Lifetime Tax & Accounting
Lifetime Tax & Accounting

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Lifetime Tax & Accounting Blog

IRS Errors that Benefit Your Business

It might come as a shock, but the IRS occasionally makes mistakes. Even more surprisingly, those mistakes occasionally wind up in your favor! When it comes to business tax refunds, calculating underpayment interest, and financial penalties incurred against your business, the IRS might come to the wrong final figures.

When any of these calculations result in your company overpaying, you are legally owed by the IRS. The problem is, many of these IRS errors go unnoticed.

How to identify IRS errors in your favor

  • Cleaning house. Have your trusted local tax firm periodically assess all your business account transactions.
  • New penalties? If your company is still young and hasn’t incurred tax penalties in the past, discover what has changed. It may be an error.
  • Ask the questions. Has your company filed amended returns, carrybacks, or tentative allowances with the IRS? If you’re hearing from the IRS about unexpected transactions, seek out professional advising.
  • Track your history. IRS audits are highly technical and in-depth. If your company is subject to an audit, keep all records and findings. They may benefit you if future errors are discovered.

Is your business at risk of IRS errors?

Any company or individual can experience an IRS mistake in their favor. IRS audits are performed by people, not machines. Because of the extensive technical nature of audits, human error is a real possibility.

Young companies and startups are typically at a greater risk of IRS errors, particularly when changing business entities or establishing initial business accounts. Curious if the IRS has made an error in a past audit or tax season? Contact Lifetime Tax today for an expert assessment. We’ll help you find out!

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Did someone else claim your child as a dependent?

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Believe it or not, this happens! This situation usually occurs between divorced spouses, but sometimes it is a case of identity theft. In order for someone to claim your child as a dependent, they would need access to the child’s full name, social security number, and date of birth.

What do I do if someone claimed my dependent?

Due to confidentiality, the IRS cannot share the information of who claimed your dependent. But there are several things you can do in order to remedy this situation.

  1. Determine the eligibility of your dependent. Your dependent must be either a qualifying child or a qualifying relative in order for you to claim them. If you are certain of your eligibility to claim the child or relative as a dependent, continue to step 2.
  2. Print out and manually file your tax return. Your claim will be flagged along with the person who claimed your dependent, and you will both have to provide proof of entitlement for the dependent.
  3. An audit will occur. Both you and the person who claimed your dependent will be audited in order to determine who is entitled to claim the dependent. You should prepare school and medical records that prove your eligibility to claim the child or relative as your dependent.

Dependent identity theft is never a pleasant situation to encounter, and we hope you never have to experience this. If you or someone you know has encountered this tax dilemma, send them our way. The professionals at Lifetime Tax & Accounting can answer any questions you might have, and we can help guide you through the process.

Contact us online, or call us at 603-230-2404 today. We’re happy to talk with you!

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The “Get Transcript” Identity Theft: Am I at risk?

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In May 2015, the information of approximately 100,000 taxpayers was compromised during tax season when hackers broke into the IRS’s Transcript Application system called “Get Transcript.” An investigation followed, and it was recently revealed that nearly 390,000 additional accounts were jeopardized.

Was your tax information accessed?

On February 29th, 2016 the IRS sent out notifications to the individuals whose information was compromised through “Get Transcript.” If you have received one of these notifications, don’t be alarmed.

What should I do if I get a letter?

First, identify whether your tax information was accessed or merely targeted. Attempts were made to access a large portion of accounts, but they were unsuccessful. If your information was accessed, you have the option to apply for an Identity Protect PIN.

This will provide protection for your SSN on your 2016 federal tax return. Visit the Get Transcript FAQ page on the IRS website to learn more specific information about the program and those affected by the attack.

Want more information on the “Get Transcript” attack?

After over 9 months of investigation, the IRS is moving quickly to repair the damages caused by this identity theft. If you have further questions or concerns, please contact us online or by phone at 603-230-2404. We are standing by to assists you in any way possible. See you soon!

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