MILLEDGEVILLE — With income tax season in full swing so too are instances of tax fraud creating leeriness for both taxpayers and tax preparers.
Tax filing season officially started Wednesday, Jan. 30, when the Internal Revenue Service began accepting tax returns. This tax season, IRS officials are taking extra measures to ensure security and safety for taxpayers.
According to a press release from the IRS, one of the biggest issues the agency comes across during tax season is tax refund identity fraud. Tax refund identity fraud occurs when a thief uses another person’s name, social security number and birth date to file a fake tax return with fabricated income and tax-withholding data to collect a false refund. Consequently, when a person comes along and file his or her real tax return, the IRS flags it because one with the same social security number has already been submitted. The agency then processes the return manually and scrutinizes everything in it to authenticate the identity and determine which return is legitimate. The result is months of delays in processing a return and any refund that may rightly be owed.
Last year, the Georgia Department of Revenue put new security measures in place and stopped just more than $98 million in fraudulent refunds, according to department officials. This year, the department will again be fighting to protect Georgia taxpayers against fraud.
“Our Office of Special Investigations has done a great job fighting fraud and protecting taxpayer money over the last several years,” said Department of Revenue Commissioner Doug MacGinnitie via press release. “Stopping fraud continues to be a department priority, and we will continue using all available resources to protect tax payers and their tax dollars.”
According to Kathy Kueven, tax preparer at Kathy’s Tax Service in Milledgeville, the two biggest types of fraud that show up quite often in Baldwin County are fraudulent claims for children or disabled adults and fraudulent self-employment information on returns.
Local residents expecting a big refund should ask themselves why they are getting it. In a number of instances, the tax preparer has pulled a crafty trick out of the hat.
“The main thing that I’ve noticed as far as tax preparers go is when they add fraudulent self employment to tax returns in order to get their client more money,” said Kueven.
It may mean more money for the tax filer, but when caught, the preparer may receive a slap on the wrist, while the filer could receive an audit, a fine to pay, and a higher level of scrutiny on any future tax returns.
“A lot of taxpayers don’t question the preparer because they place their trust in them,” said Kueven. “You should always get a copy of your return so you know exactly what is on it and what to expect in return.
“The IRS is cracking down on this by requiring written proof that the child or disabled adult has been living with the person for at least six months and they must provide written proof of the adult’s disability,” said Kueven.
The IRS and the Georgia Department of Revenue will continue to do their part to help taxpayers be protected from tax fraud, but you must do your part as well. While receiving your tax refund is a great end result to filing your taxes, make sure you and your tax preparer do it correctly, without taking unnecessary short cuts.
How to organize paperwork before tax day
• Put incoming papers in a designated spot
It takes about the same amount of time to put something in the right place as it does to put it in the wrong place. The key is to create the "right" space and make sure everyone in your family knows where it is. Put incoming papers like bills, receipts and schoolwork in a designated inbox each day and regularly transfer the contents of your inbox to labeled bins with the following categories: "To File," "To Pay" and "Needs Action." Throw away or recycle all unwanted mail and school papers before they pile up, and don't get frustrated if you are unsure whether to keep a document. For guidance on how long to keep specific documents, financial planner Ric Edelman has a good list on the Web sitewww.nextavenue.org.
• Make sure you have the proper tools
You need permanent filing space, either drawers in a desk or a filing cabinet. It is difficult to get by with a combination of portable boxes, magazine boxes and desktop files unless you are really organized; they can be hard to keep track of. If possible, find a space on the main floor of your house for your papers. Having to tote papers to the basement or the second floor requires time and is one of the main reasons paper piles up.
Filing cabinets are available in a variety of styles, sizes and colors, so finding something that fits in your home and matches your decor should be relatively easy. If you truly don't have space for a desk or a filing cabinet, there are plenty of pieces that can do double duty, such as Crate & Barrel's Incognito Compact Office. It looks like an end table but opens to become a desk with a filing drawer.
Only current files should be in your main filing space. Older and permanent documents that need to be kept indefinitely should be stored in plastic filing bins elsewhere in your home. Buy a shredder to dispose of papers containing personal information, and always have extra file folders on hand.
• Consistency matters
Even the best system requires consistent upkeep. Spend time each day putting papers in their proper place instead of allowing them to pile up in the front hall, on the dining room table or on the kitchen counter. You don't need to do actual filing each day, but you do need to open that bank statement and put it with the other items to be filed. Take a few minutes each night to look through your "Needs Action" bin to make sure you're not missing any deadlines.
• Don't try to live up to unattainable standards
Find a system that works for you. It probably won't be the system described in a magazine or one that a friend uses, but it will suit your needs. Real people have "stuff" that is never represented in magazines. What works for a single person won't work for a family of six. And what makes sense for you now will probably be different in five years. If you are one of those people who like to have papers visible, take advantage of vertical space above your filing cabinet or drawers and use a bulletin board or a magnetic board to post important reminders. Just be sure to remove old items regularly. The most important thing is to develop good habits and be consistent.
• The system won't run itself
Keep your system simple, especially if you want family members to participate. It is not necessary, and can be counterproductive, to create an elaborate system that no one can follow. Be sure to explain the simple process to the people living in your house and to set the expectation that they need to be involved, but also realize that ultimately one person has to oversee the system.
Look at the next two months as an opportunity to organize not only your tax papers but all of your papers. Reducing clutter and getting things in order now will save you valuable time each day and especially at tax time next year.
Source: CNHI News Service
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