The Tax Preparation Blog

Archive for the ‘Tax Preparers’ Category

Question: Why is the IRS not responding to my tax preparer fraud complaint?

I have sent 3 letter reporting a tax preparer for fraud and i still haven’t got any response from them yet. I put an email address for them to respond. I’m 100% sure he is committing fraud because i work for him. I think he gets people in legal trouble (audits from the IRS) while he makes thousands from them.I kept my identity a secret on those letter because i am related to the preparer that is committing a fraud. He is preparing false tax returns by “padding” deductions (schedule A) and adding education and creating false business’ (schedule C)

Answer: They’ve probably looked at it.

They’re not going to respond to you because they will not disclose any information about any actions they’re taking against taxpayers or tax preparers.

You’d be well advised to get the heck out of there. If you’re involved with someone committing fraud (Yes, being an employee is “involved”), these type of situations have a nasty habit of coming back to bite you even if you aren’t the one committing the actual fraud. If you have knowledge and stick around, after a while you become an accessory.

Some Turlock signs gone, some not

Outlaw signs have started to come down. But the “human signs” remain.

How to Save Money on Tax Preparation Services

Question: Corporate Income Tax and My Own Credit Card Charge Question?

I am meeting my tax preparer next week. But I am curious of getting to know if I charge my own credit card to my own new small business so that my small business can have some startup fund to run.

Will it be categorized as income to my small business and become reportable business income? And if not, what is it categorized as?
I did a search on internet, it said owner equity is taxable…….is that right or I am missing something here?
I am meeting my new accountant next week. But I just want to have some background before I get confused totally

Answer: It will be called owner equity.

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Ex-tax preparer in NW Ind. pleads guilty to fraud

HAMMOND, Ind. (AP) – A former income tax preparer in northwestern Indiana has pleaded guilty to taking personal information of clients and then cashing in more than $100,000 of fraudulent tax refunds.

Phil Jager Tax Preparer

Question: Should You be held accountable for the mistakes your Tax Preparer makes?

Most people don’t know much about Preparing Tax Returns, that’s why we go to those who are supposed to be the professionals. But what about when we are asked to pay for Their mistakes? Is that fair?
H&R Block and Jackson Hewitt now offer “peace of mind” guarantees that are supposed to pay for any errors, but is it what it really seems to be?

Answer: There are many different types of errors…some made by the tax pro and some made by the client. Whose error is it if the tax pro asks if the W-2 was the extent of their income and the client says yes, but the client failed to mention that they got unemployment? Is it the tax pro’s fault for not explaining the myrid type of income or the client’s fault for not bringing it up? What about when someone claim a dependent that the IRS disallows. What about when the IRS insists the activity is a business and not a hobby?

When the tax pro is clearly at fault, most places (H&R included) will pay for the filing of an amended return as well as reimburse the client for any fees or penalties. In the end, financially, to the client, it would be like the error was never made except the client got a chance to sit on some of the IRS’s money for a while. For an additional fee, H&R offers the POM which not only pays the interest and penalties, it pays the taxes owed too up to $9999. Since their butt is on the line, the POM also pays for their CPAs, EAs, and lawyers to fight for your cause against the IRS without you even needing to show up. It is this last feature that is the real selling point. And for $27, most people with complicated tax returns or large refunds usually go for it. With the POM, it is actually beneficial to the client when a tax pro makes a mistake because they won’t have to pay back the extra refund they never should have recieved.

However, neither occurs when it is the client’s fault. If the client says that they are the custodial parent when they are not, if they fail to bring in a W-2, if they say they have records of mileage used for business and they really don’t, then the POM won’t help.

In general, H&R will lean towards the benefit of the client to avoid PR hastles. However, the more obvious it is that the client is at fault, the less likely H&R will pay out. A lot of times it is the client’s word against the tax pro’s.

IRS Enforces Stricter Rules on Professional Tax Preparers

Effective January 1, 2011, the Internal Revenue Service will expand its watchdog duties and require all paid tax preparers who sign, prepare or assist with preparing federal tax returns to have a Preparer Tax Identification Number .

Beware of Bad Tax Preparers This Year!

Six Important Tips For Surviving A Tax Audit

I had just left our Scarsdale, N.Y., headquarters on a business trip a couple of years ago when an Internal Revenue Service collections officer named Celeste Green stormed in, waving a “Notice of Intent to Levy” and demanding that we pay the IRS $25,000 by the end of that month.

Question: Any advice on becoming a seasonal tax preparer by taking Liberty’s or HR Block’s classes?

Do you learn enough in the tax prep course to be offered a seasonal position? Is being a tax preparer stressful? Any helpful comments/advice would be appreciated from experienced tax preparers.

Answer: Block’s classes are great and Jackson Hewitt is not bad too. I would consider them before Liberty. Make sure you take the standard delivery course where there is an instructor to teach the class. Do not take the online course.

The most stressful time would be the first few weeks of the tax season because of the volume. After that, it’s slower so you have more time for each customer.

For me, Jackson Hewitt works better for me because they offered more hours than when I worked at Block. And the location is closer to my house.

Liberty Tax Service Faces Class Action Lawsuit

Columbia, SC (WLTX) – A widely used tax filing company is the being sued for allegedly falsifying documents and ripping of the Internal Revenue Service, as well as their clients along the way.

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