Tax Returns That I Absolutely Will Not Do

While many tax preparers will do these types of returns, I will not. It is not my intention to refuse service to anyone. These decisions are made entirely for professional reasons.

1) Returns involving international taxation issues. I feel 100% confident about US tax returns and all 43 states that have income tax (except for New York, they go out of their way to make it very difficult for out-of-state preparers to do NY tax returns). I am not an expert on international tax issues and at this point in my career I do not want to become one. If you have a situation that involves something more complex than including foreign income or credits on a US tax return, find someone else.

2) Returns using the Married but Filing Separately ("MFS") filing status. This filing status almost always results in a higher tax burden and is done mostly because of legal issues more than tax issues. And if you have potential legal issues with your tax return I don't want to get involved.

3) Returns where your ex-spouse uses MFS in the current tax year, because they are required to list your name and SSN on their return and the IRS is therefore looking for an MFS return from you as well.

FYI a person who files MFS almost always qualifies to file as Single or Head of Household, which are MUCH better filing statuses. See the discussion on "Filing Status" here.

4) First-time clients who are selling / exchanging a rental property. The entire history of the rental property - depreciation, improvements, suspended passive activity losses - is on the prior year's return and copying all of that information just to take the property out of service is a very inefficient use of my time. Whoever did the prior year's return has this information on file and it is ten times easier for them to do it than for me. So please have them do it.

5) First-time clients who are hiring a preparer mainly to deal with the issue of planning for the exercise of stock options. Many of you have these options as a component of your tax return and that's fine. Calculating the proper tax treatment of these options requires me to have a history of your taxes (income, deductions, credits, dependents, etc). If I have not prepared your return in the past and don't have that historical information in my system I don't want to start with a year involving this item.

6) I will not amend tax returns initially prepared by others. Many preparers will, but I learned the hard way this is a bad idea. About 10 years back, I amended a return (which a taxpayer had prepared themselves) to include income they had omitted. Well, turns out there were many other mistakes on the initial return - and guess who became responsible for those errors because I had signed the amended return as a paid preparer? Never again....

7) Tax returns where your (adult) child is on your Obamacare Health Insurance Plan (listed on your form 1095-A) but the child must file their own return and CANNOT be your dependent based on age and/or income.

8) Returns that involve the so-called "back door" Roth IRA contribution - where money is put into a tax-deferred retirement plan (typical 401-K) to avoid the Roth AGI contribution limit, labeled "non-deductible" on a form 8606, and then converted to a Roth IRA. I have experienced way too many issues with the IRS on these types of conversions. I won't do a return involving this type of transaction.

9) Returns that have taken a Section 179 election (advance depreciation) deduction. This (a) creates unnecessary complicated differences between federal and state depreciation and (b) usually results in a larger long-term tax bill (in favor of the short term) and that's the opposite of how I work.

10) "Innocent Spouse Relief" Form 8857 (and anything to do with it). Same issue as Item 2 above. Won't do it.

11) Returns with different filing statuses on the Federal and State returns (MFJ on one, "Single" on the other).

12) I will file tax returns for any state - EXCEPT New York. The registration / compliance requirements are very burdensome (most states have NONE at all other than being licensed in your home state). So I am done with them.

13) Tax returns that are NOT in chronological sequence. I won't file a current-year return if you need to file for past tax years as well. Many items carry forward from year-to-year and filing newer returns before older returns can create quite a mess. Additionally, if the IRS thinks you might owe for past years and you have not filed, they may not process a current-year return that results in a refund.

14)  I will not prepare prior-year (past due) tax returns during the "busy" season (Jan 15th thru Apr 10th) of the current tax year.  The time to catch up on past due returns is May thru December (when I am not as busy).  I do not do ANY tax return work from April 10th thru April 30th (I have quarterly accounting and bookkeeping clients whom I service at that time).  I re-open for tax preparation work May 1st.  I do not charge for extensions - if you're not ready by April 10th we will file an extension and get the return done in May.

15) Gift tax returns. As of 2023, any individual can give any other individual up to $15,000 (in cash or property) with no tax ramifications. A married couple could give an individual up to $30,000. The DONOR (giver) might be liable for gift tax if the amount transferred exceeds those limits. I don't deal with this section of the tax code at all (form 709).

16) Any tax return involving Schedule "F" (Farm Income).  This includes income from crops and the sale of livestock.  (Maybe) the one tax form in the entire universe I have never actually done...

17) RETURNING tax clients who want to file after June 30th (except for those waiting for K-1 forms which can arrive very late in the year). I know extensions are technically good until October but I start coaching my daughter's soccer team in July and focus my attention there. Also (respectfully) I don't want to develop a clientele of perpetual procrastinators. The last thing I want is over 100 people filing the last week of April - been there, done that. If you are the wait-until-the-last-minute type of person you will be much better served going somewhere else. If you are a NEW client I will do your return after June 30th with the understanding you will be more timely in future years.

OK, I think that covers it. If I discover any more situations during the tax season that present problems I will add them here soon...