Archive for February 2012

Claiming Tax Back! Are You Eligible For the $1 Billion IRS Giveaway?

The IRS is giving away $1 billion! Yes, you read that correctly, one billion with a “b”. There is a catch, though, you must be one of the almost 1million taxpayers who have yet to file a 2008 income tax return AND this offer expires 4/15. If you’re interested in claiming tax back go see your income tax professional immediately! Additionally, you cannot E-File past due returns, however, your income tax professional can still prepare your taxes and print a paper copy for you to mail in.

Do your own taxes? Read this article about how it costs you more in lost refund than it would cost to have an income tax professional do your taxes in the first place.

Claiming Tax Back – An IRS Video

Here’s a video from the IRS for those interested in claiming tax back:

Claiming Tax Back – IRS Tips On Getting Your Past-Due Refund

With the news on tax refund delays it’s good to see the IRS is letting you know just in case you’re interested in claiming tax back.


Claiming Tax Back – Even If You Already Filed

Did you know?

On top of those who haven’t yet filed, if your taxes were prepared incorrectly, claiming tax back is as simple as having your income tax professional file Form 1040X. The only way to know is to see your income tax professional. No-one can guarantee that you will get more money back, but many professional tax preparation services offer “second looks” where for a small fee they will look over your past filed tax returns for errors made and determine if claiming tax back is right for you. They might also find erroneous deductions that your tax preparer could’ve taken for you which the IRS WILL catch. It takes a few years, but we’ve seen that audits don’t usually occur until about the 3-5yr mark, long after your refund has been spent. If you amend in time you can save yourself from excess interest and penalties.

Interested in claiming tax back? Click the image below to contact a Jefferson Franklin Tax Patriot to schedule an appointment today!

Claiming Tax Back

Why Married Filing Separately Is Like Committing Income Tax Suicide and Our Solution For You

Now that Valentine’s Day has passed, it’s time to talk about an income tax situation that will make you love your tax professional almost as much as you love your significant other!


At JFTS we get a lot of married couples who come to us looking to file their income tax return separately. After a few follow-up questions we find out that the reasoning is that one spouse has a past debt, either child support, student loans or a past tax debt, all of which can be taken from a tax refund. The couple feels that the only way to keep their refund is to file separate and they forget to realize that there is another way. It’s called Injured Spouse Allocation!

Injured Spouse Allocation

What is Injured Spouse Allocation?

It is a provision in the tax code that the IRS setup for this particular situation where one spouse has a past collectible debt that the other spouse is NOT liable for paying. This way couples do not have to commit “tax return suicide” by filing separately and killing their tax refund entirely just to make sure that their refund does not get taken away. The irony is that filing separate almost guarantees that NEITHER spouse will get a significant refund. WHY?


When you file separately one of the credits that is unavailable is the Earned Income Tax Credit(EITC or EIC). This is the credit that most low-mid income earners with children depend on for large refunds and can be up to $5751 for married couples who have 3 children and are usually between $25k-$35k in combined earned income. Another major credit that is unavailable to separate filers is the Adoption Credit. This credit, which just became refundable in 2010 and 2011, can be up to $13,360 for each qualifying child adopted. In addition to less available credits, the income tax brackets are higher, so an income level that might’ve been taxed at 10% for a joint couple might fall into the 15% level for separate filers.


In fact, we had a client in this situation who felt it was better to file separate instead of joint despite adopting two (2) special needs children. If they filed separately not only would neither spouse have been entitled to a refund, they both would’ve OWED money, a lot of money! However, thanks to Injured Spouse Allocation they received over $20,000 in federal refund! From this $20,000 only a small portion was applied to the “injured” spouse’s past debts and it was a happy ending.


