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Now that the GD extensions have all been done, and we have rested a bit, it is time to begin to think about, and prepare for, the 2015 tax filing season.

Over the years I have developed a collection of forms, schedules, and worksheets that have proven very helpful in my practice. I have gathered these forms in a special compilation for fellow tax professionals to use in your practice during the tax season.

Some of my “homemade” forms are given to clients to help them provide me with the information I need to properly prepare their returns. Some are used as “memos” to the client’s copy and my office file copy to back-up items reported on the returns. Others are used as attachments to returns.

I also include a collection of client handouts and memos in the compilation package.

This package will be sent as a “word document” email attachment, so you may edit and revise them as you see fit to personalize them to your firm, customize them be more relevant to your particular practice, clients or specific professions, or update for annual COLAs or tax law changes.

Please be aware that this is copyrighted material and is for your internal use only.

The price for this compilation is $7.95. But for orders postmarked in November I will offer a 25% discount and let you have the package for only $5.95!

Click here for more information on this compilation and how to order. When ordering your package mention you read about the offer here at THE TAX PROFESSIONAL.


There is a line in the Broadway musical 1776 where a dispatch from General George Washington expresses his frustration with the inaction of Congress (nothing has changed in over 200 years!).

“Is anybody there? Does anybody care?”

John Adams repeats the questions and adds –

“Does anybody see what I see?”

I feel a bit like George and John with regards to the editorials I have posted here at


I have asked fellow tax preparers, here, in THE WANDERING TAX PRO bi-weekly BUZZ installments, and in frequent “tweets”, to share their thoughts on –

  • doing away with the tax deduction for depreciation of real estate,
  • our legal responsibility for “self-assessing” IRS penalties on client 1040s,
  • the need for a universally accepted industry-administered tax preparer credential,
  • the need for a national lobby for tax preparers, and
  • treating the fact that a person is a client a “state secret”.

I have received a handful of comments on some of the topics from “the usual suspects” (whose opinions I do respect) – you can read these comments on the Mailbag Page (updated frequently as needed) - but none of my commentaries have initiated substantial participation in the serious discussions I had hoped for.

Prior to publication I submitted my piece on the need for a national lobby for taxpros - in which I suggested that “NATP, NSTP, NSA, NAEA, LTPA, and any other legitimate non-profit tax preparer membership organizations need to join together in a ‘Tax Preparer Advocacy Council’ with an office in Washington DC” – to the leaders of the named membership organization for comment. Only NATP responded. The other organizations ignored my request.

NATP Executive Director Kathy Stanek gave several reasons why NATP does not lobby and could not participate in a “Tax Preparer Advocacy Council. The main reason was because the membership of the organization included all categories of tax preparers – Attorneys, CPAs, EAs, those who had been previously designated RTRP, and unenrolled preparers – “We cannot represent one group without representing another group”.

I do agree that different credentialed components of the tax preparer community may have different concerns and agendas, but there are issues that affect every single member of the community, regardless of credential, designation, or lack thereof.

Topping the list is the excessive due diligence, paperwork, and potential for penalties and agita that result from the insistence of the idiots in Congress in distributing and administering, government social and other benefit programs via the Tax Code – like the Earned Income Credit, tuition assistance, and now the Affordable Care Act.

I reiterate my plea for comments on the editorials I listed above, and those that

appear in this issue. Please let me know what you think.


One way we as tax professionals can combat “the excessive due diligence, paperwork, and potential for penalties and agita” that I mentioned above is to campaign for true substantive tax reform, perhaps via an organized “Tax Professionals for Tax Reform” organization.

There is no doubt that the current Tax Code is a mucking fess. As has been suggested in

the past by Presidential commissions and other sources, we need to completely shred the current Code and rewrite it from scratch.

In re-writing the Code we need to acknowledge the following -

1. The only purpose of the federal income tax system is to raise money necessary to fund the operation of the government.

2. Social welfare and other government benefits should not be distributed via the

US Tax Code.

3. The US Tax Code should not be used for “social engineering” or to “redistribute income”.

The new Code would start with “everything is taxable” and “nothing is deductible” and add back only those exemptions from income and “tax expenditures” that are necessary.

Many of the current “tax expenditures,” like the Earned Income Credit and the refundable Child Tax Credit, the education tax credits and deduction, and the currently expired energy credits, do not belong in the Tax Code.

