The Tax Attic — with Jerry Coon

What now?

The tax season ended on April 15. The question I now get to answer is what exactly tax professionals like me do for the rest of the year. No, we don’t take the next eight months off, although that does sound good. We do continue to prepare tax returns and we answer lots of questions.

Jerry Coon, Enrolled Agent

Last week, I discussed the fact that nationwide approximately 80% of all taxpayers file their returns by April 15. That leaves about 20% still in need of getting their returns filed. We prepare those returns all year around.

Personally, I’m not sure about that 20% figure as it pertains to West Michigan. In our market, it seems like it’s more about 90% file on time and 10% file later. In any event, that means we are working on and filing quite a few returns between now and next January.

The other factor that comes into play today is the complexity of our tax system. Back in 1978, when I started in the tax business, it seemed like taxpayers filed their tax returns and we didn’t really have any contact with those taxpayers until the next tax season.

An exception would be the time that a letter was received from our friends at the Internal Revenue Service or from the state of Michigan. In that event, we got a pretty fast call. That seemed to change in the late 1980s. Oh, we still got calls based on letters, but our tax system itself began to change. It started to become more complicated with phase-ins and phase-outs to almost all credits and deductions. Congress began tinkering more frequently with the system and frequently passing major tax legislation.

This bend toward complication coincided with the emergence of computers. The first software preparation programs were developed to help tax professionals prepare returns. Now, of course, there are many tax programs that also help taxpayers file their returns.

Action Tax Service has used Drake Professional Software since 1992. Without software, it would be darned near impossible to prepare many returns. All of that complication leads to more questions being asked by taxpayers.

Being open year round is not an option today. Congress passes laws daily, it seems, that affect all taxpayers. We prefer that taxpayers give us a call when they have a question or encounter a situation they haven’t seen before. Being proactive can quite often save tax dollars. Paying a few dollars for a consultation can sometimes be very well-spent dollars.

However, here is the rest of the answer to my initial question of what a tax professional like me does for the off-season. With the consent of my wife, Deb, I do take a week-long fishing trip to Canada. I also attend two four-day educational conferences, a two-day tax conference and two one-day conferences. I usually make it to the Knoxville Nationals World of Outlaws Sprint Car races in Iowa. I do a little camping and Lake Michigan salmon fishing. play softball in the 55-and-over league, and golf once in a while. The off-season is busy, but it’s busy with more than just tax work. After all, there has to be more to life than just preparing tax returns.

As I said above, I do attend various tax seminars and conferences throughout the year. With the advent of the Internal Revenue Service implementing tax professional regulation, the meetings should be a bit more interesting this year.

In case you missed the news, all tax professionals must register with the IRS this summer, must complete annually at least 15 hours of continuing professional education and, beginning next year, must complete at least one of three competency tests. Anyone not fulfilling these requirements will not be allowed to sign a tax return.

I think the conferences and seminars might experience a bump-up in attendance. In fact, I might just see some preparers that I haven’t seen in a class in a number of years. This is Jerry Coon signing off.

Jerry Coon is an Enrolled Agent. Action Tax Service is located on Northland Drive in Rockford. Contact Jerry at Action’s website at www.actiontaxservice.com.

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