Discussion:E-file or not?
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Discussion Forum Index --> Tax Questions --> E-file or not?
| 16 March 2009 | |
| I have some clients who don't want to e-file. I'm sure many of you come across those as well.
The author in this book recommends not to e-file (it's published in 2008). The reason is this. IRS hires lots of temp workers each season to type in the IRS computers the paper mailed returns. However, they are never able to finish them all, so at the end of the season whatever is left they just dump them all in the warehouse to be stored for a couple of years and eventually destroyed. The logic is. If there's something "wrong" with your return and you e-file it, the IRS computers will catch it immediately and you will face an audit. However, if you paper mail it, chances are nobody is going to look at it anyway. This is not to commit fraud (I prepare returns honestly - I even think sometimes that I'm too tough on my clients). My question is does this statement hold any water? (IRS store the remaining returns without checking them through their computers) Or should I list it under the Urban Legends discussion?
Disclaimer. I know of all (well, that sounds presumptuous - I should say, many)of the benefits of the e-file. I efile 90% of tax returns. | |
| March 16, 2009 | |
| Don't believe this crap. All returns filed manually with the IRS are scanned or keypunched into the computer. Do you really believe the IRS destroys tax returns without entering the information on their computers? | |
| 16 March 2009 | |
| I can't believe it's not on the Urban Legends thread already. What absolute nonsense. | |
| 17 March 2009 | |
| Just for the record. The client got back with me on the "cite".
It's Home Business Tax Deductions, Keep What You Earn by Stephen Fishman At the end of the book he talks about 10 tips to avoid audit. Tip #4 is DON"T FILE ELECTRONICALLY Exact quote: "...Every year IRS must hire thousands of temp workers to enter the numbers from millions of paper returns into its computer system. This is expensive, so the IRS has only about 40% of the data transcribed. The paper returns are then sent to a warehouse where they are kept for six years and then destroyed. The IRS makes its audit decisions based on this transcribed data. By filling electronically, you give IRS easy access to 100% of the data on your return instead of just 40%..." | |
| March 17, 2009 | |
| What an idiot. And what about Betty Lou who goes, hey, Shirley, come look at this one! And the supervisor tosses it into the audit pile. Machine to machine is under the radar unless there's something really odd or a mismatch. Much lower chance of that than Betty Lou and Shirley gossipping. | |
| 17 March 2009 | |
| Unless he is a tax attorney, who should know better...he is just trying to sell books. taxea | |
Death&Taxes (talk|edits) said: | 17 March 2009 |
| This is another form of Tax Ignorance and in some ways, can be as bad as a rogue preparer.
When the 8829 first came out, I knew of some preparers who would not use it because they felt it was the proverbial 'red flag' to alert IRS about the home office...they'd do the calculation on a line item on Sch C, like office expense. | |
| 17 March 2009 | |
| Not to distract from the "irresponsible IRS" thread, but here is a conversation I had with a client coming to pick up their completed return the other day.
My Assistant: Here you go, and we need you to sign these e-file forms Mr. Jones. Mr. Jones: You mean we e-filed the return? Me (overhearing distress): Yes, Mr. Jones, we are e-filing, so your all set! Nothing to send in. Mr. J: Oh, okay, but what about all those poor postal workers who rely on the overabundance of mail this time of year because of the April 15th deadline and all the overtime they won't be paid... Me: Yeah, I know! And imagine all the poor loggers who are out of work too! | |
| 17 March 2009 | |
| I don't entirely disagree with the author. In fact, a considerable amount of information from prepared returns IS discarded. The first time we all saw that was when the 1040PC was used and only about 40% of the information from the return made it into the finished product. I'm not willing to jump to conclusions the way the author is, but there are some truths in the statements. | |
| 17 March 2009 | |
| That's true for e-filed returns, too. The IRS doesn't retain less information for a paper return than they do for an e-filed return. | |
| 17 March 2009 | |
| So, let's assume they do discard the paper filed returns. Do the data input people just type in the refund/amount due amount and then come back to it later? I can't imagine that. Then, you have the scanning issue, we should then hand write the forms so that they cannot be scanned. | |
| 17 March 2009 | |
| The IRS uses outside contractors to process returns;is true. A few years back Mellon Bank employees said when caught destroying paper returns they were overwhelmed by the number of returns they had to process so they disposed of them. When the IRS got thousands of calls about peoples refunds they found the source quickly. The lawyers comments make absolutely no sense in light of the fact that taxpayers can't get refunds unless the return is processed first. | |
Death&Taxes (talk|edits) said: | 17 March 2009 |
| http://www.foxnews.com/story/0,2933,33227,00.html gives the gory details | |
