Discussion:Stimulus Payment Fraud
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| Revision as of 21:11, 17 February 2008 Sandysea (Talk | contribs) (My point exactly) ← Previous diff |
Revision as of 21:15, 17 February 2008 TxSrv (Talk | contribs) (There is small m) Next diff → |
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| {{ForumReplyPost|UserID=Sandysea|Date=17 February 2008|Text=My point exactly...we don't swear them by oath that they are telling the whole truth and nothing but the truth. Due diligence to me is to not do anything that is blatently false....if a new client comes in and I do their return (based on information provided to me) then I will file the return. If it is a past client and I KNOW they are doing bartering or side work, etc. then I will nicely convince them they need to provide me with information on that. The only other option we have as preparers I think would be to get a transcript from IRS for everything they have on file with the client...of course that will delay filing since a transcript is not available immediately. I will continue doing what I do but if it smells fishy, they can go elsewhere...most of my clients know that I do the best I can to help them, but I NEVER cross the line (if there is one...hehe).}} | {{ForumReplyPost|UserID=Sandysea|Date=17 February 2008|Text=My point exactly...we don't swear them by oath that they are telling the whole truth and nothing but the truth. Due diligence to me is to not do anything that is blatently false....if a new client comes in and I do their return (based on information provided to me) then I will file the return. If it is a past client and I KNOW they are doing bartering or side work, etc. then I will nicely convince them they need to provide me with information on that. The only other option we have as preparers I think would be to get a transcript from IRS for everything they have on file with the client...of course that will delay filing since a transcript is not available immediately. I will continue doing what I do but if it smells fishy, they can go elsewhere...most of my clients know that I do the best I can to help them, but I NEVER cross the line (if there is one...hehe).}} | ||
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| + | {{ForumReplyPost|UserID=TxSrv|Date=17 February 2008|Text=There is small money/return involved here, meaning IRS has not the resources to go after many of these t/p's, much less launch a preparer investigation on what returns they can work. I think it unimaginable that IRS would do a preparer sanction over a small $3500 income number furnished by the t/p. Just how is IRS going to establish the number is wrong, to the ultimate point of saying the preparer should not have accepted it? That would require the depth/breadth of a criminal investigation, for Pete's sake. | ||
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| + | This aspect of the rebate was also dreamt up by the pols. IRS' normal attitude there is Congress: give us the staffing and we'll do the enforcement; else we move on. If IRS did get into this in a massive way, Congress would go nuts, embarrassed at the exposure of their bad judgment.}} | ||
Revision as of 21:15, 17 February 2008
Discussion Forum Index --> Tax Questions --> Stimulus Payment Fraud
Fuzzy Faced Leader (talk|edits) said: | 17 February 2008 |
| Not withstanding the rules for filing for the rebate, I can foresee rampant fraud by individuals, who normally do not file, who want the rebate.
1) According to the dummy Form 1040A in the IRS instructions, self-employment income should be put on line 7 of Form 1040A. This would be "the amount you would enter on Schedule SE, Line 3". But the form does not say you have to file Schedule SE, and pay self-employment tax. If you did, the tax would exceed the rebate amount. Thus, I can see clients walking in an indicating they had $ 3,000 of net income, and want you to file the 1040A. 2) According to IRS instructions, if the taxpayer doesn't have the form from the SSA or Veterans Administration, to file for the rebate, they can "estimate" the amount they receive. Thus, I can see clients walking in and saying they "estimate" their VA or SSA benefits to be $ 3,000 and asking you to prepare a Form 1040A and putting the amount on line 14A of Form 1040. Since this Stimulus payment is really not a tax, but a government give-away, what is the tax preparers "due diligence" responsibility in preparing the return? | |
| February 17, 2008 | |
| 1. is easy enough to handle later. IRS will merely audit and ask for the money. Done.
2. is irrelevant, isn't it? Since as long as they had 3 grand in SS benefits, they qualify. Unless you're talking about people just making it up. That's fraud, there'll be a price to pay I'd expect for that one, too. | |
| 17 February 2008 | |
| Amen.....this is so ludacris I am beside myself. There are honest taxpayers who are looking forward to a rebate for their share since they certainly work and pay into the government, but the scum bags who only file to get free money...EIC and now this....it makes me ill.... | |
| 17 February 2008 | |
| Plan on a bunch of CP 2000s when the correct Forms 1099 make it into the IRS computer bank and the "estimates" get corrected. | |
Fuzzy Faced Leader (talk|edits) said: | 17 February 2008 |
| My question is: Will there be tax preparer penalties for not verifying the income claimed by the taxpayer? | |
| 17 February 2008 | |
| If you aren't filing frivolous returns and are still preparing returns based on information provided to you, I don't think there will be preparer penalties...what do they want us to do? I don't do returns if I think ethically (by virtue of hearsay of course) that the information is fraudulent.....that is really all you need to do imho that is ♥ | |
Fuzzy Faced Leader (talk|edits) said: | 17 February 2008 |
| Sandy, I think you need to read the new Circular 230 standards. If the information on the return will not "more likely than not" withstand an audit, then preparer penalties could apply, whether or not the return is frivalous. It doesn't matter if the information is fraudulant. The only question is whether the preparer did enough to verify that the information was not fraudulant, or had a reasonable basis to believe the information is not fraudulant. If the taxpayer cannot support the information on the return, and the preparer didn't perform due diligence in determining the information on the return could be supported, preparer penalties could be assessed. | |
| 17 February 2008 | |
| If I ask " Did you make $3,500 in side work which was not 1099'ed during 2007?" They say "yes". Do I need to do more verification so I do not go to jail, lose my license or get fined? I guess some individuals may say that they do certain sexual activity and claim they barter for the service for clothes, dinner and other items taxable as barter income. I am not trained to determine if they are telling a lie. | |
| 17 February 2008 | |
| My point exactly...we don't swear them by oath that they are telling the whole truth and nothing but the truth. Due diligence to me is to not do anything that is blatently false....if a new client comes in and I do their return (based on information provided to me) then I will file the return. If it is a past client and I KNOW they are doing bartering or side work, etc. then I will nicely convince them they need to provide me with information on that. The only other option we have as preparers I think would be to get a transcript from IRS for everything they have on file with the client...of course that will delay filing since a transcript is not available immediately. I will continue doing what I do but if it smells fishy, they can go elsewhere...most of my clients know that I do the best I can to help them, but I NEVER cross the line (if there is one...hehe). | |
| 17 February 2008 | |
| There is small money/return involved here, meaning IRS has not the resources to go after many of these t/p's, much less launch a preparer investigation on what returns they can work. I think it unimaginable that IRS would do a preparer sanction over a small $3500 income number furnished by the t/p. Just how is IRS going to establish the number is wrong, to the ultimate point of saying the preparer should not have accepted it? That would require the depth/breadth of a criminal investigation, for Pete's sake.
This aspect of the rebate was also dreamt up by the pols. IRS' normal attitude there is Congress: give us the staffing and we'll do the enforcement; else we move on. If IRS did get into this in a massive way, Congress would go nuts, embarrassed at the exposure of their bad judgment. | |
