Monday, July 17, 2017


Here is a practice tip to cover your arse when it comes to agita-producing clients who want to blame you for their omissions when caught by the IRS.
Place a personalized stamp or mark on all original documents you have viewed in the course of preparing an income tax return and will return to the client.  This way a client can’t say he gave you information that you failed to include on the return if he is audited and tries to claim “I told my tax preparer, but he forgot to report it”.
For example - enter your initials followed by a sequential number and an arbitrarily chosen non-sequential capital letter - RDF1C, RDF2T, RDF3W, RDF4M, RDF5F - with a colored pen on each item.  The letter “F”, or whatever other letter you chose, indicates the last document viewed in the sequence.  So even the most devious client cannot sneak in a 6th item.
When I first provided this idea in another venue I received the following comment -
I read the part of your post about marking the documents presented for tax prep.  I started doing that a few years ago after a client did exactly what you described.  I use a specific rubber stamp for each preparer in the office. I also staple the paperwork into the client folder.  So when a client told me I missed a 1099-B this year we asked for the original file I gave him.  Funny how the paper I missed didn’t have my stamp on it nor did it show staple marks.”    
Do you have an idea that has worked in your practice?  You can email me at with TAX PRACTICE TIP in the “subject line”.  I will post a compilation of submitted tips here in a future post.
+ Have you heard yet?  Kay Bell, the yellow rose of taxes, tells us “IRS to seek stay in PTIN fee collection court ruling while it pondersits additional legal options” at DON’T MESS WITH TAXES.
While Kay says the IRS and Department of Justice have not officially decided to appeal the decision that shut down the collection of a fee to apply for or renew a tax preparer’s “PTIN” (Preparer Tax Identification Number), IRS Commissioner Koskinen “said his agency is likely to appeal the PTIN ruling”.
So, fellow tax pros, don’t expect a PTIN fee refund check in the mail any time soon.
+ I came across this article via Twitter – “Which Superheroes Would Make the Best CPAs?".
Of course, coming from an AICPA source, it has the arrogance of limiting its reference to CPAs when it applies to all accountants and tax pros as well.
+ My editor at the NJ TAXING TIMES told me, and other NJ tax preparers, about a great resource for tax pros and taxpayers – a “Glossary of Tax Terms” from the NJ Division of Taxation.  It is indeed comprehensive and the individual definitions include links to appropriate pages on the NJDOT website.
+ Here is a reminder for tax pros with clients receiving a Form 1099-C for cancellation of debt from fellow tax blogger Jason Dinesen - “Insolvency Calculation: What Does “Interest in a Retirement Account” Mean?


I have been preparing 1040s since 1972. Over the years I have developed a collection of forms, schedules and worksheets that have proven very helpful in my practice. 
Some of my forms are given to clients to help them provide me with the information I need to properly prepare their returns. Some are used as “memos” to the client’s copy and my office file copy to back-up items reported on the returns. Others are used as attachments to the returns.
I offer this compilation to you for only $7.95!
Click below for more information-

