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IRS warning: Don’t be a victim of ‘ghost’ tax return preparers

Posted By Lisa Novack, IRS, Wednesday, April 11, 2018

IR-2018-89, April 10, 2018

WASHINGTON – The Internal Revenue Service is cautioning taxpayers to avoid the dangers of “ghost” tax return preparers.

According to the IRS, a ghost preparer is paid to prepare a tax return, but does not sign it, either electronically or on paper, as the paid preparer. These phantom preparers who won't put their name on the tax return are a warning sign for taxpayers of a potential scam. 

Here's how it works. The ghost preparer can print the paper return for their client and tells them to sign and mail it to the IRS. Or, for electronically-filed returns, they will prepare it but won’t digitally sign it as the paid preparer. By doing so, the tax return appears to be self-prepared, with no indication that a paid tax preparer was used in completing the tax return -- helping keep the return preparer under the radar.

By law, anyone who prepares or assists in preparing federal tax returns for compensation must have a valid 2018 Preparer Tax Identification Number, or PTIN, before preparing any tax return. Tax preparers should sign the tax returns they prepare on paper and include their PTIN on the tax return, which provides the IRS with their identifying information. A paid tax preparer who prepares more than 10 tax returns is also generally required to e-file those returns. In this case, the preparer would digitally sign the tax return.

 

For 2018, the IRS has issued more than 737,000 PTINs to tax preparers.

Dishonest and unscrupulous tax preparers, including some who are “ghost" tax preparers, perpetuate refund fraud and scams that hurt honest taxpayers who are simply trying to do the right thing and file a legitimate tax return. Dishonest preparers look to make a fast buck by promising a big refund, sometimes charging fees based on a percentage of the refund. These shady preparers may also:

  • Require payment in cash only and not provide a receipt.
  • Invent income to erroneously qualify their clients for tax credits or claim fake deductions to enable the taxpayer to get a larger refund.
  • Direct refunds into their own financial account rather than the taxpayer’s account.

The IRS urges taxpayers to review their tax return carefully and ask questions if something is not clear before they sign and file it with the IRS. They should ensure they are comfortable with the accuracy of their tax return. And for any direct deposit refund, taxpayers should make sure both the routing and bank account number on the completed tax return are correct.

 

Taxpayers can report abusive tax preparers to the IRS. Use Form 14157, Complaint: Tax Return Preparer. If a taxpayer suspects a tax preparer filed or changed their tax return without their consent, they should file Form 14157-A, Tax Return Preparer Fraud or Misconduct Affidavit.

 

To find a tax preparer, taxpayers can visit the IRS preparer directory at www.irs.gov/chooseataxpro. Remember: Taxpayers are legally responsible for what is on their tax return even if someone else prepares it.

 

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Tags:  finance  government  IRS  small business  tax planning  taxes 

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Avoid These Six Debt Collection Pitfalls

Posted By Kenyatta Turner, LegalShield Independent Associate, Tuesday, May 24, 2016

Small Business News


Avoid These Six Debt Collection Pitfalls 

Your ability to collect a debt owed to your business hinges on the processes and policies you have in place. You can avoid some of the most common mistakes and improve your chance of successfully collecting a debt by understanding where problems often arise. Your LegalShield provider law firm is ready to help you understand the laws that govern collections, draft letters to debtors and assist you in taking further legal action if necessary. Call your LegalShield provider law firm if you need assistance with a collection matter or have any questions.

  1. “We didn’t have a payment policy or written contract.” Handshake deals and verbal agreements are difficult to legally enforce. It is essential to have a signed contract for any product or service for which payment will be made at a later date. Your contract or agreement should include a uniform payment policy. Your policy should include exact due dates or a timeline for payment, the name of the individual or business responsible, accepted forms of payment and any potential fees or interest for delinquent payment.

  2. “Our accounting records are a disaster.” Accurate and detailed records will help you quickly identify and manage delinquent accounts. Your customers and clients should know exactly where their account stands. Provide itemized invoices that include a specific due date for payment. If an account is delinquent, include the total amount owed, the number of days past due, the original due date and any late fees or interest owed.

  3. "We waited because we didn't want to upset the customer." If a customer's account becomes past due, consider placing a hold on the account and contact the customer. The longer a customer's account is delinquent and the more debt they accrue the more difficult collection becomes. You may have to make the determination to stop providing additional services or products until payment is made. Always remain professional and courteous.

