Did you know that the federal government (happily) holds on to hundreds of millions of dollars in unclaimed refunds every year? As a tax professional, it truly breaks my heart, knowing that just a few thousand, or even a few hundred bucks for us “regular guys” out of that vast pool of overcharging could make a world of difference…and they are just sitting there, unclaimed!
On Nov ember 14, 2007 the IRS admitted it had $110 million in unclaimed refunds.
Yet, in an age when our tax code is getting more and more complex, regular consumers are getting bamboozled out of the money they’re due. There’s six very important reasons that this happens, and this Special Consumer Report is YOUR antidote to the madness!
MISTAKE #1— “Going It Alone” With The “Free” Online Options
Did you know that us accountants like to joke to one another about how good these online software programs (TaxCut®, TurboTax®, etc.) are for our business? Firstly, they are NOT as “easy to use” as claimed, and Secondly…they cost you an arm and a leg!
You might think…nah, they’re pretty cheap. And on the surface, you might be right (though on Monday, November 12, 2007 a $1Billion class action lawsuit was filed in the federal court in Philadelphia alleging gross misstatement of fees and deceptive standards of the federal “FreeFile” program…so even on the surface, it wasn’t always cheap! In March 2007 California was paid $31 million to settle a national franchise “misstatement of fees” suit). But I’m not even talking about the money for the service itself.
Using those programs can end up leaving hundreds, or even thousands of YOUR dollars in the coffers of Uncle Sam…even if you follow all of their instructions to a tee. I see it ALL THE TIME—frustrated clients bringing in prior year’s tax return, astonished at all the “hidden money” my staff and I are able to find for them!
Even worse…
Choosing The WRONG Method To File Your Taxes Could Put You In Some Serious Hot Water With The IRS!
Even if I didn’t owe a ton of back taxes, I still don’t want MY RECORD to show some IRS agent that there has been some discrepancy in the past so RED FLAGS start to fly and more bureaucratic people begin looking through all my past tax filings and current income holdings and, basically taking my social security number and poking around in my private life! (If you think they won’t do this, the wool might have already been pulled over your eyes …) They can do a lot of things you won’t want them to do. However, if you keep a clean slate (no IRS correspondence with you related to filing your taxes correctly), the opportunities for them to mess with your personal stuff will be limited.
MISTAKE #2: Not Choosing An Expert In The Type Of Tax Service YOU Want!
Unfortunately, with the way that most tax professionals and CPA’s present themselves to the world, it seems like we’re all the same. We all seem to offer the same services, for pretty similar fees. If I weren’t working every day in this industry, I’m pretty sure I would think that all accountants and CPA’s were the same. NOTHING could be further from the truth!
You see, each tax professional does have certain qualifications. Some might be experts at this sort of tax law, or in working with farmers or with getting money back through IRS representation, or a whole variety of different things…but are they really providing what you, the consumer, wants?
What do you want from a tax preparer?
When I sit down and talk with regular consumers, here’s what I discover:
You want to be able to work with a caring professional…NOT one of those “cattle call” shops, where you’re squeezed in with a bunch of other people, and seen by harried, poorly-trained employees that just took a basic tax course.
You want an accurately filed tax return. You want the whole thing broken down in terms that you understand, and in a way that you don’t need a translator to communicate. You want there to be processes in place to ensure that the most money is kept out of the grasping hands of Uncle Sam, and in your wallet (legally). You want a “heads up” about future ways you can legally add deductions and make sure that you can get even more money back in the future. You want assurances everything your tax preparer is doing for you is valid and correct, so a guarantee(s) is essential to the process.
And of course, you want it done fast. Look, I know this is a big deal for consumers…you don’t want your accountant pushing back at you all the time, saying “give me more time”, when you know it’s not because they’re working hard on your behalf, but that they’re so poorly organized that they’re not getting ANYBODY’S work done on time!
Oh, and if you ARE getting a refund, you want a tax firm who can get you the most money back the fastest … with the most electronic filing options available.
