Monday, December 25, 2017


While I think the tax filing season is the most wonderful time of the year - this is a close second!
From The Wandering Tax Pro and Turbo

Wednesday, December 20, 2017


Implementation of The Tax Cuts and Jobs Act changes to tax law certainly raises a multitude of questions for tax professionals.

(1) As I previously discussed in “A Nightmare on Tax Street”, will the Form 1098 form to report mortgage interest be revised and will additional recordkeeping requirements be placed on bank and mortgage companies? 

Will existing IRS regulations on acquisition debt and home equity debt – treatment of closing costs of refinancing included in principle, application of payments of principle on consolidated mortgages, etc. - remain, or will new ones be written?

(2) What about the revised dreaded Alternative Minimum Tax (AMT)?  The exemptions and exemption phase-out ranges have been changed, but I have read of no change to the “preferences”, other than because miscellaneous expenses subject to the 2% of AGI threshold are no longer deductible on Schedule A this will no longer be a preference. 

In the “old” AMT personal exemptions were a tax preference, and not deductible in calculating Alternative Minimum Taxable Income.  And the Child Tax Credit is allowed as a credit against AMT.  We will no longer have a personal exemption deduction – this deduction is replaced by an increased Child Tax Credit and a new “non-child” dependent credit.  Will the enhanced and new credit be allowed in full as a credit against AMT?

(3) How will the new Schedule A report the specific components of real estate taxes and state and local income or sales taxes that make up the $10,000 maximum if this maximum is applied?  This information will be important in determining if any portion of state tax refunds are includable in taxable income in the subsequent year. 

I would think the first line in the tax section of Schedule A would be to identify real estate taxes paid, up to the $10, 000 maximum.  A second line would report either state and local income taxes or state and local sales taxes allowed (with a box check like on the current Schedule A), up to the combined maximum, if the property taxes paid are less than $10,000. 

(4) We know that the 20% deduction of “pass-through” business income will not be deducted directly on Schedules C or E or as an “adjustment to income” to reduce AGI, but will be deducted from AGI to determine net taxable income.  But will this deduction also be applied in determining “net earnings from self-employment” subject to the self-employment tax.

And the list goes on.

With a law written and passed in such a hurry there will be lots of issues that will need to be addressed, many in additional “Technical Corrections” legislation.


Monday, December 18, 2017


I am sure you have been, and will be, getting emails and phone calls from 1040 clients asking if they can prepay their 2018 taxes to claim a 2017 deduction, considering the potential $10,000 limitation on the deduction for 2018.

The conference bill specifically states that "an individual may not claim an itemized deduction in 2017 on a pre-payment of income tax for a future taxable year in order to avoid the dollar limitation applicable for taxable years beginning after 2017."

So, it appears you can deduct prepaid real estate taxes, but not prepaid income tax. 

What exactly is prepaid state income tax? 

The actual amount of state income tax liability is based on the information on the final 2017 tax return – and will not be known until 2018.  The amount of state income tax withheld is based on the state withholding tax tables and a person’s W-2 wage income. 

And for the most part quarterly state estimated tax payments are based on either the prior year’s liability or the current year’s anticipated income.  The 4th quarter 2017 payment is not due until mid-January of 2018; is making this payment in December of 2017 considered to be a “prepayment”, even though the tax payment is being made for 2017 income?

Obviously, if your normal 4th quarter payment would be $2,000 but you send a payment of $10,000 in December you are making a prepayment of 2018 taxes.  But what about the normal $2,000 payment.  And if you do not make quarterly estimated state tax payments, having your anticipated state tax liability covered in full by withholding, but you make a 4th quarter 2017 estimated tax payment of $5,000 in December, this $5,000 is clearly a prepayment.

What about a person who can control his state tax withholding in real time, like a sub-S business owner who pays himself a year-end bonus in December?  He or she can have an excessive amount of state income tax withheld from the bonus paycheck, which would, to me, clearly be a prepayment.  But what if that person anticipates excessive year-end dividends and capital gain distributions?  This could also apply to the person making only a 4th quarter state payment.  These amounts are often not known until January when the December brokerage statements arrive.  As with anything, specific facts and circumstances would, or should, apply.    

