A Week in Perspective
Want to let everyone know that with the upcoming holidays and my need to catch up my readiness for this upcoming season, The will be no Week In Perspective on December 26th, or January 2nd.
I also want to let you all know that I have a very special post for you scheduled for January 4th.
Happy birthday to us! – Twenty years ago, five more-or-less young accountants went over the wall of a national CPA firm to start their own firm. They wisely discarded their first working firm name (“Dunderhead CPAs”) and settled on the name “Roth & Company.”
Not sure how I missed this:
Are You Ready For The Big Payroll Tax Deposit Change? – The IRS is changing the rules in a BIG way, when it comes to payroll and corporation tax deposits. Are you going to be ready for this new change? If not, you don’t have long to get ready! The new change goes into effect on January 1, 2011.
IRA Investment Planning for Taxation
3 Ways to Improve Your Credit in the New Year – Improving your credit quickly can be tough since the whole point of a credit history is to establish good financial trends – a pattern of paying off your debts. However raising your score over a longer period of time isn’t too tough if you consistently follow good money habits.
Why Don’t We Tip Everyone? – Earlier this week I asked my readers why they tip at the holidays. I was afraid a lot of you would read that, scoff, and say “Of course I tip my coffee barista! Every day!”. Of the few people that commented it seemed that everyone thought there was an appropriate time to tip (I agree) and sometimes it just doesn’t make sense to tip. But as I considered holiday tipping another thought crossed my mind. Why do only certain professions warrant the expectation of tips?
Everyone is Deserving, Right?
Friday’s Tax Quote – December 17, 2010 – “People don’t complain about taxes because they are selfish or stingy. They complain because they simply don’t believe they’re getting their money’s worth.”
- Zell Miller
Don’t Overlook This Easy Way to Put More Money in Your Pocket – If you have an employer, you might be offered a health care or dependent care flexible spending account benefit. Flexible spending accounts are one of those benefits that can make your eyes glaze over, because at first glance they don’t seem like a benefit. But they’re actually great, because when you take advantage of them you get to:
Are You on the Hook for Repaying Your Homebuyer Tax Credit? – In the wake of the financial crisis and the housing market crash, there were a number of efforts made to prop up the failing market. Among these efforts were tax credits for homebuyers, encouraging them to buy homes. However, not all the tax credits were created equal; in some cases, homeowners may be on the hook for repaying the tax credit.
Merry Taxmas! House OKs tax bill – In addition to keeping the current six tax rates that range from 10 percent to 35 percent, the bill contains a raft other tax breaks for both individuals and businesses. Many of the provisions relate to 2011, but there are some of the individual tax provisions that expired at the end of 2009 and were extended retroactively for the 2010 tax year:
- Alternative minimum tax (AMT) patch
- State and local sales tax deduction (itemizing required)
- Tuition and fees deduction
- Teachers et al write-off for $250 of out-of-pocket expenses
- Private mortgage insurance (PMI) deduction
- Direct donation of IRA money by older account holders
A New 2011 Economic Stimulus Package With Obama-Bush Tax Cuts and Unemployment Benefit Extensions – [Update - No New Taxes with Tax Extensions Approved] President Obama has signed into law a bill that covers an extension of all the bush-era tax cuts and additional tax benefits. With this legislation he has essentially created a new 2011 Economic Stimulus package, estimated at around $858 billion. Here’s how various key components of the “2011 economic stimulus package” legislation will affect you:
Estate tax extension through 2012: Nudging mama off the train in two years?
With Obama’s signing of the compromise tax deal yesterday, the really wealthy were among those who got an early tax present.
Some of the House Democrats railed against this latest version of the estate tax, but in the end, it passed.
For 2011 and 2012, estates worth $5 million or less won’t be taxed at all. For estate values greater than that, a 35 percent tax rate will apply.
Bush-rate extension passes; what it means – After a day of posturing, the extension of the Bush-era tax cuts ended up passing easily last night, 277-148.
So what does it do? Go to the above page for Joes great list of. . .
