Frequently Asked Questions.
1. What is an Amended Tax Return?
A revised tax filing based on previously submitted tax return(s) to the IRS. The amended tax filing includes adjustments based on previously recorded errors and/or omissions.
The IRS releases new tax deductions after the tax season is over. The IRS made over 400 new tax changes in 2002 alone. The IRS allows the taxpayer to take advantage of and apply the new deductions to previous tax filings.
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2. What does it mean to amend my tax returns?
To file a return to correct one or more errors or claim one or more missed deductions.
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3. Who is eligible to have their taxes reviewed?
We have found that business owners have the highest amount of missed deductions However, every U.S. taxpayer is eligible.
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4. How many years of previously filed tax returns can be amended?
Taxpayers can file amended tax returns up to three years after the due date or filing date of the original return, whichever was later. Taxpayers who filed 2002 tax returns by April 15, 2003, have until April 15, 2006, to amend those returns. A taxpayer who was granted an extension to file a return in 2001, and actually filed the return on Aug 15, 2002, would have until Aug 15, 2005, three years from the date the return was actually filed, to amend it.
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5. What are the requirements for submitting my taxes for review?
We have found that business owners have the highest amount of missed deductions. We require that our clients be business owners (corporate officers, LLC members, sole proprietors, partnerships). The IRS allows all taxpayers to look back three years for corrections on their tax returns. To maximize your recovery, we require that you submit the past four years tax returns so our review team can investigate your ’99 return for carry over purposes. You just make copies of your tax returns and your consultant will send them with a completed interview, Tax Service Agreement and the IRS form 2848.
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6. Can't I just send my returns back to my accountant?
Yes, you can. Most tax preparers will charge you for any additional analysis of your tax returns, even if they find no recovery and do you think your accountant would want you to know if he/she missed thousands of dollars of deductions on the returns prepared by their office.
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7. What if your Risk Free analysis finds I owe additional money on my taxes?
Our agreement with our clients is only to find recoveries of money owed to them from their taxes. We are therefore not required to report, and do not file returns if additional taxes are owed. Your information is always kept strictest of confidential.
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8. I amended one of my last three years’ tax returns. Do I qualify for the service?
Yes. Any of the last three years’ tax returns can be amended as many times as needed to discover all missed deductions and/or errors.
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9. I currently have a preferred tax preparer.
It is not the intention of JD Terry & Associates to replace your current tax preparer. The AccuTax review team that provides you with a Risk Free Second Opinion giving you peace of mind that your tax preparer is working in your best interest to correctly file your tax returns. According to the IRS, a substantial number of taxpayers are overpaying their taxes, and over half of these tax returns have been prepared by professional accountants or CPAs. Our reviewers help ensure that you are not overpaying, and also that your tax preparer is applying every possible deduction to help reduce your tax liability.
Most CPAs and accountants do not specialize in reviewing and amending tax returns like the AccuTax review specialists. If your current tax preparer originally made errors and/or omissions, it is probable that these same mistakes will be made once again.
My CPA is my friend, I don't want to insult him!
Since we deal with business owners, most of our clients have CPAs or tax professionals that prepare and file their tax returns. Most good tax professionals have hundreds of tax returns to file between February 1st and April 15th with over 60% being brought to the tax preparer in the last month. On average, your tax professional may spend less then one hour on your returns. They cannot spend the necessary time to fully analyze your taxes. We do not want to replace your tax professional. You may also have a great doctor, but see a specialist when you need a more detailed review of your medical situation. Think of our service as a special "check up" for your taxes. After we complete your amended returns, you can use them with your tax professional to apply those deductions to future tax returns. Your CPA remains your friend, and you have the piece of mind that your current system is not costing you any additional money.
Often it is junior accountants that are doing the majority of Tax Preparation during tax season simply because of the volume.
