Calls from a few of tax clients made us aware of the glitch, made them think the return had not been filed, don’t blame them at all. And the goal is to have returns filed electronically….?

From the IRS site.
Update: We are aware that some taxpayers who have filed electronically and received an acknowledgement from the IRS are concerned when they visit “Where’s My Refund” and are told that we have no information regarding their return. This is a temporary situation, and we expect to resolve the matter in a few days. At that time, taxpayers will be able to get an expected refund date when they visit “Where’s My Refund.”

If a taxpayer received an acknowledgment message that their e-filed tax return has been received, they can be assured that the IRS has the tax return even though “Where’s My Refund” does not reflect that. Taxpayers should not call the IRS unless specifically directed by “Where’s My Refund,” as there is no new information to give them.

We expect the vast majority of tax refunds to continue to be issued within the historical range of 10 to 21 days. The IRS is taking steps to update information so that Where’s My Refund has current information. The IRS apologizes for any inconvenience and will provide updated information as soon as possible.

JK Harris has filed for Bankruptcy, the sad thing is that there are thousands of ex-clients who hired them to help with their tax problems that are being hurt one more time by them. It is rumored that another HUGE (turn his face head shot) TV Tax ad company is purchasing the company and will be contacting the ex-JK Harris clients with NEW promises and NEW charges.

The bad news is that about 30 new Tax TV ad companies have sprung up from the ashes of JK and will start their own rip-off campaigns. The same thing happened when the Tax Lady bit the dust.

Attached article below-reporter is justifiably indignant, but perhaps a bit naive about tax problems and what people need when their paycheck or bank account has be levied, or wife/husband just walked out the door because of tax problems. Yes, the IRS has systems in place, but don’t ignore what their primary function is-collect taxes to pay for the running of our country. Many people can solve their tax problems, other’s prefer to hire a firm. It isn’t the fault of the client that JK closed and didn’t do what they were hired for, is ONLY the fault of the firm that ripped them off.

What is the next big TV Tax firm to go under? State Attorney Generals see suing these dirt bags as income source and it makes for nice press during an election year. Best of all it is the right thing to do.

For almost 10 years-We have been telling people with tax problems the same thing-Read our Tax Do’s and Don’ts.

JK Harris to file bankruptcy – Shutdown fueled by taxpayer complaints
By Jay Petrillo
Examiner.com
January 6, 2012
Visitors to jkharris.com are being greeted by the following message from John K. Harris, CEO:
I would like to let our clients and prospective clients know that we are working as fast as possible to get through this new GM/Chrysler style reorganization process. The court has responded to every request in an expedited manner and we anticipate announcing the approval of a sale motion in the next week or so.
JK Harris, one of the nation’s largest tax representation firms, suspended all active operations Thursday in front of a potential Chapter 11 bankruptcy filing.
A report from CBS Affiliate WCSC Channel 5 out Charleston, SC, gives a testimonial that is widely reflected in multiple consumer complaints about the tax representation giant.
Customer Patricia Ballman said she drove to the Goose Creek location searching for answers from corporate headquarters. The Texas resident was surprised to see workers pushing out desk chairs.
. “I think they are scurrilous, I think they are thieves,” said Ballman.
Ballman said she hired the company three years ago to help with a tax crisis.
“They never intended to do anything for me. The contract was written erroneously. It was based on resolving state tax issues. We don’t have state taxes in Texas. I wanted my money back,” said Ballman.
Since October, John K. Harris had been attempting to restructure and possibly sell the business and two affiliates under Chapter 11 bankruptcy protection.
“This is truly the most devastating event I have been forced to deal with in my 58 years on this earth,” Harris said in an email to all employees. “I am not sure it will reach that level for all of you, but I know that for some of you it will be as personally devastating for you as it is for me.”
Perhaps not as devastating as the 5,000 taxpayers who have brought on JK Harris in an attempt to settle their tax debts with the IRS. Consumeraffairs.com lists hundreds of grievances against the firm, the majority of those citing bloated fees and little to no help in return.
JK Harris led the way in robust advertisement that it could resolve tax debts for “pennies on the dollar,” a popular catch-phrase that refers to an IRS Offer in Compromise – A program designed for taxpayers to do themselves.
The nationwide firm has dogged by cash-flow problems and the cost of large settlements related to multiple claims that it misled consumers. In case after case, attorneys general complained that the company told consumers it could resolve their tax problems, and took their payments, when no such relief was possible for those particular clients.
The company sought bankruptcy protection to head off an attempt by the Texas attorney general’s office, related to such consumer claims, to force the company into receivership.
This is by far the first time JK Harris has been targeted for a failure to deliver. In 2007, a $6 million class action lawsuit was driven by consumer complaints about JK Harris’ heavily advertised tax-resolution coupled with a negligence in their part to actually assist taxpayers.
The next step for JK Harris & Co. is expected to be a Jan. 10 bankruptcy court hearing, where the company will ask a judge to appoint a trustee.
The next step for JK Harris & Co. is expected to be a Jan. 10 bankruptcy court hearing, where the company will ask a judge to appoint a trustee.
The IRS has always encouraged taxpayers to contact them directly. There are no options available to any third-party tax resolution firms that are not available to a taxpayer directly.