I am not saying that the government shouldn’t provide financial assistance to the working poor and college students, or provide encouragements for making energy-saving purchases and improvements. What I am saying is that such assistance and encouragements should not be distributed via Form 1040.

The benefits provided by the Earned Income Tax Credit and the refundable Child Tax Credit should be distributed via existing federal welfare programs for Aid to Families with Dependent Children. The benefits provided by the education tax credits and deduction for tuition and fees should be distributed via existing federal programs for providing direct student financial aid. The benefits provided by the energy credit and other such personal and business credits should be distributed via Cash-For-Clunkers-like direct discount or rebate programs funded by the budget of the appropriate Cabinet department.

Distributing the benefits in this manner is much better than the current method for many reasons:

1. It would be easier for the government to verify that the recipient of the subsidy, discount or rebate actually qualified for the money, greatly reducing fraud. And tax preparers, and the IRS, would no longer need to become Social Workers and take on the added responsibility of having to verify that a person qualifies for government benefits.

2. The qualifying individuals would get the money at the “point of purchase,” when it is really needed, and not have to go “out of pocket” up front and wait to be reimbursed when they file their tax return.

3. We would be able to calculate the true income tax burden of individuals. Many of the current “47 percent” would still be receiving government benefits, but it would not be done through the income tax system, so they would actually be paying federal income tax.

4. We could measure the true cost of education, housing, health, energy and welfare programs in the federal budget because benefit payments would be properly allocated to the appropriate departments.

The key word for the new Tax Code should be simplicity. The simpler the better. There should be simplicity for simplicity’s sake.

Why should tax professionals call for a simpler tax system? Does not each new tax law, and each complexity added to the Code, put money in our pockets? Is not a more confusing Tax Code better for business?

I truly believe, and have been saying for years, that a much simpler tax system would not hurt my business, or that of most tax preparers, at all. If I did nothing but 1040As all day during the tax season I would make more money, experience less agita, and substantially reduce the number of GD extensions.

I also believe that my clients would not decide to do their own returns if the tax system was simplified; they would continue to come to me. Most taxpayers who use a tax professional just don’t want to be bothered with the task of preparing their tax return.

And there will always be the need to calculate business, investment sale, rental, and farming gains and losses on Schedules C, D, E and F and Form 4797.

What should we tax professionals be doing to promote tax reform? Write to the idiots in Congress who supposedly represent us, and encourage our clients to do the same via our newsletters and mailings, to call for substantive tax reform, emphasizing simplification. And call for such reform in blog posts, editorials in tax publications, and letters to the editor.

Would you be willing to join a “Tax Professionals for Tax Reform” that supports and works for the kind of tax reform and simplification that I have discussed above?


Early last month I received the following email from New York State:

“The New York State Department of Taxation and Finance (DTF) promulgated new regulations ( this year that require commercial tax return preparers who will prepare New York State personal income tax returns to complete continuing education requirements. You have been identified as a person who is paid to prepare these returns. The amount of required continuing education is based upon your experience.

- If the number of income tax returns you were paid to prepare is LESS THAN TEN during any of the last three years, you must complete 16 HOURS of continuing education coursework by December 31, 2015 and FOUR HOURS of coursework in 2016 and each year after that.

- If the number of income tax returns you were paid to prepare was TEN OR MORE during each of the last three years, you must complete FOUR HOURS of continuing education coursework by December 31, 2015 and each year after that.

According to our records to date, you must complete FOUR HOURS of continuing education coursework by December 31, 2015 {it appears that this email was specifically for my situation – rdf}. If you don't complete the mandatory continuing education by December 31, 2015:

- You will not be authorized to prepare New York State personal income tax returns; and

- Your 2016 Tax Preparer Registration Certificate will NOT indicate that you prepare New York State personal income tax returns.


We will begin offering free training courses through live presentations by DTF personnel in locations across New York State THIS MONTH.

- The OCTOBER and NOVEMBER sessions will cover the FOUR HOURS of required coursework

- Additional live and online versions of the coursework will be available throughout late 2014 and 2015


If you have any questions about your Continuing Education requirements or the required coursework you may call (518) 457-1929.

The Tax Department will never send you an email asking you to validate personal information such as your username, password, or account numbers.”

Live sessions for the four-hour course will be offered from 1:00 p.m. - 5:00 p.m.

