A man, Todd P. Halpern, in New Jersey was charged with one count of tax fraud and one count of identify theft.  He was arrested at his home by agents of the FBI and IRS, according to U.S. Attorney Paul J. Fishman’s office.

Halpern prepared and filed 657 fraudulent federal income tax returns with the IRS in 2009 and 2010 using the Electronic Filing Identification Number of a deceased tax return preparer. Halpern prepared and filed the tax returns using stolen identities of actual taxpayers, without their knowledge. The tax returns contained fraudulent income and deduction amounts, which allowed Halpern to receive tax refunds deposited directly into his personal bank account. What a crook!

IRS agents determined that $373,938 in refunds from fraudulent tax returns were wired into Halpern’s personal bank account between July 2009 and August 2009. Halpern used these funds to make purchases at Prada, Chanel, Saks Fifth Avenue, and Bloomingdales, to acquire season tickets to the New York Giants, to purchase thousands of dollars in jewelry, gold coins, and silver certificates, to make car payments on multiple luxury vehicles, including a 2007 Cadillac Escalade and a 2008 Lexus GX-470, and to buy car parts for his classic 1957 Chevy Bel Air.

The charges of tax fraud and identity theft are each punishable by a maximum potential penalty of five years in prison and a fine of $250,000. Let’s hope he gets the max on each count.

It’s true. Along with providing the best training and support (among other things) in the industry, we are now certified to provide continuing education classes, including prep courses for the upcoming RTRP test! With this new resource, current and prospective partners can rest assured that they will pass the exams to become a Registered Tax Return Preparer, and who knows, perhaps EA prep will follow. Currently, Federal Direct’s partnership with Gleim does provide a 10% discount on all EA prep, etc.

As we progress through the summer you will see new courses appear, and you will be able to begin preparing for the RTRP test, which is already available, and, as always, we are here to answer any of your questions!

Ladies and gentlemen, it is time to begin thinking about your plans regarding the impending Registered Tax Return Preparer exam.  As much as many of us unintentionally procrastinate, it is advisable to go ahead and begin preparing to take the test. Do not wait until the last minute.

Here are a few facts about the current test that might help you as you plan:

1. The test is based on Tax Year 2011 tax law, so everything is current.

2. The testing fee is $116 dollars at the time of testing.

3. You must make an appointment to take the test using your PTIN account at www.irs.gov/ptin.

4. The test includes 120 multiple choice/ true or false questions.

5. The test will take approximately 2.5 depending on preparedness.

6. Passing score is 350/500. This is 70% or a C if you like grades.

7. You will get your score before you leave the testing site.

8. The test is available in English only.

***Prep Material is available now, and more material will be provided on your partner portal in the coming weeks.

Don’t forget about the webinar covering amendments this evening! It’s time to fix any errors that were made, claim rightful dependents who were previously claimed, etc.

*If you cannot make the webinar, it will be posted on your partner portal so you will have access to it once it is posted!

Here are eight important points about the two different penalties you may face if you file or pay late.

1. If you do not file by the deadline, you might face a failure-to-file penalty. If you do not pay by the due date, you could face a failure-to-pay penalty.
2. The failure-to-file penalty is generally more than the failure-to-pay penalty. So if you cannot pay all the taxes you owe, you should still file your tax return on time and pay as much as you can, then explore other payment options. The IRS will work with you.
3. The penalty for filing late is usually 5 percent of the unpaid taxes for each month or part of a month that a return is late. This penalty will not exceed 25 percent of your unpaid taxes.
4. If you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100 percent of the unpaid tax.
5. If you do not pay your taxes by the due date, you will generally have to pay a failure-to-pay penalty of ½ of 1 percent of your unpaid taxes for each month or part of a month after the due date that the taxes are not paid. This penalty can be as much as 25 percent of your unpaid taxes.
6. If you request an extension of time to file by the tax deadline and you paid at least 90 percent of your actual tax liability by the original due date, you will not face a failure-to-pay penalty if the remaining balance is paid by the extended due date.
7. If both the failure-to-file penalty and the failure-to-pay penalty apply in any month, the 5 percent failure-to-file penalty is reduced by the failure-to-pay penalty. However, if you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100 percent of the unpaid tax.
8. You will not have to pay a failure-to-file or failure-to-pay penalty if you can show that you failed to file or pay on time because of reasonable cause and not because of willful neglect.