Here’s the bottom line: You want professionalism…accuracy … you want clarity … you want to be aware of beneficial tax options … you want peace of mind … you want an efficient use of your time …. you want your refund money back in your hands fast …. And at the end of the day, you want to KNOW you got the most money back from Uncle Sam AND you know the IRS will stay off your back so you can sleep like a baby at night!
If the accountant or tax professional you are talking to can’t do these things, you need to call one that can.
Big Mistake #3 Working Without a Written Guarantee!
I’ve touched on this before, but it’s worth saying more about it.
Do you have an accountant that guarantees their work…in WRITING? Sure, some guys might say: “We’ll make it right if we screw up”, but then the stuff hits the fan and they fight you every step of the way.
I’ve heard too many horror stories about taxpayers getting a letter from the IRS, then they take it to their accountant, and then the letter sits on a desk gathering dust. Or stories about the CPA who makes some calls on your behalf, but you get charged an arm and a leg in the process. Or sadly, a taxpayer doesn’t get any help from the person who prepared their taxes for them so they go it alone and call the IRS themselves and figure out what to do and not to do during this normally ugly IRS correspondence … THIS can be a nightmare!
Don’t let that happen to you! You need to have a written understanding with your tax professional that you won’t be left in the lurch! Oh, and also—does this guarantee actually do something you want it to?
I’ve seen some accountants guarantee they will file your taxes for you by April 15th or they will file an extension for you. Well, whoopdy do! That sure makes you feel good in the morning, doesn’t it? Other weak guarantees I’ve seen in the tax industry are, “We guarantee we will begin preparing your tax return the same day we meet with you.”
That means nothing to me. I don’t care when you start preparing my taxes. I want to know how long it is going to take you to finish it and do so without leaving out silly errors you know you should have caught.
So remember: the guarantees should be in areas you care about, like:
Tax Return Accuracy … Speed of Service … Most Money Legally Yours … Ongoing IRS Protection For Years After Filing …
These are the things YOU care about! Make sure the tax professional you choose stands behind these critical areas of tax filing so you get the most out of your tax filing experience!
Big Mistake #4: Picking A Tax Professional That Can’t Stop Using “Tax Lingo”…Who Doesn’t Relate To YOU!
Most people don’t realize this, but many tax professionals live in a whole different world. It’s a world with its own language, and it can be mind-numbing for the normal tax professional. “Schedule C”, “Offer In Compromise”, “Comparable Contributions”…blah, blah, blah. And when you sit down to talk with these guys, that’s all that comes out of their mouth!
Many CPA’s have a ton of experience in complicated accounting practices, doing very complex audit work and usually doing a really great job helping some large business or very high net worth rich guy with his investments and taxes. But, for most tax returns that are filed each year … nah.
Look, does this sound like your tax return? I thought so. You are not alone. The majority of regular middle income folks don’t want to wade into the swamp of all the stuff that CPA’s and tax professionals deal with. They just want it done right, get the most money back from Uncle Sam, and they want it done fast.
Am I saying all these guys don’t know what they’re doing? Absolutely not. There are some Certified Public Accountants who take the time to keep up with the latest tax laws and are still able to speak the language of the client. But, in most cases you are better off finding a tax preparer who is good at doing what you need done. And in this case, if the tax preparer prepares a lot of middle income tax returns already, that’s even better.
Think of it this way: Would you use a sledge hammer to hang a picture frame?
(I didn’t think so.)
Remember: Go with a tax professional with TAX preparing experience, not auditing or accounting or something else that doesn’t relate to you!
Big Mistake #5: “Falling Back” on a National Brand Name, Just Because That’s The Only Option You’ve Heard Of!
I’m not going to name names here. But, just about everyone has heard of these brand name tax firms right down the block in most cities and small towns. They spend millions of dollars every tax season on “getting their name out” ad campaigns just so you will think of them when it comes time to file your taxes.
The problem is, a “brand name” never prepared anyone’s taxes – people do! So you can have all the famous names, fancy Super Bowl ads and catchy slogans, but when push comes to shove, it is a real person helping you. And too many times, that “real person” is a low-paid, stressed-out, poorly-trained employee.
