Tax Preparers

[TiconderogaCCB]

Does a tax preparer who is working for a large firm, comparable to Jackson-Hewitt, or HR Block, have to be atleast eighteen years old to file taxes?

What penalties would a company like that be fined in the event that they broke such regulations?

Would a persons taxes filed by someone younger than the requirment be able to seek legal damages against a firm for mis-represenation?

 

[Michael Wechsler]

Originally posted by TiconderogaCCB:
Does a tax preparer who is working for a large firm, comparable to Jackson-Hewitt, or HR Block, have to be atleast eighteen years old to file taxes?

What do you mean by "file"? Filing can mean something as simple as sending a form via mail and I would not think that you have to be 18 to do this. If the form was not sent then the firm may be liable to you for not filing or possibly negligence in hiring but I'm not sure that is really the issue here. If you are talking about preparing the form, that is different than filing. Who signed the form as the preparer? We'll need a few more details to understand the facts and the real issue.

 

[TiconderogaCCB]

Tax Preparer

Let's use this senario and you tell me what the legal result would be.

A person goes into a tax firm. An individual does their taxes, who is under the age of 18, but does not inform the customer. The preparer completely fills out all the forms and offers advice. When the customer leaves. Someone else, who did not do the taxes, signes the ERO or prepares line as if they had done the taxes themselves.

What would happen, what laws would be broken, and what could the customer do to the company?

Please give me the highs and lows.

 

[Michael Wechsler]

I can't give you an evaluation but just offer a common sense, discussion type response. As you can understand, a true answer can only be obtained with a real consultation with an attorney, which includes an analysis of all materials and clarification of all facts.

I would think that if the signator had reviewed the work done by others and approved that it was done correctly, there may not be a problem with there being a misrepresentation. I would think that a CPA could have their office workers do some of the clerical work to save time and that the CPA could review the work to make sure it was done properly. It all depends upon how the IRS interprets what it means to "prepare" taxes.

It seems here that there is an implication that the review was negligent so that the signature is then a misrepresentation of preparing the forms.

The next question is what are your damages? I don't think that you would get automatic damages because someone violated their state license to be a tax preparer -- that is between the state agency and the preparer. What it does do for you is assist you with the issue of proof of negligence.

So, what were your damages? If you had to have the taxes done over elsewhere and it cost you money, the additional costs you had in doing it the second time over -- those are damages. This would seem to be a breach of contract case and I don't know whether you could obtain punitive damages, which are very rarely awarded and only for truly heinous acts.

 

[rbrown100]

tax preparer under 18 years of age

You pose 3 questions, but as another poster noted it's not clear whether you're referring the minor filing his own tax return or preparing a customer's return for pay as an employee of a tax store. If you mean the former, the answers are:

1. No. A working minor (at least one over 13 as of Jan. 1 of the tax year at issue) must file a return and pay tax. Also, it seems there's no reason that he can't sign the return himself; therefore he's required to sign also. In short, he's got the same duties as any other taxpayer.

2. Any employer (it's irrelevant that here it's a tax return store) need only mail a W-2 to the minor and the IRS by Jan. 31 of the following year. If that's done, the employer incurs no federal tax penalty. ( Don't ask me about possible child labor laws!)

3. Goes nowhere.

However, I think you intended to refer to the second scenario. In that case the answers are:

1. and 2. The IRS regs on preparers penalize misconduct and lapses in record-keeping; I've never seen an age requirement but if there is one lurking in some obscure pronouncement, I'd bet a lot that it's an exceedingly minor infraction, with small if any penalties, and that no one cares about, including the Service. As long as the kid signed the return as a paid preparer and entered his correct ID number (and the tax store keeps copies for 3 years, etc.), no one's getting penalized.

3. Unless the customer-taxpayer can show that the kid botched the return AND that any such mistakes cost him money or otherwise actually, he hasn't been "damaged" even if there was an intentional misrepresentation. So there's no case against the kid or his employer.

 

[TiconderogaCCB]

reply to "tax preparer

Note: the "kid" did not sign the return! another preparer signed it without review, as if she/he had done it themself.

 

[Michael Wechsler]

Re: reply to "tax preparer

Originally posted by TiconderogaCCB:
Note: the "kid" did not sign the return! another preparer signed it without review, as if she/he had done it themself.

The last comment was excellent and very thorough and from someone who seems to know the area well. It would seem that the last point #3 is the most appropriate one to highlight -- if there are virtually no damages to you then chances are that you will not recover much. This would seem to be a typical negligence type case which will focus on what your damages were.