San Mateo, CA: You might want to consider professional Tax Account Transcript Monitoring to make sure your returns are filed with the information you provided.
Most of us think of the professionals that prepare our annual tax returns are honest, hard-working, and trustworthy folks-otherwise, we would not go to them with our sensitive tax information.
But, what if that trust is misplaced? What if the tax professional we have prepare our tax returns goes rogue ? Who is on the hook?
I had a recent case that I would like to highlight here. It begs the need for the each taxpayer to be diligent in handling their tax affairs.
Taxpayer, call her Sue, went has been going to the same preparer, call him Andy, for 7 years. Never had a problem in the past--Andy is a great guy.
This year, Sue gets her copy of the tax return from Andy and everything is OK. Sue gets her refund, everything is good--just like every year.
An issue arises with Sue that she needs to contact the IRS regarding a different matter unrelated to the tax return. In speaking with the IRS representative, she finds out that there is information on her tax return that she was not aware of. IN FACT, Sue finds out that the refund was NOT just the amount she received in her bank account direct deposit, but there was a second "SPLIT ACCOUNT" that deposited a portion of her tax return refund into a bank account she did not recognize. The IRS cannot explain to her why this happened--only that it did. They refer her to the Taxpayer Advocate Service. The Taxpayer Advocate Service advised they were so backlogged it would be several weeks or months until someone could call her back.
Sue came to me for help. I pulled Sue's IRS account transcripts and immediately saw the issue. In comparing Sue's IRS return transcript with the copy she had been given by Andy, I saw huge discrepancies. I saw that Sue's deductions had been grossly increased and credits that Sue was not eligible for were taken on the return. I also saw that the refund was split into to different accounts---and the amounts that went into both accounts.
Sue got her expected refund, but her crooked tax preparer stole the bounty of refund given by the false deductions and false credits.
Bottom line: There is no place in the tax system for crooked preparers. This preparer not only stole from the government, he stole IN THE NAME OF SUE--hiding behind his client that he has a duty to represent properly.
It got me thinking how valuable I RS account transcript monitoring really is. I was able to immediately identify the fraud and we taking steps to not only fix the issue for Sue (realize--the IRS has no idea what happened here so Sue is on the hook until we can prove otherwise) but we are making sure that the IRS and other professional licensing organizations that Andy belongs to are apprised of the situation.
Who knows how many other unsuspecting Andy victims are out there? Andy had a storefront tax preparation service that served hundreds of clients. Sue had NO INDICATION based on her prior years of business with Andy that he would do this to her.
The point of my story: Beware and protect yourself. Sue would never have know that she was being used to defraud the government until she got the audit letter in the mail. By that time, she is not only fighting the IRS to prove her innocence, she is trying to figure out what happened.
This also area is also ripe with fraud with businesses being victimized by employee embezzlers who steal trust fund monies for employee benefits. But that is a blog story for another time!
If you suspect something just isn't right with your tax preparer, drop me an email or phone call and I will see if I can help.
Kevin Rego
Disclaimer: The information provided is intended to provide a general overview of the topic presented. It is not intended to be a legal interpretation of your individual tax or legal situation. If there is a conflict between the information provided and any legal authority implementing or interpreting the topic, the legal authority shall prevail. Always seek legal advice from a licensed attorney. This article does not in anyway establish an attorney-client relationship. That relationship can only be accomplished with both parties signing a mutual, written agreement.
