Current Federal employee looking at tax prep

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  • #3305777
    EA1Day
    Participant

    Good afternoon,

    Please forgive me if my question isn’t welcome here. I wasn’t able to find a more appropriate forum for my situation, but it seems this forum would be rather helpful!

    I’m a current federal employee, but have always been interested in tax prep. If I am to pursue this, I’d like to end up in a position where this is perhaps a seasonal side-gig while I maintain my current employment. I have a couple questions as it relates to my federal employment:

    1) Can a preparer be paid to prepare without the client expecting that they be represented before the IRS, should the need arise? (Current feds can’t represent a client before any federal agency).

    2) if I obtained an EA certification, how does that change the dynamic of my previous question?

    3) My agency will not allow me to be engaged in the preparation of self-employment tax returns specifically. Does that limit my options when pursuing this?

    Any advice appreciated. Thank you all in advance.

    -EA1Day

    #3305795
    Recked
    Participant

    Does this mean you work for the IRS and audit self-employed tax returns?

    Currently less than 1% of tax returns are audited, and there are lots of tax preparers out there that have limited representation rights.
    If a tax return you prepare gets pulled for audit, you can simply refer the client to another EA/CPA for audit rep and you do the back end work, or facilitate the other party in any way necessary.

    I would probably not mention that you won't be able to help them if audited.
    And if they do get audited, just sell it as a service to the client, that you are referring them to someone who handles this type of work more often and will better able to service the client in the audit process.

    I'm not really sure how to best answer all of your questions. I was not aware these sorts of restrictions were in place.

    Memento Mori - Kingston NY CPA & EA (SUNY Albany 2002)

    FAR-93 11/9/17 (10wks, 250 hrs, Roger 1800+ MCQs, Gleim TB 600+MCQs, SIMs)
    AUD-88 12/7/17 (3 wks, 85 hrs, Roger 1000 MCQs no SIMs hail mary)
    REG-96 1/18/18 (6 wks, 110 hrs, 1400 MCQs, no SIMs)
    BEC-91 2/16/18 (4wks, 90 hrs, 1240 MCQs)

    #3305798
    EA1Day
    Participant

    Does this mean you work for the IRS and audit self-employed tax returns?

    Currently less than 1% of tax returns are audited, and there are lots of tax preparers out there that have limited representation rights.
    If a tax return you prepare gets pulled for audit, you can simply refer the client to another EA/CPA for audit rep and you do the back end work, or facilitate the other party in any way necessary.

    I would probably not mention that you won't be able to help them if audited.
    And if they do get audited, just sell it as a service to the client, that you are referring them to someone who handles this type of work more often and will better able to service the client in the audit process.

    I'm not really sure how to best answer all of your questions. I was not aware these sorts of restrictions were in place.

    Recked,

    Thank you for your reply. I’m with SSA. I’m not sure what specifically the issue is with self-employment tax returns. I think that because my job involves benefit amounts, sometimes based on projected future earnings, they suspect I’d be in position to advise the client to pay more taxes in favor of a higher S.S. benefit. I could be wrong.

    Afain, thank you for the reply!

    #3305804

    Fed Employee – what type of agency? I am pretty sure you know your limitations. Not sure why you pulled a question here.

    You know your DO's and DONT's. If we can help you here – please be more specific.

    REG - 77

    BEC - 50,61 NINJA IN TRAINING

    FAR- NINJA IN TRAINING

    AUD- NINJA IN TRAINING

    #3305810
    EA1Day
    Participant

    Fed Employee – what type of agency? I am pretty sure you know your limitations. Not sure why you pulled a question here.

    You know your DO's and DONT's. If we can help you here – please be more specific.

    Thank you for your reply. I am in the process now with my agency in trying to figure out what specific limitations there would be, or if they would outright deny the outside employment altogether.

    I suppose that I could rephrase and reduce my question. How viable of a side-gig would tax prep be if I can’t be involved with self-employment tax returns, or represent any taxpayer directly or indirectly before the IRS?

    #3305813

    You would be very limited. Yes, it is possible. Unless you would like to gain more tax knowledge.

    I represent many clients on a daily basis. I would not know how to operate in tax world without that authority.

    Self-Employment tax. Does it mean you can't prepare 1040 with W-2's? (this shows self employment tax as well).

    REG - 77

    BEC - 50,61 NINJA IN TRAINING

    FAR- NINJA IN TRAINING

    AUD- NINJA IN TRAINING

    #3305900
    Recked
    Participant

    1040 with W2 does not show self employment tax.
    Schedule SE is only for self-employed…
    W2 show Social Security and Medicare taxes, but only the employee portion.

    Memento Mori - Kingston NY CPA & EA (SUNY Albany 2002)

    FAR-93 11/9/17 (10wks, 250 hrs, Roger 1800+ MCQs, Gleim TB 600+MCQs, SIMs)
    AUD-88 12/7/17 (3 wks, 85 hrs, Roger 1000 MCQs no SIMs hail mary)
    REG-96 1/18/18 (6 wks, 110 hrs, 1400 MCQs, no SIMs)
    BEC-91 2/16/18 (4wks, 90 hrs, 1240 MCQs)

    #3305903
    EA1Day
    Participant

    1040 with W2 does not show self employment tax.
    Schedule SE is only for self-employed…
    W2 show Social Security and Medicare taxes, but only the employee portion.

    I’m the OP, and I’m not a tax preparer or CPA, but I do work for SSA. Could he be referring to maybe an S Corp situation where it’s not technically “true” self-employment but the taxpayer owns the company? So 1040 and W2?

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