Do you ask every year?

One of the due diligence questions for EITC or CTC is if the qualifying child is a citizen or a resident.

Do you ask this question every year? Or just answer 'yes' in the following years after you made the inquiry in the first year?

It is quite odd to ask your client if the same kid is a citizen or resident every year.

If the answer can never change, then I don't ask it.

The answer to that question can change. I suppose it is unlikely that you will have to ask the question if it has changed, but I always do. It's all in the delivery. As a former tax auditor in the UK, I was content to let the employer blame me if he had to institute a new policy as a result of my inspection. By the time he had done so, I was showing a clean pair of heels on my way to the Tube station. Ergo, I am quite happy to blame the IRS for this and I find most clients understand. In fact, they appreciate that I am doing a thorough job.

Lets' be honest, 95% of CPA firms are not asking any of those questions, ever. Our firm does zero % of returns while the client is in front of them. In fact less, than 10% actually come in for an appointment as most just drop off. Do you really think we are going to call and ask those questions.

The reason the software companies default everything to yes is because that is what the preparers want.

Maybe it is different for people who have walk ins or heavy turnover.

Yes, I ask every year. I have a form the client completes and signs that asks the questions.

If your client is a "Permanent Resident - holding a Green Card" who had their status canceled by USCIS because they were determined to be a "Public Charge" - then the rote answer will change.

Novacpa, is that part of the new interpretation that SCOTUS permitted a few days ago? I thought it just related to those who did not yet possess a GC. Mind you, I have to wonder how quickly anyone with a revoked GC will remain. Anyone with a GC is probably easier for USCIS to find than someone who is not fully in the system.

If you know them as friends before they become your clients, do you have to ask that questions? You know that their daughter was born in the us....just a bit stress out with all these interrogation.

if the client shows you a 1095-a, is it suffice to be a piece of documents for the residency?

Do you have to ask them for the document proof for residency every year because they may not live there for more than 6 months? How much is that proof the residency for the entire year?

Cyberdom, I think you have to take a step back and look at the totality of the information. Can you have a dependent on a marketplace policy without them residing with you. Haven't had to think about that very much, but I'd imagine the answer is yes. I don't think 1095-A is the whole jigsaw but it is a piece.

No, unless there is a really good reason to suspect the answer may no longer be true. Someone above said it - between my solo tax business as well as my former regional public firm experience, I don't ask many of the questions and most of my former colleagues don't either. That's not to say there aren't items worth the attention, but sometimes the questions are redundant and drags down efficiency. Hate to say it, but it is what it is.

Thanks, Skibum267. I am just frustrated with this client. Asking them for documents is like pulling teeth. I asked for school reports. He sent 1095 and told me that that is sufficient.

I think you need to tell them which documents are acceptable and what isn't. In IL you get a credit for school registration fees so I ask for that or library card. I was relieved when a client's refund was the same filing Single and HoH.

No, unless there is a really good reason to suspect the answer may no longer be true. Someone above said it - between my solo tax business as well as my former regional public firm experience, I don't ask many of the questions and most of my former colleagues don't either. That's not to say there aren't items worth the attention, but sometimes the questions are redundant and drags down efficiency. Hate to say it, but it is what it is.

I am just wondering. How is your firm going to handle it in case you get a EITC due diligence audit?

No, unless there is a really good reason to suspect the answer may no longer be true. Someone above said it - between my solo tax business as well as my former regional public firm experience, I don't ask many of the questions and most of my former colleagues don't either. That's not to say there aren't items worth the attention, but sometimes the questions are redundant and drags down efficiency. Hate to say it, but it is what it is.

I am just wondering. How is your firm going to handle it in case you get a EITC due diligence audit?

I don't do a single EITC return. If I did, I am well aware of the due diligence checklist and rules and would be more cautious on those returns going forward, but at this time of the 100 or so returns I do a year (I'm also a financial advisor and teach investments this time of year otherwise I'd expand a bit more), I don't prepare a single EITC return.

Skibum do you have clients with minor children?

Only a handful. My client base is mostly seniors. If anyone has experienced with best practices, let me know. My training in taxation has been limited so some of my habits may need improvement. I appreciate input, I’m truly here to learn. This forum has been great for that.

Skibum, I suppose, then, that you do not have very many clients with CTC or AOTC? Do you have any "young" seniors who are financially supporting their parents? You need to do due diligence for ODC as well. If you have any version of The TaxBook, you have access to the Tools for Tax Pros online. I use the due diligence sheet from there as a basis for asking good questions. There is plenty of space to make notes.

Sum

What % of 1040 clients do you actually meet with ? If you are not meeting with 95% of your clients which I suspect is the norm for most CPA's then do you really think they are asking questions about their three kids who they claimed for the last 15 years with no issues. Those checklists are nonsense.

Berkshire, it's my first year in business for myself. I am meeting with as many clients as possible. I daresay that number will drop as the younger clients get comfortable with Sharefile. I will need to modify how I collect that information, but haven't yet figured out how that will look. At my former employer's last year, we had a significant number of clients with due diligence - most clients were my former employer's age so had children qualifying for CTC or AOTC. We had a rough e-mail template for asking questions and the the response was surprisingly positive. We made it clear we were collecting the information to satisfy new IRS requirements, especially where CTC was concerned.