Daily Tax Update - February 16, 2007

IRS CRACKS DOWN ON ABUSIVE TELEPHONE TAX REFUND PREPARERS: Today, the IRS announced that it has served search warrants at tax preparation businesses in Atlanta, Georgia; Dallas, Tyler and Athens, Texas; Riverside, California; Miami, Florida; and New Orleans, Louisiana. All of these businesses are suspected of preparing returns on behalf of clients requesting inflated amounts involving this year’s special telephone excise tax refund.

  • The IRS said that some tax-return preparers are requesting thousands of dollars of refunds for their clients in instances where clients are entitled to only a tiny fraction of that amount. The IRS further stated, "Taxpayers who request more of a refund than they are entitled to receive will have their refunds held and be subject to an audit. To make the refund easier to figure, the government established a standard refund amount, based on personal exemptions, ranging from $30 to $60. If taxpayers have phone bills and other records, they can request the actual amount of excise tax paid."
  • IRS Commissioner Mark Everson said, "We want everyone who is eligible for the telephone tax refund to claim it but not to inflate the amount requested. We have seen limited but serious instances of abuse, and we’ve sent in criminal investigators to pursue the matter accordingly."
  • Additional information can be accessed via: http://www.irs.gov/newsroom/article/0,,id=164032,00.html


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