Stuart Bronstein wrote:

- quote -

Hence, I would continue to advise a cautious approach to
unpaid preparers who are functioning OUTSIDE of the
protection afforded by officially sanctioned tax volunteer
programs.

MTW

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MTW wrote:

- quote -

The terms of section 6103 prohibit any government employee
or "other person" from disclosing return information. I
didn't see an exemption for unpaid preparers or anyone else.
So my educated guess is that the answers to all of your
questions would be "no."

Stu

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MTW <mtwingcpa[at]yahoo.com> wrote:
- quote -

This last one could include pro bono tax preparation through
the VITA/TCE/AARP-TaxAide and similar volunteer programs,
where the volunteer has been certified to rpepare simple tax
returns.

A volunteer acting within thhe scope of this certification
receives protection under 42 USC 14503, Public Law 105-19,
The Volunteer Protection Act of 1997

The relevant portion of that act states

SEC. 4. LIMITATION ON LIABILITY FOR VOLUNTEERS.
(a) LIABILITY PROTECTION FOR VOLUNTEERS- Except as
provided in
subsections (b) and (d), no volunteer of a nonprofit
organization
or governmental entity shall be liable for harm caused
by an act or
omission of the volunteer on behalf of the organization
or entity
if--
(1) the volunteer was acting within the scope of
the
volunteer's responsibilities in the nonprofit
organization or
governmental entity at the time of the act or
omission;
(2) if appropriate or required, the volunteer was
properly
licensed, certified, or authorized by the
appropriate
authorities for the activities or practice in the
State in
which the harm occurred, where the activities were
or practice
was undertaken within the scope of the volunteer's
responsibilities in the nonprofit organization or
governmental
entity;
(3) the harm was not caused by willful or criminal

misconduct, gross negligence, reckless misconduct,
or a
conscious, flagrant indifference to the rights or
safety of the
individual harmed by the volunteer; and
(4) the harm was not caused by the volunteer
operating a
motor vehicle, vessel, aircraft, or other vehicle
....

__
Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH

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Stuart Bronstein wrote:

- quote -

You are generally correct with respect to responsibility for
signing the return, but that's not really what I'm getting
at. The questions I'm raising are:

1) Does an unpaid preparer have a lesser responsibility with
respect to the protection of a client's confidential
information than does a paid preparer?

2) Is a taxpayer entitled to less privacy protection by
virtual of using an unpaid preparer, than he would otherwise
be entitled to if he used a paid preparer?

3) If an unpaid preparer was sued in any form of civil or
criminal matter, at either the state or federal level for
making unauthorized disclosures of client data, would the
fact that he had not been paid constitute an irrefutable
defense?

If the answer to either of these questions is "yes," then I
would dearly love to see some "authoritative support" for
such conclusions. <grin
MTW

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Dannie wrote:

- quote -

That sounds like a prudent procedure under the
circumstances. I suppose you could give the client a
diskette copy of his tax data file, and that ~might~ save
you some reentry time in the future ???

MTW

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MTW wrote:
- quote -

Maybe nothing that limits its applicability, but do you find
anything that explicitly says it applies to transactions
without consideration? I think that is the crux of the
matter, and without consideration, it ain't "trade".

- quote -

Can't imagine anyone calling me "Dude.!" (grin In fact I
can't imagine having a pro bono client even. Only time I
have had was year before last for two reservists called to
active duty. Their returns were "no charge', however I did
as custom, sign them.

From a precis published by the FTC:

"The Financial Privacy Rule governs the collection and
disclosure of customers' personal financial information by
financial institutions. It also applies to companies,
whether or not they are financial institutions, who receive
such information."

see: http://www.ftc.gov/privacy/glbact/

So, my take on it all, is that if trade is involve, meaning
a business transaction with consideration given by the
"purchaser", or "user", then it applies.

ChEAr$,
Harlan Lunsford, EA n LA
Wed 26 Jan 2005

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"MTW" <mtwingcpa[at]yahoo.com> wrote:
- quote -

One reason why I tell all people I do returns for (and don't
charge) that I am keeping no copy of any of their paperwork.
I do make a copy for them and it is up to them to bring me a
copy of last years returns before I attempt to do the new
year. This is a pain and I have done 1040x's but it means
reentering the data from the paper 1040.

Dannie

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MTW wrote:
- quote -

I've never studied this. But my understanding has been
that, if you charge for doing a return you are required to
sign it, but if you don't charge, you are not. But that's
all I know about this, if that's even accurate.

Stu

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Harlan Lunsford wrote:

- quote -

I can't find anything in Gramm-Leach-Bliley or related
regulations that explicitly limits its applicability to
PAID preparers. Are you suggesting, for example, that all
of those companies offering "free" prep/efiling services
are not required to comply with the FTC regulations?

- quote -

I hope so, too. I would especially like to hear an
assessment of the liability an individual might face if he
has possession (without explicit permission) of confidential
tax data belonging to others and receives a subpoena for
same.

(Imagine this scenario: One of your pro bono clients owes
back alimony or child support to a former spouse. Former
spouse gets wind of the fact that you have been preparing
returns for people around town and has her attorney slap you
with an enforceable subpoena seeking disclosure of any
related financial information in your possession. Client
shows up at your place with a pitch fork in hand and says,
"Dude, I never authorized you to keep any data of mine!")

MTW

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MTW wrote:
- quote -

Doubt it, Mike. Graham-Bleach-Lively (somethinglikethat)
applies for paid preparers is my understanding. And since no
"consideration" changed hands, FTC rules don't apply in my
opinion. Maybe some legal beagle will/can weight in on
this ?