Monday, July 10, 2017


One of the reasons I created this blog was to initiate and facilitate thought and discussion on topics of interest and importance to the tax preparer community.
While not specifically a tax topic, the issue of “repeal and replace” does involve taxes and 1040 preparation.
The basic concept of Obamacare – attempting to provide universal comprehensive health insurance coverage by using advance credits to help reduce the up-front out of pocket cost – is a good one.
But Obamacare was hastily written by the idiots in the Democratic Party, without taking the time to properly and completely think it through, or taking the time to read it before passage, to provide Obama with a quick and early victory.  The Affordable Care Act (ACA) is a convoluted mess.
The Republican Party has also earned the right to bear the description "idiots”.  They have opposed the Affordable Care Act from the beginning, more because it was Democratic legislation than probably anything else.  So the Republicans have had 7 years to come up with an appropriate alternative to replace Obamacare.  Of course the idiots did nothing, and are now scrambling to come up with something in the same way the idiot Democrats scrambled to put together the original legislation.
Obviously, at least to the intelligent among us, what needs to be done is not Republican “repeal and replace”, but Republicans and Democrats working together to fix what is wrong with Obamacare, while keeping what is right – as some Democrats have actually suggested.  But the concept of “Republicans and Democrats working together” on anything has been impossible to achieve for decades now.
Here, from a post that originally appeared at THE WANDERING TAX PRO, is, in my humble opinion, the Good, the Bad, and the Ugly of Obamacare.
The absolute best thing about Obamacare is the advance premium credit.  It provides direct assistance to individuals not covered by employer plans who cannot afford the monthly cost of health insurance premiums.
Historically tax credits are always “after the fact” – you must wait until you file your tax return to get the benefits for the prior year.  For example – for the education credits you must wait until February to April of 2017 to get federal tax aid for tuition paid as early as January of 2016. 
With tuition, and more especially with health insurance premiums, you actually need the money provided by the tax credit at the “point of purchase” – when you must actually pay for the tuition or the premiums – and not a year later.
Another of the good things about Obamacare is the requirement that “pre-existing conditions” are covered.
There are many bad things about Obamacare.
1. The penalty for not having “adequate” health insurance coverage.  Individuals should not be forced to purchase a certain degree of coverage by being financially penalized for not doing so.  And employers should not be forced to provide health insurance for employees, and be financially penalized for not doing so.  There should be no “shared responsibility penalty”.
2. The requirement that individuals must purchase health insurance through the official Obamacare Marketplace in order to get the advance premium credit.  An individual who purchases qualifying health insurance directly from an insurance company, at probably a slightly lower premium, cannot get the needed premium assistance to which he or she would otherwise be entitled to based on income.  This is totally unfair and unjust.  Individuals should be allowed to purchase whatever is determined to be “adequate” insurance directly from whichever provider they choose, and then go to a government health care website to apply for the advance premium credit, which would be applied to reduce the monthly premium charge, or apply for the credit directly with the insurance company at the same time they apply for coverage.
3. The Obamcare NIIT and Medicare “surtaxes”.  I firmly believe that taxing the so-called “wealthy” simply because they can supposedly afford it is NOT the answer to every problem. 
4. The various restrictions and penalties on certain types of employer health care benefits, such as the “Cadillac plan” and health care reimbursement programs.
5. The other “nickel and diming” charges, surtaxes, and penalties used to fund Obamacare.
Truly the worst thing about Obamacare, and about the House Republican replacement option, is age-weighted premiums.  This is a new concept.
Under Obamacare health insurance premiums became much more expensive for older Americans, and cheaper for younger ones.  I was told the reasoning behind this was to encourage young taxpayers just starting out to buy health insurance, and maintain coverage, by making it very inexpensive.
In reality it is the younger Americans, just starting out and without any family or mortgage expenses, who are, in many cases, more able to afford to pay for health insurance - while older Americans not yet eligible for Medicare coverage often find paying for insurance difficult, especially with substantially higher age-based premiums.
The calculation of premiums should return to the way it was done before Obamacare, with older Americans not unfairly and improperly excessively charged.
We most certainly need to “repeal and replace” the current idiot in the White House (I realize there are several idiots currently in the White House – but you know who I mean).  Maybe we also need to “repeal and replace” Congress!
So what do you think about Obamacare – what should be kept and what should be repealed?