Each live session will include the following topics:

•Federal updates

•State updates

•Standards of conduct and penalties

•Common mistakes

Registration for the free sessions have apparently closed. New offerings for 2015 will be announced in mid-November.

It appears that currently the NY Department of Taxation and Finance is the only approved CPE provider for the required 4 or 16 hours. I certainly hope this is temporary, and that more providers will be approved in the future.

Since the 4 hours must be obtained before December 31, 2015 there is really no reason to attend these classes now. But because they are free it is a good idea to use it as a 2014 state tax update. Personally, I will wait until late in 2015 to take my 4 hours to see if additional locations and providers are added. I had hoped the NYS update that will be part of NJ-NATP's January 2015 seminar could be counted toward the required 4 hours.


It’s that time of year again when tax professionals sign-up for year-end update classes in preparation for next year’s tax filing season. Here are some options –

The grand-daddy of year-end updates has to be National Association of Tax Professional’s

The Essential 1040®” (formally “The Famous 1040 Workshop”), which has been around for 29 years now. This course covers the standard inflation-indexed updates for 2014 tax returns, new tax laws applicable to 2014, court cases, and recent developments. The day, of course, includes the obligatory two hours of redundant ethics preaching.

It is offered in combination with “Beyond the 1040®” in several locations in each of the 50 state

“Beyond the 1040®” is a full day discussion of topics that were hand-picked by NATP’s Tax 

Research department –

•Tax Ramifications of Divorce

•Foreign Investment Reporting Requirements

•Estimated Tax Payments and Underpayment Penalties

•Substantiation of Deductions and the Cohan Rule

NATP also offers the 3-day TAXPRO Symposium.

Day 1 is “Working with the IRS”, an interactive workshop that promotes the discussion of personal experiences and the outcomes of IRS audits to provide attendees with confidence

when dealing with the IRS and a list of action items to discuss with your clients. It will -

• explain the three types of IRS audits and techniques for handling each type so your clients understand what they might face in an audit;

• explain the first steps to responding to an IRS examination or audit;

• identify the potential penalties a tax professional and taxpayer can be subject to;

• describe the options available to a taxpayer who disagrees with the findings of an

IRS examination or audit; and

• follow best practices to assist delinquent taxpayers in satisfying their tax obligations.

Days 2 and 3 are “The Essential 1040®” and “Beyond the 1040®”.

The symposium is being offered in -

Scottsdale, AZ on November 3-5, 2014

Lakewood, CO on November 10 - 12, 2014

Orlando, FL on December 8 - 10, 2014

Bloomington, MN on October 20 - 22, 2014

Las Vegas, NV on November 10 - 12, 2014

Atlantic City, NJ on November 17 - 19, 2014

The individual state chapters of NATP also offer year-end state tax updates. Click here to

access information for the chapter for your state of residence or practice.

{If you are not a member of NATP and would like to receive membership information please email me at [email protected] with “NATP Membership” in the “subject line”.}

The National Society of Accountants is offering the “Gear Up Individual Tax Seminar” at the Mohegan Sun Casino in Uncasville CT on November 20-21, 2014. Topics include coverage of new legislation and extenders, revenue rulings and procedures, as well as case law to help the busy practitioner keep current.

And the National Society of Tax Professionals also has its 1½ day “2014 Federal Tax Update Seminar” cheduled at various locations in 29 states, with a full day of updates and 2-hours each of Schedule C topics and, what else, ethics.

Like NATP, NSTP has been offering year-end update classes for decades, and I have attended them often in the past. The instructors and materials for the seminars I took were always

top notch.

In my new home state of PA the Pennsylvania Society of Tax & Accounting Professionals (I believe it is affiliated with NSA) also offers Gear-Up and Jennings federal year-end update workshops and PA state and local updates at various locations throughout the large state.

I have not yet joined, but am thinking about it.

Here are some other year-end update providers -

Accountant's Education Services

Basics and Beyond Income tax Seminars

Katz Tax Seminars (New York only)

Spidell Tax Seminars (California only)

I have absolutely no experience with these 4 CPE providers and cannot offer any recommendation either way. I only learned of them via a Google search, although I had heard

of AES and Spidell before.

In most cases the above seminars are taught by practicing tax professionals, who often add

real-life examples and suggestions from their individual practices to the presentations. I know this is true of NATP and NSTP classes.

While the year-end offerings discussed above all provide qualifying CPE, none of them include the IRS-specific 3 or 6 hour “refresher course” required under the Service’s new voluntary Annual Filing Season Program, nor do they include any testing.

