Lothamer Tax Resolution Blog

How to Avoid Tax Preparer Fraud

Posted by Amy Lothamer on Mar 31, 2016 12:02:28 PM

Every tax season, someone will fall victim to a tax preparer fraud scheme. Most incidents occur towards the end of tax season and in low-income neighborhoods. The most common schemes are: inflating personal or business expenses; false deductions or income; and unallowable credits or excessive exemptions. Tax preparer scammers will use these schemes as a way to inflate your refund and keep the money for themselves.

While more than half of Americans will use a tax preparer for their returns, it is still your responsibility to make sure the information submitted is correct. Here are five things that should raise a red flag of a potential tax preparer fraud scheme:

1. The tax preparer is offering to obtain a very large refund for you or a larger refund than you have been told by other CPA firms.

2. The tax preparer is basing their fees on a percentage of the amount of your refund.

3. The tax preparer requires that you sign a blank tax return form.

4. The tax preparer refuses to provide his or her tax preparer identification information.

5. The tax preparer refuses to provide you copies of your tax return.


If you notice any of the above suspicious activity while working with a tax preparer, do not let that individual file your tax return. You should immediately report them to the Internal Revenue Service by using Form 3949-A, Information Referral. This form will ask you to provide specifics about the person and/or firm and details of the suspicious activity.

If you believe you have been the victim of tax preparer fraud, you should immediately contact the IRS and submit Form 14157-A, Tax Return Preparer Fraud of Misconduct Affidavit. This form is similar to the referral form, but is treated like a sworn statement under penalty of perjury.

The best way to avoid tax preparer fraud is to do your due diligence in researching that particular individual or firm and always feel free to walk away if you become suspicious of their behavior.

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Five Things to Look for When Hiring a Tax Attorney

Posted by Bridgette Austin on Mar 9, 2016 2:11:26 PM

 

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Missing 1099's ???

Posted by Brian Lorencen on Feb 9, 2016 1:15:32 PM

Now that tax season has arrived, we are all patiently waiting to receive our tax forms in the mail.  While many will receive a W-2 from our employer, some may receive a 1099 for work performed or other reasons.  Some common 1099 forms are for interest income, retirement accounts, real estate or broker exchange transactions, merchant card payments, or just miscellaneous income.  As with W-2s, any 1099 should be received by January 31st of the following year.  Here are three things you can do if you do not receive them:

1.    You can follow up or request another one from your payer.  Be careful when requesting another copy of your 1099 that the second copy does not get reported an additional income.

2.    You could request your IRS transcript.  It will show all the income reported to IRS, such as the information on that 1099 you are waiting for.  However, it may take several weeks to receive them from IRS.  In addition, people often experience extremely long wait times on the telephone, possible identity theft issues, or the IRS website is down.

3.    You can report the income on your return without the 1099.  The IRS will have the information from the 1099 already based on your social security number.  Having the 1099 form verifies the amount.  For 1099s involving interest or miscellaneous income, you should have some paperwork, such as an invoice or bank statement, that state the information you need to report the income on your tax return.  This is why it is very important to keep good records throughout the year.

The bottom line with your 1099s is to be patient, stay in contact with the payer, and know that there are other avenues to request the information if need be.  Good Luck!  

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Topics: lost tax records 1099, Missing tax records 1099

How to Hire a Tax Resolution Firm

Posted by Jesse C. Lothamer on Sep 29, 2015 12:39:31 PM

Are you having a difficult time deciding which tax resolution firm is right for you? All tax resolution firms are different. The tax professionals, locations, and resolution strategies all are diverse. It is important to fully understand what each tax resolution’s mission is.

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Topics: IRS Tax Tips

What IRS Form 433-B and How it Can Help You

Posted by John Harrington on Sep 18, 2015 9:45:00 AM

The IRS’ Form 433-B, Collection Information Statement for Businesses, is the form the IRS uses to determine a businesses’ ability to pay their tax liability. The form is required by the IRS when a business owes the IRS taxes, and requests that the IRS approve an installment plan, an offer in compromise, or place the currently noncollectible status.

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