re: question about filing taxes

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For an H&R Block franchise to be profitable the franchisee must keep his labor costs to about $15 per hour of productive time per employee. Please tell me where you get qualified tax return preparers for $15 per hour?

I have no facts or numbers to substantiate or dispute the labor costs of a Block franchise or a Block company "store" to remain profitable. As with any business, I would think those costs depend on the location of that particular business, the types of returns, and the COL in that geographic area. "Qualified" is a very relative term. A 1040EZ or a 1040 can be prepared by a CPA, the taxpayer, or someone who has taken a "crash" course in basic tax return preparation. I certainly would not advise anyone with a K-1, trust, or clergy return, for instance, to have their tax return self prepared or prepared by someone with little or no experience, qualifications, and/or certification in those returns.

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As for penalties and interest incurred due to errors made by a CPA you should learn a little about the tax laws that allow waivers of penalties when the taxpayer reasonably relied on the advice of a professional. Thus, any CPA worth a damn will be able to get the penalties waived, and then the CPA will likely pay the interest.

When someone brings me a processed return that includes penalties and/or interest, I always ask the taxpayer if they have discussed this problem with their tax preparer or if they want to discuss it with their original tax preparer, whether it be a CPA, their mother-in-law, or a paid tax pro. It is unethical, in my opinion, to not present the taxpayer with the advice and option to have their original tax return preparer "lick his calf over". Sometimes the tax payer will choose to do this and sometimes they won't. A waiver of penalty is a wonderful relief to any taxpayer IF this waiver is applied for AND accepted by the IRS. The key word here is IF. There are some tax preparers, who are, indeed, not "worth a damn". And there are some CPA's who are also not "worth a damn". In any event, in 12 years, I have never encountered anyone with a faulty, CPA prepared return who has had their interest paid by the CPA or even offered to be paid by their CPA. And this is also after I have presented the taxpayer with my discovery of errors and they have exercised their option to return to their original preparer for a 1040X. The responses from the taxpayer that I have received is, "He (my CPA) told me that I was responsible for the interest and penalties since I signed the return." Or, "He told me that he can amend the return, but it will cost me "X" dollars to amend it." Or, "He said there is nothing wrong with my return and it is filed correctly." Just as with these negative scenarios, I am willing to concede that there are many, many positive scenarios where ethical, competent CPA's have filed for waivers of penalties, and I am willing to bet that there are some ethical, competent CPA's who have "likely paid the interest". But for those returns I have amended, this has not been the case.

[quote] Any additional tax is rightly the obligation of the taxpayer.

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This is absolutely correct...and fair to both parties.

A CPA wears many hats. Too many people, I believe, look at a CPA as just a tax preparer. That is a very misguided and short sighted perception. You spent a lot of time and money earning your degree and certification. Obviously, you are a very competent, ethical CPA and you care about your clients' financial well being. I am a very competent, ethical tax preparer and I also care about my clients' financial well being. I am not a CPA and I do not claim or possess a CPA's credentials. I will never claim to know all the tax laws, rules, and regulations. There are just too many of them. One thing that I have learned in 12 years of tax preparation, is that the more I know, there is more that I don't know. Tax law is always evolving, confusing, and sometimes, very complicated. I don't have all the answers, but I can research it and, hopefully, discover the answer. The most important lessons I have learned are: Never be too proud to admit to yourself that you don't know for sure and you need/want another pro's opinion and, if you are wrong and make a mistake, admit it and make the necessary corrections. Honesty and integrity are paramount. That business philosophy works well for me and has worked for me for the last 12 years. BTW, I enjoy your posts. Thanks for your input and contributions to the tax discussions!