The Internal Revenue Service has launched a new program that will enable many employers to resolve past worker classification issues and achieve certainty under the tax law at a low cost by voluntarily reclassifying their workers.
This new program will allow employers the opportunity to get into compliance by making a minimal payment covering past payroll tax obligations rather than waiting for an IRS audit. (carrot and stick) Eligible employers can obtain substantial relief from federal payroll taxes they may have owed for the past, if they prospectively treat workers as employees. This is available to many businesses that currently erroneously treat their workers or a class or group of workers as nonemployees or independent contractors, and now want to correctly treat these workers as employees.

Contact our firm or the IRS to find out if your business is eligible. Interested employers can apply for the program by filing Form 8952, Application for Voluntary Classification Settlement Program, at least 60 days before they want to begin treating the workers as employees.
Employers accepted into the program will pay an amount effectively equaling just over one percent of the wages paid to the reclassified workers for the past year.
No interest or penalties will be due, and the employers will not be audited on payroll taxes related to these workers for prior years. Participating employers will, for the first three years under the program, be subject to a special six-year statute of limitations, rather than the usual three years that generally applies to payroll taxes.

It might be in your best interest to research this program to make sure you fully understand the benefits and potential pittfalls before contacting the IRS on your own.

Great article about rip off tax firm, falls into the trap of over generalization that all firms are bad for the bulk of article, but that is the media world we live in, drama sells. It is ironic that the Ad for the Today show on the front page of MSNBC is promoting a firm in the Today Show ad that has a challenging record, while this editorial article is posted the same day….perhaps advertising and editorial departments should chat more often.

Love the mention about the advice from attorney from Maryland about the 10-tax rules, nice re-write of our Tax Relief Do’s and Don’ts , let’s compare blog posting dates, hmmm, but at least he is promoting the truth.

Another reminder about the BBB, make sure the company has been in business for more than one year and with the BBB for at least a year. They bad guys appear to have 12 month business plan, open doors, get BBB rating, promote A rating, get clients, rip them off, get bad BBB rating, shut doors, repeat.

The simple rule is if it sounds too good to be true, it is

http://redtape.msnbc.com/2010/04/april-15-can-be-a-day-of-fear-loathing-or-even-downright-panic-and-that-can-work-to-great-advantage-for-companies-anxiou.html#posts

In the last few days, a number of our client’s have reported that they received phishing emails claiming to be from the IRS, one was a CP 2000 notice and the other was an IRS Refund notice. The IRS doesn’t communicate by email to taxpayers. Never open or click on an email claiming to be from the IRS.

