Holy crap, Intuit!!!

This just hitting the presses: First Minnesota found fraudulent returns filed through TurboTax, now 18 more states (most of whom don’t point a finger as to which software).  Intuit says that Federal filing isn’t affected, but if the states have fraudulent filings, you can be sure a fraudulent federal filing was made as well.



Is a tax preparer offering you a big refund? Don’t fall for this scam.

Every year the IRS posts its Dirty Dozen list of tax scams, ranging from tax protest schemes to ‘slavery reparation payments’.  I’ve had to clean up the aftermath of this one more than once and it can be quite ugly; huge repayments of tax plus penalties and interest.  It takes at least a year for an audit to commence and by that time the fraudulent refund is long spent and often the person you entrusted to do your taxes has vanished.  When the IRS busts one of these preparers, they will audit every return within statute, and while the scammer often goes to jail and is responsible for huge fines, the clients are responsible for paying back the ill-gotten gains from their fraudulent returns.

Inflated Refund Claims Remain on the IRS “Dirty Dozen” List of Tax Scams for the 2015 Filing Season

WASHINGTON — The Internal Revenue Service today warned taxpayers to be on the lookout for unscrupulous tax return preparers pushing inflated tax refund claims. This scam remains on the annual list of tax scams known as the “Dirty Dozen” for the 2015 filing season.

“Every filing season, scam artists lure victims in by promising outlandish refunds,” said IRS Commissioner John Koskinen. “Taxpayers should be wary of anyone who asks them to sign a blank return, promise a big refund before looking at their records, or charge fees based on a percentage of the refund.”

Compiled annually, the “Dirty Dozen” lists a variety of common scams that taxpayers may encounter any time but many of these schemes peak during filing season as people prepare their returns or hire someone to help with their taxes.

Illegal scams can lead to significant penalties and interest and possible criminal prosecution. IRS Criminal Investigation works closely with the Department of Justice (DOJ) to shutdown scams and prosecute the criminals behind them.

Don’t Fall Victim to Promises of Outlandish Refunds

Scam artists routinely pose as tax preparers during tax time, luring victims in by promising large federal tax refunds or refunds that people never dreamed they were due in the first place.

Scam artists use flyers, advertisements, phony store fronts and even word of mouth to throw out a wide net for victims. They may even spread the word through community groups or churches where trust is high. Scammers prey on people who do not have a filing requirement, such as low-income individuals or the elderly. They also prey on non-English speakers, who may or may not have a filing requirement.

Scammers build false hope by duping people into making claims for fictitious rebates, benefits or tax credits. They charge good money for very bad advice. Or worse, they file a false return in a person’s name and that person never knows that a refund was paid.

Scam artists also victimize people with a filing requirement and due a refund by promising inflated refunds based on fictitious Social Security benefits and false claims for education credits, the Earned Income Tax Credit (EITC), or the American Opportunity Tax Credit, among others.

The IRS sometimes hears about scams from victims complaining about losing their federal benefits, such as Social Security benefits, certain veteran’s benefits or low-income housing benefits. The loss of benefits was the result of false claims being filed with the IRS that provided false income amounts.

While honest tax preparers provide their customers a copy of the tax return they’ve prepared, victims of scam frequently are not given a copy of what was filed. Victims also report that the fraudulent refund is deposited into the scammer’s bank account. The scammers deduct a large “fee” before paying victims, a practice not used by legitimate tax preparers.

The IRS reminds all taxpayers that they are legally responsible for what’s on their returns even if it was prepared by someone else. Taxpayers who buy into such schemes can end up being penalized for filing false claims or receiving fraudulent refunds.

Taxpayers should take care when choosing an individual or firm to prepare their taxes. The IRS has a list of tips and other resources to help taxpayers select a qualified tax professional.

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The IRS says tax season won’t be delayed, but…

The latest spending bill cuts the IRS’s budget…again.  You might hate the IRS, but they do need to pay people to do what the agency is there to do: administer the tax code that Congress enacts.  Throughout the year, we’ve seen many TIGTA reports regarding fraudulent refunds and abused credits, but on the same hand the budget for ferreting out fraud has been cut.  At the same time, the IRS has been tasked with reconciling the Affordable Care Act credits and issuing penalties for not having insurance, along with the myriad other bits of social engineering Congress keeps inserting into the tax code.

So although the commissioner has said the filing season will not be delayed, there’s been no date given for when filing can commence.   He also stated that refunds could be delayed to the lack of personnel, and don’t expect to be able to call the IRS for answers; the general information line was shut down this year due to lack of staff.  Hold times of up to two hours have been reported for the practitioner’s priority line during this very slow time of the year, and it definitely won’t get better once filing season opens.

So what does this mean?  The IRS has been tasked to do more with less, and no matter what your politics, it means worse customer service.  Don’t expect a quick refund if you are claiming any of the most easily abused refundable credits.  If you are audited, don’t expect a quick resolution.

I’m just glad I have a landline speakerphone just for tax agency phone calls.