Can Tax Services Cause You Grief And Problems From The Irs Later?

How often does it happen? I have a friend using one service and they are boasting that he is getting back over $3000. That seems excessive based on his earnings and filing status. What tricks do these tax services use and how can it hurt you later?

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5 Responses to “Can Tax Services Cause You Grief And Problems From The Irs Later?”

  1. Judy, on November 26th, 2009 at 2:57 pm Said:

    “Big box” tax services are not always up to date on current tax law (as some friends of mine found out).
    It’s best to spend the little bit of extra money, and take it to an individual tax professional (CPA).

  2. tonalc1, on November 26th, 2009 at 3:01 pm Said:

    Believe me they don’t use tricks, they use the information that you give them. It’s very easy to get $3000.00 back especially if you have a child, or a home. You can’t just base it on what you know about his earnings/filing status.
    As for your question can it hurt you later, yes if you give wrong information to the tax service it can definately hurt you!

  3. Delay, on November 26th, 2009 at 3:13 pm Said:

    If a tax preparer files a false return for a client, the tax preparer is likely to end up in big trouble, right along with the client who signed the false return. There aren’t “tricks” available.
    If your friend has children and has income under around $38,250, he is probably eligible for an earned income credit which could result in a high refund. Or if he had way too much withheld, he’d get a large refund.

  4. Beverly S, on November 26th, 2009 at 3:13 pm Said:

    Yes, it can bite you.
    Ask your friend did he look at every line of the return?
    Did he RECOGNIZE every deduction or credit?
    If yes, that’s okay. That’s the whole point of using a preparer–they know what can be deducted even if you don’t.
    On the other hand, is there income that he doesn’t recognize as his? Is there a bizarre credit that he’s never heard of? Did he suddenly itemize and claim charitable and business deductions he never made? If yes, the tax return is fraudulent and can come back to haunt him 3,4,6,10 years down the line. If any return is marked as fraud with a preparer, the IRS will pull ALL of the returns that preparer did looking for fraud. Since the TP signs the return under penalties of perjury, he is just as guilty and there is no statute on fraud.

  5. the tax lady, on November 26th, 2009 at 3:46 pm Said:

    i dunno.

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