Taxpayer ID: They use your email address or business name here-00000103460456US
Tax Type: INCOME TAX
Issue: Unreported/Underreported Income (Fraud Application)
Please review your tax statement on Internal Revenue Service (IRS) website (click on the link below

The IRS has more information on other scams on their website.

http://www.irs.gov/newsroom/article/0,,id=170894,00.html

The IRS publishes this list, well worth reading.
WASHINGTON — The Internal Revenue Service today issued its 2010 “dirty dozen” list of tax scams, including schemes involving return preparer fraud, hiding income offshore and phishing.
“Taxpayers should be wary of anyone peddling scams that seem too good to be true,” IRS Commissioner Doug Shulman said. “The IRS fights fraud by pursuing taxpayers who hide income abroad and by ensuring taxpayers get competent, ethical service from qualified professionals at home in the U.S.”
Tax schemes are illegal and can lead to imprisonment and fines for both scam artists and taxpayers. Taxpayers pulled into these schemes must repay unpaid taxes plus interest and penalties. The IRS pursues and shuts down promoters of these and numerous other scams.
The IRS urges taxpayers to avoid these common schemes:
Return Preparer Fraud
Dishonest return preparers can cause trouble for taxpayers who fall victim to their ploys. Such preparers derive financial gain by skimming a portion of their clients’ refunds, charging inflated fees for return preparation services and attracting new clients by promising refunds that are too good to be true. Taxpayers should choose carefully when hiring a tax preparer. Federal courts have issued injunctions ordering hundreds of individuals to cease preparing returns and promoting fraud, and the Department of Justice has filed complaints against dozens of others, which are pending in court.
To increase confidence in the tax system and improve compliance with the tax law, the IRS is implementing a number of steps for future filing seasons. These include a requirement that all paid tax return preparers register with the IRS and obtain a preparer tax identification number (PTIN), as well as both competency tests and ongoing continuing professional education for all paid tax return preparers except attorneys, certified public accountants (CPAs) and enrolled agents.
Setting higher standards for the tax preparer community will significantly enhance protections and services for taxpayers, increase confidence in the tax system and result in greater compliance with tax laws over the long term. Other measures the IRS anticipates taking are highlighted in the IRS Return Preparer Review issued in December 2009.
Hiding Income Offshore
The IRS aggressively pursues taxpayers involved in abusive offshore transactions as well as the promoters, professionals and others who facilitate or enable these schemes. Taxpayers have tried to avoid or evade U.S. income tax by hiding income in offshore banks, brokerage accounts or through the use of nominee entities. Taxpayers also evade taxes by using offshore debit cards, credit cards, wire transfers, foreign trusts, employee-leasing schemes, private annuities or insurance plans.
IRS agents continue to develop their investigations of these offshore tax avoidance transactions using information gained from over 14,700 voluntary disclosures received last year. While special civil-penalty provisions for those with undisclosed offshore accounts expired in 2009, the IRS continues to urge taxpayers with offshore accounts or entities to voluntarily come forward and resolve their tax matters. By making a voluntary disclosure, taxpayers may mitigate their risk of criminal prosecution.
Phishing
Phishing is a tactic used by scam artists to trick unsuspecting victims into revealing personal or financial information online. IRS impersonation schemes flourish during the filing season and can take the form of e-mails, tweets or phony Web sites. Scammers may also use phones and faxes to reach their victims.
Scam artists will try to mislead consumers by telling them they are entitled to a tax refund from the IRS and that they must reveal personal information to claim it. Criminals use the information they get to steal the victim’s identity, access bank accounts, run up credit card charges or apply for loans in the victim’s name.
Taxpayers who receive suspicious e-mails claiming to come from the IRS should not open any attachments or click on any of the links in the e-mail. Suspicious e-mails claiming to be from the IRS or Web addresses that do not begin with http://www.irs.gov should be forwarded to the IRS mailbox: phishing@irs.gov.
Filing False or Misleading Forms
The IRS is seeing various instances where scam artists file false or misleading returns to claim refunds that they are not entitled to. Under the scheme, taxpayers fabricate an information return and falsely claim the corresponding amount as withholding as a way to seek a tax refund. Phony information returns, such as a Form 1099-Original Issue Discount (OID), claiming false withholding credits usually are used to legitimize erroneous refund claims. One version of the scheme is based on a false theory that the federal government maintains secret accounts for its citizens, and that taxpayers can gain access to funds in those accounts by issuing 1099-OID forms to their creditors, including the IRS.
Nontaxable Social Security Benefits with Exaggerated Withholding Credit
The IRS has identified returns where taxpayers report nontaxable Social Security Benefits with excessive withholding. This tactic results in no income reported to the IRS on the tax return. Often both the withholding amount and the reported income are incorrect. Taxpayers should avoid making these mistakes. Filings of this type of return may result in a $5,000 penalty.
