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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 THE TAX PROFESSIONAL. 


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 is once again time to renew our PTINs and pay the $63.00 “extortion fee” to the IRS so that we can stay in business for another year.


You can renew online (click here) or manually via Form W-12 (click here).

I do agree that issuing PTINs to tax preparers is a good idea.  It originally began as a way to combat identity theft by giving preparers an alternative to listing their Social Security numbers on prepared returns.


And I do agree that the IRS needs to maintain a national registry of paid tax preparers via requiring PTINs of all those who prepare tax returns for compensation.


But why the $63.00 annual registration fee?  The PTIN used to be free.


This fee was first instituted under the now dead RTRP mandatory tax preparer licensing regime as a way of subsidizing some of the costs.  With the death of this mandatory program via Loving vs IRS there is no need to charge such a substantial fee, or any fee, for acquiring or maintaining a PTIN. And there is really no reason for annual renewal. A preparer’s PTIN could be renewed every three years, at no, or minimal, charge, so the IRS could remove preparers who no longer prepare from the system.


I am not the only tax preparer who is questioning the PTIN fee.

The INCOME TAX SCHOOL BLOG recently told of a “Class Action Lawsuit Against the IRS for PTIN Fees”.


This class action lawsuit is being filed by a pair of CPAs: Adam Steele of Bemidji of Minnesota and Brittany Montrois of Georgia.”

The lawsuit challenges a couple of things:


1. Whether or not the IRS has authority to make you pay and maintain a PTIN number.


2. Whether the IRS has the right to charge the amount that they do and use the fees collected for unrelated activities.


There are 700,000 individual practitioners who pay the annual PTIN fees. That means that the IRS has collected more than $150 million since 2010. The plaintiffs claim that the IRS only uses a small portion of the fees collected to pay the vendor who manages the registration.”


Let us hope the plaintiffs are victorious.  I will keep you up-to-date on the progress of this suit here at THE TAX PROFESSIONAL.


The annual $63.00 PTIN renewal fee is almost as bad as the $100.00 that all paid preparers, except for CPAs, attorneys, and Enrolled Agents, are required to send to the State of New York each and every year in order to be able to prepare New York State tax returns (CPAs and attorneys are exempt because NY already gets an annual registration fee from them, and EAs are exempt because they successfully fought the imposition of the fee).


I prepare 20 or so New York State individual income tax returns (IT-201 and IT-203) each year, and my invoice to clients for whom I prepare a NY return includes a separate line item charge of $5.00 which I clearly identify as “New York State Tax Preparer Extortion Fee Surcharge”.


To be fair, as indicated in the previous item, NY now has added mandatory annual CPE, and an initial competency test, to its registration regime and it could be said that a minimal fee is necessary to offset the costs of the new components.  But not $100.


Hey, eliminating or reducing the IRS annual PTIN renewal fee is something that the “Tax Preparer Advocacy Council” could lobby for.




+ The NATIONAL SOCIETY OF ACCOUNTANTS announces “DC Court Shoots Down AICPA Tax Preparer Lawsuit”.


A D.C. federal judge on Monday decided the Internal Revenue Service can continue its voluntary Annual Filing Season Program for uncredentialed return preparers.”


U.S. District Judge James E. Boasberg hit the nail on the head, stating –


“. . . the crux of [the AICPA’s] concern is apparent:  its membership feels threatened by the specter of increased competition from previously uncredentialed tax return preparers who choose to complete the program.”  


The AICPA erroneously feels that CPA’s “own” the tax preparation business, and wants to discourage any credential or designation that identifies competence and currency in preparing 1040s.


The NSA item tells us Judge Boasberg felt “. . . the AICPA didn’t have the authority to sue the authority because it was not harmed by the Program”.


I find the IRS program of no real value to preparers because of its lack of an actual credential.  You can read my comments on the program, and my alternative suggestions, in prior “issues” of THE TAX PROFESSIONAL.


