The taxman is coming next month, and, as in the past, I would like to bring to your attention some issues regarding tax preparers.
We all know fraud happens, so please adhere to some of the following recommendations, courtesy of the Internal Revenue Service.
Tax return preparer fraud involves the preparation and filing of false income tax returns by preparers who claim inflated personal or business expenses, false deductions, unallowable credits or excessive exemptions on returns prepared for their clients.
Preparers may, for example, manipulate income figures to fraudulently obtain tax credits, such as the Earned Income Tax Credit.
In some cases, the client, or taxpayer, may not know of the false expenses, deductions, exemptions and/or credits shown on his or her tax return.
However, when the IRS detects a fraudulent return, the taxpayer — not the return preparer — must pay the additional taxes and interest and may be subject to penalties.
While most preparers provide honest services to clients, the IRS urges taxpayers to be careful when choosing a preparer — as careful as they would be choosing a doctor or lawyer.
Even if someone else prepares a tax return, the taxpayer is ultimately responsible for all the information on the return.
For that reason, taxpayers should never sign a blank tax form. And they should review the return before signing it and ask questions on entries they don’t understand.
Also, the IRS suggests that taxpayers:
• Be cautious of preparers who claim they can obtain larger refunds than other preparers.
• Avoid preparers who base their fee on a percentage of the refund.
• Use a reputable tax professional who signs the tax return and provides a copy.
• Consider whether the individual or firm will be around to answer questions about the preparation of the tax return months or even years after the return has been filed.
• Check the person’s credentials. Only attorneys, certified public accountants and enrolled agents can represent taxpayers before the IRS in all matters, including audits, collection and appeals. Other return preparers may only represent taxpayers for audits of returns they actually prepared.
Find out if the preparer is affiliated with a professional organization that provides its members with continuing education and resources and holds them to a code of ethics.
Reputable preparers will ask to see receipts and will ask questions to determine whether expenses, deductions and other items qualify.
If you suspect any kind of fraud, call 800-829-3676 or visit the IRS web site at www.irs.gov.
I want to thank all of those who emailed me regarding last week’s column on Neighborhood Watch, sharing your great stories, which I will soon publish for others to read.
I was perplexed by some emails from associations that still to this day feel that Neighborhood Watch signs are an indication there is crime in the area. Those signs indicate prevention, and that residents are watching to prevent crime in their area. I won’t embarrass those associations, but its sad that they won’t let their residents implement the program in their community. But here is where the residents can take a stand and vote out those board members with that kind of mentality. We all can make a difference by getting involved.
















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