Perhaps I will see you at the NATP Tax Symposium in Atlantic City.


+ An email from Thomson Reuters told me about a new whitepaper available that shares five ways to be a better tax researcher.

+ Jason Dinesen adds his more than 2 cents to a discussion I began in “What Is Our Legal Responsibility” in the September issue of THE TAX PROFESSIONAL in his blog post

What Responsibilities Do Tax Preparers Have in Assessing ACA Penalties?”.

I thank Jason for his contribution to the discussion, and look forward to hearing what other tax pros have to say.

+ I recently became aware of the “Smart Center Blog”, which suggests that it will help you learn “How to Build the Ultimate Modern Tax Firm” and provide “Real answers you need to have a next level tax business”.

+ Jeff Stimpson talks about “Sack Race: Firing Clients Before Next Season” at TAXPRO TODAY.

He hears from tax pros on the question “Before next tax season begins, how can you pinpoint and fire your worst clients?”

+ And Jeff also tells us “IRS to Send EITC Due Diligence Warnings” to preparers who appear not to be complying with due-diligence requirements in October.

The item explains one of the reasons that the EITC does not belong in the Tax Code.

“The IRS estimates that from 22 percent to 26 percent of all EITC claims contain ‘some type of mistake’ that altogether cost the government a total of $13.3 billion to $15.6 billion in 2013.”

+ This announcement came via the NJ-NATP restricted Spacebook group –

Join Karen L. Hawkins, Director of the IRS Office of Professional Responsibility (OPR), on October 29th for a free webinar on recent changes to Treasury Department Circular No. 230, Rules Governing Practice before the Internal Revenue Service!

Title: Practicing Before the IRS - Circular 230 A to Z

Time: 2:00 p.m. (ET); 1:00 p.m. (CT); 12:00 p.m. (MT); 11:00 a.m. (PT)

Contact: SB/SE Webinars

Email: [email protected]

Event Information: This FREE 2 1/2-hour broadcast is for all tax professionals.

Topics include:

1. Recent changes to the regulations governing tax practice before the IRS

2 Due diligence obligations of tax professionals.

3. Overview of other key Circular 230 provisions.

4. Practitioner responsibilities to their clients and to the tax administration system.

5. Best Practices for all tax professionals.

6. OPR Policies and Procedures

7. Live Q&A session with Karen L. Hawkins, Director of OPR

Certificates of completion are being offered. Earn 2 CE credits: 1 CE Credit = Ethics and 1 CE Credit = Federal Tax.

To register for the event, visit the Internal Revenue Service Webinar Registration website.

Click here.

+ Speaking of NJ-NATP, the Fall 2014 issue of NJ TAXING TIMES, the newsletter of the NJ chapter of NATP, is available to download! Click here.

Lots of good “stuff” in this issue. I have written a couple of items.


Here is what I do when it comes to multiple W-2s on a client’s tax return.

First I separate the various copies into three piles – “B” for Uncle Sam, “2” for the state return, and “C” for the client.

I run an adding machine tape of federal “Wages, tips and other compensation” (Box 1) and “Federal income tax withheld” (Box 2) and staple it to the “B”s.

I run a tape of “State wages, tips, etc” (Box 16) and “State income tax” (Box 17) and staple it to the “2”s.

I run a tape of Boxes 1, 2, 16, 17, and any SUI. SDI, and FLI included in Box 14 and attach it to the “C”s.

If there are multiple states or excess Social Security tax I do some additional additions on the appropriate tape

I compare the totals on the tapes for the “B”s and “2”s to the totals on the tape for the “C”s to make sure they are the same.

I enter the totals for Box 14 SUI, SDI, and FLI, adjusted for any amounts in excess of the maximum, on Line 8 (“Other taxes”) of Schedule A (if itemizing), identifying the amount as

SUI and/or SDI and/or FLI as applicable. I chose not to include this amount in “State and local Income taxes” claimed on Line 5 (box “a”).

I prepare all my federal 1040s manually – but if I did use flawed and expensive tax preparation software I would do this procedure and as an additional check compare the totals on the tapes

to the appropriate numbers on the computer-generated 1040 and state return.

If you have a tax practice tip you would like to share with your fellow tax professionals email me at [email protected] with “Tax Pro Practice Tip” in the “subject line”.