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 rdftaxpro@yahoo.com
with TAX PRACTICE TIP in the “subject line”.
I will post a compilation of submitted tips here in a future post.
TAXPRO BUZZ
+ 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?”
TAFN
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-
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