I have been receiving some excellent responses to my earlier piece on the new IRS practice of auditing people who file amended tax returns claiming refunds.  I will pass along and report on these.

There is an interesting slant to this story that I hadn't considered until I received this email from another CPA:

Mr Guru - I didn't realize that IRS is now targeting 1040X's for full audit.  This does put a damper into some of my problem client solutions.  But, just the same, I appreciate your warning.  I'll see what happens around here regarding this matter.
 
Also, on the Jennings/H&R Block deal, your comment "Their free service offer is worth every penny."  Jeez, talk about a back-handed slam!  I take it you don't think highly of H&R BlockHead, right?

My Reply:

There's actually a connection between those two topics that I didn't notice until your email.

It has long been a very lucrative part of a tax practice for those of us who believe in truly minimizing taxes for clients in preparing amended tax returns for clients who used H & R Block.  We could very easily recover thousands of dollars in taxes that the clients had overpaid under Block's legendary wimpy approach to tax preparation, and we had loyal clients who were able to directly compare the two approaches.

This new policy of IRS auditing amended returns with refund claims will put a stop to many of those changes we would normally make to previously filed Block returns.  I have never heard of any connection between Block and this new IRS policy; but you have to admit that this will most likely help them.  I guess we could always still prepare the amended returns for new and prospective clients in order to illustrate the additional taxes they flushed down the toilet by using Block; but warn them not to send the returns to IRS unless they are gluttons for punishment of the audit type.

Thanks for helping me make this connection.

Kerry

 

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 12/07/2004 12:15:00 PM Send this post: