Thursday, July 5, 2018


The excessive “due diligence” requirements forced upon tax preparers by Congress is wrong.

Let’s face it – it is truly “passing the buck”.  Congresscritters are lazy.  If Congress is faced with a tax law that is being extraordinarily abused or misused rather than dealing with the problem and fixing or changing the individual deduction, credit or loophole it passes the responsibility down to tax preparers.

First the Earned Income Credit, then the Child Tax and American Opportunity Credits, and now the Head of Household status.  Coming soon – when a divorced parent with joint legal custody claims a child as a dependent we will be required to make periodical unannounced “bed checks” during the year.

Tax preparers obviously must perform basic “due diligence” in preparing a tax return, or in helping anyone complete a government form or application.  We must not purposefully and knowingly lie on the form or application.

If a person filling out a government form or application tells us that he is an African-American, or has blonde hair and blue eyes, we cannot put that information on the form or application when our eyes tell us the person is white or has brown eyes and hair.

If we know from personal experience, observation, or from information from a third party, that a client has a side-line business doing home repairs we must report that business on the client’s return – or refuse to prepare the return.  If a client living in Hoboken wishes to claim a grandchild as a dependent, but we have personal knowledge that the child lives with an aunt and uncle in Swedesboro, we cannot claim that child as a dependent, or we must refuse to prepare the return.

But that is where it ends.  If we have no personal knowledge to the contrary, or no reason to suspect the veracity based on what we see or have seen or know or have been told, we must believe the client is telling the truth.  The IRS audits tax returns - as it has the right to do so and should have the right to do so - but we do not.

If a person tells us his blood type is A-, or that he had steak for dinner the night before, we are not required to take blood samples or view restaurant records and videos to verify the assertion.

As I have said time and again, the tax preparation industry truly needs an organized national lobby in Washington to combat attempts by Congress and the IRS to turn us into Social Workers, and to otherwise protect our interests.


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