Monday, July 3, 2017


Let me start off the return of THE TAX PROFESSIONAL blog with an idea for a post-tax season promotional campaign that I had always wanted to undertake in the past, but never got around to it.  At this point I will never get to try it, as I am no longer looking for new clients.  I am actually attempting to “thin the herd” as I approach retirement after my 50th tax filing season. 
This idea will take an initial investment of money and time, but has great potential and could turn into an annual event.
Pick a slow period when you have free time – like now - and take out ads in local papers and on local radio programs to announce a special offer.  The ads will begin by asking taxpayers if they are confident that their past tax returns were prepared correctly, and that they paid the least amount of federal and state income tax or got the biggest federal and state refunds possible. 
You then offer a special free service.  During the chosen month taxpayers can bring their past three years’ federal and state tax returns to your office and you will review them for free.  If the returns were prepared correctly and there is nothing you would change there is no charge.  If you find an error, and can amend a return or returns to get a refund, you will prepare the amended return(s) at your normal fee schedule, or maybe a special reduced rate (perhaps 50% of your normal fee).
In the case of minor errors that would generate small refunds of perhaps $50 - $100, and your fee to amend might eat up most or all of the refund, amend anyway and either do not charge or charge a nominal amount not to exceed 50% of the refund.
My mentor and I discovered early on that the best way to get a new client for life, and a good source of future referrals, was to amend a past return, prepared by the taxpayer or someone else, to get a refund.  Of course back in “the day” we had more tricks we could use, like Income Averaging and 10-Year Averaging, to get a potential new client a really big check.
Today the main target audience of such a campaign is the taxpayer with little or no knowledge of tax law and the Tax Code who “self-prepares” by using a “box” (tax preparation software).  You want to emphasis the fact that no tax preparation software is a substitute for a competent and experienced tax professional.
And, what was always my favorite thing to do, you also want to take clients away from the fast food preparation chains.
If you find an error that caused the taxpayer to underpay their correct tax liability you would point it out and recommend that they amend, but charge nothing if they do not.  Sometimes identifying a serious mistake and offering to fix it promptly before the IRS bills the taxpayer(s), to reduce potential penalty and interest, will also result in a new loyal client.
Have you ever tried something like this?  How did it work out?
And those of you who decide to try this idea, please let us know the results.
If you have a practice tip you would like to share with fellow tax professionals you can submit it to me at

Wednesday, June 28, 2017



I have decided to revive THE TAX PROFESSIONAL, written especially for my fellow tax professionals, as a weekly blog.
The purpose of this blog will be to –
§ share information and resources with fellow tax pros, and
§ initiate and encourage thought, discussion, and debate on issues of importance to the tax professional community,
Your participation, by commenting on my thoughts and opinions, suggesting topics for discussion, and sharing information and resources you have found, is welcomed and solicited. 
Please subscribe to THE TAX PROFESSIONAL by entering your email address in the box at the top of the left margin.
I will begin weekly posting on Monday, July 3rd.

Tuesday, August 20, 2013


Over at TAX FACTOR Jamaal Solomon’s “Confessions of a Mad Tax Accountant” continue with the promised "Arrogance of Some (Not All) Old Tax Accountants (30+ years' experience)”.
Jamaal advises -

My advice to young tax professional is not to be shy. Young professionals MUST seek advice from ‘seasoned’ tax professionals. You will meet some jerks but hey that’s life! You have to keep on striving for excellence. My advice to ‘seasoned’ tax professionals is don’t be greedy. ‘Seasoned’ professionals MUST share their knowledge.”

In looking back at my more than 4 decades in the business, the only “seasoned” tax pro from whom I actively sought advice during my earlier years was my teacher and mentor James P Gill.  We worked together just short of 30 tax seasons, and he eventually “handed over” his practice to me when he got tired of 1040s at age 75.  To be honest, while I have been attending NATP and other conferences for over 25 years, I did not begin to “network” with other tax pros until only very recently. 

Over the years I obviously received guidance from “seasoned” seminar and workshop leaders at NATP, NSTP and other continuing professional education sessions via their presentations.  And since I began blogging - around the time my mentor went to his final audit - I have sought guidance and help on tax preparation issues from time to time from my fellow tax bloggers (especially the MISSOURI TAXGUY, who actually credits me as one of the reasons he started to blog) – some less “seasoned” than myself.  Different tax preparers have different areas of experience and expertise.

