IRS-Warning: 12 Tips to Avoid Scam Tax Preparers

IRS-Warning: 12 Tips to Avoid Scam Tax Preparers

IRS-Warning: 12 Tips to Avoid Scam Tax Preparers

Tax Return Preparer Fraud Ranks on 2018 ‘Dirty Dozen’: Taxpayers Urged to Choose Reputable Tax Preparers

IRS strongly advises to “Choose Return Preparers Carefully”. Avoid scam tax preparers with these 12 tips:

WASHINGTON — With more than half of the nation’s taxpayers relying on someone else to prepare their tax return, the Internal Revenue Service reminded consumers to be on the lookout for unscrupulous tax preparers looking to make a fast buck from honest people seeking tax assistance.

Again, this year, the IRS included tax return preparer fraud on its “Dirty Dozen” watch list of common tax scams. The agency wants taxpayers to be on the lookout for unscrupulous return preparers and help protect their sensitive financial and tax data.

The majority of tax professionals provide honest, high-quality service. But there are some dishonest preparers who operate each filing season to perpetrate refund fraud, identity theft and other scams that hurt honest taxpayers. That’s why unscrupulous preparers who prey on unsuspecting taxpayers with outlandish promises of overly large refunds make the “Dirty Dozen” list.

Tax return preparers are a vital part of the U.S. tax system. About 56 percent of taxpayers use tax professionals to prepare their returns.
Selecting the right tax professional is critically important because taxpayers are ultimately responsible for what they submit on their tax return.

The IRS is also working to protect taxpayers from shady return preparers. The pursuit of illegal scams can lead to significant penalties and interest as well as possible criminal prosecution. IRS Criminal Investigation works closely with the Department of Justice to shutdown scams and prosecute the criminals behind them.

Choose Return Preparers Carefully

It is important to choose carefully when hiring an individual or firm to prepare a tax return. Well-intentioned taxpayers can be misled by preparers who don’t understand taxes or who mislead people into taking credits or deductions they aren’t entitled to claim. Scam preparers may take this step in order to increase their fee. Every year, these types of tax preparers encounter everything from stiff penalties to jail time for defrauding their clients.

Here are a few tips for taxpayers to consider to help avoid a fraudster when choosing a tax preparer:

  1. Avoid fly-by-night preparers. Make sure the preparer will be available if needed, even after the return is filed. In the event questions come up about a tax return, taxpayers may need to contact the preparer.
  2. Ask if the preparer has an IRS Preparer Tax Identification Number (PTIN). Paid tax return preparers are required to register with the IRS, have a PTIN and include it on tax returns.
  3. Inquire whether the tax return preparer has a professional credential (enrolled agent, certified public accountant or attorney), belongs to a professional organization or attends continuing education classes. Tax law can be complex. A competent tax professional needs to be up-to-date in these matters. The IRS website has more information regarding the national tax professional organizations.
  4. Check the preparer’s qualifications. Use the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications. This tool can help locate a tax return preparer with the preferred qualifications.
  5. The Directory is a searchable and sortable listing of tax preparers registered with the IRS. It includes the name, city, state and zip code of:
    • Attorneys
    • CPAs
    • Enrolled Agents
    • Enrolled Retirement Plan Agents
    • Enrolled Actuaries
    • Annual Filing Season Program participants
  6. Check the preparer’s history. Ask the Better Business Bureau about the preparer. Check for disciplinary actions and the license status for credentialed preparers. For CPAs, check with the State Board of Accountancy. For attorneys, check with the State Bar Association. For Enrolled Agents, go to IRS.gov and search for “verify enrolled agent status” or check the Directory.
  7. Ask about service fees. Avoid preparers who base fees on a percentage of their client’s refund or boast bigger refunds than their competition. Don’t give tax documents, Social Security numbers or other information to a preparer when only inquiring about their services and fees. Unfortunately, some preparers have improperly filed returns without the taxpayer’s permission once the records were obtained.
  8. Make sure the preparer offers IRS e-file and ask to e-file the tax return. Paid preparers who do taxes for more than 10 clients generally must file electronically. The IRS has processed more than 1.5 billion e-filed tax returns. It’s the safest and most accurate way to file a return.
  9. Provide records and receipts. Good preparers will ask to see tax records and receipts. They’ll ask questions to determine the client’s total income, deductions, tax credits and other items. Do not rely on a preparer who is willing to e-file a return using a pay stub instead of a Form W-2. This is against IRS e-file rules.
  10. Understand representation rules. Attorneys, CPAs and enrolled agents can represent any client before the IRS in any situation. Annual Filing Season Program participants may represent taxpayers in limited situations if they prepared and signed the return. However, non-credentialed preparers who do not participate in the Annual Filing Season Program may only represent clients before the IRS on returns they prepared and signed on or before Dec. 31, 2015.
  11. Never sign a blank return. Don’t use a tax preparer that asks clients to sign an incomplete or blank tax form.
  12. Review the tax return before signing. Before a taxpayer signs a return, they should review it and ask questions if something is not clear. Taxpayers should ensure they are comfortable with the accuracy of the return and that the refund goes directly to them – not into the preparer’s bank account. Reviewing the routing and bank account number on the completed return is always a good idea.