Also with More coverage of the final bill:
Robert D. Flach, TaxGrrrl, Tax Foundation, Kay Bell, Peter Pappas, The Blog that Inexplicably Hates Our LInks
Tax Bill Passes: What This Means for You – Here’s what’s in and out and what this means for you.
Boston Tea Party Anniversary – The Boston Tea Party was 237 years ago.
Steps To Stimulate A Recovery And Employment The Law Of Opposites
December 19th, 2010 Filed under: MBA Finance Jobs — Finance Author
As I wrote in 2008 on the financial crash, I was in the small minority that would have let the market crash. Now, you may be wondering what I meant then and mean now:
How do we distribute tax benefits for charitable donations? – I’m struck by the remarkable generosity of many of the low-income taxpayers at our Union College Volunteer Income Tax Assistance (VITA) site, who rarely get any tax benefits for their donations.
The AMT Effect for Individuals – For years, tax practitioners have been clamoring for a permanent fix to the AMT system. Ask a tax preparer about the late extension passed in 2007. If Congress does not pass the extension this year, it is estimated that 28 million taxpayers will pay AMT, with 82% of those taxpayers earning below $200,000. You will notice, that in 2009, 4.5 million were subject to the AMT.
2010 and 2011 AMT Tax Brackets – AMT is Alternative Minimum Tax. The Bush tax cut extension law officially known as the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (H.R. 4853) includes an AMT patch for 2010 and 2011. Congress used to patch AMT one year at a time. This time they did two years in one shot. That’s a 100% improvement!
How much are those New Year’s Eve babies worth?
A time to be born … a time to die – Playing the video while you read this post. And yes read the post. This is a great Article Mary.
“There’s no such thing as a free bike.” – Those “gift” bikes could turn out to be very expensive, because the IRS does not treat it as a “gift” but as a “taxable fringe benefit.”
It raises interesting tax questions.
Rentals and 1099s – Beginning in just a few days, landlords will have a new complication to renting their properties. As if dealing with renters who don’t want to pay their rent or trash the house when they leave isn’t bad enough, landlords will have to begin issuing 1099MISC to any service providers they pay $600 or more over the course of the year.
The new 1099 Requirement you MUST comply with in 2011 – Real estate investors take note: January 1, 2011, is the starting date for new 1099 Reporting rules. Effective January 1st, you must track payments you make to all businesses and individuals that you buy services from. Once you have paid $600 or more to any one business or person in connection with any kind of rental property expense, you’ll need to report those payments to the IRS, and issue each person or business a form 1099-MISC…
Form 1099 repeal fails yet again
While waiting for the Senate to get around to its final vote on the deal to extend the current income tax rates, the chair of the Finance Committee took another shot at repealing the new Form 1099 reporting requirement.
This tax task was devised as a way to help pay for health care reform. Specifically, businesses will have to provide 1099 information returns to each payee that the business pays $600 or more during the year.
How the Price to Earnings Ratio is Calculated – The price to earnings ratio (P/E ratio) represents a company’s current share price compared to its earnings per share. Commonly referred to as the earnings multiple, the P/E is commonly used by investors to compare and analyze stocks, as well as determine if a company is under or overvalued. There are many different versions of the price to earnings ratio which are often used to understand past, present, and future valuations.
TAX BLOGOSPHERE BUDDIES – PROF JAMES MAULE – Friday series of mini-interviews with fellow tax bloggers is Professor James Maule of MAULED AGAIN. A fellow “Wandering Traveler in the Internet Wilderness”, Jim has been a professor at Villanova University School of Law in Pennsylvania since 1983, and has been blogging since 2004. I enjoy reading Jim’s, appropriate for his profession, scholarly posts on tax policy. We have both made the extreme error of disagreeing with a certain multi-initialed blogger.
Social Security by the Numbers
Charge cards vs. credit cards: 3 reasons to charge it – The other day, someone asked me, if given the option, which I preferred: charge cards or credit cards. My answer: “There’s a difference?”
There is. And who knew?
(If you knew, kudos, because I always thought “charge card” was what our ancient ancestors – Mom and Dad – called the plastic we carry around in our wallet.)
