Posts Tagged ‘tax attorney’

Bad Tax Preparers: What to watch out for. What to do if you have one.

Saturday, February 22nd, 2014

 

By Bradley Conway, Tax Attorney

Guess what? It’s tax season again and you know what that means? Guys dressed up as the Statue of Liberty will be standing by the side of the road to lure you into their tax preparation offices.

Now, not all tax preparers are bad, but you should be cautious of who you choose to prepare your tax returns. I get a ton of calls every year from people who’ve had their refunds stolen or had more money than they were told it would cost taken out of their return. There are a few things you can do to protect yourself:

1)  Get everything in writing. A lot of problems are caused when the terms of your deal with the tax preparer are left to mere words. If you have a written copy of what the preparer promises to do and what the preparer is charging, you’ll have a much easier time proving that to the police, IRS, or a judge should things go south.

2) Pay them up front. I know a lot of people prefer to let the preparer take their fee out of the refund, but it’s another place where people get cheated all the time. You don’t want the tax preparer to have control over your money when it comes in. People get tempted and if they’ve gotten away with it before, they’ll most certainly try to get away with it again.

3)  Review your return. Every tax return requires that the taxpayer sign it, whether it’s pen to paper or electronically. When you sign your tax return you are telling the government that you’ve reviewed all the information and, to the best of your knowledge, it’s correct. I know a lot of people don’t understand the tax part of it, but you can make sure that, if you’re getting a refund direct deposited, that the account number and routing number just above the signature block are correct.

4)  Get a copy of everything. This is the only way to truly protect yourself. Get a copy of the contract. Get a copy of your completed return. This will help you protect your refund and at least give you a chance to get your stolen money back.

I can hear you thinking. You’re thinking, “But, Brad, what do I do if I’ve already been scammed?”

The IRS is not going to be super helpful. Once they send out the return they’re not going to bother helping you get it back. You can file a Form 14157 to let the IRS know that the preparer you used is stealing returns, but, that’s not going to help you get your return back, but it might keep the same thing from happening to others.

Another option is to contact the local police and file a report. Again, the police may not be very helpful and may tell you that it’s a civil matter. The end result is that, once again, nothing gets done.

Your only other options are to file a small claims suit yourself or to contact a lawyer and have them write a letter to file a suit on your behalf. Letter writing isn’t too expensive, but filing a suit might be. Regardless, neither method is assured to get your return back. Even if you get a judgment, getting that money out of them might be a problem.

Overall, it’s just best to be careful. Know who’s doing your taxes and know where your refund is going. If you have IRS problems created by a bad preparer, contact a tax professional ASAP. Ignoring an IRS problem will never make things better.

Death and Taxes

Monday, June 27th, 2011

by J.C. Bailey

The month of April has taken more than its share of bad publicity over the years. The Lincoln assassination and sinking of the Titanic come to mind. Currently April has become synonymous with the joy of filing our federal income tax returns. Even if you file for the six-month automatic extension of time to file, you still have to do most of the work to estimate whether you owe additional taxes or not. If you owe additional taxes there is no extension of time to pay them without interest and penalties. As much as most of us hate to pay taxes, there are some valuable lessons to be found in our tax returns.

Most of us who pay income tax receive income. It may not be as much as we’d like or as much as we think we deserve, but most of us have some income. This presents us with the opportunity to make choices with regard to how we spend and invest it. If I owe more than $1,000 in taxes or am receiving more than $1,000 as a refund, I need to look at my withholding. Coming up with that much money to pay additional taxes may be difficult or impossible. Giving the government an interest-free loan for several months doesn’t make much sense either. If your income is steady, you should be able to set your withholding to come out about even come tax time. Talk to your payroll department or service.

Plan ahead and keep more money for yourself and your future. The tax code encourages both saving and investing for retirement. Make sure you know what benefits your employer offers. Human resources or payroll departments should be able to educate you on opportunities to save for the future and pay less in taxes. People who don’t have access to that information should talk to their accountant or financial planner. If your employer matches contributions to certain plans, you need to think hard before walking away from that money. In many instances, you won’t miss the money you are investing for your future and it will actually lower your tax bill. The earlier in your working life that you invest, the more impactful the results will be.

Most of us have discovered the truth that it is more of a blessing to give than to receive. Charitable contributions to qualified organizations are tax deductible. Americans are some of the most generous people in the world and our tax code encourages that generosity. Think about what is important to you and your family. Finding a cure, disaster relief assistance, faith-based initiatives and environmental causes can all use your help. Think about including those less fortunate or a cause that is close to your heart in your annual giving and include it in your estate planning. Times are tough, but a little planning can go a long way in helping you make the most of what you have.