Report abusive tax preparers to the IRS. Taxpayers can report abusive tax return preparers and suspected tax fraud to the IRS. Use Form 14157, Complaint: Tax Return Preparer. If a return preparer is suspected of filing or changing the return without the client’s consent, also file Form 14157-A, Return Preparer Fraud or Misconduct Affidavit. Forms are available on IRS.gov.

To find other tips about choosing a preparer, understanding the differences in credentials and qualifications, researching the IRS preparer directory and learning how to submit a complaint regarding a tax return preparer, visit www.irs.gov/chooseataxpro.

Remember: Taxpayers are legally responsible for what is on their tax return even if someone else prepares it.

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      Always Settling for Less.

Ronald A Muscarella, CPA and the Tax Relief Team has helped 1000’s of clients settle their IRS Tax Debt for less than they owed. There is relief for your IRS Tax debt no matter how much you owe. Please contact us today at (954) 746-7801 and put your IRS Tax problems behind you.

So, You’re Being Audited. What should you do next?

So, You're Being Audited by the IRS.

So, You’re Being Audited. What should you do next?

You open your mailbox to find a letter from the IRS.  The IRS only sends out letters for several reasons, but the two main reasons are to gather more information or because your tax return has been selected for an audit.

What should you do if you are selected for an audit? Relax – tax returns are selected for an audit based upon a Discriminant Inventory Function System (DIF) assigning a numeric score to each return shortly after they are filed.  Therefore, the higher your DIF score is, the more likely you are to receive a letter.  The main purpose of an audit is to ensure information is reported in accordance with current tax laws and the tax liability has been computed accurately.

Steps you should take when selected for an audit:

  1. Review the letter again to understand why you are being audited.
  2. Gather the necessary supporting documents that were used to prepare your tax return.
  3. Hire a professional.

Why should you hire an experienced CPA who specializes in IRS matters over a tax attorney?  We can save you money – as our fees are typically lower than an attorney.

An experienced CPA can:

  • Fully represent you during the IRS audit
  • They are educated in current tax law, IRS procedures and policies
  • Organize your records and ensure they are complete and accurate
  • Able to amend or file delinquent returns, if necessary
  • Help to lower or eliminate any potential penalties that may arise from the audit

Having an experienced CPA on your side will limit the amount of time you spend with the IRS – thus freeing up your time to spend with the family.

If you have questions about this article or a specific tax problem, you may be facing, please contact us. We are here to help.

 

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      Always Settling for Less.

Ronald A Muscarella, CPA and the Tax Relief Team has helped 1000’s of clients settle their IRS Tax Debt for less than they owed. There is relief for your IRS Tax debt no matter how much you owe. Please contact us today at (954) 746-7801 and put your IRS Tax problems behind you.

YOUR PASSPORT IS IN JEOPARDY IF YOU OWE MONEY TO THE IRS

Passport revoked due to IRS tax debt

YOUR PASSPORT IS IN JEOPARDY IF YOU OWE MONEY TO THE IRS

This month, the IRS will begin implementation of new procedures affecting individuals with “seriously delinquent tax debts” that may get your passport revoked, deny its renewal or deny an application for one.

There are various options at your disposal, and we are experts at taking advantage of those options for your benefit. Like a “Offer in Compromise” which can settle your tax liabilities for pennies-on-the-dollar.

Read the IRS official announcement:

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IRS LOGO

IRS Urges Travelers Requiring Passports to Pay Their Back Taxes or Enter into Payment Agreements; People Owing $51,000 or More Covered

IR-2018-7, Jan. 16, 2018

WASHINGTON — The Internal Revenue Service today strongly encouraged taxpayers who are seriously behind on their taxes to pay what they owe or enter into a payment agreement with the IRS to avoid putting their passports in jeopardy.