Pre-paid credit cards: Why you should give them a second look – Today, it’s often difficult for anyone to get a credit card – whether it’s a zero percent balance transfer card or a best cash back credit card. And if you’re just starting out -or starting over – getting an approval based on your credit score can be even more of a hassle. This is what makes pre-paid cards so attractive if you want to use them for online shopping, travel or even just everyday expenses.
Reminder;
You can go to my company web site Tax Center page where you’ll find this year I have a Free Tax Organizer. You’ll need a .pdf reader to open this 14 page organizer. You can also find my Online Tax Organizer, used mostly by clients and/or those who will be clients.
Enter your email to subscribe to the L & R Tax Preparation monthly newsletter.
New Blog ranking
Okay, so this isn’t about taxes. Recently was introduced to a new ranking site and thought I’d let you all know about it. It is really cool.
The new ranking service is called Blog Rank. It comes to us courtesy from Invesp Consulting.
It is rather interesting the way things are broken down for us. In a post they describe just how does blog rank determine the ultimate rank calculation, how it works – sorta. Maybe more than I realize, but I found it a bit vague. But what would I know about creating a ranking for blogs, I’m a tax preparer?
As I first looked, though it I was amazed by the information it provided. Of course, I was reading more into how I could improve things here at taxguy.
Aside from showing and pointing me towards new blogs that go around the taxing world, it pointed me to different areas of rankings. Nope they don’t just show you rankings by the ultimate score. (taxguy is 15th in the ultimate ranking.)
The ultimate ranking is comprised of a variety of other rankings:
- by Feedburner RSS membership
- by unique monthly visitors
- by Yahoo indexed pages
- by Google indexed pages
- by number of incoming links (via Yahoo)
- by the ratio of incoming links to numbers of pages
- by pages per visit
- by Google PR
- by Technorati rank
- by Alexa rank
- by Compete rank
- via Social sites
Each shown on the blog type ranking. Oh, no, no, it isn’t just a tax blog ranking, they are ranking all sorts of blogs. Much like Alltop, you pick the type you are interested in, Personal finance, taxes, Money, history, Art, just all sorts of blog types.
Very cool stuff.
Please go check it out.
(Like I say on my Who writes this blog “of course, it will cover whatever may strike me about the Internet.” And I like this ranking site.)
Passing the week
Well, a week of blogging for me and as it goes a week of reading and searching for information you should have, or some just plain good reads. Passing the week is my regular postings of blogs I read and felt a need to pass on to you.
Before I get into all that, I want to mention that last week I said on twitter that I’d be creating a site where tax pros such as myself and other professional tax geeks can gather and all give our two cents about a tax issue. Although as life would have it, life is what happens to you while you’re busy making other plans.
This wasn’t done last week due to a few family situations. One being my son having surgery on an ear. (He is all right.) The plan is still for me to gather up things and get this site up and running, only the time frame has been changed. I am hopeful that time will allow me to get this done this week, preferably in time to be added to “The Buzz”. At some point when it is up and running, I will make a formal announcement here with the necessary link to get there.
And speaking of links I want to introduce everyone to Monica Lawver, she writes The Tax CPA, and Confessions of a CPA. Both are excellently presented and written blogs so please give her a read. She also has an extensive list of tax blogs that if you have time, you should venture though as she has some great bloggers listed both concerning tax and CPA stuff.
With that, there have been a lot of post this past week about Audits, and the first one I’d like to bring up is Monica’s Avoiding the IRS audit. Here she answers a question put to her by TWTP. These questions were sparked by the post “5 Slam Dunk IRS Audit Red Flags” over at the Tax Lawyers Blog. Peters post along with all the comments between us all sparked my post No sure way to avoid an audit.
Also in the IRS Audit department of post, please see:
Assumptions and The Audit Letter – First Action from Trish at Our Taxing Times.
Speaking of the five-slam dunk post, this post is the start of some debating from professionals that well you’d have to have been there. Monica gives a brief run down in here post When tax preparers attack, as it went on this whole thing is about the upcoming and recent conclusions that tax preparers should be regulated. Her post will point you in the right direction of where the debate starts. At some point, I entered into it all. Frustrated by some comments made, I even take in hand that someone was a Pompous Arrogant Ass. On that subject, my mind is still set to that conclusion. Please see my post, Righteousness in Designation?
