Google Groups no longer supports new Usenet posts or subscriptions. Historical content remains viewable.
Dismiss
suspicious EITC
23 views
Skip to first unread message
Gary Goodman
May 10, 2012, 5:51:35 PM5/10/12
to
A client's household employee was notified by the state of NY that it
needs additional information. The employee filed her tax return
claining the earned income tax credit before she received her W-2. The
preparer listed an amount on Schedule C. The amount happens to be just
enough to generate the highest amount of federal EITC at the lowest
possible SE tax level. Not to mention that the amount listed was far
less than the employee's net pay.
1. Are we obligated to tell the IRS about this (I'll be charitable
here.) mistake?
2. Any suggestions for how to cover our behinds?
Thanks,
Gary
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2011) - All rights reserved. >>
<< ------------------------------------------------------- >>
needs additional information. The employee filed her tax return
claining the earned income tax credit before she received her W-2. The
preparer listed an amount on Schedule C. The amount happens to be just
enough to generate the highest amount of federal EITC at the lowest
possible SE tax level. Not to mention that the amount listed was far
less than the employee's net pay.
1. Are we obligated to tell the IRS about this (I'll be charitable
here.) mistake?
2. Any suggestions for how to cover our behinds?
Thanks,
Gary
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2011) - All rights reserved. >>
<< ------------------------------------------------------- >>
Mark Bole
May 10, 2012, 7:55:21 PM5/10/12
to
On 2012/05/10 14:51, Gary Goodman wrote:
> A client's household employee was notified by the state of NY that it
> needs additional information. The employee filed her tax return
> claining the earned income tax credit before she received her W-2. The
> preparer listed an amount on Schedule C. The amount happens to be just
> enough to generate the highest amount of federal EITC at the lowest
> possible SE tax level. Not to mention that the amount listed was far
> less than the employee's net pay.
>
> 1. Are we obligated to tell the IRS about this (I'll be charitable
> here.) mistake?
>
> 2. Any suggestions for how to cover our behinds?
>
> Thanks,
> Gary
>
Even if the household employee was your client (and apparently she is
> A client's household employee was notified by the state of NY that it
> needs additional information. The employee filed her tax return
> claining the earned income tax credit before she received her W-2. The
> preparer listed an amount on Schedule C. The amount happens to be just
> enough to generate the highest amount of federal EITC at the lowest
> possible SE tax level. Not to mention that the amount listed was far
> less than the employee's net pay.
>
> 1. Are we obligated to tell the IRS about this (I'll be charitable
> here.) mistake?
>
> 2. Any suggestions for how to cover our behinds?
>
> Thanks,
> Gary
>
not), you still would not be obligated to tell any third party, let
alone the IRS.
If she *were* your client, per IRS Circular 230 (which I assume you are
subject to), you would be required to inform the client of the error,
and what the consequences are for not correcting it. That's it.
You could also consider filing a Form 14157, Complaint: Tax Return
Preparer, which I believe is new this year, but it is designed to be
filled out by the client, not another professional.
I won't even ask what the State of NY has to do with federal EIC....
--
Mark Bole
EA in CA
makbo at pacbell dot net
Don Priebe
May 10, 2012, 9:50:21 PM5/10/12
to
>
> I won't even ask what the State of NY has to do with federal EIC....
>
New York also has a refundable EIC, normally 30% of the Federal amount.
> I won't even ask what the State of NY has to do with federal EIC....
>
Don EA in Upstate NY
paulthomascpa
May 11, 2012, 2:11:00 PM5/11/12
to
"Gary Goodman" <gar...@gmail.com> wrote
>A client's household employee was notified by the state of NY that it
> needs additional information. The employee filed her tax return
> claining the earned income tax credit before she received her W-2. The
> preparer listed an amount on Schedule C. The amount happens to be just
> enough to generate the highest amount of federal EITC at the lowest
> possible SE tax level. Not to mention that the amount listed was far
> less than the employee's net pay.
>
> 1. Are we obligated to tell the IRS about this (I'll be charitable
> here.) mistake?
Nope.
> needs additional information. The employee filed her tax return
> claining the earned income tax credit before she received her W-2. The
> preparer listed an amount on Schedule C. The amount happens to be just
> enough to generate the highest amount of federal EITC at the lowest
> possible SE tax level. Not to mention that the amount listed was far
> less than the employee's net pay.
>
> 1. Are we obligated to tell the IRS about this (I'll be charitable
> here.) mistake?
> 2. Any suggestions for how to cover our behinds?
employees file their returns is of no concern to me or my clients.