Of course, if a person substantially overpays his or her state income tax for 2017 by whatever method he or she is only temporarily postponing paying federal income tax.  The resulting refund of excessive withholding or estimated payments would be included in taxable income on the 2018 return – although this money would be taxed at a slightly lower tax rate, and the taxpayer would get the potential benefit of the money earned on the deferred taxes if properly invested.

Any thoughts on the question?


Monday, December 11, 2017


It seems to me that the underlying reason for the existence of any labor or trade union, or professional membership organization like the AICPA, is to get as many benefits as possible, financial and otherwise, for, and lobby to protect, its membership – regardless of whether or not the benefits and lobbying are appropriate, or whether or not providing the benefits, or what they lobby for, does harm or damage, financial or otherwise, to any other party or parties.  Their existence is purely selfish in nature– as I guess it should be.

For example, the actions and lobbying of the AICPA is solely for the purpose of lining the pockets of, and reducing competition for, their CPA members.  They don’t care if what they lobby for is morally or ethically “correct” or “appropriate”, or if what they want comes at the expense of, or does harm to, non-CPA groups and individuals.  They are not interested in proper tax administration, or what is in the best interests of individual and taxpayers.  They only care what is in the best interests of CPAs, and act accordingly.

Case in point – the AICPA opposes anything that gives additional credibility to Enrolled Agents or to “unenrolled” tax preparers.  If they oppose tax preparer regulation it is because they do not want taxpayers to think non-CPA preparers who receive IRS “approval” or credentials are as good as, or closer to reality better than, CPA tax preparers.  They think they “own” the tax preparation profession and want to keep it that way.  When they do support any regulation of preparers they expect to be exempt from its requirements.

While Enrolled Agents do have the National Association of Enrolled Agents to promote and protect members, and lobby on the behalf of members, more ethically and appropriately than the AICPA, “unenrolled” preparers do not have an equivalent of AICPA or NAEA. 

There is NATP and NSTP – but these organizations are geared more for providing quality education and resources for members.  While they do speak to legislation and IRS issues occasionally on a basic level, and do promote their members, they do NOT act affirmatively to protect members via aggressive lobbying against legislation and government rules and regulations that adversely affect members.

Unenrolled tax preparers, or more to point non-CPA members of the tax preparation industry, truly need a loud and aggressive voice in Washington

But I see a lobbying organization for tax preparers representing the interests of ALL preparers - EAs, the “unenrolled” and CPAs, actually all PTIN-holders - and dealing with the concerns that are common to all preparers.  Unlike the AICPA, this organization would not attempt to portray that one class of preparer – the unenrolled and/or the Enrolled Agent – is “more better” than another – the CPA.  The competence and appropriateness of a tax preparer should be determined and judged on the combination of the specific qualities and qualifications – knowledge, training, experience, remaining current, pricing and practices - of the individual preparer. 

Its purpose would NOT be to promote tax preparers, or one class of tax preparer, in the eyes of the public, but to protect ALL tax return preparers from the imposition of excessive and inappropriate rules and regulations by Congress and the IRS.

Your thoughts?


Monday, December 4, 2017


As you all know by now, in the wee hours of Saturday morning the Senate approved its version of the “Tax Cuts and Jobs Act” by a vote of 51 to 49.  The Republicans were actually able to finally pass a bill in both the House and the Senate, despite the handicap of having arrogant idiot Donald T Rump in the White House!

FYI - see my post on "Making One Bill Out of Two" at TWTP.

This bill is not as good as the Republicans claim it is, and not as disastrous as the Democrats insist it is.  There is both good and bad in both the House and Senate versions of the bill.  

What is bad with ANY legislation at ANY time is rushing it through without proper intelligent review, research and discussion merely so the idiot in the White House, and the Republican Party, can claim a legislative victory (Trump really doesn’t give a rodent’s hind quarters what is actually in the bill – he just wants Congress to pass ANY bill so he looks good).  The “Affordable Care Act”, aka Obamacare, was similarly rushed through, with nobody actually reading in full the actual bill, to get an early victory for Obama – and, while like the tax reform bill it was based on a good concept, the actual legislation that passed was a mucking fess.