The person I referred to and I have agreed to continue or “conversation” on it all but we have yet talked about where that might be. In my post Righteousness in Designation? I ask him several questions that haven’t been answered, hopefully when he and I continue we will get those answers.
My friend, The Wondering Tax Pro, hasn’t written much this past week, I am sure he is busy getting Extensions done. Once he is done and or able, I am sure he’ll be back to great posting as usual. With any luck, we’ll be doing likeminded post again as well.
Now is a Good Time to Check Your Withholding to Avoid a Tax Surprise, a post written by Stacie Clifford Kitts, CPA. She has written an e-book book about tax stuff and coauthored another book, and is the author of the blog More Tax Tips. Look through her past post, some good reads.
On Monday Tax Carnival #55: Tax Fireworks was released. A great Carnival of blogs, and of course when you are at a fireworks display, you always enjoy the big explosion that is saved for the end. That would be my post Righteousness in Designation? But since everyone has already read that one, please go to the Tax Carnival #55: Tax Fireworks and read all the other great post.
From the IRS – Hitman two great reads this week IRS Penalties: How do you remove them? and IRS Offer in Compromise, The Facts against the Fiction. The titles speak about the content. If these apply to you please read them, then contact a tax professional in your area.
From Joe K. over at Roth & Company, P.C. Tax Update Blog On vacation some automated post are being generated. All are great reads, yet I’d like to guide everyone to Keeping books and records. As this is what people need a CPA for, keeping exact records is key to an exact tax return. The post is concentrated on business, yet has information for everyone.
Joe also in another post provides a link to a book, “How Business Gets Done: Words of Wisdom by Central Iowa Experts.” If I am not mistaken he had a part in writing.
Although written awhile back, Jim Maule at Mauled Again wrote about the prerequisite qualities of a good tax professional at Why Tax Practitioners Must Be Good With Words, Not Just With Numbers: is a good read considering other things that have been going on. (For those of you not paying attention, Jim or James, not Jack.)
From my reads at PF blogs:
3 Money Reasons to Buy a New Car – Tax Deductions, Used CAR Trade-In Vouchers and Electric-Hybrid Credits From Andy over at $aving to Invest.
How to Manage Your Finances – 8 Tips to Take Control of Your Finances From Susan at
7 Things To Consider When Moving Offices, Debit Card Versus Credit Card – Which Is Better? From Patrick at Cash Money Life.
Worried about inflation? Over at Living Almost Large
10 Seriously Painful Budget Cuts was written and posted last year over at MoneySavingGuide.com but I enjoy going back and re-reading it. Also from them if you link up you’ll receive a free gift. I am very excited.
Taxes Must Go Up Eventually From Kevin at No Debt Plan is a good read for everyone. I may even expand on this topic with a post of my own or even the site not yet created. Great post Kevin!
In the Personal Finance Blogging area, I started with Ashley over at Wide Open Wallet. When I Left my regular writings at “taxguy”, I also stopped reading as many blogs as I used to. (those listed above are only a fraction of all of them I do read). Sadly, on my return to normal activity (reading and writing being a part of this so called ‘normalcy’), I find that Ashely is no longer writing. I am very happy that life is doing her well and she has found her path. However, I am personally sad that her blog isn’t a part of her path. I will miss your writings Ashely. You and one other are the push and guide behind my start out here and I will be forever grateful. Thank you for your blog, I will miss you. As I am sure, we all will.
Back to tax stuff:
Lastly, Peter P. of The Tax Lawyer’s Blog on Friday announced his 5 Best Tax Nerd Blogs: The Second Annual Rick Moranis Awards. I am not on the list, and rightfully so. His list is indeed compiled of some great blogs/bloggers. Well done.
I’m Back with “Who is”
Okay, things have settled and for the most part organized. Taking up this blogging thing again as before; Monday, Wednesday, Friday, with a recap of the past week on Sunday’s. I have missed being active regularly and I have been missed, but things are going strong again.
