Ch 7 Prep - Appendices Flashcards
What can happen if the IRS audit of tax professional comes up with a complaint
Can get forwarded to the Criminal Investigation division for possible prosecution and fines against the tax professional and/or company.
What documents verify taxpayer info
Income info worksheets, forms 8453/8879, Form 1040
Other issues to clarify and check?
Business losses
rental property losses
child care credits
E1C returns
Schedule A or C characteristics that manage to sweeten the pot
Income sources such as daycare and cleaning services
Schedule A or C with round dollar amounts
Schedule A with no mortgage, but high deductions that include non-documented items.
Record what to protect yourself and HR Block?
Efforts to obtain appropriate documentation and exercise due dilligence.
In high-risk cases, what should you do?
Advise the taxpayer: “This may expose your return to a higher degree of scrutiny by the IRS. Without excellent documentation, this could be challenged.”
If you know the taxpayer is not providing accurate info or does not have the documentation to verify a claim, what should you do?
You have the right to refuse to complete the return until accurate and sufficient documentation.
If you think a taxpayer is attempting to defraud the IRS what should you not do?
Do not accuse them of attempting to defraud the IRS. Instead focus on their lack of documentation.
What is the fastest growing crime in the US, according to the IRS?
Identity theft
What should you do to help prevent identity theft?
Take every precaution to protect the info from loss, misuse, and unauthorized access, disclosure, alteration, and destruction.
When speaking about specifics, what should you avoid?
Speaking numbers. Show them/point to them. Prevent others in earshot from overhearing.
What is Section 7216 of the Internal Revenue code?
Requires that you obtain the taxpayer’s written consent before using their info for purposes other than preparing their return or before you may share their tax return information with affiliates or third parties.
What is the Gramm-Leach-Bliley Act?
GLB
A privacy law that applies to tax return preparers. You must provide, at least on an annual basis, “clear and conspicuous notice of HR Block’s policies and procedures for protecting customers’ nonpublic personally identifiable info (NPI).
What is another name for the Gramm-Leach-Bliley Act?
The Financial Services Modernization Act
What does the GLB act require
Requires us to:
Disclose to clients the types of information we collect about them
Disclose to clients our information sharing practices.
Permit clients to decide, by opting in or opting out, whether or not we may share information with third parties.
Manage the physical security of offices, computers, and client records to minimize vulnerability to information theft and unauthorized access.
Manage security and integrity of our computer systems to prevent unauthorized access and protect the data processed and stored by those systems.
How is listening different from hearing?
Listening involves a more sophisticated mental process than hearing, demanding energy and discipline. It is an active process.
Listening in this context is:
Taking in info from the taxpayer while remaining nonjudgmental and empathetic.
Acknowledging the taxpayer in a way that invites communication to continue.
Providing limited, but encouraging, input to the taxpayer’s response.
Carrying the taxpayer’s idea one step forward.
What is level 3 listening?
Listening in spurts: tuning in and tuning out, being aware of those around you but mainly paying attention to yourself.
What is level 2 listening?
Hearing sounds and words, but not really listening: staying at the surface of communication, not paying attention to the deeper meaning. Hearing what the taxpayer said but not making an effort to understand the intent.
What is level 1 listening?
Active listening: looking at things from the taxpayer’s point of view. Acknowledging and responding. Being empathetic.
How to improve skills as a listener?
Find areas of common interest.
Take initiative to find out what the taxpayer knows.
Focus on central ideas in the conversation
Make meaningful notes
Hold your response until you have listened to the full point.
Ask questions to clarify understanding
Summarize the taxpayer’s statment back to ensure full understanding.
Focus on the content of the statement rather than delivery style.
What is the appropriate use of Open Questions
Keep taxpayers alert, involved, and thinking. Bring an uninvolved taxpayer back into the conversation.
What is an example of an open question?
How soon do you want your refund?
What is the appropriate use of Closed questions?
Prompted by BlockWorks. Guide the conversation to another topic.
What is a closed question?
Yes or no answers.
What is the appropriate use of a Rhetorical question?
Compel taxpayers to think, but not reply, when an answer is not required.
How do you ask effective questions?
Pause slightly to attract attention.
Ask the question and make eye contact and lift your voice at the end.
Pause until you get a reply
Rephrase the question to clarify or suggest the type of answer you desire
Wait for the answer and respond
What should you do before the interview in terms of handling questions from the taxpayer
Anticipate questions and prepare answers.
Prepare an answer and rehearse the delivery.
What should you do during the interview, in terms of handling questions from the taxpayer.
Repeat or rephrase the question for clarity.
Thank the taxpayer for asking a good question.
Answer the question and check for understanding.
If you don’t know the answer to a question asked, what should you do?
Repeat the question to give time to formulate the answer.
Ask for the question to be repeated. It may become clearer.
If you don’t know, admit it, but say you will find out.
