Friday, June 6, 2014


* A great quote from a CPA in a comment on one of my posts at the NJ-NATP Spacebook group –

. . .the required CE for a CPA doesn't have anything to do with taxes. They need accounting and auditing and additional credits in whatever subject they chose. No required tax education. That's why an EA is better equipped to prepare an accurate 1040 than a CPA.”

Right on!

* Joe Kristan references and responds to my Wednesday TWTP post on a voluntary RTRP-like credential in a recent Tax Roundup.

At this point in my career I am not “looking for a brain” or for validation of my competence via a credential.  I no longer accept new 1040 clients – so I do not need a credential.  If one was available I would probably not apply.  However if I were still seeking new business I would want to have some kind of voluntary credential.

Joe, unlike many of his fellow CPAs and the AICPA, supports an independent, non-IRS administered, voluntary 1040 designation.  He is a competent and experienced tax preparer, and is confident in his abilities.  But many other CPAs, and the AICPA, fear that having a designation identifying 1040 competence will result in dispelling the totally untrue “urban tax myth” that a CPA is automatically a 1040 expert, or that, as the AICPA has told at least one member, the CPA “owns” the tax preparation brand.  

* The TAX FOUNDATION gives us a “Map of State Gasoline Tax Rates in 2014”.

California and New York head the list of most expensive states.  My former home state of New Jersey is #48 – a truly rare occasion where NJ is not highly taxed. Alaska has the lowest rate at 12.4 cents per gallon.  The rates on the map do not include the additional 18.4 cent federal excise tax.

* “A Heretic Speaks Out Against Value Billing”.  The heretic is Jason Dinesen of DINESEN TAX TIMES.  And “value billing” is apparently “the concept that service providers should bill clients based on the client’s perceived value of the work completed”.

This is the first I have heard of this nonsense.  And I agree with Jason that it “is BS”..  What a client thinks my work is worth more often than not has absolutely nothing to do with reality.
However I take exception with Jason on two points –

I agree with proponents of value billing when they say that hourly billing is not the way to go (though I do bill by the hour sometimes).”

What is wrong with hourly billing?  My time is valuable, especially during the tax filing season.  If I feel my time is worth $50 or $75 per hour, why would I not charge a client $150 or $225 for three hours of work?

I also use a base “per form or schedule” fee.  While it may take 1 hour to complete a Schedule C, the off-season education necessary to remain current on Schedule C may be more than it is for, say, Schedule E, so that is a factor in my per form fee base fee for a Schedule C. 

I also agree with them that it’s important to be able to quote a firm price to the client up-front — something that’s hard to do when billing by the hour.”

No tax preparer should quote a “firm” price to a 1040 client up-front, other than identifying his/her hourly fee.  It is literally impossible to tell how much it will cost to prepare a 1040 until after the return has actually been prepared.  In the past when a potential new client would ask me what I charge to prepare a 1040 I would say, “Anywhere from $50 to $500”.  Obviously this is not what the person asking the question wanted to hear – but it was really the truth. 

The correct answer to “what do you charge to prepare a 1040?”, like the answer to just about any question related to taxes, is “it depends”.

* The idiots in Congress are up to their old tricks again.  CCH week-day daily Tax News Headlines reports “Tax Extenders Bill Likely Stalled Until November Says Reid”.

Senate efforts to renew some $85 billion in tax extenders, the EXPIRE Bill (Sen 2260) will most likely be put off until after the midterm elections in November, according to Senate Majority Leader Harry Reid, D-Nev.

What more can I say?  They really are idiots.  We need to vote out all incumbents running for Congress this November (as long as we do not vote in any Tea Party members or supporters).


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