IDs & Filing Status
This filing status requires proof that a dependent lived with the taxpayer more than half the year and that the taxpayer provided most of the household support.
What is Head of Household?
A taxpayer says, “I claimed my child this year, but my sister claimed them last year.” This situation may result in what?
What is duplicate dependent claims?
A client brings one W-2 but “forgets” about their Uber income. This is an example of what?
What is unreported income?
A taxpayer claims daycare expenses but doesn’t have receipts or provider info. What must they provide if the provider refuses to give an SSN/EIN?
What is a signed statement by the provider and taxpayer?
Preparer notes that only say “Checked ID. W-2. HOH.” are considered what?
What are weak/non-compliant notes?
If a client’s driver license is expired, you cannot file their return until they provide this.
What is a valid government-issued photo ID?
A newborn baby cannot be claimed without this document.
What is a Social Security card (or ITIN letter)?
A taxpayer has $6,000 of self-employment income but no 1099. They must still provide what type of proof?
What are bank statements, CashApp, Venmo, or other transaction records?
Claiming Head of Household without any documentation is risky because the IRS will ask for what type of proof?
What is dependent residency and household support documentation?
The best way to structure preparer notes is using this acronym.
What is VIDEO (Verification, Income, Dependents, Expenses, Other Notes)?
A taxpayer wants to file Married Filing Joint but says, “I’m not legally married.” This is the red flag.
What is filing status doesn’t match legal marital status?
A taxpayer tries to claim their cousin who only lived with them for 3 months. This fails which test?
What is the residency test?
A client worked in Georgia but didn’t mention state withholding. This creates what issue?
What is a missing state return?
A client brings tuition receipts but not a 1098-T. What credit can’t be claimed without the 1098-T?
What is the American Opportunity or Lifetime Learning Credit?
If a client changes their story halfway through intake, you must do what?
What is pause the return until clarified with documentation?
The client’s name on their ID does not match the name on their Social Security card. This mismatch will cause what?
What is an IRS rejection?
A parent wants to “split” dependents with their ex-partner even though the children live full-time with one parent. This requires what form?
What is Form 8332 (release of claim)?
A client asks you to “leave off unemployment so the refund is higher.” This is an example of what?
What is fraudulent omission of income?
A taxpayer says they donated $2,000 in cash but has no receipts. Why can’t you claim it?
Because charitable donations require documentation.
If a client’s income seems too low to cover their reported expenses, this is considered what?
What is a red flag requiring documentation of support?