For my readers who have hung with me thank you. I apologize in advance for the repost below but given everything, I find it necessary.
So much talk about hiring a tax professional and so much debate about who is a professional I want this out again.
The biggest point I want to make is that just because someone is a CPA, doesn’t automatically make them a tax professional.
Tax professionals are hard to find because as you may have heard, there is no accreditation from the AICPA (American Institute of Certified Public Accountants) that says “Tax Professional”.
Hope you enjoy my return to active blogging.
Repost of Who is. . .
As a tax preparer I am often asked what is the difference between a tax attorney, an accountant/CPA, a bookkeeper, an Enrolled Agent, and a tax preparer.
A Tax Attorney is not the same as an accountant. The accountant can work with the financial issues and has a general knowledge of tax laws; however a tax attorney is a specialist in all aspects of tax law. Although they often work closely together, they are two complete different services. Typically large and even small businesses will meet with a tax attorney once every quarter or once a year to ensure that they are making the best possible business choices with regards to investments and tax issues. Since the taxation laws change constantly, this is an important step.
A Bookkeeper is responsible for keeping accurate, up-to-date business records for proper cash flow management, balance sheet preparation, and developing expansion and investment plans. A bookkeeper also assists in filing tax returns with updated tax records. Accurate bookkeeping is a legal requirement and should be kept well within the standards that are set by local and federal tax agencies. A bookkeeper accurately records all of the financial transactions. It is the responsibility of bookkeeper to note all monetary transactions that are received and paid out. The records also include outstanding balances that the company owes to other parties and others who owe to the business. Business bookkeeping takes a lot of time and cannot be done in a hurry. At small businesses, bookkeepers also double as company accountants. Perhaps bookkeepers have the biggest responsibilities in the company as business planning, payroll management, and tax return preparations are dependent on accurate bookkeeping. Bookkeepers often do not have the qualifications or certifications of accountants, but the responsibility is not any less. Bookkeepers that have a great deal of experience can market themselves as accountants or managers. For that, they also need to supplement their profession with certificate courses, seminar attendance, and on-job training. All types of businesses require bookkeepers who are experienced in their specific business functions.
Accountants keep track of a company’s money. The company’s managers and people outside the company read their reports. Managers look at the accountants’ reports to see how well their companies are doing. There are four kinds of accountants:
Public accountants work for public accounting companies. They do accounting, auditing, tax, and consulting work. Some have their own businesses. They do many different kinds of accounting for people outside the company.
Management accountants keep track of the money spent and made by the companies for which they work.
Accountants generally work a standard 40-hour week, but some work 50 hours a week or more. Tax accountants often work long hours during the tax season, from January to April. Most accountants have a college degree in accounting. Public accountants have to take a special test as well, resulting in a certification. Public accountants also must have a special license from the State in which they live. Accountants are generally good mathematicians, and have good analytical skills.
An Enrolled Agent (EA) is a federally-authorized tax practitioner who has technical expertise in the field of taxation and who is empowered by the U.S. Department of the Treasury to represent taxpayers before all administrative levels of the Internal Revenue Service for audits, collections, and appeals. “Enrolled” means to be licensed to practice by the federal government, and “Agent” means authorized to appear in the place of the taxpayer at the IRS. Only Enrolled Agents, attorneys, and CPAs may represent taxpayers before the IRS. The Enrolled Agent profession dates back to 1884 when, after questionable claims had been presented for Civil War losses, Congress acted to regulate persons who represented citizens in their dealings with the U.S. Treasury Department.
A professional Tax Preparer is an individual who prepares tax returns. A professional tax preparer can be a Tax Attorney, an Accountant/CPA, a Bookkeeper, an Enrolled Agent, or anyone who professionally prepares tax returns for clients. Most return preparers are professional, honest and provide excellent service to their clients.
So there you have it.
How do you choose the right one to prepare your taxes? There is no one factor to use in determining this. I suggest you read the IRS Tips for Choosing a Tax Preparer. Or my website page Finding a Qualified Tax Preparer. I would also hope you to read 5 Biggest Mistakes most taxpayers make when choosing a tax professional!
