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-

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