How would you like to get an $11,000 check from the IRS, after you had filed your returns and perhaps even cashed a small refund check?
If so, remember this word. Amended.
A Colorado Springs company called Tax Recovery Group says it has recovered more than $10 million from the IRS on behalf of taxpayers it has prepared amended returns for, and that the checks averaged $11,000.
“Saying that the United States’ tax system is fair, equitable and uncomplicated is like saying that terrorism is an appropriate means of international interaction,” said TRG president Brace E. Barber.
Rich folk are being stiffed by the tax system, the firm says. It quotes an Associated Press article that says Americans whose incomes are in the top five percent foot the lion’s share of the nation’s tax burden, while people on the bottom half pay “only a fraction of the total take.” The rich must get “selfish” to sustain their wealth, the company asserts.
Barber said TRG has developed the nation’s largest consultant force dedicated to educating and helping businesses and high net-worth individuals pay a fair share of taxes. But no more.
Filing an amended tax return is not something that will make your tax preparer or accountant very happy, Barber acknowledges. Barber contends many tax returns are inaccurate because preparers have so little time to complete them. The average tax preparer does 480 sets of taxes in two and one-half months, Brace claimed.
“We recover money for well over 50 percent of our clients, and our average client qualifies for over $11,000 in tax refunds,” Barber said. “The crazy thing is that we are using the IRS’s own system to recoup this money… The IRS doesn’t have a problem with giving you the money that you are legally due.”
However, Richard A. St. John, with Fiducial Century Small Business Solutions, says that is a dangerous route to fly.
“It seems to me (filing such an amended return) like you are lonely and you want an audit. You meet people that way,” St. John said.
It is possible some mistakes occur when people preparing taxes on the side don’t have the best software, St. John said. But larger companies and higher income Americans work with companies that have software that locates every legitimate deduction. He does not believe the risk of an audit is worth such aggressive tax preparation.
St. John recalled a recent situation in Denver when another company was in the amended tax return business. “Eventually, everyone whose taxes were done by the preparer had an automatic audit,” claimed St. John.
Tax Recovery Group said Money Magazine conducts an annual tax test where they submit hypothetical family taxes to up to 50 preparers. In a statement, Barber said over the years the discrepancy between what preparers say is owed to the IRS ranges from 65 percent to over 1,000 percent.
The TRG is located at 5525 Erindale Drive in Colorado Springs. The telephone number is 388-9583. Fiducial Century Small Business Solutions is at 4245 Austin Bluffs Parkway. Its telephone number is 590-7373.