IRS auditors, where do they get them?

[BulldogTom]

I have a client under audit for 2006. EIC disallowed on his return. He also married his longtime girlfreind and mother of his 2 kids. She has 2 kids from a previous marriage. Filed single and his wife did too. Gotta love those national preparation companies getting 2 returns out of one. He took 2 kids, she took 2 kids.

When they came to me, his return was being audited for EIC. I tell the auditor that there is more, he is married and we want to fix the returns. Fine. Present to auditor POA for him, her, and both. Give auditor all the proof for EIC and copy of the marriage cert. She wants to "study" the returns and will get back to me. That was 6 weeks ago.

I called last week to get an update, and this morning the auditor calls me back. EIC looks like it is resolved and that issue will go away. Fine.

Then the auditor asks me for a letter signed by the clients that they want to combine the returns. I tell her I will provide the letter under the authority of my POA. She insists that it has to be signed by them. I ask why. She say "I need to make sure they don't want to file Married Filing Separately." I try to assure her that the clients do not want to file MFS, and I will send the letter today to her fax machine indicating that position. Her response "Are you sure they won't change their mind?"

Lets see, I have just had the client go through all the trouble to get all the records from doctors, schools, birth certs, rental leases, etc to prove that they qualify for EIC, and then they are going to change their minds, file MFS and lose EIC?

What was this lady smoking?

Tom

Lodi, CA

[jainen]

>>What was this lady smoking?<<

One of my favorite things on these internet forums is defending the IRS. I pretty much have the field to myself here.

Your clients, Bulldog Tom, were caught red handed in an egregious, fraudulent lie. Selling their immortal souls for a bit of tax credit, as it were. By rights the IRS ought to slam a two-year sanction on them, along with all the financial penalties. You're darn lucky you drew one of the bureaucratic types who just wants some meaningless piece of paper to photocopy for her file.

I don't know what is "all the trouble" of ordinary records like a doctor bill or school registration or lease. You're getting off easy, my friend. Write the letter, Tom. You can give it to the clients along with your invoice for a successful representation. Win-win. The auditor is proud to have forced a professional to back down; the taxpayers get a check which they share with you. Why, I wouldn't even bother pointing out that under the code they CAN'T change from joint to MFS.

[BulldogTom]

The clients relied on JH to prepare their returns. Believe me, these clients are not the sharpest knives in the drawer. They went into a storefront and said "get us the most we can get." JH got the most out of them they could. That is the real crime. Using those who are uneducated to take a clip off the top of a tax credit for the poor. Enough of defending the client.

As for the agent. The point was, we went through the first half of the audit proving they were eligible for EIC. Why would we do that if we wanted to file MFS? We would lose the EIC we fought to get? I guess it seems obvious to me, but not to her.

The letter is written and will be faxed over today. So she got to beat me down. Big deal, my client wins.

But why does she not respect the POA? I have the right to represent and bind my clients to an agreement that I make with the IRS while representing them. It is within the scope of practice to agree to the filing status that is best for the client. She had no right to go around that POA. But I guess it made her feel big and strong. So petty. Just like the IRS. Until you get to the appeal level, the knowledge and professionalism of the staff is severely lacking.

Hope that doesn't offend, but it is my observations from dealing with the service for 12 years.

Tom

Lodi, CA

[jainen]

>>it made her feel big and strong<<

That should always be the #1 strategy in any IRS audit. And it makes sense, because they ARE big and strong.

[kcjenkins]

"why does she not respect the POA?"

Because she is not very good at her job, and/or she is a bully. But in this case, it's not worth a fight, even tho you are correct, and she is clearly in the wrong.