+ Pennsylvania tax professional Denise E. Brandt, EA of Main Street Tax & Accounting Services, Inc., who taught a recent PA-NATP workshop I attended, provides several worksheets and resources that fellow tax pros can review and adapt on her firm’s website.  Included is a sample Engagement Letter.  Click here.


+ Here is a great idea from an NATP member that was posted in the Association’s members-only “Community” section –


​“Since the Government is requiring us to do extra work in filling out the extra schedules for the Care Act, It would seem that a bill should be passed to require the government to pay us tax preparers at least 50.00 for each client we have to interview.


Does anyone agree that the government should pay us for the extra work instead of having the poor public pay us to the extra time.”


E G Anderson, EA ATA ABA


One member beat me to it by suggesting the same thing for EITC clients.


+ If you were unable to attend any of the IRS Nationwide Forums this summer you can view some of the sessions online, apparently for free (at least if you just want to “audit” a session).  You can also print a transcript of the presentation without charge.  If you need CPE for listening to sessions this is also available.  Click here.


+ Planning your 2015 calendar?  FYI, the 70th Annual Meeting of the National Society of Accountants will be held at the Hyatt Regency Vancouver in Vancouver, British Columbia Wednesday, August 19 - Saturday, August 22, 2015.


+ Alister M Nevius of The JOURNAL OF ACCOUNTANCY tells us “Final Regs Allow Deduction for Local Lodging Expenses”.


+ At ACCOUNTING TODAY Jeff Stimpson discusses “Clause for Concern: Essentials for Engagement Letters”.


+ And Jeff also deals with the constant requests we get for free tax information in “Gimme Gimme: Handling Requests for Free Advice” at TAXPRO TODAY (I am quoted in the piece).


+ Lee Reams II OF CLIENT WHYS lists “11 predictions that could affect Tax Accountants in the upcoming tax season”.


Here are the ones that interest me –


1) Compliance with the Affordable Care Act tax will force many DIY tax software users to return to professional tax preparers.


4) The number of returns on extension in 2015 will increase substantially due to the additional complexity of tax return preparation created by the Affordable Care Act.


5) The cost of having a return prepared in 2015 will increase substantially due to the additional time required for the Affordable Care Act reporting and reconciliation requirements.


Lee is not the first tax professional to predict an increase in GD extensions next tax filing season. 


+ TAXPRO TODAY reports on the recent NATP Fee Survey in “Preparers’ Fees, Workload Increasing: Survey”. 


NATP Members can get a copy of the survey – one of the many benefits of membership.


+ PARKER PUBLISHING has sample client letters on “2014 Year End Tax Planning for Individuals” and “2014 Year End Tax Planning for Businesses”.


+ Click here for a list of upcoming live webinars presented by NATP.




Many years ago, before I was “gifted” my mentor’s tax practice at the end of the last millenium, I had only about 100 of my own 1040 clients.  In December I would send each client on my list a tax-themed Christmas card, usually purchased from an accountant supply house, and, as I did with all my Christmas cards, included an annual “year-in-travel” newsletter.


Many families include in their Christmas card a newsletter talking about what the family has been up to during the year, often with emphasis on their kids’ achievements.  My uncle, a confirmed bachelor, was a world traveler and would each year compose a Christmas newsletter that outlined his many travels that year.  We occasionally travelled together.  I followed in his footsteps, both in travelling (I am, after all, known as the “wandering” tax pro) and in writing an annual Christmas letter highlighting my travels for the year.


As my travels used to include attending both the NATP Annual Conference and the NSTP National Convention each year at various cities throughout the US, many of which I would not have visited were it not for the tax CPE, these trips were reported in my letter, as were trips to Atlantic City and other locations for year-end tax update classes.  I found this a subtle but effective way of reminding my clients of my extensive continuing professional education throughout the year to keep up with the ever-changing 1040.


When I took over my mentor’s practice my client list expanded from 100 to well over 300.  It became too expensive to send each client a Christmas card.  But I continued to send out the Christmas travel letter as part of my annual January informational mailing to clients.


Over the years I have had more favorable comments on this annual Christmas travel letter than any other mailing sent to clients.  Many clients, to this day, tell me they look forward to reading it each year.



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