  4. “We don’t have any documentation but I remember talking to the customer.” Good accounting practices will insure you retain copies of bills and invoices. You must also document your collection efforts. Your records should include letters and emails, as well as the dates and times of any phone calls or meetings. This information will be extremely important if legal action becomes necessary.

  5. “I was so mad I couldn’t stay calm.” Remain professional and friendly during each interaction with delinquent customers. It is illegal to threaten, harass or intimidate customers who are unable to make payment. Never threaten an action you are not willing or legally allowed to make. Making the issue personal or becoming aggressive will hurt your chances of successfully collecting the debt and could land you in legal trouble.

  6. “I didn’t really think the attorney could help.” Utilize your LegalShield small business membership. Call your provider law firm for assistance with collection matters. Your attorney can help you understand the law, draft a collection letter on your behalf, review your contracts and answer other legal questions you may have. If a collection letter does not resolve the matter, your provider law firm will advise you on additional legal remedies available to your business.  

 

For more information about LegalShield or IDShield for yourself, your family, your business, or your employees, please contact Kenyatta Turner, Independent Associate at 602-367-1069 or KenyattaTurner@LegalShieldAssociate.com.  Worry Less...Live More!

 

Tags:  accounting  Bookkeeping  contracts  CPA  debt cancellation  debt collection  family-owned business  finance  financing  legal advice  legal services  small biz  small business  Taxes 

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DOL's Revised, Final Rule on Overtime Doubles Minimum Salary Level Starting December 1, 2016

Posted By Daniel Schenck, Clark Hill PLC, Wednesday, May 18, 2016

It Still Hurts - DOL's Revised, Final Rule on Overtime Doubles Minimum Salary Level Starting December 1, 2016

By: Paul A. Wilhelm

 

On May 18, 2016, the Department of Labor ("DOL") issued its long-awaited Final Rule for overtime exemptions, focusing on the "white collar" exemptions (executive, administrative, professional and certain computer employees). The Final Rule comes after the DOL processed 270,000 public comments on its proposed rule about which we wrote you, from late last summer. The Final Rule will take effect December 1, 2016 and will:

  1. Raise the minimum annual salary level required for "white collar" exemptions to $47,476 ($913 per week), up from the current $23,660 ($455 per week) - an increase of just over 100%. (Recall, the salary level test does not apply to doctors, lawyers, or teachers, and certain computer employees can be exempt if paid at least $27.63 per hour and meet applicable duties tests.) This final level is down slightly from the $50,440 annual figure proposed last June.
  2. For the first time, allow employers to use nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10% of the standard salary level (i.e., up to $91/week or $4,732 total annually), provided these payments are made on a quarterly or more frequent basis. The remaining 90% of the required, new salary level is $822/week, or $42,744 annually, totaling $47,476.
  3. Raise the minimum salary for those covered under the "highly compensated employee" exemption, from $100,000 in total compensation annually, to $134,004 - an increase of 34%. This final level is higher than the proposed rule, which had called for a new level of only $122,148 - an increase of 22%.
  4. Impose an escalator provision into the FLSA, automatically "updating" the above salary levels every three years, beginning on January 1, 2020, by tying the levels ad infinitum to certain economic measures. The proposed rule had called for annual "updates."
  5. Impose no changes to the duties tests. The DOL had sought comments on possible changes to the standard duties tests for these exemptions, but decided not to make any such changes.

Misclassification of salaried-exempt employees is among the fastest-growing civil actions in both federal and state courts. With the Final Rule, the incentive for employees (and/or the DOL) to claim misclassification has increased. We advise clients to begin assessing whether they wish to pay the higher salaries and/or take other measures. We also advise them to review the duties of their employees that are or may be classified as salaried-exempt to ensure they meet the various duties tests for the white collar exemptions.

 

Look for an announcement regarding the launch of Clark Hill's FLSA Compliance Toolkit through HR Advantage coming soon. If you have additional questions, contact Paul A. Wilhelm at (313) 309-4269 | pwilhelm@clarkhill.com, or another member of Clark Hill's Labor and Employment Practice Group.

Tags:  finance  legal  salary  small business 

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International Fraud Scheme

Posted By George (Clint) Frederick CPA PLLC, George Frederick CPA PLLC, Thursday, November 12, 2015

 Note:  Had the fraud been successful my accounts would have been compromised.  Even though this 'appears' to be a valid offer from a legitimate billion dollar company that is publicly traded.