It is obvious that, despite what Trump tweeted in self-congratulation, the tax cuts for working families and the middle class in the bill is certainly not MASSIVE.  And let’s be perfectly clear - self-absorbed Trump truly gets a MASSIVE tax cut in this bill.

I look forward to seeing the final legislation that the conference committee will come up with.

One thing that has always confused me in both versions is the need to reduce the maximum tax rate on “pass-through” business income, which includes income reported by a sole proprietor on Schedule C.

Am I not seeing something?

Under current law corporations pay a maximum of 35% on corporate income, and when this income is passed to shareholders as dividends they pay a maximum of 20% in income tax and 3.8% in NIIT on the dividends. So, the income of a “C” corporation CAN be taxed at a maximum federal rate of 58.8%.

Pass-through business income is currently taxed at the business owners’ individual tax rate. It is not subject to NIIT. So, under current law the maximum federal tax on, for example, “S” corporation income is 39.6%. When you consider the phase-out of items affected by AGI the actual effective maximum rate may be a bit higher – but nowhere near 58.8% The purpose of pass-through treatment is to avoid the double-taxation of corporate income.

Partnership and sole proprietor income is also subject to the self-employment tax, but the W-2 salaries of corporate owners is subject to FICA tax. So this is not included in the above comparison.

So why does there need to be a reduction to the federal tax rate of pass-through business income?

All pass-through entities are not equal.  Owners of sub-S corporations must be paid a W-2 salary, taxed as a W-2 salary; the amount that is passed through on the K-1 is in full the equivalent of corporate dividends.  The “pass-through” income of sole proprietors and general partners is a combination of wage-equivalents and dividend-equivalents, but is currently taxed in full at ordinary income rates and subject in full to the self-employment tax.  And the deductions for health insurance and pension contributions for the self-employed sole proprietor and general partner do not reduce net earnings subject to the self-employment tax; they are treated as adjustments to income on the Form 1040.  These items are not subject to FICA tax for a corporate owner-employee.  It is the in the application of the self-employment tax that inequities exist. 

If nothing else, the pass-through rate changes add additional and unnecessary complexity to the mucking fess that is the Internal Revenue Code, and more unnecessary work and agita for us at tax time.

I would very much like to hear from fellow tax professionals on this issue.  You can send a comment to this blog or email me at


Monday, November 27, 2017


So, a week ago I finished sitting through the, thankfully, free  4 CPE hours (4 50-minute hours) of webinars that are required as part of my annual registration as a preparer of NY state income tax returns.

FYI - Click here to read my “review” of last year’s required NYS CPE and here to read the “review” of the 2015 CPE.  In both reviews I stated that the 3 1/3 hours I spent were a total waste of my time.

I first “enrolled” in “New York State Updates and Department Messages” –  which were in the past updates of the previous year’s tax filing rules and NOT the upcoming current one (i.e. the information reported last year at this time was for 2015 returns, the returns prepared during the tax filing season that ended in April of 2016, and not for 2016 returns).  Like last year, instead of an actual “webinar” it was a PowerPoint-like series of slides.  At the end of a series of slides I was asked multiple choice questions.  If I answered correctly a check mark appeared.  If I entered a wrong answer I was told so in a box, which also provided the correct answer.  I could then select the correct answer and could proceed to a new section.  As I said in the past, I really do like this method. 

This year I needed to complete three (3) required courses and one (1) course chosen from among 4 optional topics. The required topics were –

1. New York State Updates and Department Messages– 45 minutes
2. Tax Preparer ID Numbers and Permissions – 40 minutes
3. Standards of Conduct and Penalties – 75 minutes (of course the longest was redundant ethics)

For my optional topic I choose NY State Subtraction Modifications scheduled for 40 minutes.

