Question

The following scenarios are based on actual returns and situations that have occurred in this years VITA program. The responses provided here would be similar to those you would provide to actual taxpayers in the event a similar situation would occur.

Scenario

Inez Sanchez, age 49, ITIN # 933-12-1987 is married but has been separated from her husband since March 3, 2017. She is a housekeeper for Acme Hotels Inc. She has four daughters, all born and raised in the U.S. who lived with her the entire year who she fully supports. No one had any health insurance for the entire year

Name Date of Birth Social Security Number Earnings

Polet Sanchez 09/09/2006 454-11-2222 $0

Jessica Sanchez 07/07/2004 453-11-2222 $0

Stephanie Sanchez 05/05/2002 452-11-2222 $0

Juanita Sanchez 03/03/1995 451-11-2222 $8000

For legal reasons, she tells you that she wants to file a paper return. She also wants her refund mailed to her.

Inez’s Refund for 2019 was $4,600.

After completing Inez’s return, she mentions to you that many of her friend’s and co-workers who make about the same amount of money and have the same number of children got almost double of what she is getting?

Obviously, one of the major reasons is that she has an ITIN number and not a social security number which does not make her eligible for EIC. Another reason is because she has a child who is over 24 and makes more than $4250. Lastly she has a child who turned 17 in 2019 and is no longer eligible for the child tax credit

As usual the taxpayer is upset and believes that the return was not completed correctly. As the tax preparer or quality reviewer, your job is to explain to the taxpayer why your work is correct and why this changed occur

In the preparation process, all UIW-VITA procedures were followed and the results of your return are 100% accurate.

Instructions

For the purposes of this scenario, you must explain to Inez why her refund is the way it is. As the tax preparer or quality reviewer, your job is to explain to the taxpayer why your work is correct and why this return resulted in the refund that it did. Remember, you are dealing with a taxpayer who is unhappy with your work. For this assignment, you are not required to re-explain to me the results of the return again. Rather, I am looking for a procedure you would use to assure the taxpayer the result of your work are accurate. Remember, all of the policies and procedures that were used in the preparation process. Be creative.

P. S- This is a class related to tax in USA.

Answer 1

Inez

To start with - A tax return is a document filed with a taxing authority that reports income, expenses, and other relevant financial information. We at UIW-VITA follow all the processes and procedures in the preparation of the tax returns, we are all experienced and work under CPAs, tax attorneys, enrolled agents, and IRS agents.

As per the scenario - the first thing I will do is

1. Listen to the client (Inez) and understand her perspective.

2. I apologize to the client and say sorry if things have been inconvenienced.

3. I will call over the client to understand why she is unhappy and as a professional, we always think that when a customer is unhappy, there may be a very good reason for it. It gives us an opportunity to evaluate and improve the situation.

4. Ask the client what her problem was relating to the tax return and then try to explain to her the situation relating

to his tax return and why the refund is not as per her calculation.

5. I will try to explain to her that all the other client situations are not the same and give her return as an example compared with their co-workers. I will go line by line with the client about the inputs relating to the return process.

6. I will try to get more information from the client and correct her if she is wrong in her thinking by explaining to her the law and change that took place due to the recent tax law change (TCJA).

7. Explain to her the difference of having social security number versus ITIN number and how it affects the tax return in arriving the refund / due part.

For eg: if the client had a social security number, according to the law, she would have got $2,000 per child in the form of the child tax credit and if she had ITIN the number would have been reduced to $500 per child. This is one of the factors that affect clients' tax refunds.

8. Finally, I will consider giving a coupon or a certificate for a future discount. Giving clients a percent off coupon will make her feel as if they got money back even if they didn't.:)