Monday, April 3, 2006
Help Me Howard: Tax Time
He paid an accountant to do his taxes and now the irs is saying they were done wrong. Can Howard take on the IRS and win? Seven's Patrick Fraser with the story.
WSVN--Whether you work for a buck or if your rich uncle left you a billion, we all face the same thing in April: Tax time.
Joe Rodriguez: "Medley Steel, can I help you?"
Joe Rodriguez earns his money selling metal.
Joe Rodriguez: "So pretty much the trailers come in and back 'em up. They off-load it, put it where it belongs."
Joe knows metal... The tax code is another story. So he turns them over to an accountant.
Joe Rodriguez: "Well as far as I am concerned I thought it was a great job because I was getting money back...from my income tax return."
Of course if things turned out great, Joe wouldn't be here with us..
Joe Rodriguez: "Well everything was fine till a couple of months ago when I got letters from the IRS... stating there were deficiences in my 2003 and 2004 tax return."
Deficiency was the exact word the IRS used. There were other words like... Joe, you owe us.
Joe Rodriguez: "In the amount of eight thousand dollars."
The reason they are coming after Joe right now.. He says his accountant claimed a few strange deductions in 2003 and four.
Joe Rodriguez: "Over $1,500 in eductation and I don't go to school."
That was one....and then there was this whopper...
Joe Rodriguez: "He put down $26,000 for itemized deductions. Yes...how much did you have in itemized deductions? I shouldn't have had anything."
Now of course Joe did sign the tax return... Which brings up the question... Why didn't he catch the -- to put it politely -- mistakes?
Joe Rodriguez: "He says, 'Ok Joe, this is great, sign here, you're getting x-amount of dollars back.' I didn't bother to check it cause I am paying him a fee to take care of this for me. I didn't think I had to check it...and I didn't."
Of course Joe says he was not the only one who got letters from the IRS.
Joe Rodriguez: "It has affected at least seven employees here because everybody would go to the same guy who is conveniently located here in Hialeah."
And not only do they all owe back taxes...They face interest and penalties.
Not the kind of thing working people want to hear as they struggle just to pay this years taxes.
Joe Rodriguez: "This is a problem...that this guy is causing stress and grief to a bunch of good hard working citizens."
But what can they all do? What do they have to pay and what is the accountant responsible for? Lets bring in Help Me Howard.
Howard Finkelstein: "The IRS holds the taxpayer responsible no matter who prepares your taxes. And if there is a mistake you have to pay the taxes that are due. But you can sue your accountant and force them to pay the interest and penalties. And one more note...if the accountant did this intentionally you can bet the IRS will consider criminal charges."
The accountant did not return my calls.
Later his attorney got in touch with us and told us, 'his client filled out the taxes based on documents provided by Joe.'
He added, 'he has the paperwork to prove it.'
When I asked about the seven other people Joe mentioned, he said they had only heard from two clients and straightened that out quickly.
He also mentioned the accountant would sue anyone who falsely accused him of anything.
Howard says actually court is where the taxpayers may want to go as well.
Howard Finkelstein: "Because this is a 'he said-he said,.' However, the law does allow whats called similar fact evidence. In other words all the of the taxpayers can come into court and testify for each other. And as we all prepare our taxes there is a lesson here... Take your time, read that form...even the best accountants can make a mistake."
Joe learned his lesson..and now wants to make sure no-one else goes through what he is going through.
Joe Rodriguez: "It's affecting alot of people and I am hoping we can all get together and say hey look we ought to take a little action against you for causing everybody all these problems... Because it's all unnecessary if you had just wrote down the truth."
Patrick Fraser: "I spoke to the IRS...Needless to say they take these kind of cases very seriously. And store this webpage away...IRS.gov.
"If you know a taxpayer or an accountant is commiting fraud go to the webpage type in fraud and fill out the available. If you are right, the IRS pays a reward for turning people in. Make a little money and catch a crook...only in America."
A taxing situation troubling you? Contact those three letters that deduct headaches from people...HMH...Help Me Howard.
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