tax prep

benchmark 1040 fee flattens out at $233

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rates up only $4 in two years for “main street” firms.

most tax professionals will be charging an average of $233 for a typical itemized return this year, relatively unchanged since the beginning of the recession, according to a new survey of national society of accountants members.

the new $233 benchmark represents barely a $4 increase in the two years since the last biennial survey, when accountants posted a 10% advance from the 2007 poll, which followed a scant 2% gain from $201 in 2005.

the survey of nearly 8,000 tax preparers by the nsa found that the average fee for preparing an itemized form 1040 with a schedule a and a state tax return cost taxpayers only $233 this year. rates for non-itemized returns are also largely unchanged at $128 for a form 1040 and state return without itemized deductions.

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are refund anticipation loans dead?

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“last nail in the coffin.”

via consumeraffairs.com

the federal deposit insurance corporation has notified republic bank & trust of kentucky that the bank’s high cost refund anticipation loans are “unsafe and unsound,” effectively cutting off jackson hewitt and liberty tax, the second and third largest tax preparation chains in the country.

the fdic’s action follows a similar action by the office of comptroller of currency, which issued a regulatory directive on christmas eve against hsbc (h&r block’s ral partner bank) prohibiting that bank from making rals.

“this may be the last nail in the coffin for rals,” said adam rust, research director for community reinvestment association of north carolina. “if so, we will be glad to see the death of these high cost, high risk loans.”

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new irs requirements could force big shake-out in tax prep industry

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wall street: mom-and-pop tax shops in peril.

john hewitt, the founder of jackson hewitt and now ceo of liberty tax, expects a huge shakeout because of the new irs requirement for paid tax-return preparers to register with the government.

john hewitt
john hewitt

market share for the two largest tax chains, h&r block and jackson hewitt, has eroded by about 9% in the past four years as do-it-yourself online tax software gained ground. turbotax, for example, grew by about 121%. but the new irs ptin rules may slow the decline by forcing out mom-and-pop paid preparers, according to wall street analysts. read more →

how costly loans drive the tax prep industry

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excerpts from the irs report on tax return preparers. get the full report: free download here (pdf, 55 pages). related: irs seeks to regulate tax pro’s today, a majority of u.s. taxpayers rely on tax return preparers to assist them … continued

irs seeks to regulate tax pro’s

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but will new exam confuse taxpayers? via irs the internal revenue service kicked off the 2010 tax filing season today by issuing the results of a landmark six-month study that proposes new registration, testing and continuing education of tax return … continued

irs clarifies code section 7216

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nsa says:  yes, you can talk to your own clients. via the national society of accountants as tax return preparers should be aware, code section 7216 establishes a criminal penalty if a preparer knowingly or recklessly discloses or uses any … continued

jackson hewitt loses bank funding for ral’s

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jackson hewitt’s key bank has reportedly cut off most of the money it used for tax refund loans. regulators ordered santa barbara bank & trust to stop providing the loan money, which covered about 75 percent of jackson hewitt’s financial … continued

cch updates last-minute congressional action

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as both houses of congress move toward adjournment, cch has updated three of its special tax briefings on the provisions of estate tax, tax extender and health care legislation. for estate tax legislation, click here (free download: pdf, 4 pages); … continued