Wednesday, April 09, 2003

I just read an AP article, entitled -
IRS running out of funds to go after unpaid taxes

Doesn't that give you a warm fuzzy?
Maybe you can get away with not paying taxes at all, right?

Funny thing that happens when IRS doesn't have staff and time.
They take the easy way out.

What does that mean to you?

It means that if you owe tax money and IRS knows
how to find your assets, they'll just take them, if you
ignore their automated letters. (Did the reporter forget
to tell you that a whole lot of the system is automated?)

IRS knows

a) where you work (W-2s)
b) who your clients are (1099-MISCs)
c) where your money is (1099-INT, 1099-B, etc.)
d) where your home is (1098s)
e) what your driving (auto registrations)

They'll just send out levy notices on your accounts,
or garnishments on your wages.

All those short-staffed people won't be to your advantage.

The fact is, you won't be able to reach someone to help
you get off the hook - to help you stop those garnishments.

THAT's going to be the real problem with the budget shortfall.

When we need help - there won't be anyone there to HELP us!!!!!

OK, now, I'll tell you a little, tiny secret...there are special
phone lines for tax professionals to use to get help for our
clients. So, we're going to be just fine - and so will our clients.

But, you, out on your own thinking you're going to rip off the
system...well, there just won't be anyone there to help you
when you need it.

Hmmm...should I be gloating?

Is this budget cutback really designed to help provide more
income to Tax Professionals. Heck, I love it!

Monday, April 07, 2003

Last week, one of my tax pro readers brought it to my attention that the State of California had some legislation pending that will affect tax preparers.They tried it last year and got shouted down. Governor Davis proposed it again. It would require all tax preparers who prepare over 100 tax returns to file all returns electronically. It would assess a penalty if we don't.

Do you have any idea how many tax preparers in the State of California are not set up for this? Or how many are still charging SO little, especially in the smaller towns, that it would completely put them out of business?

Following is my open letter to Governor Gray Davis. Similar letters were sent to California State Senators and Assemblymembers.

Dear Governor Davis,

I'd really like to add my voice to those objecting to this proposal.

You are receiving substantial tax monies to handle administration.

As tax preparers, we often don't get paid enough to make all the
detailed entries required for e-filing.

For instance, when a client works for the film industry, s/he may
have 20 W-2s. For me to enter ALL of them,with all the details
needed for e-filing, would take me well over an hour extra.
Do you think that client will be willing to pay me and extra
$150.00 for that task? I know they won't.

For you to do that, it might cost as little as $15.00.

I had another client who had a list of 300 stock transactions.
Naturally, in this market, resulting in over $50,000 of losses.
Do you have ANY idea how long THAT would have taken
me to enter, line by line? Including proof-reading, that might
have meant an entire day. There is no way I could charge that
client over $1000 extra, after he had given me a neatly printed
schedule that I can attach to the return. Yet, to file it electronically
would have required that.

You require that we maintain signed Forms 8453 in our files;
signed before the return is transmitted. Well, for tax professionals
who don't do simple W-2 only returns, we rarely have our clients
present when we complete their returns. It may take days or
weeks to track them down, get them the form to sign and get
a signed form back, whether original or faxed. For some clients,
it's simply not practical to file electronically.

And then there are those people who have complex returns
with K-1s and other pass-through income/loss that has errors
on them. Sometimes, we have to over ride lines in the program
and attach explanations. We can't e-file those returns either.

Sorry, folks. We pay good tax money to cover your staff's wages.
Please use it for the purpose intended, not to make us an
unpaid part of your staff.

Where we can file electronically, we will.

But you can't penalize us for not doing your job.

I respectfully request that you quash this bill.


Eva Rosenberg, EA
President, Inc.

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