By Asharp Bookkeeper
Knowing little regarding tax preparation does not mean you should be careless about it. You may not understand the processes or the documents, but be sure to understand who will get it done right.
To cut the chase, there are certain tax preparers that you ought to keep away from at all costs. They are the category that will promise you the best but get you into trouble eventually.
Taxation has laws. These are intended to standardize, safeguard and streamline the taxation practice. The last place you want yourself is at the wrong side of the law. Well, let’s presume that a crucial illegality is found out by the Internal Revenue Service (we’ll see an example shortly). You and I know that you did not commit any of that. Perhaps you may feel that the only thing you are guilty of is trusting your tax preparer; trust- which is not punishable by law- right? Wrong!
To that end you shall be guilty of a completely different offence: ignorance. Need I remind you that this is not a defense before the law? Before you fall victim, here are the tax ‘professionals’ you need to be very careful with.
The deal will sound great. Anyone can be lured by that. But where do they get you the great tax refunds? That should be your first red flag.
Now here is what you need to know. Such tax preparers are widespread and popular for their big refunds….first indicator. They typically operate from a small store or an apartment.
Most of the time, people have to stand and wait for hours just for the chance to have their taxes prepared here…common indicator. This may be easily mistaken for a vote of confidence.
The unfortunate reality however is, income tax returns can easily be manipulated to create a huge tax refund. Regrettably this refund is always temporary. Read on…
While legitimate persons will genuinely get up to $20,000 on refunds if they go for it, unscrupulous tax preparers illegally add some or all deductions and credits provided by law to anyone's tax return.
Such deductions normally apply if you have a certain combination of children, taxes, mortgage interest, cases of babysitting, education expenses and large withholdings.
The tax bad mannered tax preparer will add these deductions to your returns and you will be given really great deductions. In the process the preparer becomes really popular and earns their pay.
It may appear like a win-win for both you and the tax preparer. But the truth is different. The fraudulent return that claims large deductions will earn you the money from the IRS but this tax bureau will eventually get you. . As such, undeserving tax refund is always temporary.
That may not happen in months or in a few years, but it will happen eventually. The IRS moves slowly but it does. The country is big and they have a lot of work, which only slows them down but does not cripple them.
When the Internal Revenue Service finally unveils the illegitimate details, the person is fully held responsible and not the tax preparer who helped file the fraudulent returns. You cannot use the fact that your tax preparer did it as a defense. The fact that you did not know about the breach will not be sufficient for the IRS.
There are a number of penalties available. You will be subjected to paying back all of the money you received unlawfully together with additional penalties. These may include interests, fines or both.
The bureau also has the right to freeze your assets such as bank accounts and salary. This State Department of Taxation is also mandated to seek a jail option against you in such a case.
Your unscrupulous tax preparer will not often tell you such a reality. But here is one telltale sign to look for: their refusal to sign the preparer’s section of your tax return. A legitimate tax preparer will always be willing to sign as a requirement by the IRS if they prepare it on your behalf.
An established tax franchise will have a lot of presence and transparency of practice. Unfortunately that is not always the case with some. There are some- the faceless type- that hire only seasonal part-time employees moonlighting for extra cash.
These staff members often receive training from their corporate offices every year on the new tax laws. They are not primarily specialized in tax preparation and are likely to do a sloppy work for you. If you find little record of a seemingly big franchise then don’t hurry to sign up for a deal. The better move would be to dig deeper. So take your time.
Asharp Bookkeeper|
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