Tuesday, January 13, 2015


* Hey taxpros, have you checked out my TAX PROFESSIONALS FORMS, SCHEDULES, WORKSHEETS, AND CLIENT MEMOS yet?  Why not?

* New at BOB’S BABBLINGS – “We’re Not In Kansas Jersey City Anymore!

* Jason Dinesen thinks “The IRS’s Preparer Directory Will Be Bad News for Enrolled Agents”.  I do not disagree with Jason, but I think the list is basically useless anyway.

Being listed on this new IRS directory is the only real benefit being offered by the Service for volunteering for its new Annual Filing Season Program.  It is no benefit.

As Jason points out, the IRS database will list a preparer’s name only, and not the postal or email address or telephone number. 

Will taxpayers really use a list of alleged “IRS-approved” preparers to find a tax pro in the first place?  I do not think so.  Many taxpayers are paranoid when it comes to the IRS period – and would be wary of a restricted list of tax preparers “approved” by the IRS.  But ieven f they do actually use the list it will not provide any contact information. 

The only possible benefit that this list could provide to taxpayers is that once they have located a potential tax professional via another source this list can be used to verify that the potential preparer has a PTIN and truly possess any credential that they advertise.

Taxpayers will do a lot better by searching the various databases I have included on my FIND A TAX PROFESSIONAL website.

What the IRS should do is provide an alphabetical listing by zip code of all PTIN holders, without designations or credentials, so a taxpayer can verify that a potential tax preparer is indeed “legal” – has registered with the IRS and received a PTIN.  

* Jason follows that post with some fine whine, correctly noting that “H&R Block Doesn’t Really Have ACA “Specialists” On Staff” (highlight is Jason’s) -

Here’s the thing about the ACA: no one in the tax industry can claim with a straight face that they are a ‘specialist’ or ‘expert’ on the ACA.

I have read the law, sketched out examples in my own notes, taken continuing ed, and given presentations about the ACA. But I am not an expert on the ACA.

No one, no matter how much we’ve read or how much CPE we’ve taken, can call themselves an ACA specialist until we’ve actually dealt with ACA issues in the real world over the course of several tax seasons.”

Jason is reacting to Henry and Richard’s tv ad inviting taxpayers to come in and talk to their “ACA Specialists”.  What does H&R consider to be an ACA specialist?

ACA Specialists are tax pros at H&R Block, that have completed several hours of training both online and in person, to help them be prepared.”

As Jason correctly points out (again highlight is his) –

Excuse me, but using this ridiculous definition of ‘specialist’, almost anyone in the tax industry could claim to be an ACA specialist.”

The bottom line takeaway –

Block Doesn’t Have ACA Specialists.

If you see anyone who claims to be an expert or specialist on the ACA, just know that it’s all a bunch of marketing hype.”

I would ad - you shouldn’t pay attention to Henry and Richard’s often ridiculous ads.  And you certainly shouldn’t use H&R to prepare your tax returns.

* Kelly Phillips Erb, FORBES.COM’s TaxGirl, provides her thoughts on “How Not To Choose A Tax Preparer: 10 Red Flags To Avoid”.

While, for the most part, Kelly’s list is an excellent one (with similar thoughts to those I express in “Choosing A Tax Preparer”), I do take some exception to item #3 -

3. Tax preparers who insist that you mail your own tax return.”

Kelly goes on to say -

Most preparers, however, are require to submit prepared returns electronically. If they won’t give you the option (and there’s not another explanation), you should be concerned.”

I do not offer my clients the option to submit their federal returns electronically, although I do offer the option to submit NJ returns online via the NJWebFile system (if the return is acceptable by this program).  The reason I do not offer this option is that I do not, and will not, use flawed and expensive tax preparation software to prepare a tax return, and therefore cannot submit client returns electronically.  So I guess I have “another explanation”.

But then I do not accept any new 1040 clients (period, exclamation point).  I just want to point out that there may be a legitimate reason why a preparer does not submit returns electronically, which, I guess, Kelly does suggest via “another explanation”.

Kelly does make an excellent point that much advertising for tax preparation concentrates on free stuff, such as Jackson Hewitt’s $50 Walmart gift card, and not the qualifications and competence of the preparers.

And I certainly agree with her statement –

Preparers may lure taxpayers in the door with the promise of low rates and fancy promotions but quickly add on fees for their services bringing those ‘low, low rates’ way, way up.”

BTW – there is no way that the fees of Henry and Richard or the others of their ilk are “low, low rates”, even before their unnecessary “add on fees”.

* It is a bit early to be thinking about GDEs, but William Perez gives us “State Tax Extensions: Directory of income tax extensions for each state” at ABOUT.COM.

* Trish McIntire helps to keep the word out there about “Phishing and Tax Identity Theft” – specifically IRS phone scams.

Trish’s comments bear constant repeating -

The IRS does not, repeat does not, email or call taxpayers out of the blue with the promise of money or the threat of audits, liens or levies. These calls and emails are scammers so ignore them.”

* More statistics on why the Earned Income Credit does not belong on the 1040.  According to the TAX POLICY BLOG “The Earned Income Tax Credit Still Faces High Error Rate”.

From a recent TIGTA report -

The IRS’s Fiscal Year 2013 EITC improper payment report to TIGTA estimates that in Fiscal Year 2013, EITC claims totaled approximately $60 billion and that 24 percent of the EITC payments were paid in error.”

A 24 percent error rate means $14.5 billion in tax dollars were improperly paid out to filers in FY 2013.
How many times do I have to say it - the Earned Income Credit does not belong in the Tax Code!


Nobody gets more of your money back than Block? 

More likely nobody takes more of your money in fees than Block!


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