This month, the IRS will begin implementation of new procedures affecting individuals with “seriously delinquent tax debts.” These new procedures implement provisions of the Fixing America’s Surface Transportation (FAST) Act, signed into law in December 2015. The FAST Act requires the IRS to notify the State Department of taxpayers the IRS has certified as owing a seriously delinquent tax debt. See Notice 2018-1. The FAST Act also requires the State Department to deny their passport application or deny renewal of their passport. In some cases, the State Department may revoke their passport.

Taxpayers affected by this law are those with a seriously delinquent tax debt. A taxpayer with a seriously delinquent tax debt is generally someone who owes the IRS
more than $51,000 in back taxes, penalties and interest for which the IRS has filed a Notice of Federal Tax Lien and the period to challenge it has expired or the IRS has
issued a levy.

There are several ways taxpayers can avoid having the IRS notify the State Department of their seriously delinquent tax debt. They include the following:

• Paying the tax debt in full
• Paying the tax debt timely under an approved installment agreement,
• Paying the tax debt timely under an accepted offer in compromise,
• Paying the tax debt timely under the terms of a settlement agreement with the Department of Justice,
• Having requested or have a pending collection due process appeal with a levy, or
• Having collection suspended because a taxpayer has made an innocent spouse election or requested innocent spouse relief.

A passport won’t be at risk under this program for any taxpayer:
• Who is in bankruptcy
• Who is identified by the IRS as a victim of tax-related identity the”
• Whose account the IRS has determined is currently not collectible due to hardship
• Who is located within a federally declared disaster area
• Who has a request pending with the IRS for an installment agreement
• Who has a pending offer in compromise with the IRS
• Who has an IRS accepted adjustment that will satisfy the debt in full

For taxpayers serving in a combat zone who owe a seriously delinquent tax debt, the IRS postpones notifying the State Department and the individual’s passport is not subject to denial during this time.
• In general, taxpayers behind on their tax obligations should come forward and pay what they owe or enter into a payment plan with the IRS. Frequently, taxpayers qualify for one of several relief programs, including the following:
• Taxpayers can request a payment agreement with the IRS by filing Form 9465. Taxpayers can download this form from IRS.gov and mail it along with a tax return, bill or notice. Some taxpayers can use the online payment agreement to set up a monthly payment agreement for up to 72 months.

Some financially distressed taxpayers may qualify for an offer in compromise. This is an agreement between a taxpayer and the IRS that settles the taxpayer’s tax liabilities for less than the full amount owed. The IRS looks at the taxpayer’s income and assets to determine the taxpayer’s ability to pay. To help determine eligibility, use the Offer in Compromise Pre-Qualifier, a free online tool available on IRS.gov.

IRS.gov has other tips for taxpayers to catch up on their filing and tax obligations and more information about the revocation or denial of passports because of unpaid taxes.

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      Always Settling for Less.

Ronald A Muscarella, CPA and the Tax Relief Team has helped 1000’s of clients settle their IRS Tax Debt for less than they owed. There is relief for your IRS Tax debt no matter how much you owe. Please contact us today at (954) 746-7801 and put your IRS Tax problems behind you.

So You’re Being Audited. What should you do next?

Picture this you have just returned home from a relaxing two-week vacation cruise in the Caribbean. While going through the large stack of mail you find a letter from the IRS that they are Auditing your 2016 tax return!

What should you do next? Get professional help. In most cases, the hiring of an experienced CPA who specializes in IRS representation is your best bet. Generally, your fees and cost would be far less than when you choose to hire a tax attorney.

Hiring a CPA who specializes in IRS matters has several benefits:

  • He or she can fully represent you, which means you will not have to appear at audit meetings nor communicate with IRS.
  • Your Representative will have a greater understanding of tax law, IRS procedures and policies.
  • Your CPA representative can help you organize your records and put to gather any missing pieces.
  • Your CPA representative can prepare or amend any delinquent tax returns.
  • You no longer must carry the stress and worry on your shoulders now that a CPA is representing you.
  • Your CPA representative can achieve a much more favorable outcome by exercising their knowledge of tax relief available to you.

If you have questions about this article or a specific tax problem you may be facing please contact us. We are here to help.