Lisa:

Unless you are sure that you have all tax liabilities paid,
please don't cash that check. It can be used to pay down
tax debts and may mitigate penalties and interest.

Charles

PS As to your original scenario, I believe the years you
filed yourself had TDI investigations on them, and the year
the EA filed did not. (or something like that!)

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Thanks to everyone who answered. I hadn't realized that the
quick payment *might* have been a mistake, so I'm coming
away from this resolved a) *not* to pay out any money I
might not recoup, and b) get the two outstanding returns
filed hopefully by Monday 14 June at the latest.

Thanks again;-)

Andy Katz

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"Gene E. Utterback, EA" <eagent[at]alliancetax.com> wrote:

- quote -

Thanks for the comments. Mr. Utterback. It never occured to
me that the IRS might have erred (oh, goodness;-) in issuing
the refund.

The letter they sent regarding the '03 return indicated they
believed that we do owe tax for '01 & '02 (we don't) and
hence they were holding up that refund.

We also received an awknowledgment of the '00 return about
six weeks prior to receiving the check. I can't locate the
document (are you beginning to see why it was so hard to
keep caught up here?;-), but it seems as though it would
behoove us to get '01 & '02 filed asap.

- quote -

One problem is that I've been dealing with the IRS for 15
years regarding this matter. At one point my wages were
being garnished. I had understood, from the IRS itself that
to pay off the tax debt would require them to tell us what
the minimum payment per month would be based on income,
expenses, etc.. That was pretty scary. About five years ago
I hired an attorney who was also a CPA to help. She informed
that payments were up to the IRS when I asked in a general
way what someone in our income range living where we lived
might expect to pay. Turned out her practice consisted
almost entirely of real estate sales;-)

Now that we've engaged the IRS itself the process has been
far simpler than I was led to believe. Once we get the last
two returns done, that ought to be it. The EA who prepared
'00 obviously did a good job, but since our income and other
circumstances haven't changed that much in the ensuing
years, we feel we *can* do it. We did our '03 return based
on his '00 (eg, alternative minimum tax), and although the
refund is smaller, that's to be expected because we had
fewer expenses.

In fact, given the possibility of that rapid payment being a
mistake and the IRS demanding it back, I don't dare risk
spending $1,500.00 that I might not recoup.

When I found out what his fee was I suggested he send in the
returns and take the fee off the top of the refund like a
literary or theatrical agent. Alas, he told me, he couldn't
do that:-(

Thanks again,

Andy Katz

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Lisa Katz <eak01[at]earthlink.net> wrote:

- quote -

Not at all likely, but it would be nice if it did.

--
To reply to me directly, remove the XXX characters from my email address.

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Lisa Katz wrote:

- quote -

The fact that a return is prepared be an EA generally should
have no impact on how a return is processed. But a return
that contains longwinded explanations could be handed off to
a higher level IRS employee and therefor subject to greater
scrutiny.

On the other hand it could be the result of Murphy's Law.

--
Frederick E. Jorden http://Tax-Accounting-Payroll.com
7825 Midlothian Tpk - 207 Richmond, VA 23235-5247
EMAIL knowtax[at]bigfoot.com
(804) 320-6210 FAX (804) 320-6211

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Lisa Katz <eak01[at]earthlink.net> writes:

- quote -

Other factors. IRS has no legal basis for holding refunds
pending unfiled returns. At some point they have to give up
and refund the money or start paying interest. If they
haven't issued the refund within 6 months you can sue.

Basically, the threat to hold up refunds is an idle one.

Phil Marti
Topeka, KS

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"Lisa Katz" <eak01[at]earthlink.net> wrote:

- quote -

As an EA myself I'd love to tell you nothing more than the
IRS bows to us! However, I do have to admit that this is my
ego talking. In over 21 years of practice I have come to
"BELIEVE" that the IRS "TENDS" to place a bit more
credibility on returns prepared by, and examinations
conducted through, either an EA, CPA, or attorney. Keep in
mind that "belief" like "faith" is the reliance upon an
idea, or ideal, when there is a specific lack of
substantiating supporting proof. I cannot prove that I got
better results with the IRS than a knowledgeable taxpayer
could have gotten on their own, but years of experience lead
me to believe that there is some extra reliance given
whenever a professional is involved.