From the odd questions and comments presented during my tenure at various CPE sessions by participant tax preparers, who one would think to be “seasoned” based on years, I have come across many that seem to need a lot more “seasoning”.  Years in the business alone does not necessarily yield “seasoning”.   

I like to think I am one of the “great ‘seasoned’ tax professionals” that JS refers to in his post.  I have tried to be supportive, and provide guidance, support, and publicity (via BUZZ), to new tax bloggers, Jamaal included, over the dozen years I have been writing THE WANDERING TAX PRO.

I do agree with JS that “seasoned” tax pros need to share their experience with newbies, and new tax pros need to seek out “seasoned” mentors.

FYI, Jamaal and I, a “young” tax pro and a “seasoned” tax pro, will soon be providing guidance, advice, and resources for beginning tax preparers in a book that we are currently working on with the tentative working title “Won’t You Take This Advice I Hand You Like a Brother”.  I apologize to JS for not devoting more time to my contributions to the manuscript lately, but I have been plagued by GD extensions.

Next up for JS – turnabout is fair play with “Arrogance of Some Young Tax Professionals”.  I am looking forward to this next post almost as much as I was looking forward to the current one.


Monday, August 19, 2013


+ The madness continues.  Jamaal Solomon talks about: “Receiving CPE Offers” in “Confessions of a Mad Tax Accountant #4”.

I, too, have noticed that many new CPE providers have sprung up, and have solicited me via email, since the IRS initiated its now hopefully defunct required RTRP regime.  And new RTRP-related membership organizations, most really thinly-veiled profit-making CPE providers also appeared.

While I have attended CPE from various providers and organizations over the years, lately I have limited my CPE to NATP and the NJ chapter, but I also recommend the IRS Nationwide Tax Forum.  Unlike JS, I do not complain about CPE emails, as I am always looking for new legitimate providers either nearby or at locations I would like to visit.

I look forward to the next installment in the Mad Tax Accountant series – “Arrogance of Some (Not All) Old Accountants (30+ years)”.

+ The always on the ball ACCOUNTING TODAY gives us the word that “IRS Postpones Shutdown of Online e-Services Apps” -

The Internal Revenue Service said Friday that it is delaying the planned retirement of its Disclosure Authorization and Electronic Account Resolution online applications for three weeks.”

+ The IRS has issued draft copies of a lot of 2013 forms and instructions recently.  Click here to check them out.

+ Diane Gilabert explores “The Section 199 Deduction – 9 True/False Questions” at her TAX MAVEN BLOG –

The section 199 deduction is one of the most overlooked tax breaks for businesses. The alphabet soup of acronyms is intimidating. But a potential tax deduction of 9% of qualifying taxable income is too compelling to pass up.”  

+ And DG also provides a detailed “Purchase Price Allocation Example” for reporting the sale of a business.


Monday, August 12, 2013


+ “Psychopathic CPAs? Not Likely”.  I don’t know about that.

Bill Sheridan of the MARYLAND ASSOCIATION OF CPAS suggests that, according to the Great British Psychopath Survey, “If you're a CPA, here's a bit of good news: You're probably not a psychopath.”

It is no surprise that #2 on the list of the most psychopathic professions is Lawyer.  With some exceptions, I have always thought of lawyers as #2.

+ TAX MAVEN Diane Gilabert lists “5 Things Bill Belichick can Teach us About Winning an IRS Audit”, the third installment in her series on IRS audits.

To be honest, until I read the post I had no idea who Bill Belichick was.  The only sport I follow is bowling. 

+ TAX PROFESSIONALS RESOURCE has a great inventory of “Tax Articles”.

+ FYI, the “other NSA” is offering an online seminar on “Financially Distressed Taxpayers: Cancellation of Debt, Foreclosures and Repossessions” on August 27th at 2:00 PM EDT, 1:00 PM CDT, 12:00 PM MDT, 11:00 AM PDT.