A recent IRS report has highlighted the need for honest Santa Rosa tax professionals, because many tax "experts" are leaving their clients at risk of serious penalties. Is your current tax professional putting you at risk?
Like most Americans, you probably want to receive a larger refund from the IRS. You should be aware of every tax deduction that you can legally take advantage of. However, some people either unknowingly or intentionally try to take advantage of tax deductions that they shouldn’t be receiving, which get them into major trouble with the IRS.
A recent report from the IRS shows that many people are illegally taking advantage of tax credits that they shouldn’t be receiving. While many of these people aren’t knowingly doing anything wrong, they risk massive penalties or possible criminal charges due to the actions of unscrupulous tax professionals. This report clearly demonstrates the need for honest Santa Rosa tax professionals.
The IRS states that many people aren’t trying to actually break the law. Some dishonest tax preparers are actually illegally taking misrepresenting their clients’ income, which means unsuspecting clients can face serious consequences down the road. You should speak with a legitimate tax expert in Santa Rosa to ensure you aren’t violating any laws.
Are you or your tax professional making any of these mistakes?
The IRS recently warned people about a recent scheme that many dishonest tax preparers are using. They will over report their client’s income to help them receive a larger tax return.
How can this possibly work? Aren’t you supposed to pay higher taxes if you have a higher income? Not necessarily. There is a loophole in the tax code that dishonest tax preparers are illegally taking trying to exploit, which could be leaving their clients at risk.
This new scam works by taking advantage of the Earned Income Tax Credit, which is a provision created in 1975 to reduce hardships for low to moderate income families by lowering the tax owed to the IRS. Many people may receive tax returns for money that they earned, even if they didn’t pay taxes during the year.
According to the Intuit Tax Calculator, a couple of two earning $20,304 or less wouldn’t have to pay any taxes in 2014. However, they would still be eligible for a tax credit.
The Bankrate tool shows that if a couple reported that their income was $20,304 (enough to not have to pay a cent to the IRS), then they would receive a tax refund of $12. If they reported that their income was $15,000 then they would receive $417. The credit would be much higher if they had children.
The catch is that you can only receive the earned income tax credit if your income is over $13,650. If your income is below that limit, then you still won’t have to pay taxes to the IRS, but you won’t receive a generous refund.
The IRS recently reported that some dishonest tax companies are illegally over reporting clients' earnings to help them receive a credit that they are not eligible for. These agents are often compensated a percentage of their client’s tax refund, so they have an incentive to lie to help you get a larger return.
Why should you be concerned if your accountant is helping you receive a larger refund? Because you are the one that the IRS will come after if they find out.
The IRS plans to start cracking down on this problem, because some experts estimate that the fraud rate is about 25%, which is a serious cause for concern. You will need to make sure that you hire an honest Santa Rosa tax preparer to avoid these consequences.
At Horne Financial, we are committed to helping you receive every cent that you deserve. However, we also want to make sure that your taxes are honestly reported so that you don’t get in trouble if you are audited by the IRS.
Please don’t hesitate to contact us if you need for an honest Santa Rosa tax expert. We look forward to helping you receive the refund that you deserve!
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