Four Billion Dollars and Counting From Stolen Tax Returns by Identity Theft!
By Patricia A Gaines
According to news media identity thieves have stolen over 4 billion dollars from tax refund recipients by using the information found on their tax statement. It is also reported this stolen money is likely from people who have done their own return without the help of a tax professional. There always are exceptions.
Finding a competent tax preparer who not only understands the tax code but one who comprehends identity safety is imperative. A seasoned professional looks for solutions to your circumstances and works diligently to help you get the refund you deserve. You are looking for a problem solver.
Using the services of a knowledgable professional, especially in today's economy is critical. Doing the taxes yourself on-line can lead to over-paid dollars, audits and identity theft. No one can guarantee one hundred percent safety, but professionals are more likely to have systems in place to protect your information.
There is a big difference between professional tax preparers and number crunchers. A professional is willing to go the extra mile to help you receive the most refund you can get legally. Another good quality to look for is someone skilled in tax defense audit and who will attend audits with you.
If you own a business, especially a home-based or small business, doing your own tax returns can add stress as well as confusion. Keep in mind you need to affirm the accuracy of your return. If an audit does happen, do you want to go it alone?
If you want to pay as little tax as possible and get your tax deductions, you need detailed planning and advice from an educated professional. If your taxable circumstances are complex then you need specialized advice and tips. If you invest in the stock market, own rental property, or live outside of the United States, doing your own tax preparation without the help of a professional leaves you vulnerable to paying more money or even identity theft. No-one is immune to the greed and thievery from information bandits.
Enrolled agents who have passed the extremely rigorous tests and background checks administered by the IRS are often the best qualified and specialize in complex tax situations.
Tax preparers come from a variety of backgrounds so be very careful and don't ever be afraid to ask the right questions when deciding the best one to meet your need and handle your return with professionalism, has your best interest at heart, not just number crunchers with a software program on a computer.
Beware of anyone who wants you to hide from the IRS. Know that one day you will be found. If you receive any information about this please run as fast as you can in the opposite direction. You are ultimately responsible, for the information on your tax return, not the preparer; so choose wisely. Keep your information safe and always beware of who reads your tax return.
For the lastest information you might want to visit The United States Tax Payers Association. This is a free membership site. This site is NOT in any way affiliated to the IRS or the government.
Today in these difficult financial times and tight economy there are predators lurking in the shadows of cyberspace, looking for easy targets or victims to prey upon. They search out and find private financial information and pilfer the banks, credit cards and investment accounts of their victims. For the most part, these predators and thieves walk away with their victims money and are seldom caught. You can learn valuable lessons that will secure your identity..Stay informed, be sure you are safe. Learn how to protect and secure your identity. For more help http://www.patrcagaines.com
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Regardless of the circumstances of your foreclosure, you could receive a 1099 from the IRS.
Here are 10 facts the IRS wants you to know about Mortgage Debt Forgiveness.
Normally, debt forgiveness results in taxable income. However, under the Mortgage Forgiveness Debt Relief Act of 2007, you could exclude up to $2 million of debt forgiven on your principal residence.
The limit is $1 million for a married person filing a separate return.
You may exclude debt reduced through mortgage restructuring, as well as mortgage debt forgiven in a foreclosure.
The debt qualifies if it is for buying, building or substantially improving your principal residence and is secured by that residence.
Refinanced debt proceeds used to substantially improve your principal residence also qualify for the exclusion.
Proceeds of refinanced debt used for other purposes such as paying off credit card debt can not qualify for the exclusion.
If you qualify, claim the special exclusion by filling out Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness, and attach it to your federal income tax return for the tax year in which the qualified debt was forgiven.
Debt forgiven on second homes, rental property, business property, credit cards or car loans do not qualify for the tax relief provision. In some cases, other tax relief provisions such as insolvency are applicable. IRS Form 2 provides more details about these provisions.
If your debt is reduced or eliminated you normally will receive a year-end statement, Form 1099-C, Cancellation of Debt, from your lender. By law, this form must show the amount of debt forgiven and the fair market value of any property foreclosed.
Examine the Form 1099-C carefully. Notify the lender immediately if any of the information shown is incorrect. You should pay particular attention to the amount of debt forgiven in Box 2 as well as the value listed for your home in Box 7. For more information about the Mortgage Forgiveness Debt Relief Act of 2007, visit http://www.irs.gov. A good resource is IRS Publication 4681, Canceled Debts, Foreclosures, Repossession and Abandonment, IRS Codes and Regulations.
How does the Mortgage Forgiveness Debt Relief Act work? Under federal law, a financial institution is required to file a Form 1099-C whenever it forgives or cancels a loan balance greater than $600. This may create a tax liability for the debtor because the canceled debt is considered income for tax purposes.
This Debt Relief includes the cancellation of the complete debt. If the mortgage terms were renegotiated, up to $2 million of forgiven debt is eligible for this exclusion ($1 million if married filing separately). The amount of debt forgiven must be reported on Form 982 and be attached to the taxpayer's tax return.
Be sure to report the canceled/forgiven amount on Form 982, and include that form with your income tax return. Obtaining the services of a competent tax professional is recommended.
A great site for more information about IRS Codes is United States Tax Payers Association website; membership is free.
Today in these difficult financial times and tight economy there are predators looking for easy targets or victims to prey upon. This can cause problems with the IRS. Stay informed and be beware in your own life. Learn how to protect and secure your identity. For more help http://www.patrcagaines.com
Article Source: http://EzineArticles.com/?expert=Patricia_A_Gaines
Patricia A Gaines
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Patricia A Gaines enjoys Writing Life Stories, Business Conshttp://www.Patricia-A-Gaines.comulting, & Mentoring with integrity based values. Her twenty years plus in sales and marketing is directly associated with her ability to produce results. She helps people grow strong lasting relationships. Patricia is living her dream helping others reach their dynamic potential. Social Media, Internet Marketing,