Is it illegal for a company to charge for an amended tax return?

[dbradshaw]

What is the name of your state (only U.S. law)? NY

I came across a company in NY that said they are not a CPA but said that they could get me a refund from NYS based on my mortgage that I have from 2008.
Some other people I know have had success with this company, but are they legally able to charge for this service?
They charge a percentage of the amount they recover for you.

Any help would be appreciated.

Thanks,
David

 

[Zigner]

Sure they can.

America - what a country!

 

[dbradshaw]

Thanks for the quick response!

Part of the service they provide is they accept the check from NYS and then cut me a check for the amount minus their fees. Is this a common practice?
Also would I then be taxed on the amount that I recieve as a refund?

 

[Banned_Princess]

Are you talking about h & r block? I use them every year.

You mentioned you will be filing an amended return? I don't think that is eligible for rapid refund, because you have to mail the IRS the paper forms. (even not through H&R block, thats true with everyone. )


Sir, How else do you think these people are going to be able to be paid for their service?

We are a capitalist country sir, where waking money is only illegal for things the government cant tax. And they do tax you for paying for your return to be done. WHICH you pay in the inital fee, as a sales tax. Other then the fees paid for the service, and the tax on the sale, you pay no additional fees.

I'm sure you did not mean you wanted it for free. Happy Tax Season.

 

[LdiJ]

What is the name of your state (only U.S. law)? NY

I came across a company in NY that said they are not a CPA but said that they could get me a refund from NYS based on my mortgage that I have from 2008.
Some other people I know have had success with this company, but are they legally able to charge for this service?
They charge a percentage of the amount they recover for you.

Any help would be appreciated.

Thanks,
David

Actually, the answers you have received are not entirely accurate.

Any company is perfectly in the right to charge for their services. HOWEVER, a company dealing with tax returns, whether they are original or amended, is specifically prohibited, under federal law, from charging a fee that is based on your refund. So if they are charging a percentage of what they recover, they are operating illegally. If they are willing to break that rule (which is a serious one) then its quite possible that your amended tax return would not be done legally either.

Now, that is completely different from percentages that are charged for refund anticipation loans, because those percentages are for the cost of the loan, not the preparation of the tax return. H and R Block for example, is not loaning any money to you, the bank that they have contracted with is loaning you the money.

 

[dbradshaw]

Actually, the answers you have received are not entirely accurate.

Any company is perfectly in the right to charge for their services. HOWEVER, a company dealing with tax returns, whether they are original or amended, is specifically prohibited, under federal law, from charging a fee that is based on your refund. So if they are charging a percentage of what they recover, they are operating illegally. If they are willing to break that rule (which is a serious one) then its quite possible that your amended tax return would not be done legally either.

Now, that is completely different from percentages that are charged for refund anticipation loans, because those percentages are for the cost of the loan, not the preparation of the tax return. H and R Block for example, is not loaning any money to you, the bank that they have contracted with is loaning you the money.

Thanks!

This is what I was looking for. Now with that said as a consumer, would I be violating the law by using them and paying the fee?
The golden rule of ignorance of the law although no excuse for breaking the law comes into play.

I know personally that they do recover money and it does work...Now is it worth the fee they charge if they choose to operate illegally?

 

[Banned_Princess]

Thanks!

This is what I was looking for. Now with that said as a consumer, would I be violating the law by using them and paying the fee?
The golden rule of ignorance of the law although no excuse for breaking the law comes into play.

I know personally that they do recover money and it does work...Now is it worth the fee they charge if they choose to operate illegally?

Are you saying this "company" is charging you directly related to the amount of refund you get?

or are they charging flat. (a set price per form the complete)

 

[dbradshaw]

Are you saying this "company" is charging you directly related to the amount of refund you get?

or are they charging flat. (a set price per form the complete)

From what I have seen from others who worked with this company they charge anywhere from 20-33% of the return they get for the customer. They don't charge up front but they take their money then give the customer a check for the rest.

 

[Banned_Princess]

% of the refund?? or % of the return.


What about people who owe taxes? how do they charge them? ??

is this a corporate chain, or some people in an office.

 

[dbradshaw]

% of the refund?? or % of the return.


What about people who owe taxes? how do they charge them? ??

is this a corporate chain, or some people in an office.

Ok lets say they can get you a refund by amending your 2008 taxes of $1,000, and say they charge 20%, they would get $200 and you would get the remaining $800. As far as I know they are not a corporate chain. And they don't claim to be CPA's, just well versed in getting refunds I suppose.

 

[Banned_Princess]

Based on the knowledge shared by LdiJ, Sounds illegal to me, How bad do want the refund?

 

[dbradshaw]

I'm not one to leave $$ on the table..

I mean they are getting me money I wasn't expecting or planning on. So their fee us justified I suppose.

What kind of trouble can they get in by doing this I wonder?

 

[Banned_Princess]

I'm not one to leave $$ on the table..

I mean they are getting me money I wasn't expecting or planning on. So their fee us justified I suppose.

What kind of trouble can they get in by doing this I wonder?

lol, I guess none if everyone is happy. (except GOV lol)

but if it comes up later, you are on the hook.

 

[You Are Guilty]

Given the impropriety of the fee arrangement itself, I suspect their "amendments" may also be illegal. If that is true, one could easily argue (against you later in a tax case) that you knew or should have known that this was a shady place and you don't even want to know about the penalties for that kind of stuff.

I'd walk away. There's no such thing as a free lunch.

 

[dbradshaw]

Given the impropriety of the fee arrangement itself, I suspect their "amendments" may also be illegal. If that is true, one could easily argue (against you later in a tax case) that you knew or should have known that this was a shady place and you don't even want to know about the penalties for that kind of stuff.

I'd walk away. There's no such thing as a free lunch.

From what I know thus far the refund is based on overpayment of taxes when I bought my home in 2008 that I didn't claim. And it is NOT the first time homebuyers credit cause the check if from NYS and the amounts are different than the exact credit you get for the gov't program.

If you file for an amendment, NYS gives you the refund, can NYS come back and demand that $$ back from you?