Help... the so-called-friend that filed my taxes is keeping part of my money!!!?

Question

i have a (ex)friend who has done a few of our mutual friend's taxes over the past few years. well i was filed jointly with my husband so when we separated i have to file them myself this year. well since i have a child (and so do most of my friends he's done this for) i was convinced he could get me a decent tax return. so i decided to let him do them. - he uses turbo tax software, i do not know if he is licensed - he deposited all of our refunds (his, mine and my friends) into his personal bank account - he only charged my friends $50 - he only gave me $1000 of my $1581 return - he said he could only withdrawl $500 at a time - he has been giving me the run around about the 531 (minus the $50 for his charge) - when my boyfriend intervened they got in an agrument about him stealing from a single mother and the "tax-guy" told him he only owes me $300 (and told him it was $100 electronic filing fee +$100 for filing ???$81) so since then (early june) i have no more money from him

Answer 1

So I wonder if the IRS is aware of his income as a tax preparer. They say they give a reward if you turn someone in for tax fraud.

Answer 2

Paid tax preparers are barred by Federal law from commingling client funds with their personal or business funds.  To put it simply, they are NOT permitted to flow your refund to their bank account.  If you don't have a bank account, you should have told him to submit your return for payment by paper check.

File a formal complaint with the IRS.  I'm willing to bet that he didn't sign the return as a paid preparer either, another violation of the law that the IRS can and will deal with.

Then sue him in Small Claims Court for what he owes you.  Between Small Claims and the IRS, he'll wish that he'd played by the rules.

Answer 3

How Do You Report Suspected Tax Fraud Activity?

  

If you suspect or know of an individual or company that is not complying with the tax laws, you may report this activity by completing Form 3949-A. You may fill out Form 3949-A online, print it and mail it to:

Internal Revenue Service

Fresno, CA 93888

If you do not wish to use Form 3949-A, you may send a letter to the address above. Please include the following information, if available:

Name and address of the person you are reporting

The taxpayer identification number (social security number for an individual or employer identification number for a business)

A brief description of the alleged violation, including how you became aware of or obtained the information

The years involved

The estimated dollar amount of any unreported income

Your name, address and daytime telephone number

Although you are not required to identify yourself, it is helpful to do so. Your identity can be kept confidential.

Frequently Asked Questions - 1.13 IRS Procedures: Reporting Fraud

How to Report Abusive Tax Promotions and/or Promoters:

Complete the referral form which documents the information necessary to report an abusive tax avoidance scheme. The form can be mailed or faxed to the IRS address and fax number on the form.

How to Report Abusive CPAs, Attorneys or Enrolled Agents:

Report suspicious actions by tax professionals to the email address of the IRS Office of Professional Responsibility.

Answer 4

You need to call a lawyer. Do you already have one from your divorce? You could claim the the lawyers fee as part of the money he owes you.

Answer 5

You are right he is cheating you.  He could have had your refund sent to your house - or deposited in your account, not his.  And doing taxes for pay with Turbotax illegally violates the license for Turbotax.

He can't get you any better refund than any other competent preparer unless he put false info on your return.  And if he did, YOU are the one responsible for paying back any extra.

Since the money he gave you was in cash, you're right there is no way for either of you to prove the amount.

You're in a mess, and there might not be any way to get the rest of your money - a lot is your word against his.

Answer 6

I would contact the local authorities first (police, sheriff, whatever).  Gather all your paperwork, organize it & be prepared to speak clearly, calmly & completely.  Tell your story, file a police report & see what they tell you to do next.

I don't know what state you are in, but there is a list of phone numbers at http://www.irs.gov/compliance/enforcemen... where you can call to report IRS fraud.

Don't be afraid to report this crime.  Yes, he could lie (& he probably will), but the people who will interview him & look into it are used to dealing with liars.  You can't control how he reacts, you can only control yourself.

Answer 7

You could report him to the Office of Professional Responsibility at the IRS http://www.irs.gov/taxpros/agents/articl...

Filing a police report and small claims court are also good ideas.  On page 2 of your 1040 it will list the routing number and account number that your refund was deposited in, you should go to that bank and get a letter stating that you don't have an account there.  You could also report him for fraud by filing form 3949a http://www.irs.gov/pub/irs-pdf/f3949a.pd...

If he is using turbo tax and depositing refunds in his account (illegal) he is  a very small preparer and likely not licenced (most states don't require it) or enrolled by IRS.  If he is an ex-friend i would give him 1 more chance to do the right thing then carry through with what you have learned here.

Answer 8

You need to take him to a small claims court.  Gather as much physical evidence as you possibly can (proof that you should have actually received a check for $1581, a copy of your taxes, etc) and bring him to court.

In the future, never ever ever ever ever ever (ever time infinity) involve yourself in a deal without a written contract over a substantial amount of money.  Since there is no paperwork whatsoever it is going to make your case MUCH harder to prove.