Like the past two years, the entire process was a total waste of my time.  While it appeared the update session may have been about 2017 returns, there was minimal information provided that actually applied to the NYS tax returns I prepare (only IT-201 and IT-203).  There was relevant information on various tax credits, but only one applied to my clients.  It appears that there is nothing new relating to the actual returns I prepare for my clients.  The other 2 required sessions were truly redundant – the same information from last year.  The optional topic was truly basic.  I learned absolutely nothing new by sitting through these sessions.

Some good news.  While I will not tell you the exact amount of my time that was wasted, I will say that it was much less than the “advertised” 200 minutes.  So, thank God for small favors.  I did “satisfactorily” complete all the required CPE, and was able to print certificates for each class.

Every January as part of the NJ chapter of NATP’s “Famous State Tax Seminar” there is a session on New York State tax updates led by NY preparer Kathryn Keane.  It is an excellent presentation, and actually covers what is new for the upcoming tax filing season for NYS tax returns, and allows for questions from participants.  But, of course, this presentation does not satisfy the state requirement

I would much rather pay a fee and attend a live half-day seminar offered by the NY or NJ chapter of NATP, or John Sheeley’s organization, than waste my time with the free NYS offering.

After finishing the CPE, I attempted to pay my annual $100 extortion fee.  I tried multiple times over the past week without luck.  Each time I was told “Our records indicate that you have not completed your mandatory tax preparer education requirements”, despite the fact that I had in hand printed certificates for, and email confirmations that I had completed, each of the 4 required classes.  As of this writing I have still not been able to give NY my $100.  I will call the number provided on Monday morning (the day this post first appears).  What a total pain in the arse!

As I wind down my practice toward retirement (after completing 50 tax filing seasons), I truly look forward to the point where I prepare less than 10 NYS income tax returns (I currently do at least 20), so I do not have to deal with this nonsense every year – neither the CPE time-waste nor the $100 fee.

FYI – I add a special line item charge on the invoice sent to each client for whom I prepare a NY state income tax return for $5.00, which I identify as “NYS Tax Preparer Extortion Fee Surcharge”.

So, do any of you have any comments on the NYS registration process and its CPE and fee requirements?

UPDATE 11/29/2017:

I found out why NYS would not accept my $100 extortion fee payment.  They were apparently correct when they told me in an error message “Our records indicate that you have not completed your mandatory tax preparer education requirements”. 

The state lied – the CPE requirement is NOT 4 CPE hours (4 50-minute hours of 200 minutes). I had to take 230 minutes.  It appears that one must take 1 class each from 2 separate optional groupings.  So, I chose a class titled “Tax Computation Credits and Other Taxes” advertised as 30 minutes. 

I now have a printed “Certificate of Completion” for “successful completion of 2018 Registration Education Requirements”!

I will wait for my completion of the final class to be processed and try to give the state my extortion money later today.  Hopefully they will finally take it and this nonsense will be over for another year.


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-

Wednesday, November 22, 2017


A recent discussion in the Spacebook group for tax professionals that I host touched upon the idea of a national sales tax and the Fair Tax proposal.

While I do not support the proposed Fair Tax Act, my concerns are more with the practical implantation of the plan than with the actual concept of a national sales tax.  The national rate would need to be very high to replace all other forms of taxation, and there is no way to easily or properly provide an equivalent to the “standard deduction”.

Besides, if we are going to replace the federal income tax with a national sales tax I would want to wait until I have retired from preparing 1040s.

Yet there is much to be said for the concept of a national sales tax, as I originally pointed out in an early post at a young THE WANDERING TAX PRO many years ago -

1) A national sales tax would be relatively easy to administer.  Almost all of the 50 states already have a state sales tax, with all the appropriate collection and auditing functions in place. The national sales tax could be incorporated into the collection and compliance process of the various state sales taxes, with the states receiving a ‘commission’ from the federal government.

2) A national sales tax (with exemptions for food and clothing purchases) would eliminate the problem of the “underground economy”, which escapes taxation under the present system. Everyone, regardless of the source of their income, would pay sales tax at the point of purchase.

3) A national sales tax would encourage saving and investing.  As the tax is assessed on retail purchases only, income from investing activities would not be subject to tax.