Abuse of Charitable Organizations and Deductions
The IRS continues to observe the misuse of tax-exempt organizations. Abuse includes arrangements to improperly shield income or assets from taxation and attempts by donors to maintain control over donated assets or income from donated property. The IRS also continues to investigate various schemes involving the donation of non-cash assets including situations where several organizations claim the full value for both the receipt and distribution of the same non-cash contribution. Often these donations are highly overvalued or the organization receiving the donation promises that the donor can repurchase the items later at a price set by the donor. The Pension Protection Act of 2006 imposed increased penalties for inaccurate appraisals and set new definitions of qualified appraisals and qualified appraisers for taxpayers claiming charitable contributions.
Frivolous Arguments
Promoters of frivolous schemes encourage people to make unreasonable and outlandish claims to avoid paying the taxes they owe. If a scheme seems too good to be true, it probably is. The IRS has a list of frivolous legal positions that taxpayers should avoid. These arguments are false and have been thrown out of court. While taxpayers have the right to contest their tax liabilities in court, no one has the right to disobey the law or IRS guidance.
Abusive Retirement Plans
The IRS continues to find abuses in retirement plan arrangements, including Roth Individual Retirement Arrangements (IRAs). The IRS is looking for transactions that taxpayers use to avoid the limits on contributions to IRAs, as well as transactions that are not properly reported as early distributions. Taxpayers should be wary of advisers who encourage them to shift appreciated assets at less than fair market value into IRAs or companies owned by their IRAs to circumvent annual contribution limits. Other variations have included the use of limited liability companies to engage in activity that is considered prohibited.
Disguised Corporate Ownership
Corporations and other entities are formed and operated in certain states for the purpose of disguising the ownership of the business or financial activity by means such as improperly using a third party to request an employer identification number.
Such entities can be used to facilitate underreporting of income, fictitious deductions, non-filing of tax returns, participating in listed transactions, money laundering, financial crimes and even terrorist financing. The IRS is working with state authorities to identify these entities and to bring the owners of these entities into compliance with the law.
Zero Wages
Filing a phony wage- or income-related information return to replace a legitimate information return has been used as an illegal method to lower the amount of taxes owed. Typically, a Form 4852 (Substitute Form W-2) or a “corrected” Form 1099 is used as a way to improperly reduce taxable income to zero. The taxpayer also may submit a statement rebutting wages and taxes reported by a payer to the IRS.
Sometimes fraudsters even include an explanation on their Form 4852 that cites statutory language on the definition of wages or may include some reference to a paying company that refuses to issue a corrected Form W-2 for fear of IRS retaliation. Taxpayers should resist any temptation to participate in any of the variations of this scheme. Filings of this type of return may result in a $5,000 penalty.
Misuse of Trusts
For years, unscrupulous promoters have urged taxpayers to transfer assets into trusts. While there are many legitimate, valid uses of trusts in tax and estate planning, some promoted transactions promise reduction of income subject to tax, deductions for personal expenses and reduced estate or gift taxes. Such trusts rarely deliver the tax benefits promised and are used primarily as a means to avoid income tax liability and to hide assets from creditors, including the IRS.
The IRS has recently seen an increase in the improper use of private annuity trusts and foreign trusts to shift income and deduct personal expenses. As with other arrangements, taxpayers should seek the advice of a trusted professional before entering into a trust arrangement.
Fuel Tax Credit Scams
The IRS receives claims for the fuel tax credit that are excessive. Some taxpayers, such as farmers who use fuel for off-highway business purposes, may be eligible for the fuel tax credit. But other individuals are claiming the tax credit for nontaxable uses of fuel when their occupation or income level makes the claim unreasonable. Fraud involving the fuel tax credit is considered a frivolous tax claim and potentially subjects those who improperly claim the credit to a $5,000 penalty.
How to Report Suspected Tax Fraud Activity
Suspected tax fraud can be reported to the IRS using Form 3949-A, Information Referral. The completed form or a letter detailing the alleged fraudulent activity should be addressed to the Internal Revenue Service, Fresno, CA 93888. The mailing should include specific information about who is being reported, the activity being reported, how the activity became known, when the alleged violation took place, the amount of money involved and any other information that might be helpful in an investigation. The person filing the report is not required to self-identify, although it is helpful to do so. The identity of the person filing the report can be kept confidential.
Whistleblowers also may provide allegations of fraud to the IRS and may be eligible for a reward by filing Form 211, Application for Award for Original Information, and following the procedures outlined in Notice 2008-4, Claims Submitted to the IRS Whistleblower Office under Section 7623.

