Taxes: Unsure about the Documents Clients Provide to you? Here is what to Do

Tuesday, July 28, 2015 Print Email

More often than not, many clients take a lot of paperwork in the offices of those who prepare taxes? Have you ever wondered what the best way of pointing out that the records are not only clear but also complete is? This is necessary so that one does not land in trouble. Clients may also withhold information from you. It is therefore important to know how to deal with them.

According to Twila Midwood who is an enrolled agent at Advanced Tax Centre, one needs to ask for substantiation as delicately as possible. He tells clients that the type of questions asked are the same ones that IRS asks when carrying out their audit. The engagement letter categorically states that clients are the ones who have the responsibility and should maintain and keep all records for substantiating any item in the tax return.

There are several issues and problems that can arise from doubting the records of a client, EA Sherry Whah confirmed. Such issues include missing records, estimated or unclear records, and even claiming dependents that are not appropriate. In case issues like these arise, it is recommended that the tax payer is aware of your worries. In addition, correctly reporting it at present is better instead of risking an impending penalty through an audit.

In a JGL Managing Consulting, Jim Loperfido stressed of the importance of a client being transparent and said that they can even be stricter. With time, this works. There are a number of clients who appreciate it; others don’t but everybody appreciates that it is for their own good.

Enraging those who are dishonest

Jeffery Sauer in Minn is able to detect the problem from afar. Perhaps there are many people who keep submitting but they don’t keep the details. He said that when a client submits more than ninety percent of a vehicle’s business use; that situation is doubtful. Donations are subject to problems. It is a big challenge to educate clients when it comes to this situation. Small businesses are also expected to print their Profit & Loss account and not just pull numbers anyhow.

Source: ReadyRatios

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