A previous client called me.He said HRB notified him of a e/f reject
stating "TP SS# has already filed"
We all know what this means, but the story got more interesting, HRB wanted almost $400 for his tax prep.
Fax me a copy sez i.
Well it was 1 w2 for 12k and a 1099misc for similar amt..thats it.
sch c did have auto depr and auto expense adding up to 120% of gross income...wtf? i thought...
anyways he balked paying the 400 bucks.
I said we would redo sch c and greatly reduce the crazy amt of auto exp and still get a reasonable refund ,plus a cover letter explaining id theft and photo id attached and file by paper all for $200.
Yet the 400 bugs me, cause i would feel dirty charging that much..
Am i out of touch?
Is being in business all about being fair to your ethics,morals and society or is it get what you can from the client?
"sch c did have auto depr and auto expense adding up to 120% of gross income...wtf? i thought....I said we would redo sch c and greatly reduce the crazy amt of auto exp and still get a reasonable refund." sci_encefic...
Um, I agree the auto expense is crazy, but you can't just make up more audit-proof ones. Where did his expenses come from? If off the ceiling, then yes, try to get more realistic numbers. But just maybe those numbers were realistic. Some people drive a thousand miles before they make a sale, or go to Home Depot or AutoZone for parts every day because they don't plan ahead. If the numbers came from a daily log, then you have to use those numbers. They are what they are.
This dilemma comes up often with clients eligible for EITC. The rules are that you have to deduct your ordinary and necessary business expenses (Those with $15k gross income can't ignore their $5k in expenses that will actually lower their EITC.) On the other hand, the rules say you can't deduct expenses you don't have receipts/records to substantiate. In fact, if you get audited and can't substantiate your expenses, they get thrown out, which can end up raising your EITC.
Many clients don't exactly keep impeccable records (if any at all). So what's a preparer to do? With auto, you can create a reasonable log, which is what I hope you did with this client. With supplies, it's impossible if they don't have receipts. I hope you advised this client to start a separate checking account just for the business.
I thought the same thing, who cares what the amount is, as long as it is the correct amount, if the amount is very high, I will suggest to my client tht they might have to prove that they drove that much, and they say they can, so that is where it goes, you have to claim what it is, why adjust the figures for the client, that is still cheating, and cheating is cheating, right.
In reality the Block preparer took 12k income to a 15k (loss) hence the wtf..to top it off the loss never showed up on the 1040...great quiz question.huh
Why did it not end up on page 1 of 1040..?
And remember the bill was near $400
I wonder if there is quality control at Hrb?
btw..the "tp ss# has already been filed" error code affected my practice by 6/1500 that is 6 id thefts out of 1500 filed by my office.
2009 was 1
before that? 20 yrs worth..0
Not to worry HRB..i only saw 2-3 of your lost sheep...so bravo
Take a gander at the numbers and make your own determination of who is out of touch. Per the IRS website, the SOI numbers showed that the number of 1040EZ returns increased from .958 million to 1.087 million from 2000 to 2008. The number of 1040A returns decreased from 4.18 million to 2.352 million from the year 2000 to 2008. Not really the kind of market you want to hang your hat on.
Total 1040 returns with a paid preparer name on it increased from 63.977 million in 2000 to 78.777 million returns in 2008. That is a 23% increase in returns completed by paid preparers during that nine year period.
Per the HRB annual reports, there appeared to be about 18 million returns completed by Block paid preparers in 2000. In 2010, it looked like it dropped to a little over 14 million. That is about a 22% drop.
Translating that to market share, Block had about a 26% market share in 2000. In 2010, it had a 17% market share.
Numbers don't lie, people do.
Does anyone know if these numbers of "paid preparers" from the IRS (SOI) inlcude free sites like VITA? My suspicion is that VITA and AARP etc. would not mark the return "self prepared" even if they do them for free. So if "free" sites are included in the "paid" return count then the truly PAID market is not accurate and the IRS should have a designated "third category of "not self prepared nor Paid" category to make sense of the real market place.
"UNFORTUNATELY Sched E and Sched C clients with auto and depreciation are getting bills that seem to be out of line." (david4801)
And after next tax season the powers-that-be at Block will sit around, wondering why there was another decrease in the number of returns prepared. This will be especially painful because many of the nonreturning clients will be at the high end of the price spectrum. Fixing the price problems for certain groups, but then making up for the lessend average charge in those groups by shifting the burden to other groups only works for a short time. I think that Mr. Smyth understood this -- and "left for a better opportunity" because of it.