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Jesus

So much for mind your own business.

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It sure sounded like they had a court order . . .

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The IRS has the right to ask tax preparers information about situations they are looking at.

Cir 230 says that tax preparers have to give information to the IRS unless it is 'priviliged'.


The most BASIC information you could give to the IRS is a person's name and SSN.  It is the very first things at the top of the tax form.   It that is 'priviliged' than was isn't?


And go back and read the very last sentence of my post.

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Wait, so it's kosher for a tax preparer to rat his client out so long as he starts the phone conversation off with "I've seen some shady shit I want to tell you about. Ask me who it is?"

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I graduated with a Bachelor's in Accounting last August, but haven't had any luck finding a job. So, I took a seasonal tax preparer / office manager position with a national tax prep service. This past week, while doing a client's taxes, I discovered a HUGE mistake where the taxpayer has wrongfully received about $40,000+ in refunds over the last seven years, through no real fault of his own, but because of inept tax preparers. He's been a client of ours for 7 years.

As part of the interview process, we have the clients fill out a data sheet, which includes their personal information and information about dependents. The dependent info includes the relationship of the dependent to the taxpayer. The client is in his late 20's, and is claiming his two cousins as dependents. The kids are about 8 and 9. Their parents are both incarcerated. In the past, the client had also claimed his mom, the children's aunt, due to her being unemployed. This year, however, he's not claiming her, as she moved out on her own. His mom has legal custody of her niece and nephew, but they live with her son, the client. The client was upfront about them being his cousins.

For those of you who aren't well-versed in tax law, there are some refundable credits (Child Tax Credit / Additional Child Tax Credit / Earned Income Tax Credit) for which nieces and nephews are qualifying relatives, but cousins are not. Cousins can be claimed as dependents for exemptions, though.

Our computer software allows us to keep notes, which are important for demonstrating due diligence, especially when EITC is involved. Our software also populates much of the information from returning client's prior year returns. As I started entering his dependent information, the fields populated as "nephew" and "niece" from last years return. I asked the client if he had told last year's preparer that they were his niece and nephew, without telling him why. He and his Mom, who was sitting there, assured me that they had always said they were his cousins. When I looked into the notes, I found that the preparers recorded them as niece and nephew. Apparently, the preparer the first year can't read a court order for custody and realize that the son of a person's aunt is the person's cousin, not their uncle. And, it appears the following year's preparers simply hit enter when the relationship field appeared without reading it, which caused them to be claimed as niece and nephew every year.

The client's refund this year was just over $700, which is what he'd had withheld, after his Head of Household Standard Deduction ($8,700) and 3 personal exemptions ($11,400) reduced his Adjusted Gross Income to zero. The previous seven years, he had gotten back in excess of $7,000 every year, due to ACTC and EITC.

When I discovered it, I let our Help Desk know. Their response was "Fortunately for us...unfortunately for the IRS they only catch 1 in 1000 of these." Later that evening, I spoke to my Team Leader, whose name was on the returns for two of the prior years, and let her know what I found, giving her a head's up that she could end up in a lot of trouble. She was genuinely worried. The following morning, I talked to one of the guys who works for me, whose name was also on at least one of the returns. He acted nonchalant about it at the time, but apparently bitched to my Regional Manager. I also spoke to my Operations Director (the Regional Manager's boss), who basically said it was no big deal, as the IRS would likely never catch it. When I talked to the Regional Manager a little later, she didn't seem to care, either.

So, since no one else in the company seems to think it's a big deal that incompetent, untrained, employees didn't do their due diligence and caused the IRS to throw away more than $40,000, I decided to blow the whistle and tell the IRS. I called the Inspector General's office on Thursday, who told me to send them an e-mail with the details. The next day, I got a reply from them with instructions on what IRS form to use for filing my complaint. That paperwork went out, via USPS Priority Mail, this morning.


TL;DR: I work as a tax preparer and found that fellow employees fucked up and a client got over $40,000 in refunds to which he wasn't entitled. When I told my bosses, they tried to sweep it under the rug. So, I dropped a dime to the IRS.

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No.


But if you told your manager about it and then went above his head and they continue to tell you break the law?  And in breaking the law they are bilking thousands of dollars of taxpayer funds?  Then yes, it is time to get others involved.  Even the IRS.

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TL;DR: I work as a tax preparer and found that fellow employees fucked up and a client got over $40,000 in refunds to which he wasn't entitled. When I told my bosses, they tried to sweep it under the rug. So, I dropped a dime to the IRS.

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1.  The preparer is obligated under 230 to inform the client that something on his previous returns is not correct.

