4th of July
Forget taxes for a day and have a safe and fun day.
Forget taxes for a day and have a safe and fun day.
While looking for a file from my old ibook, I found an Appleworks presentation I built 5 years ago on blogging. I had just started blogging and following blogs and the presentation was based on what I had learned.
The IRS has released a draft of the 1040 Schedule M for 2009 returns. This form is how the Making Work Pay and Retiree tax credits will be computer. You can download the form here.
I'm wondering if in our effort to make things easy for our clients we can end up hurting ourselves. Are we in danger of losing clients because we make tax preparation look easy?
We have all heard the old saying that "assume" can make an ass out of you and me. But in the case of the IRS assuming can get you a letter. Generally, the letter is everyone's favorite oops notice the CP2000.
The regulation that Congress can't seem to pass - tax preparer licensing - is back in the news. IRS Commissioner Doug Shulman has announced that by the end of 2009 his office will propose recommendations to better "leverage" tax practitioners. The idea to increase tax compliance and ethical standards. Possibly to include preparer licensing. Nothing new there. Nina Olson, the National Taxpayer Advocate, has been recommending licensing for years now. In fact, there have been bills before the last 3 Congresses which would require licensing. They have all died when that Congress ended because there were other more pressing issues distracting lawmakers. Even before Mr. Shulman office releases their recommendations, I would not be surprised if a new licensing bill is introduced. There is considerable interest in tax preparer regulation. Why? Because there are people who are preparing returns that are incorrect and costing the government millions is missing revenue. Some mistakes are mistakes of knowledge some are fraud. A good licensing program should cut both types of mistakes down. But what is good licensing regulation?
Looks like Kansas has put a hold on tax refunds again. Tax revenues are down due to the economy. Current estimate is about a month delay.
HUD has announced that it will allow qualified homebuyers purchasing a new home through the FHA program to use the potential of their First Time Homebuyer's credit to help with their down payment or closing costs. FHA approved lenders will be allowed to advance the credit for those purposes. HUD is not waiving the traditional down payment requirements. The home owner will still have to have to be able to provide, from their own funds, at least 3.5% of the appraised value. The new program will allow homebuyers take actions that will allow them to save money on interest over the life of the loan. HUD is hoping that these changes will help taxpayers to buy a home now and help grow the housing market and the economy. More info can be found in the HUD press release.
I just grabbed a new box of paper clips and realized that this is the fifth box I have opened since the first of the year. I use a lot of clips when working on a tax return. I use them to separate information and papers. But when I finish with a return, I replace the clips with staples. That leaves me with a stack of paper clips to go back into the dispenser. In an ideal world, I should get back all almost all the clips I put into a return. But this isn't happening. Yes, I do send some home with clients; holding the envelope to a return that has to be mailed (Oklahoma), or the payment voucher to the front where they can find it quickly. But that does not account for the massive losses especially taking into consideration the clips I get from clients with their information. May be we need a Paper Clip Taskforce to look into this. Are the being held with all the socks that don't comeback from the dryer? Or do I just need to stop procrastinating on a minor issue and start working on CPE?
I am as independent as they come. I always have been. It was something my father used to joke about all the time. But the keys to being independent are doing your homework and knowing when you can't do it yourself. I could change the oil in my car myself. But I know I wouldn't like doing it and would procrastinate until I was doing real damage to the car. So I pay a professional to do it for me when it needs to be done.
Over the last few tax seasons, I have seen an increase in clients switching to online or box tax software and preparing their own taxes. That is part of the process of this business, you lose clients but you also get new clients to replace them. And sometimes they come back because they decide the money is worth not having to do it themselves.
The real problem in the process are the taxpayers who don't want to do the homework necessary to do the job correctly. It isn't just taxes. You see the same issue in bookkeeping, playing the stock market, starting a business or taking a vacation. They learn enough to be dangerous. When they run into a problem, they ignore it or patch over it. They don't prevent or solve the issue. How many business die because the owners don't really understand payroll, labor laws, health laws or something easily preventable? How many vacations are a disappointment because the trip planner didn't check on attraction times or what the weather is usually? How many taxpayers have received a heart stopping letter from the IRS because they didn't fully understand what the software was asking?
Just because there is a computer program or app that will help you complete a task, doesn't release you from making sure you understand the choices you make with that program.