Tax Return Verification?

[Denne]

I had a phone call earlier yesterday regarding wanting my email address. Later in the morning I got an email from an Audit/Investigation company asking me to verify the tax return from 2006 of a client that has moved out of state. Any ideas about what they are looking for....really? I do know that he borrowed money for several rental/flip properties and lost his shirt. That was in perhaps 2010 or 2011. He isn't my client now and hasn't been since he moved. Mom is a client here so that is how I know he is no longer here. I did do the tax return and if anything I think he claimed every little deduction on his rentals that he could. I haven't looked to see if the return they sent to me matches the return from 2006, since my home/storage has been flooded and I don't have access to those old files at this time.

This inquiry seems strange to me... after 7 years. I may not even have copies back that far if those records were destroyed with the water damage. I sure don't want to give the impression that I am not cooperative if this is a real investigation, but sure seems like someone is looking for something or to collect money on something to me..... The company doing the investigation and/or Re-Verification is Research Consultants Group Inc....out of Charlotte, NC.

Any information, experience with this type of matter or advise is appreciated greatly!

Thanks for your time!

[JohnH]

I'd tell them the proper means of obtaining this info is to request a transcript from IRS. They will have no problem obtaining that info if they are authorized tp get it. But I will be interested on what others on this forum have to say about the inquiry.

BTW, here's a link to their web site. http://www.researchconsultants.net/services.php

[Guest Taxed]

I would NOT disclose any tax information about a current or former client without written authorization from the taxpayer unless it is a law enforcement request subject to proper credentials and authorization. There is too much risk for us with identity thieves wanting to get their hands on a tax return.

I must get have got over a dozen requests last year and this year from mortgage brokers wanting me to verify the tax returns of clients who submit that for loan refinance. Each case I get a written authorization from the taxpayer much to the displeasure of the broker.

Few years back a divorce attorney was trying to arm twist me to fax a copy of the return for one of the litigants without an authorization!

You have to be extra careful these days.

[taxxcpa]

I've received legitimate requests of this type, but I explain that I cannot provide such information, but will e-mail it to my client, password-protected, and, if the client so chooses, he can forward my e-mail to the requesting party.

Even if the client, himself, requests that I provide tax information to someone, I follow the same policy, and let the client forward it.

[Guest Taxed]

Do you get requests from your client to fax or mail copies of tax return to other third parties (because they don't have a fax or too cheap to make copies and lick a stamp)?

How do you handle the authorization?

[JohnH]

I never give any info to third parties. I'll send to the client and let them turn it over, but no way I'm going to get in the middle of a transaction between a client and a lender. I'll gladly give the lender the form number for requesting a transcript, and that's all.

One lender pressed me on this, implying that the client might alter the info. I told him if he really thought that to be the case, the bigger question would be whether he should be doing business with the client in the first place.

[Gail in Virginia]

It was my understanding that we are required to have written authorization, including certain specified statements as to purpose and length of time, to provide tax return information to anyone other than the client. While many of my clients probably think this is a pain, they have gotten so used to privacy restrictions that they just accept that and come by and sign. Without written authorization, such as my form or a subpoena, I don't even acknowledge that they are my client.

[ILLMAS]

I had a similar case, business client of mine received the call but didn't have records so she told them to call me and gave me permission to provide what ever they needed. Here is the deal, the owners daughter bought a house put down that she worked for her parents business and with the help of the realtor and loan officer they prepared a fraudulent W-2 to qualify her for the loan, well the property went into foreclosure within months and the company was verify information that happened in 2005/06. They build a case to go after mortgage companies.

[taxtrio]

I would not give out any information unless I had a supoena, or written request from client.

I had a client that needed copies of his 2005 to 2011 returns last summer... applied for a new job and the background check went back to 2005! He had just divorced and his wife had all copies.

[Guest Taxed]

My issue with the mortgage companies is that they want me to authenticate the income which I can't. I will fax them a copy of the return as they requested and then they start calling. The other issue I ran into a few times is a real estate broker who wants a return amended to help their client who is a property flipper.

[MAMalody]

It was my understanding that we are required to have written authorization, including certain specified statements as to purpose and length of time, to provide tax return information to anyone other than the client. While many of my clients probably think this is a pain, they have gotten so used to privacy restrictions that they just accept that and come by and sign. Without written authorization, such as my form or a subpoena, I don't even acknowledge that they are my client.

This is also my recollection.

[Terry D EA]

It was my understanding that we are required to have written authorization, including certain specified statements as to purpose and length of time, to provide tax return information to anyone other than the client. While many of my clients probably think this is a pain, they have gotten so used to privacy restrictions that they just accept that and come by and sign. Without written authorization, such as my form or a subpoena, I don't even acknowledge that they are my client.

