Its unfortunate that many taxpayers who owe federal income tax or have tax problems avoid consulting with a tax attorney. When you have a legal problem - you see a lawyer and when you’re sick - you see a doctor. So why is that many of you would rather stick your head in the sand and wait for the IRS to knock on their door than to consult with a tax attorney?

I guess one of the reasons is you’re not aware of the benefits of a tax attorney; maybe it’s because you feel it will cost you a fortune or maybe you just don’t know that a tax attorney is your best ally against the IRS.

Regardles of the reason you have avoided consulting a tax attorney, its time to change and seek tax help. Tax attorneys are schooled in knowing U.S. tax laws, representing you in IRS cases, providing you your legal options, help you restructure your finances to alleviate future tax debts. Perhaps the biggest benefit you can get from consulting a tax attorney is peace of mind.

What you need to understand about a consultation with a tax lawyer is that it is just a consultation. You are not obligated to hire the professional. Tax attorneys work like other lawyers, you pay for a consultation and go from there.

If you owe back taxes or haven’t filed federal income tax statements, the worst thing you can do is to continue to avoid them. It will cost you in the long run. In fact, it could cost you more than money, in extreme cases it could cost you time in jail.

Now that the tax season is official underway, I thought it’d be a good time to give a little advise on what to avoid when looking for a tax preparer.  Here are 5 of the top reasons to avoid choosing a tax preparer:

1.  Make certain to avoid tax preparers who claim they can obtain larger refunds or guarantee refunds. Also be careful to avoid any tax preparer who base their fees on a percentage of the refund. 

2. You want to avoid any tax preparer who completely closes their offices immediately after tax day, April 15th, every year.  If there is any doubt in your mind, speak to a trusted friend. A personal reference is a better way than choosing one blindly.

3. Absolutely avoid any tax preparer who try to persuade you to say something on your tax return that is not true, regardless if you will get a bigger refund.  Although the tax preparer completes your forms, you are ultimately responsible and will be held liable for your federal income tax return.

4. Never, ever choose a tax preparer that asks you to sign a blank return or requires the refund be sent directly to them. This should automatically send up a red flag as a possible scam.

5. You want to avoid a tax preparer who pressures you into buying additional products and services.

Other Notes:
Make sure your preparer fully explains every form you are asked to sign. In addition, ask your preparer about the use and disclosure of your personal tax return information.  The information on your tax form is sensitive, and in the wrong hands, could lead to identify theft - and then you will be confronted with a whole load of very serious problems.

In closing, use your common sense.  If you don’t feel completely comfortable with your tax preparer, find someone else.  And when in doubt, talk to a trusted friend for a personal recommendation.

Well, what are you waiting for, April 15th is not that far away!

A Brooklyn man who ran a tax preparation business in Flatbush was sentenced last week in Brooklyn federal court to two years in prison for defrauding the IRS.

Remy Milien, who owned and operated the Maximum Refund tax return preparations company, fabricated people’s tax returns without their knowledge so as to make his services more attractive to his customers.

Between the years 2000 and 2002, Milien defrauded the U.S. government of an estimated $200,000 to $400,000 by listing false tax deductions on the returns of his customers, as well as on his own forms.

He was sentenced before Judge Edward R. Korman to two years in prison last week, after pleading guilty in 2007 to 21 counts of fraud in U.S. District Court for the Eastern District of New York, located on Cadman Plaza East in Downtown Brooklyn.

The IRS determined the extent of Maximum Refund’s fraudulent operations after analyzing tax return forms that passed through its office and interviewing some of the taxpayers, as well as sending an undercover agent to Maximum Refund to have a tax return prepared.

Milien, without asking the agent for any relevant information, prepared a fraudulent tax return form with fabricated deductions. Thus, investigators determined that he was performing these illegal operations without the knowledge of the taxpayers he represented, some of whom may face unanticipated tax debt and audits.

Maximum Refund processed over 2,000 tax returns in total — almost of all of them for low-income individuals. These sorts of crimes are difficult for the IRS to prosecute because they consist of consistent small-scale frauds by third-party tax preparers that aggregate into large-scale fraud after hundreds of repetitions.

Milien fabricated tax deductions on the 1040 income tax returns for his customers — for example, gifts to charity, job expenses, gambling losses and medical expenses. A majority of the returns claimed itemized deductions in excess of 50 percent of the taxpayers’ adjusted gross income, according to court documents.

As Milien performed much of this fraud without the knowledge of his customers, presumably he was trying to make his business more popular by offering customers impossible and illegal savings on income tax.

A close analysis of 26 returns by the IRS revealed that Milien’s fraudulent claims lost the IRS roughly $58,000, which he now owes in restitution. Furthermore, upon analyzing 125 more tax returns processed by Maximum Refund, the IRS found additional losses of over $200,000 in fraudulent claims on more than half of the forms.

Milien’s requests in court for a lower sentence based on his low risk of recidivism were dismissed by prosecutors, as they argued that while he was charged with several counts of fraud, he actually committed these same crimes hundreds of times.

According to a report by the Champaign-Urbana, Ill. on Nov 5, 2008, nearly 160 people in Champaign County and 42 in Vermilion County are due federal tax refunds or economic stimulus payments, but the IRS has been unable to deliver them.

“In Illinois, the average undeliverable stimulus payment is $569, and the average undeliverable regular refund is $957,” said Sue Hales, an IRS spokeswoman in Illinois. “That’s a lot of money that could come in handy as the holidays approach.”

It’s crucial that taxpayers who may be due a stimulus check update their addresses with the IRS by Nov. 28. By law, economic stimulus checks must be sent out by Dec. 31 of this year.

At least one person whose name appeared on the list of people due payments said he’s already received his check.

“They messed up my stimulus payment, but I got it straightened out and did receive it,” said William Clary, who lives on Duncan Road in Champaign.

Clary said the IRS told him the original check was issued July 11. After he asked where it was, he was notified Sept. 9 a new check would be issued. He deposited the new check about three weeks later.

“They said it was undeliverable,” Clary said. “I’ve only lived here 12 or 13 years. They don’t have trouble finding me any other time.” Barry Rowe, a retired Champaign school teacher, said he was able to arrange for his stimulus payment shortly after being notified Thursday by The News-Gazette that he was on the list.

He said he called the IRS and was told he would receive the check in three to four weeks.

Rowe said he thinks his “undeliverable” status was related to his May 2007 move to the Turnberry Ridge subdivision.

“We moved, and our accountant had actually put the old address on our return,” he said.

Oddly enough, notice of the impending stimulus payment came to the new address, but the check itself never arrived. Rowe wondered whether it might have been deposited directly into his account.

Now that the check has been reissued, Rowe, a former technology director for Champaign schools, is considering what to do with it.

Maybe “buy a new computer,” said Rowe, to help keep track of future checks.

Nationally, the IRS says fewer than 1 percent of the checks it mails out are returned by the postal service as undeliverable.

Through September, the government had distributed 116 million economic stimulus payments, with only about 279,000 checks being undeliverable. The IRS distributed more than 105 million regular refunds, and only about 104,000 of those were undeliverable.

To find out whether you’re one of them, you can go to the IRS Web site www.irs.gov and use the “Where’s My Refund?” and “Where’s My Stimulus Payment?” tools to check the status of your payment. You can also get instructions on how to update your address.

Those without Internet access can call 1-866-234-2942 to check on the status of a stimulus payment or 1-800-829-1954 to check on the status of a federal tax refund.

Maybe President Obama, the former Senator from Illinois can help his constituents.