Getting it right
Five days ago I read a post on a topic that is of interest to everyone. The author of course responded to my comment. AN up and coming CPA/tax blogger gave a note where, of course, the author responded, and I put in another two cents worth. At this point, a new voice entered with a statement and some questions.
I hope now to answer those questions, and maybe a few others.
This all started simply enough because of a 2003 Study. Findings were such that CPA Prepared Returns Result in Fewer Audit Adjustments than Returns Prepared by Non-CPAs
I made the comment that maybe this study was not entirely accurate. Not because of the study itself, but because taxpayers blindly believe that a person with CPA behind their name means they are tax preparation experts.
For the record, just so you know, just because somebody has CPA behind their name, this does not make them a “tax professional”.
In a post from another tax blogger, she was thinking about all the fancy credentials the AICPA offers for CPAs to specialize – financial planning, fraud examination, business valuation – and wondered how to become a certified tax expert. A representative of the AICPA (American Institute of Certified Public Accountants) responded to this saying, “We do not offer a credential in taxation. In general, our approach has been not to develop credential programs around areas for which the public already believes CPAs to ‘own’.”
As I read this I was amazed that someone representing the AICPA actually admitted that the general taxpaying public blindly believes that just because someone is a CPA they own the title of tax professional.
Again, A CPA designation does not by itself qualify as tax expert. Other than EA (Enrolled Agent), there is no real designation available to be obtained to verify or prove a Tax Preparation Professional. There needs to be.
I suggested then that we needed to educate taxpayers in the difference of just a CPA and a tax professional (who by the way could be a CPA).
As it was pointed out to me, who would pay for this, who should or would be charged with this responsibility?
The comment that sparked this post – “I think the industry should accept that it has taken certain missteps along the way and repair that. . .”
In an annual report by National Taxpayer Advocate, Nina Olson said that she would work with the Inspector General for Tax Administration to develop regulations for presently unregulated (commercial preparers who are not attorneys, CPAs or enrolled agents) tax preparers.
To me this is misleading. I mean it is being proposed that those who are not attorneys, CPAs or enrolled agents aren’t regulated. When in fact they are governed by the same rules as those preparers as who are attorneys, CPAs and enrolled agents. (We are talking about what is commonly referred to as an un-enrolled preparer.)
So to clarify, According to Circular 230 (Circular 230 contains the regulations governing the practice of attorneys, certified public accountants, enrolled agents, enrolled actuaries, and appraisers before the IRS.) a preparer is defined as “An individual who prepares and signs a taxpayer’s tax return as the preparer, or who prepares a tax return” And preparers are governed by the regulations described in Circular 230, including ethics.
If you are an Attorney, CPA, EA you are afforded more mobility within the IRS to act on a taxpayers behalf as also described and regulated by Circular 230.
As it stands right now, anyone can claim to be a tax preparer. There are no guideline as to education requirements, or continuing education requirements. This concerns people, as it should.
I am considered an un-enrolled preparer. By all means I am all for a change. Somewhere somehow there needs to be some sort of something, be it college education and designation or Federal licensing. There needs to be something. To assume this needs to only be done for un-enrolled preparers is pompous.
Any preparer, whether you are un-enrolled, a CPA, an Attorney, and EA, whatever they are, there needs to be something for everyone who signs as a preparer. A standard for all who assist taxpayers in the preparation of their return.
Righteousness in Designation?
Friday I was interviewed and retained by a new client. This particular client has several issues that actually can fall in line with a great debate we have all been following.
First, a little background:
A young newly wedded (three years) couple has their tax return done by “pros” as they are not among those who follow the taxing world. We will call them Pat and Jody Taxpayer. Having just started their own Business they left HeRBert (the group who prepared their returns) for what to them was perceived as a tax professional. They retained a CPA to handle some general bookkeeping and complete tax returns.
Good choice?
Of course it is, “All but the militantly nefarious and hopelessly deluded concede that CPAs are experts at keeping books and records. There simply is no higher accounting “designation.” then CPA.