With 7 of the 10 cases we review prove that Money Magazine's research is correct, and our clients receive an average refund of over $10,000. If the IRS owed you a "qualified refund" would you want it back? Since 1987 Money Magazine's tax study proves that, if we gave our taxes to 50 CPAs, we would get 50 different results of how much we owed the IRS. There are lots of reasons for the discrepancies. We had a client in Phoenix who had his taxes done by the States largest CPA firms in Arizona. After we reviewed his tax returns, our client received a $100,060.00 refund from the IRS! Regardless of who prepares your taxes our job is to provide you the best and most extensive review possible. Since there is never out of pocket costs you have nothing to loose.
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10. Why wouldn't I just go back to my own accountant/CPA and have them amend my returns?
Chances are if they missed a deduction or made an error once, they will most likely do it again. Most accounting/CPA firms are not trained to perform the service our review team does. We specialize in reviewing your tax returns for accuracy.
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11. Why are your tax specialists different from my current tax preparer?
Our tax specialists' focus is on amending returns and recovering money for our clients and that is their focus year round. We give you access to some of the top tax minds in the United States who are not only experts in the current tax laws but also receive on-going education pertaining to newly released IRS tax codes and changes. They stand behind their work and guarantee to defend their calculations with any tax agency.
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12. How do I know Capital Tax Recovery will maintain confidentiality of my personal information?
All Client-provided personal tax documents are strictly confidential. Through a Tax Service agreement, Capital Tax Recovery & AccuTax provides assurance that personal information will not be sold, rented, disclosed, or shared, in either written or verbal form, with any third parties. All photocopies of your returns and schedules provided is destroyed at the conclusion of the tax review process, if a tax refund is not discovered. If a tax refund is discovered, AccuTax will confidentially maintain tax records for three years.
Who looks at my taxes?
Your taxes are extensively reviewed by our Team of Enrolled Agents. In fact, if you prefer not to have your Capital Tax Recovery consultant handle your tax returns, you can send them in a confidential sealed envelope only to be seen by our Review Team. We are a national company that has acquired refunds for hundreds of business owners just like yourself, all of your taxes and personal information is kept strictly confidential.
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13."Tax Season is Over"
That's correct. The IRS releases new tax deductions for previous years after the tax season is over. The IRS made over 400 new tax changes in 2002 alone. The independent tax review specialists we use stay current on all the latest tax laws and changes. For the diligent, the IRS allows the taxpayer to take advantage of and apply any new deductions to their last (3) years of taxes.
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14. Does an amended tax return trigger a “red flag” with the IRS or enhance my chances of being audited?
The IRS created the amended tax return process for taxpayers to take advantage of numerous changes in tax laws and to correct errors that were made. An estimated 4.6 million people will amend their taxes in 2003. The IRS finds that approximately .5 percent of individual tax returns result in audit reviews. The chance of having a tax return randomly selected for audit review is minimal. In addition to that, when your taxes are being amended your name is taken out of the random pool until your amendment is completed reducing the days that your name can be picked at random.
With the focus being on finding missed IRS accepted deductions and errors in calculations Capital Tax Recovery and AccuTax have never seen our program create an IRS audit as a result of filing an amendment, and we have never had an amendment rejected. We only look at legal standard deductions that are allowed by the tax code. And, we provide full documentation to back-up and substantiate the deductions.
How many amended returns have been audited? How many amended returns have been rejected?
None! None!
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15. What is the average refund amount? What percentage of tax reviews result in a refund?
The average tax refund amount is $6,000 - $10,000. Approximately 70% of tax reviews result in a refund.
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16. How long does the tax analysis take?
Our analysis usually takes about three weeks from the time your returns are submitted. Our analysis is not a rushed process. Our Tax Specialists take the necessary time to find every legal deduction from your tax returns. Once the amended tax return is filed, the IRS refund is processed on average within 3-4 months.
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17. What information do you require to amend my returns?
We require your last four years of filed tax returns, both state and federal, including all supporting schedules, a signed authorization, and a completed interview to identify possible missed deductions. Additional documents may be requested if new adjustments are claimed with the IRS on the amended tax return. In total, you the client is looking at about investing1 hour of your time in this process.