--
Paul Thomas, CPA
www.paulthomascpa.com
Watkinsville, Georgia
Bob Sandler
May 11, 2012, 4:26:22 PM5/11/12
to
>A client's household employee was notified by the state of NY that it
>needs additional information. The employee filed her tax return
>claining the earned income tax credit before she received her W-2. The
>preparer listed an amount on Schedule C. The amount happens to be just
>enough to generate the highest amount of federal EITC at the lowest
>possible SE tax level. Not to mention that the amount listed was far
>less than the employee's net pay.
>
>1. Are we obligated to tell the IRS about this (I'll be charitable
>here.) mistake?
>
>2. Any suggestions for how to cover our behinds?
Why does your behind need to be covered? How did you get to
>needs additional information. The employee filed her tax return
>claining the earned income tax credit before she received her W-2. The
>preparer listed an amount on Schedule C. The amount happens to be just
>enough to generate the highest amount of federal EITC at the lowest
>possible SE tax level. Not to mention that the amount listed was far
>less than the employee's net pay.
>
>1. Are we obligated to tell the IRS about this (I'll be charitable
>here.) mistake?
>
>2. Any suggestions for how to cover our behinds?
see the employee's tax return? Has she now become your
client? Is she asking you for help with the NY State notice?
Bob Sandler
Gary Goodman
May 11, 2012, 6:19:59 PM5/11/12
to
On May 11, 2:11 pm, "paulthomascpa" <paulthomascp...@bellsouth.net>
wrote:
information about her Schedule C. The reason we are in this mess is
that the client only recently admitted he had a household employee. He
paid her cash and we are looking at ways to bring him to the legit
side of things. Of course he is worried about the cost of compliance
(our fees for filing payroll returns, payroll taxes, etc.)
I think the employee is upset that she will have to pay back the EITC.
We may advise her to complain about the preparer.
Thanks,
Gary
wrote:
> "Gary Goodman" <gar...@gmail.com> wrote
>
> >A client's household employee was notified by the state of NY that it
> > needs additional information. The employee filed her tax return
> > claining the earned income tax credit before she received her W-2. The
> > preparer listed an amount on Schedule C. The amount happens to be just
> > enough to generate the highest amount of federal EITC at the lowest
> > possible SE tax level. Not to mention that the amount listed was far
> > less than the employee's net pay.
>
> > 1. Are we obligated to tell the IRS about this (I'll be charitable
> > here.) mistake?
>
> Nope.
>
> > 2. Any suggestions for how to cover our behinds?
>
> It doesn't sound like your "mistake" to worry about. How my clients
> employees file their returns is of no concern to me or my clients.
>
> --
> Paul Thomas, CPAwww.paulthomascpa.com
> Watkinsville, Georgia
>
> --
New York has an EITC. The state sent her a notice requesting
>
> >A client's household employee was notified by the state of NY that it
> > needs additional information. The employee filed her tax return
> > claining the earned income tax credit before she received her W-2. The
> > preparer listed an amount on Schedule C. The amount happens to be just
> > enough to generate the highest amount of federal EITC at the lowest
> > possible SE tax level. Not to mention that the amount listed was far
> > less than the employee's net pay.
>
> > 1. Are we obligated to tell the IRS about this (I'll be charitable
> > here.) mistake?
>
> Nope.
>
> > 2. Any suggestions for how to cover our behinds?
>
> It doesn't sound like your "mistake" to worry about. How my clients
> employees file their returns is of no concern to me or my clients.
>
> --
> Paul Thomas, CPAwww.paulthomascpa.com
> Watkinsville, Georgia
>
> --
information about her Schedule C. The reason we are in this mess is
that the client only recently admitted he had a household employee. He
paid her cash and we are looking at ways to bring him to the legit
side of things. Of course he is worried about the cost of compliance
(our fees for filing payroll returns, payroll taxes, etc.)
I think the employee is upset that she will have to pay back the EITC.
We may advise her to complain about the preparer.
Thanks,
Gary
paultry
May 11, 2012, 7:27:44 PM5/11/12
to
On 5/11/2012 5:19 PM, Gary Goodman wrote:
>>> 1. Are we obligated to tell the IRS about this (I'll be charitable
>>> here.) mistake?
>>
I've seen several opinions here that you are under no
>>> 1. Are we obligated to tell the IRS about this (I'll be charitable
>>> here.) mistake?
>>
obligation to report the offending preparer. As one who
spent many years on the IRS side, I'd think any legitimate
preparer would feel a moral obligation to help rid the
system of those who would seek to undermine it.
0 new messages