The CPA (Certified Public Accountant) maintained records by gaining access to Pat & Jody’s bank account using the online statements. The first tax season for this CPA came around and she completed the 2007 tax return. Another year passed, and she completed the 2008 return.
Several months ago, the IRS notified the Taxpayers that the 2007 return was under investigation. Seven lines on two different Schedule Cs were in Question.
Considering a CPA had prepared this return there should be no worries.
So how did I get this return?
When the time came for the audit with the “Tax Compliance Officer”, the CPA, had manufactured information to provide the IRS to validate two of the seven lines in question and did not show up to guide the Taxpayers through the 3 ½ hour long ordeal. Needless to say, the IRS found no substantial proof or validation for seven lines in question. P & J now are holding a bill from the IRS for over $10,000.00.
Not only are the taxpayers confused about what happened, but the “Compliance Officer” also looked at their 2008 return, they are about to undergo another audit.
“Because good accounting skills are a critical part of good tax preparation, CPAs are uniquely qualified to be tax preparers.”
So where is this CPA? Avoiding Pat and Jody.
This is a most uniquely “qualified” tax preparer?
I reviewed 2006 (again prepared by HeRBert – a fast food chain preparation service), 2007 and 2008 returns. (again, these two returns were prepared by the same “CPA”)
- 2006 had 6 errors resulting in a $213 refund to Pat and Judy (I can say this because I have already amended this return)
- 2007 has 21 errors - three missing forms (associated with errors) and if that wasn’t bad enough, 5 of the errors are mathematical.
“Good tax preparation is about numbers. It’s about keeping good books and records.
In short, it’s about good accounting.
In fact, what is a tax return if it’s not an accounting?”
Hummmmm
if anyone needs a definition to “accounting” I have a link to the right for Merriam-Webster Dictionary or you can click this.
Good thing it doesn’t suggest an ability to add or subtract.
Same for Accountant.
- 2008, well is just wrong. I say this because nothing changed from 2007 through 2008.
- 2007 consisted of
- 1040 Long Form
- 2 Schedule Cs
What the 2008 return consisted of was a 1040A – Short Form, nothing more.
My conclusion is this CPA stands proudly among those who are truly CPA tax professionals. You real CPAs who are tax pros, give her credibility she assuredly doesn’t need.
As for Jody and Pat, luckily they found a tax professional. I will help them through the amended returns, the audit up coming, and any and all IRS intervention that may come their way. If you wish to stay updated on their situation, I will create a blog page giving more detail information and will keep it updated.
However not all of you will see it this way. Why? Well, I am no longer a CPA. I am not an EA, nor am I an Attorney. What does this make me? I am an unenrolled preparer.
Unenrolled preparers, by definition, have no recognized credentials and are bound by no professional standards
And what are the unique qualifications of an unenrolled preparer?
Would someone please tell me?
Anyone?
The silence is deafening.
That’s because the answer is “none . . . nada . . . zero . . . zilch.”
The silence sir, is deafening because you are on your computer. But now, please, open your eyes fully, adjust your glasses, I want you to hear me plainly.
An unenrolled preparer is a unique person. Like a Lawyer, a CPA, or Doctor or any other profession, you are going to have unqualified hacks. My Credentials are useless in the taxing industry.
Or did you miss it?
The AICPA told a CPA/Tax Professional “We do not offer a credential in taxation. In general, our approach has been not to develop credential programs around areas for which the public already believes CPAs to ‘own’. In addition, we do not endorse a particular tax credential.”
An unenrolled preparer sees how others take advantage of the miss-conceptions of the designation and learns tax rules and regs to help people through what can be a very taxing time (no pun intended).
I question your thinking when you say a man with over 35 years in the tax preparation industry has no credibility. I only have 23 so I must not have any either?
Hummmm, let’s look at my background a bit:
a) A Masters in Accounting
b) Formally employed by this countries (at the time) Largest Accounting firms
c) Formally a CPA
d) 23 years preparing returns for taxpayers
Of the four listed in my mind, only qualifies me to call myself a tax professional. I can assure you it isn’t one of the top three.
“There simply is no higher accounting designation.”