INTERNATIONAL FRAUD SCHEME

10/17/2015
Good Morning,

Central Glass Co., Ltd would like to employ your services on temporary basis on commission. Please write back for more details.

Juan Cui

Supervisor & Coordinator

Central Glass Co., Ltd

 

I responded with interest in the position thinking it might be fraud; they had my personal email from some source so a response seemed OK.

10/20/2015 - Another email is received with the following after some pleasant introductions:

JOB DESCRIPTION:

With the high demand of our products in your North America, we are currently working on establishing representative offices and sales centers in that region. Until the centers are established, we need a reliable company / individual (irrespective of the business type) that will stand as an intermediary between our customers in your country/region and Central Glass Co., Ltd.

In recent times we have had some good, bad and ugly experiences with our customers in North America, and we have been working out possible strategies to overcome these challenges. Some of these challenges includes (Detail listing followed).
COMPENSATION:

We shall be paying you the sum of $5,000 USD as monthly salary for your services, and you will be entitled to 5% commission of every payment received on behalf of Central Glass Co. Ltd. from our clients/customers. (Note this would be considered a part time position)

Kindest regards,

Takeo Komata; Executive Manager; Central Glass Co., Ltd.

Email: takeokomota@cgc-jp.net

http://www.cgc-jp.com/ 

 

NOTE:  The difference in spelling – Takeo Komata whereas email shows Takeo Komota.

Central Glass Company is listed on the Tokyo exchange.  It has a value of over $1 billion.  A list of the executives show Takeo Kamata is an executive of the company.  I attempted to call Japan to talk personally with Mr. Komata; but not speaking Japanese I couldn’t make it past the switchboard.

I sent a response of continued interest in the position.  I’m curious where this will lead.

On 10/22/2015 I received another email:
To speed up and commence with this process, we shall now proceed to signing of the Memorandum of Understanding. To do this, we require some information from you to prepare the Memorandum of Understanding. Information needed are as follow: (Note:  Requested information consisted of information that is public knowledge and nothing that I felt would jeopardize my accounts.) The email continued:

Upon receipt of the above, we shall send you a copy of the Memorandum of Understanding for signing. As soon as the signing of the MOU is done by both parties, we shall then forward your information to our customers and as well furnish you with their information.

 

On 10/26/2015 I sent an email directly to Takeo Komata as shown on the Central Glass Web Site requesting confirmation of the legitimacy of the offer.  I received no response.

On 10/29/2015 I received another email:
Attached hereto is a signed Memorandum of Understanding by our company. You are required to review, sign and return to us as soon as possible. Upon receipt of the M.O.U., we shall provide you with more information on our customers and supporting document (s). (Note:  The MOU was signed by the Chief Executive Officer of Central Glass Company along with his Executive Vice President.

I replied to the email containing the MOU, indicating that I would need to form a separate company, obtain a separate bank account, and pointing out the fact the company internal controls over accounts was very weak.  I did not sign the MOU.

On 10/30/2015 I contacted the local office of the Federal Bureau of Investigation (FBI).  I also sent by USPS (snail mail) letters to the officers that purportedly signed the MOU.

On 11/3/2015 I received a reply from the FBI: Please report this to our Internet Crime website at www.IC3.gov.  Thank you.

On 11/05/2005 the following email was received:
Thank you for your mail.

My apology for responding late. There was a fire outbreak in one of our ware houses. Properties worth millions of dollars was lost. This is a very big blow for our company at the moment.

The content of your email was clearly understood. We do not have an account in US for now but we are planning to set up one once we begin our liaison office in January. We are in agreement with your suggestion on the MOU. Please proceed to modify and return to us so that we can draft out another MOU and sign.

I did not respond to the last email.  On 11/11/2015 I received the following:


Thank you for your letter of 2nd of November. 
With regard to the offer and the MOU, we did not send you such offer and documents and the corporate email address written on the MOU and the person `Juan Cui' have no relation to our company. Also we recognized the signatures on the MOU as forged ones. It has come to our attention that there are a lot of spam emails being sent at the moment that indicate the sender as Central Glass Co., Ltd. or our officers and employees. 
Please discard these emails and documents you received. 
We apologize for any confusion these documents may have caused. 

