Enrolled Agent/ Certified Tax Resolution Consultant.
Education & Training with FishCoin Tax Solutions IRS 00139079-EA
I represent taxpayers before the IRS and Minnesota Department of Revenue in New Hope, Minnesota and the surrounding twin cities metro.
According to the IRS, there are many organizations and individuals who pose as legitimate tax businesses in order to scam people out of their money and leave them in a world of legal trouble.
Tax preparer fraud typically occurs when a person posing as a qualified tax preparer excessively and illegally claims deductions and credits on your behalf to inflate your tax return.
In this blog you will learn how to spot possible fraud from reviewing your recent or pass tax returns.
Please check the following pages of your return.
- Check Page 2 of 1040- Banking Information. If the second page of 1040 does not have your bank information(routing/ account number) or different bank account number or the words like “Bank Product applied for”. There is a possibility of tax fraud. Beware, true tax professionals will collect their money upfront, and we never promise a large refund or a percentage of the fees because this is against the IRS Circular 230 guidelines.
2.Schedule C: Check if your return has a Schedule C. If you are an employee and you don’t have any business. You should not have this page on your return. You will also see the information on 1040 Pg. 2 Schedule 1 and Schedule C (business income)- to be a negative number. The tax preparer is claiming a business loss to reduce your taxable income.
- Check the Schedule A (Itemized Deduction) on your return. So many fraudulent activities can be done here, they may decide to increase your Charitable Contributions, medical expenses, Mortgage Interest, property taxes so as to reduce your taxable income.
- Form 8863- Education Credits.If you are not a student, you should not have this form on your return. American Opportunity credit is a partly refundable credit. They use this credit to get more money.
5.Schedule EIC (Earned Income Credit). This is the most abused credit. The number of dependents claimed on the return. The IRS tools to help figure out if you qualify for the credit. The Earned Income Tax Credit (EITC) helps low- to moderate-income workers and families get a tax break. If you qualify, you can use the credit to reduce the taxes you owe – and maybe increase your refund.
There are other ways that fraudulent tax preparers use to secure a big refund. It is up to you to do due diligence to make sure your return is prepared right by asking questions, seek a second opinion and you can even order your transcript to make sure what the tax preparer submitted matches the tax return you have.
Fraudulent tax preparers operate on two basic facts.
1.Taxpayers most often hire tax professionals because they trust that the tax professional is reputable and responsible.
2.The IRS will always hold the taxpayer responsible for their tax return, whether it was completed by a professional or not.
You can check this 5mins video to show you the forms on your 1040 tax return you need to review.
If you or someone you know have tax issues with the IRS or Minnesota Department of Revenue. Please contact me
Joe Alabi EA MAcct (Taxation)
7600 Bass Lake Road Suite 106A
New Hope, Minnesota 55428
Tel 612 516 5878