Thus, if the Internal Revenue Code imposes an affirmative duty on taxpayers to maintain good books and records, doesn’t that alone explain why CPAs are uniquely qualified to prepare tax returns and why many CPAs are drawn to the field of tax preparation?
Of course it does.”
You Pompous arrogant ass. Is your head so high in the sky that you are not getting enough oxygen?
True enough, the IRC does affirm duty to taxpayers to maintain good and accurate records. Alone that tells me (a former CPA) should seek advice from a CPA on how to keep those records not how or where to put them on a tax return.
It is my opinion that a good majority of the CPAs that are drawn to taxation and preparation do so for the money.
(Not to get off subject, but are you actually a licensed Tax Attorney, and a CPA? I know a few Lawyers and I’ll have to ask, to be sure, but I think like the AICP, there is nothing out there for Lawyers to hold actual “tax” credentials. If I am wrong please correct me, do you have some designation that says you’re a Tax Lawyer? If so, what is it?
As for not being bound by professional standards, I find it hard to understand why I have to point out to a designated pro that we (The Unenrolled prepares) are bound by the same rules in Circular 230 as you are. Maybe you should read it some time.
A while back, I post Who is: a post that defines different titles. If you want to see the entire post please click on the link Who is: Below is a brief recap:
A Tax Attorney - Typically large and even small businesses will meet with a tax attorney once every quarter or once a year to ensure that they are making the best possible business choices with regards to investments and tax issues. Since the taxation, laws change constantly.
A Bookkeeper – is responsible for keeping accurate, up-to-date business records for proper cash flow management, balance sheet preparation, and developing expansion and investment plans.
Accountants – keep track of a company’s money.
Enrolled Agent – is a federally authorized tax practitioner who has technical expertise in the field of taxation and who is empowered by the U.S. Department of the Treasury to represent taxpayers before all administrative levels of the Internal Revenue Service for audits, collections, and appeals.
Tax Preparer – an individual who prepares tax returns.
Other post from the “taxguy” blog that may be related to the taxpayer issue mentioned in this post.
Choosing the Right Representative
5 Worst Things You Can Do if You Get an IRS Collection Notice a Guest post from Peter Pappas. . .
How to Avoid IRS Penalties and Interest
Picking A CPA With Too Much. . .
From the flyer notes
First time homebuyer Credit doesn’t mean you have to actually be a first-time buyer to qualify. And personally I think credit is the wrong word too.
During the summer President Bush signed the Housing Assistance Act of 2008. It allows first-time buyers (homes) a tax “credit” to the lesser of $7,500.00 ($3,750.00 if married filling separate) or 10% of the purchase price of a home. {Meaning if your home that you are buying only cost $45,500.00, your so called credit won’t exceed $4,500.00}
What is a first time home buyer? Well for this purpose it is described as an individual who had no present ownership interest in a principal residence for the three years prior the purchase of the home. If you are married both spouses’ must meet this requirement.
This “credit” is available for houses purchased after April 8th , 2008 and before July 1st, 2009.
Have you ever heard the phrase “If it sounds to good to be true it probably is.”? Well this in my opinion is one of those times. The “credit” has to be paid back. So is it a credit or a loan? Well, you decide. You must pay this back over a period of 15 years from your tax return. You have to start paying this back with the second tax year after the residence was purchased. No you only have to pay it back if you take the credit. You take the credit, two years later start paying it back.
So lets say you buy a $75,000.00 home and you elect to take this credit. You’ll get a credit of $7,500.00. In two years you will add back to your return (subtract from a refund, add to an amount due) $500.00 And will keep doing this for 15 years. There will be phase outs for income and a few other rules but that is the just of it.
Seems more like a loan than a credit to me.
I have a few clients who will qualify for this so called credit and I have already called and visited with them about it. I advised them of all the situations that applied to them and asked them to discuss it amongst themselves then to re-visit the issue come time to prepare their returns. As to take it or not I am not advising anyone in this, My view is that Taxes are high enough, new homeowners from my client base are young couples (one individual) starting out and having a tax liability for the next 15 years seems a bit questionable.
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