Tags:  business  finance  fraud  tips 

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Yes The IRS Can Give You Advice

Posted By George (Clint) Frederick CPA PLLC, George Frederick CPA PLLC, Thursday, November 12, 2015
IRS ADVISES TAXPAYERS TO CHOOSE A TAX RETURN PREPARER WISELY IR 2015-124
Noting that there is still some time before the next tax filing season, IRS has advised taxpayers to make use of that time to consider the appropriate options in choosing a tax return preparers. Basic advice. IRS provides some basic tips that taxpayers can keep in mind when selecting a tax professional and filing their returns:
• Select an ethical preparer; taxpayers entrust some of their most vital personal data with the person preparing their tax return.
• Check on the service fees up front; avoid preparers who base their fee on a percentage of the refund or those who say they can get larger refunds than others.
• Ask the preparer whether he has a current Preparer Tax Identification Number (PTIN); paid tax return preparers must have a current PTIN to prepare a tax return.
• Research the preparer's history; check with the Better Business Bureau, or, for the status of an enrolled agent's license, check with the IRS Office of Enrollment. For certified public accountants, verify with the state board of accountancy, and, for attorneys, check with the state bar association.
• Ask for IRS e-file; any paid preparer who prepares and files more than 10 returns for clients generally must file the returns electronically.
• Provide records and receipts; do not use a preparer who, against IRS e-file rules, is willing to e-file a return using the latest pay stub instead of Form W-2.
• Review your tax return and ask questions before signing; taxpayers are legally responsible for what's on their return, regardless of whether someone else prepared it.
• Never sign a blank tax return; the preparer could put anything they want on the return, even their own bank account number for the tax refund.
• Ensure the preparer signs and includes their PTIN; the preparer must also give the taxpayer a copy of the return. To help taxpayers determine return preparer credentials and qualifications, IRS offered the following information:
• Any tax professional with an IRS PTIN is authorized to prepare federal tax returns. • Enrolled Agents—licensed by IRS—are subject to a suitability check and must pass a three-part Special Enrollment Examination, which is a comprehensive exam that requires them to demonstrate proficiency in federal tax planning, individual and business tax return preparation and representation. They must complete 72 hours of continuing education every three years.
• Certified Public Accountants—licensed by state boards of accountancy, the District of Columbia and U.S. territories—have passed the Uniform CPA Examination and completed a study in accounting at a college or university and also met experience and good character requirements established by their respective boards of accountancy. In addition, CPAs must comply with ethical requirements and complete specified levels of continuing education in order to maintain an active CPA license. CPAs may offer a range of services; some CPAs specialize in tax preparation and planning.
• Attorneys—licensed by state courts, the District of Columbia or their designees, such as a state bar—generally have earned a degree in law and passed a bar exam and have on-going continuing education and professional character standards. They may also offer a range of services; some attorneys specialize in tax preparation and planning.
Representation rights. Taxpayers can designate their paid tax return preparer or another third party to speak to IRS concerning the preparation of their return, payment/refund issues and mathematical errors. The third party authorization checkbox on Form 1040, Form 1040A and Form 1040EZ gives the designated party the authority to receive and inspect returns and return information for one year from the original due date of the return (without regard to extensions). Enrolled agents, certified public accountants and attorneys have unlimited representation rights before IRS. Tax professionals with these credentials may represent their clients on any matters including audits, payment/collection issues, and appeals. Preparers without one of these credentials (also known as unenrolled preparers) have limited practice rights. They may only represent clients whose returns they prepared and signed, but only before revenue agents, customer service representatives, and similar IRS employees, including the Taxpayer Advocate Service. They cannot represent clients whose returns they did not prepare and they cannot represent clients regarding appeals or collection issues even if they did prepare and sign the return in question. For tax return preparers that have an active PTIN (PTIN holders) but no professional credentials and do not participate in IRS's Annual Filing Season Program (AFSP, a voluntary program requiring a certain number of continuing education hours), this is the final year that they will have those limited representation rights for returns they prepare and sign.
For returns prepared beginning Jan. 1, 2016, only AFSP participants will have those limited representation rights.
References: For who is a tax return preparer, see FTC 2d/FIN ¶ S-1117; United States Tax Reporter ¶ 77,014.24; TaxDesk ¶ 867,002; TG ¶ 71753. For standards of practice, see FTC 2d/FIN ¶ T-10900; TaxDesk ¶ 867,008; TG ¶ 71758. [ top ] ecently posted the following:
Posted Yesterday

Tags:  finance  fraud  tax 

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