New IRS procedures. This is a positive step by the IRS to help those taxpayers who in the past couldn’t file an OIC.

IRS has directed IRS employees to consider a taxpayer’s current income and potential for future income when negotiating an offer in compromise. Normally, the standard practice is to judge an offer amount on a taxpayer’s earnings in prior years. This new step provides greater flexibility for the unemployed when filing an OIC. There is one potential catch, the IRS may also require that a taxpayer entering into such an offer in compromise agree to pay more if the taxpayer’s financial situation improves significantly. What, when, and how the improvement will be evaluated will be important to learn before moving ahead with an OIC.

Great article. I applaud her for her tenacity and the amount of time and effort she put forth to ultimately win her battle with the IRS. I do wonder where her tax preparer was during the audit, it is possible tax preparer may not have been experienced enough to representing her in the audit. There is also the question what emotional cost did she pay for her time, effort, and worry during the process.

If she had hired a firm to represent her when she first got the audit letter the story would not have been as compelling to read, but the same outcome could have occurred without the drama.

It is something to consider when hiring a firm to prepare tax returns. Will they or can they help if you ever get audited (random audit, or triggered by claims made by ex-spouse, disgruntled ex-employee)?

I recall in a meeting a few years back, where a CPA (medium sized firm) bragged that none of the clients in all their years had been audited. Two things struck me as he talked: First, I hoped that he would be wise enough to never consider representing one of his clients in audit, given his obvious fear of the IRS and lack of experience. Second, was his firm preparing returns with such fear and for their own goals, that their clients were being short changed in the tax preparation?

http://finance.yahoo.com/taxes/article/108550/nurse-outduels-irs-over-mba-tuition?mod=taxes-advice_strategy

Last July we received a visit from the an agent from the Department of the Treasury, he informed us that our company name IRS/State Tax Relief Associates, Inc was potentially in violation of a U.S. code regarding the misuse of Department of Treasury names, symbols, etc. The fact that the IRS approved our name years ago and apparently that the IRS was not even aware of the code makes this more amusing and the fact that hundreds of tax returns have been sent to IRS with our company name as preparer had no bearing on how the code was to be interpreted.

After several months of not hearing back, we contacted the agent to ask when we would receive the determination and he informed us he was still working on the file. We did get the chance to voice our frustration that time could spent on our name while dozens of “phony tax firms” were all over TV & the radio every day promising impossible outcomes and stealing from clients while the U.S. Treasury watched without interference was a strange to say the least. We met today to discuss what we should do and decided that a name change is inevitable so we have put the name change process into motion. Now we have to decide on what to change it to. This is a pain! We are sure there is a silver lining to this mess, guess we just have to look harder. More to come.

The IRS sends out this warning out one or two times a year to remind taxpayer that the IRS does not use e-mail to communicate with taxpayers. The link below is to the IRS site.

http://www.irs.gov/newsroom/article/0,,id=211669,00.html