(http://www.irs.gov/newsroom/article/0,,id=256616,00.html)

During the most recent Bush administration, individual income tax cuts passed which are now expected to expire at the end of this year. This year is an election year which means that politicians are waiting until after the election to decide whether or not the tax cuts will be extended.

According to Accounting Today, most democrats, along with President Obama, want to extend the tax cuts to all income levels except the top two brackets for high income earners. Republicans, however, want to extend the tax cuts to all income levels.

The potential problem at hand is whether or not there will be sufficient time to make the decision regarding the tax cuts without causing mass confusion to taxpayers. Not just confusion, but delays worse than we’ve seen in the past which will affect every single taxpayer, not just those who file a certain type of form (for example, in 2010 taxpayers who itemized had to wait until mid February to file).

Not only would this create delays for the possibility of filing, this could create a backlog of returns that could postpone acceptances and refunds as well.

The deadline to file your taxes is April 15th.  Many people find themselves not quite ready to file, and this is when knowing how to file an extension becomes very useful, giving your client another reason to keep you as his personal tax professional.  There will be a webinar this Thursday, April 5th at 6pm est, discussing Extension filings.  It will be a short webinar, probably 30 min or less just covering the basics of what extensions provide, how to complete them, deadlines, etc.

Rejections are an inevitability in the tax preparation world. Previously claimed dependents, wrong EINs, etc. Now, take a second to think about how nice it would be with out them. Ok, stop. That will never happen. So, instead of wishing for the impossible, simply go to your partner portal, log in, and go to your WEBINARS tab.  There it is!  The webinar to help you fix, resubmit, and get accepted those returns that are sitting. Sitting returns translate to zero dollars in your pocket until you get them accepted, which could potentially be a great deal of money.

Yet another company claiming to assist taxpayers with tax debt resolution files for Chapter 11 bankruptcy. From false claims of help to deceptive businesses practices, another national tax resolution company shows why it may best to go with a local tax professional.

Many national tax resolution companies advertise negotiation help in resolving clients’ debt problems. Many do the work they advertise, while many, such as TaxMasters, are catching heat due to claims that they are taking the money and refusing to do the work on behalf of a client.  TaxMasters has recently filed for chapter 11 bankruptcy which allows for reorganization of the business, assets, and debt.  In most cases the debtor is still in control of business practices.

One big problem with these national debt resolution firms is that they always say “YES.”  Yes, we can lower your debt. Yes, we will fix your tax problems.  The correct response to these questions is “Maybe.”  There is absolutely no guarantee that anyone can reduce or eliminate any tax debt or liabilities that a person or company has.  For this reason, the word “scam” is throw around. Is it always a scam? No, but many times it is. If it sounds too good to be true, it usually is.

There are other resources available to people or business with tax debt issues. Local Enrolled Agents are a great resource.  Generally speaking, they can charge lower rates than a national firm and have just as much, if not more, expertise than national companies that bank on flashy commercials.

The results are in!  The winners of the second annual St. Patrick’s Day Tax Filing Contest are as follows:

Bank Funded Returns:

1st. Place:  Farrell’s Tax & Services, LLC  ($250 and a FD Laptop bag)

2nd place: Friendly Tax Service (FD Laptop bag)

Honorable Mention: RGS Tax Services, St. Louis Tax Service, Maydelin Martell Agency

E-filed Returns:

1st. Place:  Eastern Shore Tax Services  ($100 and a FD Laptop bag)

2nd place:  Girotel # 4 (FD Laptop bag)

Honorable Mention:  Rodriguez Tax Service, Alamo Business Concepts, Remesas Cibaio, Inc.

Congratulations to the winners! For those who didn’t win, there’s always next year!

*All prizes will be shipped today.