2.  The client is responsible for all penalties and interest under the law.

3.  The client can sue this business if they do not pay the penalties and interest.

4.  If the OP is considered to be subject to the requirements of circular 230, he F'd up BIG TIME by telling the IRS the name and identifying SS of the client.  He can tell the IRS about general company practices, but telling the IRS about individuals is not kosher.

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Nice to see we have a bunch of FSA enablers around.

OP was right, plus it's a temp seasonal job, I say burn the bridge and get some of OUR tax money back. Then file for unemployment when you get fired

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Fired for cause = no unemployment.

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LAWL sounds like the client and business are in the clear legally after all.

OP prepare your anus, for a ghetto-goblin attorney's ding dong approacheth...

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Maybe. Maybe not. The fired employee can always appeal the decision of the unemployment claims examiner. And in this case I'd bet a dollar to a donut that he would win.

And by the way, OP: You done good. And the supporters of the FSA, and all the "Stop Snitching" adherants on this forum should be ashamed of themselves.

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Ashamed at refusing to be a Federal snitch?









Unregistered SBRs and Machineguns are tax evasion, too. How many people performing that bit of fraud on the government are you willing to turn in?

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Maybe. Maybe not. The fired employee can always appeal the decision of the unemployment claims examiner. And in this case I'd bet a dollar to a donut that he would win.

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They aren't taking money from the taxpayers.



But I think OKCPA above put it best.  As a CPA or professional tax preparer, take it up the chain in his firm and if they don't fix it, then just remove yourself from the situation by quitting.


I'm going to have quite a shift in thought processes going from law enforcement to public accounting.  

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Thanks.

Being a former Army NCO, my integrity is worth a hell of a lot more than the $10 an hour I get paid to do taxes for ghetto goblins.

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I'm going to have quite a shift in thought processes going from law enforcement to public accounting.  

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Maybe. Maybe not. The fired employee can always appeal the decision of the unemployment claims examiner. And in this case I'd bet a dollar to a donut that he would win.



And by the way, OP: You done good. And the supporters of the FSA, and all the "Stop Snitching" adherants on this forum should be ashamed of themselves.

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Agreed.  And if they fired him now it would not be with cause.  He is now considered a whistleblower, which almost now a days is a protected class and he could in turn not only get unemployment but sue the company as well.



 

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It's interesting seeing what are considered privileged relationships in various fields. For example, you've got attorney-client privilege, on one hand. On the other side, I'm a custkms broker (license in progress). Our relationship with customers is not privileged. If CBP comes asking questions about my customer,  I must answer. No way around it.

Posted Via AR15.Com Mobile

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You're just now finding out that many on ARFCOM don't support the government's goals? Haven't you seen all of the threads about not talking to the police? You've been here since 2002 and have over 4,000 posts, certainly this isn't really news to you.

As for the case at hand, I find it hard to work up a lot of sympathy that the government that wants to take my guns had someone take $40,000 from them. As a rule I don't condone illegal activity, which includes falsifying tax returns. However, I'm certainly not sitting here being sad that someone did it. Even if the client spent that money on crack and prostitutes I imagine that he still put it to better use than the federal government would have.

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Agreed.  And if they fired him now it would not be with cause.  He is now considered a whistleblower, which almost now a days is a protected class and he could in turn not only get unemployment but sue the company as well.

 

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LOL if you had paid attention to thread it appears that the original tax returns were correct, as the mother was the legal guardian of the cousins, and as such the constructive relationship for tax purposes was as if they and the client were siblings.

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LOL if you had paid attention to thread it appears that the original tax returns were correct, as the mother was the legal guardian of the cousins, and as such the constructive relationship for tax purposes was as if they and the client were siblings.

Judging by the tone of the OP, he saw 'fraud' where none existed in large part because he had a minority client, and violated ethics by tattling on that client to the IRS not to mention stabbing his employer in the back.

Why do you think he hasn't been back to this thread, even though he's logged in lately? He's starting to realize he done fucked up good, that's why.

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Or maybe the OP was under the impressiion that most of the posters would support him doing the right thing. Common GD mistake. I'm sure from now one, he'll restrict himself to only posting pcitures of what he had for dinner.

So, the OP does the legally and morally right thing, risking his job future in the process, and we get 7 pages (mostly) of people giving him a hard time. And by extension, supporting the FSA.

That makes me double check the website URL to make sure I wasn't on DU by accident.

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Jesus



So much for mind your own business.



Some poor bastards life is about to be turned upside down.

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There are just as many hypocrites in the right wing as there are in the left.

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Very true. I just didn't expect OP to get such a hassle on here for doing the right thing and saving the government money. Maybe I've been away from GD for too long.