Above the Line

Just in time for tax season – the IRS moves to shut down preparers

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This week, the IRS announced that it requested an injunction be issued against Martha Jones. According to the complaint, Jones claimed invalid and illegal deductions and charitable contribution carryovers, failed to sign returns, and failed to discuss returns with taxpayers. The IRS reviewed 56 returns and found errors on all of them, with an average deficiency of $4,700 per return. The IRS estimated that Jones prepared over 200 returns (she claimed 50 to 100), but since she did not sign the returns – even after the IRS notified her that she must – the IRS cannot accurately determine the extent of her fraud.

In a similar manner, another tax preparer in Florida claimed he could prevent the IRS from collecting taxes by adjusting the taxpayer’s master file (IMF). This is not a new scheme, and the IRS has long held that engaging in this scheme will subject you to substantial penalties. Yet the preparer was still able to find dozens of people willing to put up $1,800 each for a scam that doesn’t work. Wonder how happy they’ll be to find out their not only out the $1,800, but additional taxes, interest and penalties, too.

If your tax preparer doesn’t discuss your return with you after he’s done, that’s a red flag. So is claiming that you are entitled to deductions that you’re not, and promoting tax schemes designed to prevent the IRS from coming after you for not filing a return.

Does your tax preparer promise you refunds? Encourage you to take questionable deductions? Add ‘little things’ to your return that he or she ‘knows that they can get away with’?

If the answer to any of the preceding questions is ‘yes’, then you need a new preparer now, before the IRS knocks at your door. Call my office, and take advantage of my review program!


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