It’s an old adage, but still very much relevant in today’s tax world: If it sounds too
good to be true, it probably is. Take for instance the sometimes Wild West that is
the tax preparer industry. According to a recent CNN Money report, the
profession’s unregulated practices and occasional lawlessness has been very
much on the radar of the National Consumer Law Center, which found: “In most
states, there are no training, education and competency requirements governing
tax preparers and that is resulting in careless mistakes and outright fraud.”
The financial shenanigans haven’t gone unnoticed by the IRS either. CNN Money’s
Blake Ellis reported: “The IRS proposed federal regulations in 2011, but a district
court blocked the proposal and an appeal of that decision was rejected last week,
so any future action will likely need to come from the individual states or
Until any such federal and state legislative action is taken, the legal onus will
continue to fall squarely on individual taxpayers. “As the taxpayer, you’re the one
who will pay the price if you end up with a bad preparer—facing fines or even
criminal action if you sign off on a fraudulent tax return filed under your name,”
Blake Ellis warned.
According to the same CNN Money report, there are some obvious do’s and
don’ts when it comes to filing your taxes. Don’t let your tax preparer invent fake
dependents for you. Sure, your refund will be heftier, but so won’t the financial
restitution you’ll be paying, before or after your time in prison.
And some tax preparers are dodgy characters, outright. To wit, CNN Money
reported on this doozy: “A tax preparer from Essex County, N.J., filled out two
versions of returns for many of his clients: The first version was fraudulent,
claiming bogus deductions like medical and dental expenses, which he would
show to the client. But then, he would fill out another fraudulent tax return
claiming even bigger refunds, and send that one to the IRS instead.”
Then there are other cautionary tales that Blake Ellis dug up, like a tax preparer
turned absconder who decamped to Mexico with a bag of client cash; the unscrupulous preparer who stole a client’s identity, and another preparer who,
allegedly, engaged in the highly illegal, The Wolf of Wall Street-esque hijinks of
hiding “offshore income for their clients” and “help[ing] their customers set up
secret offshore bank accounts.”
Blake Ellis has some sound advice for anyone willing to jump into the tax preparer
shark tank: “Steer clear of any tax preparer who charges fees based on the size of
your refund and never let a preparer ask for the refund to be deposited to their
account rather than sent straight to you.
“Also, check the Better Business Bureau’s site to find out their license status and
whether they’ve had any disciplinary actions taken against them.
“And of course, never sign a blank return that a preparer says they will fill out
later, and make sure your preparer signs your return before submitting it to the
DOR has a free, even simpler and safer solution.
DOR + Social Media — #CheckUsOut posted on Jul 28
State tax administration might not deliver such seismic news events as LeBron’s eagerly-awaited announcement of his return to his old Cleveland team, but knowing what’s going on at any given moment in the tax world could save you some time and effort, and maybe …Continue Reading DOR + Social Media — #CheckUsOut
Commute to work on the T, Commuter Rail or Turnpike? You may be eligible for a Massachusetts Commuter Deduction on your tax return! posted on Jul 16
The Commuter Deduction was enacted by the Legislature to cover specific commuter expenses. To help understand the deduction, the Department of Revenue’s DOR University has released an e-learning module explaining what qualifies for a deduction, real-life examples and how you can claim your commuter deduction …Continue Reading Commute to work on the T, Commuter Rail or Turnpike? You may be eligible for a Massachusetts Commuter Deduction on your tax return!
DOR Offers FREE E-Learning Course on Fraternal Organization Tax Responsibilities posted on Jul 9
Help get the word out! The Department of Revenue’s online DOR University has recently developed a new free e-learning course on the tax responsibilities of fraternal organizations. Fraternal organizations are considered a type of Chapter 180 Corporation, which are formed for charitable or other purposes. …Continue Reading DOR Offers FREE E-Learning Course on Fraternal Organization Tax Responsibilities