Under Criminal Investigation ... Ask TaxMama ... July 2, 2004

Ask TaxMama.Com
Tax Information With A Mother's Touch

Published by Eva Rosenberg, MBA, EA
Volume 6, Issue 265 July 2, 2004


	TaxMama's Resources & Specials
	TRA86
	Combining Student Loans
	Too Young for Medicare
	Under Criminal Investigation


	IRS Summer Tax Tip - Summer Day Camp


	A Revelation In Heaven

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Under Criminal Investigation

» From: Chicago, IL

Dear TaxMama:

A person received a letter from the Criminal Investigation Dept (CID) of IRS advising that her tax preparer is being investigated. She was instructed to call for an interview appointment.

There are two years of incorrect (false deductions, credits) on this person's returns amounting to refunds received of about $9,000. Should she get an attorney to call in response to letter?

Alice

Dear Alice,

How awful. Whether your friend needs an attorney or not will depend on whether she knew she was committing tax fraud.

If, looking at her return, it was obvious there were falsehoods on it, but she signed it anyway, greedy for the refund - get an attorney. FAST.

If the return was complex and hard to understand, and the falsehoods were buried .... she might be able to convince IRS's CID folks that they're innocent.

However, if CID determines there is fraud, they can open up 6 years (or more) and audit all of them.

So, what do you think?

If the return was one of those prepared through Irwin Schiff or his National Audit Defense Network ... I'd get an attorney.

640,000 people will be hearing from CID.

Good luck!

If I can help your friend find someone, let me know. I'll do some digging if you need it.

Best wishes,

Eva Rosenberg
Your TaxMama

<Alice Updates Us>

Thank You. Here's an update on this (interesting, I think)

The Revenue Agent says this taxpayer may be called on as a witness against the preparer. No penalties will apply, and they're trying to find allowable waiver of interest!

Correct tax, of course will still be due when all is said and done.

Also, preparer submitted returns signed (forged) by preparer, not clients. Return copy given to clients may be different from what was sent IRS, and may have been amended by preparer!

Since taxpayer cannot afford $1500 upfront to talk to an attorney, she feels better.

I gave her your response. She will keep me posted.

<TaxMama ALERT>

Wow! OK my friends - did you see the danger sign?

Your tax preparer signing your returns for you?

Don't ever let them do that. LOOK at the return first.

Even when you file electronically, there's no reason why you shouldn't have either a hard copy of the return or a PDF file version of it. The PDF (Adobe) file can be e-mailed to you and you can open it whether you have a MAC or PC computer.

Any tax professional who does electronic filing has software to convert the tax returns to PDF. (If they don't, they should be updating their software provider - even the leastexpensive ones offer this ability.)

When we file my clients' returns electronically, we have each client sign a Form 8453 transmittal sheet.

Yes, there's a way to use a PIN instead. But, when TaxMama started getting letters from readers whose ex-spouses started using their PINs to steal their refunds the year after the program was started, I stopped using PINs for my clients' protection.

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