ChEAr$,
Harlan Lunsford
Monday, 24 Jan 2005

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Vic Dura wrote:

- quote -

Nevertheless, I would guess that you need to furnish your
"clients" with an FTC-style privacy policy statement and
offer them an opt-out with respect to record retention.

MTW

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"MTW" <mtwingcpa[at]yahoo.com> wrote:
- quote -

Good question and I thought about it but don't have an
answer. Since I don't sign the returns, the main reason I
keep the files is in case the TP wants to amend during the
year. I didn't mention it in the original post that you
quote, but this is a small town (900 people) and I often see
these TPs in the library throughout the year. I'm often
there reading and they often ask a question about the return
or a refund. I've only had one case where I had to do a
1040X and I was glad I had the file. They know I keep the
file because I tell them when they "..come back next
year.." I'll be able to import the previous years relevant
data.

I don't ask them to sign an acknowledgement about retaining
the data but since maintaining the data doesn't make me
privy to anything that I wasn't already privy to, I don't
worry about it. These folks are my neighbors, nobody else
sees the files and they are password protected.

The TPs that I help are mostly very limited-income folks
that haven't a clue about how to fill out a simple return.
If I didn't help them, it would probably cost them $50 to
get the return done. That's a lot of money to these folks
and they are grateful to be able to avoid the cost and I am
gratified to be of some small service to them.

It's an interesting question and no doubt I can be faulted,
but in our society if you don't do something because you
_may_ be faulted, there's just not much you will ever do.

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

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- quote -

I teach the VITA and AARP/TaxAide tax instructors/counselors
courses in central Ohio but I don't have the book in front
of me.

Basically there is a federal law, around the late 1990s,
that protects volunteers who were certified to do their
volunteer preparation by a federal agency like the IRS or
its designate, from neglience etc. The kicker is you have
to be certified, which I am, and my student instructors are
and the tax counselors are. So when we do pro bono tax prep
we are protected against lawsuits by statute. You are not
certified (it's an annual thing) so you are not protected
by this law.

__
Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH

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- quote -

Thanks Vic. Sounds like good advice. I also have been
requesting from TP a copy of last years federal and state
tax returns. For many older taxpayers there is not much
change from year to year and if their is, well it might
point to an overlooked deduction/income. Dannie


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Vic Dura wrote:

- quote -

But I wonder about that. Since you are not a paid preparer,
and you are not operating under the "protection" afforded to
volunteer preparers associated with the IRS, what right do
you have to retain ANY information? I'm not being critical
here, I'm simply raising the question because I'm not sure
how your situation should be handled.

MTW

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- quote -

Although I do a great deal of work, pro bono, as a paid
preparer, I have always signed all of my returns. I do
this, whether or not I charge a fee. Often I don't know
whether or not I will be paid and the signature block is
already printed on the return. There are times, if I
remember, or know in advance, that it is pro bono work, I
print "Pro Bono" in the signature block.

"Jack" - John H. Fisher - TaxService[at]aol.com
Philadelphia, Pa - Atlantic City, NJ - West Wildwood, NJ
My Newsgroups & Boards at: http://members.aol.com/TaxService/index.html

Where Ignorance is bliss, 'tis folly to be wise!=

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- quote -

I am in a very similar situation. I was never a tax-pro, but
I have been a volunteer tax preparer for several years
through the IRS TCE/VITA program. I no longer wish to be
associated with the IRS program, so I now provide free tax
assistance on my own through the local library. My personal
rules are:

1) I don't sign the return.

2) I keep a copy of the return as I prepared it. This is
mainly so I can import data for the next year's return or
provide assistance to the TP if he looses his return or
needs to amend it. It also provides me with a record of what
I provided the TP vis-a-vis what was filed with the IRS.

3) If I run into something that is too complex for my level
of experience, I refer the TP to a tax-pro. This happened to
me once when a TP had a Sch-C new small business start-up
and the auto/vehicle use was a mess. I did the rest of the
return but referred him to a pro for the schedule-c.

4) I don't prepare the return at all if the is anything that
I see that is seriously wrong, incorrect, or inconsistent. I
have never run into this problem, but if I do I know how I
will handle it.

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

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Helen P. OPlanick EA wrote:
- quote -


Maybe a little clarification is in order. When Helen says
that "our clients are final authority on what is sent in to
the IRS, what she means is the client is the one who signs
the return. As paid preparers, however, we are on the hook
for interpreting the law correctly, and when we sign the
return, we vouch that it's correct and letter perfect as far
as we know.

She was not saying that any client can overrule our
interpretation of the law, for if we know that any client's
interpretation or desires as to what goes onto the return,
we simply do not do the return.

If the client mails it in, of course he is the final
arbiter of what goes to the IRS.

is that clear? I hope.

ChEAr$,
Harlan Lunsford, EA n LA
Mon 17 Jan 2005

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The person filing for the tax is responsible for the correct
tax payment. The IRS would only come after you if
deliberate fraud were the case, not arithmetic errors.
However, the filer can sue whenever and whomever they want.
Having them sign a disclaimer for unintentional error can
help alleviate this, but not fully eliminate it.

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"Dannie" wrote:

- quote -

I don't think you meant "false," as that would be a crime,
whether you signed it or not. :-) But if you're not a
paid preparer, then the preparer penalty for certain kinds
of understatements doesn't apply. This penalty is not as
easy as it sounds for IRS to apply anyway, even if you were
compensated.

Fred F.

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