4) If under the national sales tax system corporate and business income taxes are abolished, along with the need for expense compliance costs, the savings could be passed along to consumers in the form of reduced prices and to stockholders in the form of increased dividends.

5) States like New Jersey have had much more success raising revenue from sales tax audits than from audits of income tax returns.

So, what do you think?


Monday, November 20, 2017


Every year for as long as I can remember the National Association of Tax Professionals has offered a 2-day year-end tax update program during November and December – the first day devoted to updates for the upcoming tax filing season (The Essential 1040) and the second day a more detailed discussion of specific tax topics (Beyond the 1040).

And every year for as long as I can remember (I have been a member for 30 years) I have attended at least one of the two days.  I have often attended the offering in Atlantic City.  This year I signed up for day one only – I was not interested enough in the day two topics (tax reporting requirements for occupations such as clergy members, truckers, cannabis farmers, gamblers, barbers and beauticians, home flippers, Airbnb operators, and foreign-sourced income) to pay the additional fee – held last Friday at the Holiday Inn Parsippany located conveniently on Route 46.

I stayed overnight at the Holiday Inn this year, considering I was coming from PA.  The hotel was, as expected, clean and comfortable, with an excellent complimentary breakfast buffet.  The “spread” in the conference room, however, for those who did not stay at the hotel, was truly pitifully “skimpy” – and certainly not “diabetes-friendly”, a common complaint of all CPE workshops and not limited to NATP offerings.

As for lunch – thankfully there was a WENDY’s across the highway as an alternative to the only “in-house” option – a Cuban restaurant.  The hotel should have offered to sell box lunches to participants, as I have seen done at other locations.

The workshop leader for the two days was Helen O’Planick, an EA and a CSA (Certified Senior Advisor) from Manchester PA.  I do believe this is the first time I have “had” Helen.  While obviously some NATP workshop and seminar leaders are better than others, all are good and I have never been disappointed with any.  Helen was a good leader with some good anecdotes from her life and practice.

As is the case with this workshop each and every year since the Enron scandal, I paid for a full 8 50-minute hours of tax education, but got only 6 – thanks to the annual redundant ethics preaching, which I neither want nor need.  As I have said time and again, if I’m not “ethical” by now after preparing tax returns for 45 years, being forced to sit through 2 hours ain’t going to perform a miracle!  Of course, I did not sit through it – thankfully it was the last topic of the day, so I just walked out.

If the workshop is to be truly an “update”, any discussion of “ethics” should be limited to true “new developments” – new legislatively-required due diligence, new IRS rules and regulations, and related recent Tax Court decisions.

To be fair to NATP, I do understand its reasons for including ethics redundancy in this workshop each year.  The fault for this nonsense lies not with NATP or other CPE providers, but with the idiots in government and regulatory agencies who create these requirements and regulations.

The true value to this workshop, at least to me, lies in the level of “new developments” in tax law and regulation.  This offering does include a detailed review of the new COLA and inflation adjusted numbers that will affect tax returns prepared during the upcoming filing season, and this is important for many tax preparers – but I literally “write the book” on these changes each year in the form of my annual “What’s New For” compilation, and am made well aware of them when they are first released in October of the previous year.  There was really not much new of any consequence that will affect 2017 returns, and most were covered in the NATP National Conference and NATP Tax Forums I attended earlier in the year. 

So, this was not an especially informative workshop for me, although I do always learn one or two new things and am reminded of or review other things at every session.  NATP, as usual, did a good job of what there was, and certainly continue to deserve kudos.

Do any fellow participants have anything to add?


Wednesday, November 15, 2017


New Jersey Chapter of NATP

The New Jersey chapter of NATP’s “Famous NJ State Tax Seminar” – and it is truly famous – is scheduled for Saturday, January 13, 2018 from 8:00 AM - 4:50 PM at the APA Hotel Woodbridge in Iselin.  Registration begins at 7:15 AM.  

As I say each year, this is a “must attend” for all tax professionals who prepare NJ state income, payroll and sales tax returns and reports.  I have attended almost every one since the first, missing only one or two because of excessive snowfall, and have never been disappointed.