How much time will I have to spend with the Consultant to complete the review?
Any questions that the CPA may have can typically be answered with the information that you provide, in addition to the knowledge and familiarity they have with similar businesses and tax situations. In the event they identify a deduction that could be applied to your taxes, but that can't be supported with the information you already provided, they will contact you before applying the deduction, to find out if you have the necessary receipts and supporting documents to back it up. If the CPA has any additional questions regarding your returns, you will then be contacted by your consultant.
How will the review of my S-Corp (or LLC, partnership, etc.) affect the taxes of the other shareholders or partners?
If there were changes to the Sub S return to reflect additional deductions, an amended return would be filed. The other partners may or may not amend their returns. There is no mandatory amending requirement to claim additional deductions.
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18. What happens if the tax preparer amends my tax returns and determines that I owe the IRS money?
We work for you! We are not required by law or ethics to report that to any taxing agency, and we do not disclose to the IRS if a Client owes money. We will outline the areas in which problems were identified and you will be able to go back to your original tax preparer to make the necessary adjustments at no cost.
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19. Do I have to pay taxes on the refunds I get back?
You are not required to pay taxes on any Federal or Social Security/ FICA refunds received, except for on the interest that the government pays you. You are required to pay taxes on all state refunds.
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20. What if I have received a refund during the last 1-3 years, do I still qualify to have my returns amended for FREE?
Absolutely, since it really does not matter whether you received a refund or if you needed to pay more than was withheld. It is likely that deductions were missed, errors were made, or the tax laws and codes were changed since you originally filed your returns.
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21. How long will it take to get my refund checks?
It depends on your specific state, the type of return amended, and the years you are amending. Typically, you will get your refunds from state, federal, and FICA/Social Security within 3-4 months.
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22. What is the interest rate that the IRS will pay on the refunded amount?
The interest rate can very between states. The typical rates paid to you range from 5% - 8%, depending on which year(s) is being refunded.
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23. Why do you require me to sign an agreement and a Power of Attorney (POA) when my own accountant doesn't require that?
First of all, when your accountant/CPA prepared your original returns, you provided them with supporting documents, receipts, 1099s, logs, etc. We are only looking at your tax returns and our Interview form. We require a document binding you, the taxpayer, so that all of the information that you are submitting for our review is valid. In addition, no accountant/CPA has the authority from the IRS to file amended tax returns without a signed (Form 2848) Power of Attorney (POA) from a client.
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24. Because you get paid with a portion of any refund that is found, how can I be sure you won't apply deductions that are in the gray area of the tax law just to increase the amount of the refund, and therefore your fee?
We use only professional and licensed independent CPAs to perform the reviews. What this means to you is that they are not paid on a contingency basis, or in other words, based on a percentage of the refunds found - because they can't be. By law, they can only be paid a flat fee for every return that results in a refund. For this reason, the size of the refund makes no difference to them. They are more interested in finding legitimate errors and missed deductions that can help you reduce your tax liability.
Your taxes will only be reviewed by highly regarded tax professionals that work strictly within tax laws. Not only will you be held accountable for the information that is provided to the IRS, but the CPA doing the review and preparing the amended return will also be held accountable. As such, they will stand by their work and guarantee to defend it with any Department of Revenue.
JD Terry & Associates and AccuTax imposes strict ethical standards on the independent CPAs that perform the reviews. For this reason you can be assured that all information provided to the IRS is legal and accurate.
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25. Is this a tax avoidance scheme?
No. We strongly advocate that all Americans pay their taxes. It's an ethical and moral responsibility to pay one's fair share of taxes. After all, we all enjoy a great quality of life and benefit from tax revenue. We also advocate that Americans utilize the tax code and legal deductions so they don't overpay their taxes. Therein lies the opportunity. There are approximately 50,000 pages of tax code and regulations!
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