While
I freely admit that my mind tends to wander during the required 2 hour “ethics”
sermon we must sit through at least once each year during continuing education
sessions, I do listen in on the discussion every now and then. Hearing all the rules and requirements
enacted in the name of privacy and security it is obvious that regulation has
gone overboard. Much of what the
instructor discusses is, to be perfectly honest, totally ridiculous.
Say
I was talking to a friend, who was also a client, in a public place and another
client, let’s call him George, who my friend coincidently also knows, happened
along, saying hello to us in passing. If
my friend asked me, “How do you know George,” I would normally think nothing of
replying, “I have been doing his taxes for years”.
But
by doing so, I am told, I would be seriously violating “privacy” rules!
Obviously
I am not allowed to discuss the details of George’s Form 1040, or any other
financial or personal information I was told in confidence in the course of
preparing his return, with my friend.
But not being able to simply mention that he is also a client is pure
nonsense.
And,
while it is not my responsibility as a tax preparer to personally verify every
single on a client’s 1040, the IRS basically wants me to do so when it comes to
the Earned Income Credit. A tax preparer
can be substantially penalized for not going through extra hoops when it comes
to this credit – even if the credit itself turns out to be legitimate and the
amount claimed correct.
As
I wrote in an earlier post in a series on my obligations as a tax preparer -
“Although I am not obligated or required to
personally verify all numbers entered on the 1040 (or 1040A), I am required to
do what is called ‘due diligence’ when it comes to information provided by the
client. What this means is that I must –
• evaluate information
received from clients,
• apply a consistency and
reasonableness standard to the information, and
• ask additional
questions if the information appears incorrect, inconsistent or incomplete.
Obviously, if a client
says or indicates something that does not make sense, or does not seem
reasonable, I must ask questions.
But if what a client
tells me, or indicates on a worksheet, appears to me to be reasonable
considering the individual facts and circumstances than I do not need to go any
further.
When it comes to the
Earned Income Credit I am required to be a bit more ‘due’ in my ‘diligence’. As
a side comment, I do not think it is fair for the IRS to require tax preparers
to determine if an individual is eligible for federal welfare (which, after
all, is what the EIC is).”
I
am a tax preparer – not a Social Worker!
The Earned Income Credit has no place being in the Tax Code in the first
place.
If
I had not been doing this for 40 years now without incident, and I was
considering a career as a paid preparer, I seriously think I would be scared
away from the profession by all of this.
I
am in a very unique situation. I do not
accept, or want, any new 1040 clients – period.
I am actually looking to “thin the herd”.
I
certainly believe that you can teach an old dog new tricks – but some new
tricks come with too much agita that they are not worth learning. It is easier for me to say, “I will never
have a client that this would apply to”, or, “If this applies to a client I
will just send him/her elsewhere” then to put up with the added agita.
There
have been times during the last few years when I have seriously considered
retiring in December of 2013, so I would not have to put up with all the new
aggravation, including the new paid preparer regulation regime (which I do, for
the most part, support). 42 years would
be a good run. And waiting till the end
of 2013 would give me time to look into more opportunities for income from
writing on taxes and other topics, so I would still be able to eat.
But
what about my 300+ clients? It would be
very easy to say good-bye to some – but a great many have relied on me for so
many years that it would be difficult to tell them I could no longer prepare
their returns. Hey, if I won the lottery
it would be one thing. But not to
voluntarily just walk away.
So
I guess I will hang in there until the idiots in Congress or the IRS go too
far. Maybe, as I hope and pray, the
current Tax Code will be totally shredded and a more simpler one written in the
next two years.
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