The cost $225 for an NATP member and $275 for a non-member if your registration is received by January 6, 2018, and $245 or $300 thereafter.  A breakfast buffet (beginning at 7:15 AM), buffet luncheon, and coffee break is included in the price.

The day’s itinerary includes -

Overview of NJ Taxation – John Ficara, NJ Acting Director

NJ Tax Current Updates – Jacob Foy, NJ Division of Taxation
NJ Resident Credit – Robert Skala, NJ Division of Taxation
NJ Property Tax Relief - Alexis Reid, NJ Division of Taxation
NJ Inheritance Tax - Michael Rosen, Chief of Audit Activity
NJ Sales and Use Tax – Alexis Reid, NJ Division of Taxation
NY Taxation and Federal Updates – Kathryn Keane, EA

No time wasted on redundant ethics preaching!

Click here to print a registration form. 

FYI - click here to read my "review" of the January 2017 seminar.


Tuesday, November 14, 2017


In light of the revelation of the dueling GOP tax Acts I have created my own Flach Tax Plan and a new, much simpler Form 1040.

My new simpler Form 1040 that follows was not created from an economic point of view – how much tax is collected – but from the point of view of simplicity and fairness.

I have actually incorporated some of the GOP proposals in my plan.  But it also contains some unique concepts –

* There is only one tax rate schedule for all taxpayers, regardless of filing status.  The Head of Household filing status is gone.  Married taxpayers can elect to file separately on one return or to file separately on separate returns – and a married person filing separately is treated exactly the same as a Single filer.  The method for calculating the tax liability of married couples filing a joint return does away with the marriage penalty.

* No deduction would be allowed for any business activity on any tax return for the depreciation of real estate or capital improvements thereto.

* The delivery of government social welfare and other program benefits are totally removed from the Tax Code.  There is no Earned Income Credit, refundable Child Tax Credit, deductions or credits for qualified post-secondary education expenses, or Premium Tax Credit on my new Form 1040.  I have not done away with these benefits; they are distributed via more “normal” methods.

* I replace IRA, HSA, MSA, ESA, and Section 529 accounts with an all-inclusive USA (Universal Savings Account).  All taxpayers, without exception, can contribute up to $10,000 per year. 

Distributions made before age 62 for education and medical expenses or to purchase a first home (only one first home per lifetime) would be considered to be qualified withdrawals.  There would be no penalty on non-qualified withdrawals after age 59½, but earnings would be taxed.  All withdrawals after age 62 would be considered to be qualified.  
I also replace all employer and self-employed retirement plans with a RSA (Retirement Savings Account).  Employers can elect to contribute up to 25% of wages annually, all employees can elect contribute up to $20,000 of wages annually.  There would be no requirements for either to contribute.  Self-employed taxpayers can contribute, and deduct, up to 20% of adjusted net self-employment income.

There would be “traditional” (for the USA fully deductible and no tax on earnings for qualitied withdrawals and for the RSA employee contributions would be “pre-tax” on the W-2) and ROTH (contributions non-deductible – qualified withdrawals totally tax free) options for both accounts.

* Contributions to an RSA by a self-employed taxpayer and the deduction for the health insurance premiums paid by a self-employed taxpayer would reduce the net earnings from self-employment that is subject to the self-employment tax.

* Social Security and equivalent Railroad Retirement benefits would be taxed the same as regular employer pensions.  Employee contributions would be recovered by amortizing them over the taxpayer’s life using the, what else, “Simplified Method” to determine the taxable amount of the benefits received.  

* And perhaps most controversial - no charitable deduction would be allowed for contributions to a church or religious organization for religious activity.  Non-religious social and community action programs (soup kitchens, homeless and domestic violence victim shelters, youth centers, day care centers, etc) run by individual churches and religious groups would need to separately organize and request non-profit status to allow contributions to be deductible.  Permitting a deduction for contributions to churches and religious organizations for religious activity results in the government in effect subsidizing religious activity, which, in my opinion, is a violation of the separation of Church and State.