For anyone who wants to file Injured Spouse Allocation, here’s what you need to qualify per IRS regulations:

  • File Married Filing Jointly(MFJ)
  • Only ONE spouse can have “legally enforceable” past-due debts which include: Federal Tax, State Income Tax, Child Support, Spousal Support, Federal Nontax Debt(i.e. Student Loans)

One situation that might complicate matter is if you reside in a “Community Property State”(AZ, CA, ID, LA, NV, NM, TX, WA or WI) at any time during the year. While this won’t necessarily disqualify you from Injured Spouse Allocation, it will reduce the benefit somewhat. Like ALL tax matters it is dependent on your specific situation and the only way to know is to speak with an income tax professional, such as a JFTS Tax Patriot.


With all that said, when should you file Married Filing Separately(MFS)? Answer- ALMOST NEVER.


The only situation that would make sense filing separately is if there is a spouse who has left the state or country and there is no possibility of getting their signature on a joint return. Otherwise, even in cases of divorce or separation, if there are dependents involved there is a special filing status known as “Married, but Unmarried for Tax Purposes” and it is similar to the Head of Household(HOH) filing status. Since this is a complex income tax matter it is best to check with a Tax Patriot first to see if you qualify.


Hope this helps and if you enjoyed what you read please leave a comment or share this with your friends. Sharing is as easy as clicking on one of the links above to share on our preferred social media networks(Facebook, Twitter, Google+ and LinkedIn).

We Need To See Some ID! How To Tell If Your Tax Preparer Is “Legit”

Now that the IRS has finally instituted the Preparer Tax Identification Number(PTIN) requirements for paid preparers it is our duty to make sure that you know how to designate between the different professionals out there who prepare and file income tax returns for pay. In addition, we will show you samples of what IRS issued identification looks like.


It’s hard to believe that before 1/1/11 ANYONE could prepare and file an income tax return and it was not just limited to the usual professionals such as a Certified Public Accountant(CPA), Enrolled Agent(EA), Enrolled Actuary or State Licensed Tax Attorney. All you had to do was sign a return, use your Social Security Number and viola, you’re in business as a paid income tax preparer. Despite this new requirement there will still be income tax preparation services that find a way to operate around this guideline. Unfortunately, at this time there is no database to lookup a PTIN to make sure it is valid. The best course of action is to check with the IRS, either on or by calling them at 1-800-829-1040.


To check on the credentials of most tax return professionals you can try the following methods per

  • Enrolled agents, enrolled actuaries, and enrolled retirement plan agents can contact the IRS Office of Professional Responsibility at (202) 927-3397.
  • Certified public accountants can find contact information for all state boards of accountancy at
  • Attorneys can find contact information for all state bar associations at

In addition, we have found that some provisional PTIN preparers are confused as to what is an EA and a RTRP. I even asked a manager at a local store-front income tax service “Are you an Enrolled Agent?”. Her response “I have a license number, but I still need to take a test”. Well there are two tests, one which will be the minimum IRS requirement to become a RTRP and the more thorough examination to become an EA. Here’s the official distinction according to the IRS:


Is there a distinction between Enrolled Agents and Registered Tax Return Preparers? (posted 1/22/10)

Yes. The practice of enrolled agents before the IRS generally is not limited. The practice of Registered Tax Return Preparers is limited to preparing and signing tax returns for compensation and representing taxpayers before an Examination function of the IRS when the Registered Tax Return Preparer prepared the return under examination.


Here is what an IRS issued PTIN card looks like:


And an IRS issued Enrolled Agent(EA) card:


When it comes to tax professionals, the official stance of the IRS is:


“The IRS does not endorse any particular individual tax return preparer. For more information on tax return preparers go to”


Go figure that they would have such a “politically correct” stance on this issue. The decision is yours, who would you trust the most to work on your taxes? A dedicated income tax professional such as an Enrolled Agent who focuses solely on income taxes and is required to take Continuing Professional Education(CPE) courses that are approved by the IRS OR a preparer who only abides by the minimum standards?


A great resource to look-up tax professionals is: TeaSpiller – Find An Accountant or Tax Pro