Easy Fix for Expense Reimbursement Fraud
It is often the case that individuals involved in expense reimbursement will attempt to make life easier for themselves by engaging in practices that are outside the scope of the basic rules and regulations that apply to all employees. It is this type of extraneous and unprofessional behavior that provides the perfect opportunity for fraudulent activity to take place. In order to avoid being victimized by this type of dishonest conduct, it is important to be aware of what may constitute an “easy fix.” One such easy fix that often occurs involves fraudulent activity is the practice of creating duplicate accounts. Duplication of accounts is considered to be an “easy fix” when an individual is involved in a wide variety of business transactions with various companies and pays employees and commissions on a regular basis.
An example of a transaction that may involve multiple tax expenses is a vacation trip to an island location. At the end of the vacation, if the individual decides to submit documentation that he or she spent that holiday in an area that is restricted by security laws, a tax consultant may suggest that the individual open a new account at a tax service located on the same island. The tax consultant may recommend that the individual continue to pay expenses to the new account. Alternatively, the tax consultant may encourage the individual to open a new account in his name, which may represent a much simpler transaction.
The first step in this type of scheme would be to identify the areas in which you have spent money in the past. A thorough review of your financial records should include information regarding past vacations to resorts and other similar locations. If it is determined that you have not fully claimed your expenses on your personal tax return, then you will have the opportunity to consult a tax professional about how best to address your tax problem. The assistance of a tax consultant may provide a number of “easy fixes” that could include an adjustment to your refund withholdings.
Another approach to consider is whether the accounting firm that prepared your tax return provides a tax consultation service. If they do, then the professional may be able to make recommendations to you regarding how to adjust your tax reporting strategies. The tax consultant may also be able to provide advice regarding whether the items you report on your personal tax return qualify as allowable self-employed expenses. In this case, you would not need to consult with a tax professional again.
If you decide that you want to retain the services of a tax professional in the future, then discuss the options with the tax accounting firm. You may be able to get an extension on the time period in which you need to repay the fraudulent claim. They may even be willing to provide a letter of understanding with the IRS on behalf of you.
Individuals who are suspected of committing tax fraud often believe that they can rely on the integrity of the tax preparation business to keep them out of trouble. In reality, the Internal Revenue Service is not very cooperative when individuals try to avoid their taxes. In many cases, auditors will send agents to the business or individuals’ home to observe and record tax transactions. If an audit triggers an audit letter, then the IRS will seek permission from the taxpayer to send a tax debt resolution agent to observe the transaction in question. In some cases, the audit will trigger an audit request, which means that the IRS will move forward with pursuing the individual or company for tax debt relief.
An audit is not the only situation in which it makes sense to retain the services of a tax preparer. If the tax preparer does not have enough records to support a claim, then the tax preparer could file wrong forms or provide erroneous information. In addition, the tax preparer might not have a complete understanding of all tax codes. If the audit triggers an audit letter, then the preparer may not have the ability to fix the problem. An audit request can be sent to the tax debt resolution agent for review.
Some people think that they can protect their taxes by engaging in expense reimbursement fraud. After all, there are many honest tax preparers who work at businesses that prepare both federal and state income tax returns. However, these professionals might not be knowledgeable enough about complex tax codes or about which deductions are valid for which tax filers. In some cases, a tax return can be electronically filed, but errors can still occur if the preparer cannot explain the implications of those forms to the client.