Outstanding personal service just because some smiling face says it on the TV… not a chance! Better listen to what OTHER taxpayers like you are saying. Have they already experienced that particular tax firm’s services in the past and can testify to this effect? If so, that has more credibility than some high paid ad agency putting together some commercial on Madison Avenue.
(Hearing it from the “horse’s mouth” so-to-speak is even better. If you can listen to what other real people are saying about their tax filing experiences, and you like what they are saying — then by all means, go to that particular tax business and give’em a shot at filing your taxes this year.)
So for the record, don’t be “blind” to the fact that fancy ad jingles translate into the high quality tax services. They don’t.
Big Mistake #6: Paying Too Little OR Too Much When Filing A Regular Middle Income Tax Return!
Does that seem funny to you? Well, let me explain.
Let’s start with the one that probably surprised you: “paying too little” for filing a middle income person’s tax return. Think about it…who are the ones that are charging too little?
In our industry, we call these folks the “fly-by-night” tax preparers. Sure, they might know a few things about taxes, and they are often very nice people…but do you really want them as the ones representing you before the IRS?
Tax professionals who “low ball” on price often work out of their home or they have so few resources, that they can be working off of the prior year’s tax code! Even worse, many of these one-person shops have NOBODY checking their work to make sure they got all of the deductions you could get.
Don’t you want all of the money you’re due?
The second problem may be a bit more obvious: paying too much when filing a tax return?
It’s weird, but there are people in the world that brag about paying the highest price possible. And there are plenty of folks out there willing to charge it. I’m talking about $1,200, $1,500, or even $2,000 to prepare a decently simple tax return…that’s it! Do you have that kind of money just laying around?
These folks … after they write the check to the accountant for $1500 bucks or whatever, they may feel pretty good, but I bet their gut tells them something is wrong.
It’s called overpaying when you don’t have to! Getting a quality preparer with multiple guarantees backing up their work, ongoing support and year round access to a leader or manager in charge is all you need. Do you need to pay $1,500.00 or $1,800.00 dollars for that?
Actually, on most middle income returns, you can pay in the $180 to $400 range and be just fine. Some high-priced tax professionals will charge you $1,000 or $1,500 for the same forms and schedules. Or you can find a “Fast Eddie” to help you file your taxes and probably only pay $100 or less. My advice is to find a tax professional who charges by the form so he/she is not pulling fees out of thin air.
CONCLUSION – Now you Don’t Have To Fall Prey To These Mistakes …
I hope this Free Report has opened your eyes to important lessons about filing your taxes. Some of them, may be ones you already knew in your gut…you just never had them verbalized before.
Choosing the RIGHT tax professional is an investment of time and money … and I will add, a WISE INVESTMENT indeed. I say “wise” because the consequences of a misfiled tax return, an incorrect tax return or a late/penalized tax return are awful in the short and long term.
But I’ll tell you a bigger problem.
I mentioned this before…Unclaimed refund money taxpayers never receive because they had no idea they were entitled to a certain deduction or they never filled out a particular form that automatically got them more money or ……… (the list is endless!)
Statistically speaking, you could be out as much as $1,300.00 in back refund money because you choose to file by yourself or with someone that doesn’t pay attention. (Ouch!)
I wouldn’t take that chance. I’d choose a quality tax professional this year and ask to let them review your previous 3 years of tax returns at the same time. You might have some “buried treasure” lying around in your files and never know it. Wouldn’t that be a scream! (Caribbean Vacation, here we come ….)
Take Action Now – 619-283-8055
The clock IS ticking. Most taxpayers procrastinate. I hope you are not one of them… If you’ve made it through this Free Report, we’d like to give you a special incentive to have your taxes done right. Call our office and ask about the “Don’t Get Screwed by the IRS Gift” when you make an appointment, and you’re gonna watch your worries melt away! All these mistakes that regular folks make…well, they won’t happen to you!
