Jul 26, 2013

Confessions of a Mad Tax Accountant #1: Earned Income Tax Credit

honesty
 
If you are easily offended then here is your chance to stop reading this post. Confessions of a Mad Tax Accountant will not be politically correct. I will write about what most tax accountants will be too scared to say or write. The first confession will be dealing with some Earned Income Tax Credit clients.
 
Technically, the earned income tax credit (EITC) is is a tax credit to help you keep more of what you earned. It is a refundable federal income tax credit for low to moderate income working individuals and families. Congress originally approved the tax credit legislation in 1975 in part to offset the burden of social security taxes and to provide an incentive to work. When EITC exceeds the amount of taxes owed, it results in a tax refund to those who claim and qualify for the credit.
 
Trust me when I say that I'm nowhere close to be considered upper-middle class. I'm barely making the middle class income level. I understand that for some families, the EITC is needed and respected. However, I dealt with a great amount of people that think receiving the EITC is a bonus for being "poor." There was a two-year period in my career that I worked for someone that dealt with a lot of EITC clients. What I learned during this period shocked the crap out of me. I promised myself to never market my services to EITC clients UNLESS they meet the following standards:
  1. If you are dressed with $200 shoes, $300 sweaters, and $150 pair of jeans, then don't inquire about the EITC. Find someone else to do your tax returns.
  2. If you tell me that the EITC will pay for your Vegas vacation, then I'm not your tax accountant or travel agent. This tax credit is not play money.
  3. If you want me to make up a fake business so that you can qualify for the EITC, then you are disrespecting me by thinking your small fee is worth losing my license. Have a good day sir!
  4. If you are going to quit your job because the EITC is enough to cover your entertainment expenses for the next couple of months then I will not aid your plan to scheme the government.
  5. If you are claiming a child but don't know the basic information like the child's birth date and middle name, then stop being a dead beat parent and handle your responsibilities. Get out of my office before I decide to report you to child services!
You may think my standards are harsh or unrealistic. It is all good, maybe this is way I'm broke (lol)! However, I experienced crazy situations that you won't believe me even if I told you. I been cursed out for refusing to scam the government many of times. I promised myself to never lower my standards EVER. No client will be worth me going to jail. I'm too damn skinny to survive life in jail! I will not reject my moral for a little $100 preparation fee. Maybe some other tax professionals should show some morals too.
 
I will write about nine other confessions. Next confession will deal with bum clients! Stay tuned!

Visit the new and improved Tax Factor blog: www.thetaxfactor.com
 
 

8 comments:

Chris said...

The fraud rate on earned Income Tax Credit is now extremely high.

Chris

Owner Cel Financial Services
IRS Registered Tax Return Preparer
Registered bonded California CTEC Tax Preparer
Please visit my website for all your Fillmore Income Tax needs.
http://www.taxprepfillmore.com/

Jamaal Solomon, EA said...

You are right that EITC fraud is extremely high. Too high accountants and taxpayers view EITC as easy money.

Thanks for the comment and good luck with your practice!

Charmain said...

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Bwmillerdean Wellington said...

Really good post that give detail about confession of mad tax accountants. The first confession dealing with some earned Income Tax Credit clients. In order to prevent such situation in your business you need to best accountants wellington. Thanks for sharing the post.