not make it a practice, not do I go out and soliciate this type of return, but from time to time they do come in. Usually when they do we get into a very big argument about why in the past their tax return preparer was able to e-file, and when I see what was done, it was because they (their preparer) altered the info on the W-2 to get it through. I did not do that. I electronically filed, per IRS instructions using the ITIN number on the front of the 1040 and then making sure that the social security number that was on the W-2 is what was imputed into the W-2 worksheet. I e-filed the return on Sunday and it has been accepted. Again thanks for you who responded. Quote Link to comment Share on other sites More sharing options...
Pacun Posted June 5, 2007 Report Share Posted June 5, 2007 By requesting ITINs, I have helped the IRS collect thousands of dollars from people that want to violate one law and respect others. It is like being a good citizen by using your seat belt all the time but runing a yellow/red light from time to time. It is like going to church and having a lover. It is like being a good citizen by going to the army but kill people during war. It is like reporting all your income from tax preparation but leaving out those $20 you got when you returned a wallet you found on the street or that $20 tip you got when you drop off your friend to the airport or that $20 dollar you found on the street. If the system created ITINs for illegals to comply with IRS rules, we have support that and comply with it... we do not chose what regulations we like and comply with only those, we have to comply with all of them. I do understand that you can refuse to prepare taxes to any one and if you feel unconfortable helping those people. In any event, when a client sits in front of you to have his taxes prepared, do you know if your client in front of you has raped, killed or otherwise mistreated people, is using illegal drugs, steals things from the stores... we don't and our obligation is to prepare his taxes based on the rules. I try to limit my practice to taxes and let other government agencies to deal with problems under their jurisdiction. Again, if under your believes, you feel the need to refuse preparing taxes to any one, please feel free... I do that from time to time and more often than you think. Quote Link to comment Share on other sites More sharing options...
Pacun Posted June 5, 2007 Report Share Posted June 5, 2007 From Mark Minassian, Your Guide to Business Law / Taxes: U.S.. FREE Newsletter. Sign Up Now! Why the Social Security Administration Loves Illegal Immigrants A few years ago our firm was processing year-end W-2s for one of our clients who owned a small convenience store. It was the first year we were e-filing his W-2s directly with the Social Security Administration (SSA). When we processed the W-2 for one of his employees (who had been an employee for the prior three years), the SSA immediately kicked out the W-2 because the employee's name did not match his Social Security number. We immediately notified our client about the situation. The employee in question was an illegal immigrant and admitted to our client that the Social Security number and card that he was using was fake. Our client fired the individual and then went down to our local Social Security office to report the situation. To his astonishment, the SSA did nothing to either prosecute the individual nor investigate the situation. Their response was that they would take action if the fake Social Security number showed up again attached to another individual. The lesson to be learned from this: The SSA doesn't really care if illegal immigrants are using fake Social Security numbers because they are still paying into Social Security and Medicare and will never be able to claim any of the benefits. The Social Security and Medicare systems face enormous shortfalls and will take whatever contributions they can get, even if such contributions are from illegal immigrants using fake Social Security numbers. Tuesday May 22, 2007 Quote Link to comment Share on other sites More sharing options...
Jack from Ohio Posted June 5, 2007 Report Share Posted June 5, 2007 If a client presents me a W-2, that he/she knows has an improper SS# on it because he/she chose to use it to circumvent the rules/laws concerning employment, is that not fraud by anyone's definition?? The reasons why a person chooses to use someone else's SS# are irrelevent to the fact that it is fraud. I do not see any gray area in this matter. Quote Link to comment Share on other sites More sharing options...
Julie Posted June 6, 2007 Report Share Posted June 6, 2007 And if you file the tax return, correctly inputting the false SSN in the W2 worksheet in order to efile the tax return, and filing the return under the ITIN number, are you not, by that action, informing the US government of that individual's fraud, and giving them all the information they need, should they decide to arrest and prosecute that individual? In other words, if you call the police and inform them of your neighbor's marijuana garden, and the police do nothing, somehow you are complicit in his lawbreaking? I understand that you're not comfortable with this, but consider: most illegal immigrants are low-income. They are not eligible for EIC. They pay SS taxes, just like everyone else. They are not eligible to collect SS benefits. If a client presents me a W-2, that he/she knows has an improper SS# on it because he/she chose to use it to circumvent the rules/laws concerning employment, is that not fraud by anyone's definition?? The reasons why a person chooses to use someone else's SS# are irrelevent to the fact that it is fraud. I do not see any gray area in this matter. Quote Link to comment Share on other sites More sharing options...
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