As always, your thoughts and comments on my new Form 1040 are welcomed.  And you are welcome to share the link with, or download and copy the report to distribute to, friends, family, co-workers, and colleagues.


Monday, November 13, 2017


It is widely thought, within and without the industry, that continued and constantly added complexity in the US Tax Code is good for our business.  I remember that the Tax Reform Act of 1986 was referred to by many as “The Accountant’s Full Employment Act”.

I strongly disagree.  Complexity is bad for business.  While it may drive clients to use tax professionals, and certainly generates more billable hours, the real result is additional aggravation, agita and anxiety for tax professionals as well as the increased potential for error and preparer penalties.  It creates more work – but more unnecessary and wasteful work. 

There are only so many hours in the tax season.  I would much rather prepare more returns that are simple for lower fees, with less agita and error potential, than less returns that are complicated but generate higher fees.

I have said for years that I would make more money, experience less agita, make less errors, and substantially reduce the number of GD extensions needed each year if I did nothing but 1040As all day during the tax filing season.

I firmly believe my clients would not decide to do their own returns if the tax system was simplified; they would continue to come to me.  Most taxpayers who use a tax professional simply don’t want to be bothered with the task of preparing their tax return, and want to make sure they do not miss anything.  And even with a more simplified tax system there would still be a need to complete Schedules C, D, E, F, SE and related forms.

Less complication also reduces my cost – for paper and ink and for CPE.  The less complicated the tax return the less additional forms, schedules and worksheets it generates and the less continuing education I need to keep up-to-date and educated on the complexities. 

The current proposed tax law changes resulting from the belief by the Republicans in both houses of Congress that “pass-through” business income should be taxed at a lower rate on the 1040, a truly stupid idea to begin with, is a good example of unnecessary complexity. 

Much of the complexity forced upon tax professionals comes from the continued erroneous and inappropriate practice by the idiots of both parties in Congress of distributing government social welfare and other benefit programs via the Tax Code, and in the process making the IRS and tax preparers become social workers.  Not only the complexity of the tax law, but the added excessive due diligence requirements, wastes our time and resources. 

And another bad result – the additional work that should generate additional fees, especially when it comes to the Earned Income Credit, the refundable Child Tax Credit, and the Premium Tax Credit and penalties of the Obamacare individual mandate, applies to low income clients who can least afford the additional fees – and are more often than not charged less than appropriate additional fees, or no additional fees, by tax preparers,

Tax professionals should champion the cause of tax reform that produces true tax simplification. 


Your thoughts?


Monday, November 6, 2017


Many years ago, before I was “gifted” my mentor’s tax practice at the end of the last millennium, I had only about 100 of my own 1040 clients.  In December I would send each client on my list a tax-themed Christmas card, usually purchased from an accountant supply house, and, as I did with all my Christmas cards, included an annual “year-in-travel” newsletter.

Many families include in their Christmas card a newsletter talking about what the family has been up to during the year, often with emphasis on their kids’ achievements.  My uncle, a confirmed bachelor, was a world traveler and would each year compose a Christmas newsletter that outlined his many travels that year.  We occasionally travelled together.  I followed in his footsteps, both in travelling (I am, after all, known as the “wandering” tax pro) and in writing an annual Christmas letter highlighting my travels for the year.

As my travels used to include attending both the NATP Annual Conference and the NSTP National Convention each year at various cities throughout the US, many of which I would not have visited were it not for the tax CPE, these trips were reported in my letter, as were trips to Atlantic City and other locations for year-end tax update classes.  I found this a subtle but effective way of reminding my clients of my extensive continuing professional education throughout the year to keep up with the ever-changing 1040.

When I took over my mentor’s practice my client list expanded from 100 to well over 300.  It became too expensive to send each client a Christmas card.  But I continued to send out the Christmas travel letter as part of my annual January informational mailing to clients.

Over the years I have had more favorable comments on this annual Christmas travel letter than any other mailing sent to clients.  Many clients, to this day, tell me they look forward to reading it each year.

Do you have a unique idea that has worked in your tax practice?  Email me at with TAX PRACTICE TIP in the “subject line”.


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-