Tax Practice News
Editor's Note: This article is from our new publication, Tax Practice News. A news source for the tax preparer; to help get your firm into good habits, efficient workflow procedures and help with the overall success of your firm. Subscribe to this weekly publication, here.
I have had the pleasure of reading many articles and watching conversations around the new tax forms and how “easy” tax preparation will be. It has been interesting to say the least. As I sit here in my office staring at a 700 page Tax Reform finder, I have to wonder why anyone would think that just because the forms changed that the actual preparation of the returns has become simpler.
In January of 2018, I went to the Don Farmer Seminar for eight hours of learning as much about the changes that were coming down the pike for the US Taxpayer. After the eight hours, we got through about 30 pages of the 700 page book. This tax reform was way too important to only learn about 30 of the 700 pages of changes and/or updates and when those changes/updates would go into effect. Some were beginning as soon as January 1, 2018, some were beginning as soon as January 1, 2019, and then some would expire after a certain number of years while others appeared permanent.
In September, I decided to take a trip to Florida to the IRS Tax Forum for four days of learning. Yeah, I know, tough job getting to travel to Florida: TO SIT IN A CLASSROOM! Now five days of seminars and 40 hours later, I am finding myself reading the opinions on the fact that tax season will be easier and we are going to lose the majority of our Form 1040 clients. I have a couple of positions I would like to take on that. First, yes, I think people are going to try to do their own returns to save money. Unfortunately, those who don’t even understand what a 1095-B is are going to “do it themselves.” Good luck with that. Second, I would like to say that with the tax reform, the changes are so dramatic that I think that our clients are going to ask more questions, want to understand the good, the bad and the ugly with regards to their return, and guess what… they will think that we will charge them the same as last year!
Tax Reform and Tax Form Changes are actually antonyms. Tax Reform is the laws around income tax and will be the factors which will dictate what the taxpayers will actually be liable for. Tax Form changes are simply changes to where you have to report the various pieces of your financial world in 2018. The tax law changes are not easy to follow and there are a lot of factors when it comes to each individual situation.
To sum it up, paying a professional to prepare your return isn’t a waste of money. Tax preparers are held to a standard just like doctors and lawyers. Taking a chance that signing on a line that states “Under penalties of perjury, I declare that I have examined a copy of my electronic individual income tax return and accompanying schedules and statements…”. What that means is that the taxpayer is signing off at the risk of perjuring themselves if they have not reported all income on their return. I have been dealing with many IRS civil and criminal audits where the taxpayers were “self-preparers” and let’s just say, $500-$1000 for a professionally prepared return is nothing compared to the $5,000 retainer for the civil audit representation or the $20,000 retainer for a criminal audit representation.
For those individuals who prepare a very simple return, yes, makes sense to file your own, that has always made sense. But just because the IRS makes form changes to make it “easier,” I’m going to call that a bunch of hogwash (or BS). Don’t worry practitioners, if anything this whole discussion will make us more money, or take a couple more years off our lives during this next season. Best wishes to all of you as we head through this journey together as of today, according to the IRS, January 29 will begin the filing season.
Dawn Brolin, CPA, CFE and Founder of Team Brolin
Author Bio: Dawn W. Brolin is a Certified Public Accountant, Certified Fraud Examiner, and CEO of Powerful Accounting, LLC, a nationally recognized accounting, tax, forensic and fraud, IRS Representation as well as a QuickBooks consulting firm. Dawn’s list of professional accomplishments is extensive and includes speaking and consulting for prestigious companies. Named “Top 25 Most Powerful Women in Accounting” 2012-2017 by CPA Practice Advisor, a “Top 10 Managing Partner Elite – Great Accounting Firm Leader” in 2017 by Accounting Today, and selected as a “Top 40 Under 40” by CPA Technology Magazine.