Frankly, I suspect that IRS has erred in issuing you the
refund check, it should have been held until your other
returns were submitted. That being said, it is also
possible that the IRS has prepared SFRs (Substitute For
Returns) for you using information from their database and
your most recent return - NOTE, this is highly unlikely, but
it is possible. If the SFRs showed you would not owe any
tax it is possible, again though highly unlikely, that they
would have released your refund. Again, with over 21 years
in practice I've only had this happen once or twice. Don't
be surprised if the IRS sends you a letter asking you to
return the money until the remaining returns are filed.

As far as the fees for the returns go - tax preparers are
entitled to charge however and whatever they like.
Accordingly, fees vary - sometimes greatly and frequently
for no apparent reason. In our office personal returns
start at $250 and go up from there depending on the forms
and schedules included in the return, the condition of the
information brought in for us to use, the time constraints
placed on us and, quite honestly, the PIA factor generated
by the particular client. Our average fee for a personal
return is in the $500 to $750 range though we do have some
well into the $2,000 PLUS range - it just depends on all the
factors involved.

Can you get results similar to the preparers? As an EA, after taking a 16
hour test on taxation and passing a background check, he has to take at
least 24 hours of continuing education in taxation to maintain his license,
so he should be able to deal with the various tax law changes that impact
your returns. Without knowing the particulars of your return none of us can
comment on how complicated, complex or convoluted they are. I would venture
this though, they were apparently intricate enough that you didn't feel
comfortable doing them yourself at first, otherwise you wouldn't have gone
to the EA in the first place.

Good luck,
Gene E. Utterback, EA

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- quote -

Other factors I'm sure. While I would love to say just
because an EA did your returns they went thru the system
quicker, that would be a bold-faced lie. We don't have any
additional "pull" having those returns cleared thru the
system any faster than you do.

Helen, EA in PA
50 miles, 3 days, 1 cause - Multiple Sclerosis Challenge Walk for the Cure
October 1 to October 3, 2004
Donate on-line at www.msandyou.org

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Hello everyone,

It goes like this: for reasons too stupid to elucidate we
wound up not filing federal income tax for twenty years.
Over time we've managed to catch up with most of it (our
state taxes have been caught up). Anyway, to make a long
story short, after filing the requisite closed years, I had
an EA here in Manhattan do our open years. Not willing to
abadon stupidity all at once, I neglected to ask him what is
fee was per return ... how much could it be? I figured 200
to 400.00 per. Turned out it was 750 per.

So I figured let him do 2000 and we'd do 01 & 02 ourselves.

We sent 2000 in along with our regular 03 return. IRS
replied to 03 first, they weren't sending any refund until
we got caught up with all the years, okay. Fair enough. Then
last week we received a check in the mail, nothing more. It
was for the total refund indicated in the 2000 return.

"This is a joke, right?" my wife said.

As far as the numbers go, I think we can get results similar
to the preparer. He's a good guy, but the returns aren't
complicated, and I hate to pay $1,500.00 for something I can
easily do myself. Still, I wonder if having an EA's name on
the bottom of the return didn't expedite payment by the IRS.
We were totally shocked to receive such rapid, unquestioned
payment, especially when two years remain unfiled, and the
one we filed ourselves is being held up (though I realize
they're handled by different offices), and we're not in a
huge hurry for the refunds, we're talking 10,000 to
12,000.00 for both, so it might be worth paying 1,500.00 to
expedite matters.

That is my rather long-winded question, was it likely the
IRS's alacrity depended on the return being done by an EA?
Or were there other factors?

TIA

Andy Katz

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