I agree here totally. I have had mortgage companies, insurance adjusters; etc try to get information. I don't even accept a faxed consent form that a client has signed. Other than the subpoena, the client has to sign the release form in front of me no exceptions. No e-mail from client's requesting me to forward copies to a lender either.

[Max W]

The company RCG is a high powered detective agency. Since they have a copy of the tax return, they must have gotten it from the mortgage lender and they are investigating potential mortgage fraud.

If the investigation results in a lawsuit or criminal prosecution, you could very likely be called as a witness to confirm or deny the accuracy of the tax return.

You should try to recover your records (don't you have them archived on a disc?), because failure to produce them could set suspicious minds to working on a conspiracy to defraud.

Therefore, my suggestion is to contact an attorney.

[Guest Taxed]

Unless the tax preparer was involved in creating or covering up the fraud I would not worry about it too much.

In any lawsuit where our client's tax return is an issue, we could be called as a witness. I had to provide affidavits in 2 cases.

I would worry if a subpoena showed up at my shop and then I would contact my attorney.

[GeneInAlabama]

Years ago, two men showed up in my office and identified themselves as being from the criminal investigation division of the IRS and then read me my rights. They then asked me if so and so was my client and I told them that he was at one time but not now. They then asked me if I knew if he was keeping two sets of books. I told them no, I did not. They asked a few more questions and left and I never heard from them again.

[Terry D EA]

What happens to the 3 year record retention requirement? Is it our responsibility to maintain records further back than 3 years? According to circular 230 I don't think so. This is interesting that this has come up. I do have tax returns back to 1994 on CDs and am in the middle of removing the old ATX programs from my old desk top. 1st thought is to move everything to the external hard drive and store it in the safe. 2nd thought is to retire the machine entirely. The ATX programs date back to 2001. Opinions please.

[Jack from Ohio]

Keep an old computer with XP operating system. Keep all the prior programs on it. Archive all the return files and backup files for all the years on a flash drive. CDR media is questionable as to longevity. This computer would not even have to be connected to the internet or network.

This is our plan at the firm. We have program and returns back to 2000. ATX programs older than 2004 are NOT compatible with Windows 7 at all.

[Guest Taxed]

Heat and light are the enemies of CD life. It is recommended that you use CD-R (not CD-RW) store them in a CD case and then the CD case in zip lock bag in a cool dark place (like storage chest in the basement). I have CD's from 1999 that still are readable without any loss of data. Obviously if you have two separate backups that is even better.

I know people who had stored CDs in their attic and the summer heat destroyed them within 4 years.

[Jack from Ohio]

Flash drive and an external hard drive used redundantly is the safest long term archive solution in today's technology. Flash drives have no moving parts and have very very low rates of failure.

CDR longevity is mainly based on the materials used in the read/write layer of the disk. Too risky for me for long term storage.

[Guest Taxed]

>>>CDR longevity is mainly based on the materials used in the read/write layer of the disk. Too risky for me for long term storage.<<<

I will be happy if I can get 20 years storage life. So far I got 13 years already. The statute of limitation in most cases in 7 years.

This is what OSTA.ORG (Optical Storage Technology Association) position on CDR is. Note they say up to 200 years, but that has to be taken with a grain of salt!

How long will data recorded on CD-R and CD-RW discs remain readable?
The life span of a written disc depends upon a number of factors including such things as the intrinsic properties of the materials used in the disc’s construction, its manufactured quality, how well it is recorded and its physical handing and storage. As a result, the life span of a recorded disc is extremely difficult to estimate reliably. However, to calculate disc life spans within some practical timeframe blank media manufacturers do conduct accelerated age testing by subjecting samples of their discs to environments much beyond those experienced under normal storage conditions. Generally speaking, only the effects of varying temperature and humidity are considered. These test results are then used to predict how long a disc will remain readable under more normal storage conditions. Since questionable testing and measurement procedures can seriously impact upon and compromise these estimates several international standards have been developed which specify procedures to be used conducting accelerated testing and analyzing the resulting data from prerecorded (pressed) and recordable CDs:

ISO 18921:2002, Imaging materials — Compact discs (CD-ROM) — method for estimating the life expectancy based on the effects of temperature and relative humidity

ISO 18927:2002, Imaging materials — Recordable compact disc systems — method for estimating the life expectancy based on the effects of temperature and relative humidity

For years now many media manufacturers have performed their own lifetime evaluations using these or a variety of other homegrown tests and mathematical modeling techniques. Historically, manufacturers have claimed life-spans ranging from 50 to 200 years for CD-R discs and 20 to 100 years for CD-RW. Be aware, however, that disc producers, manufacturing methods and materials change over time as do applications and cost imperatives. Consequently, those concerned with disc longevity should consult the appropriate international standards and their media manufacturer for more particular information.

It is important to remember, however, that nothing lasts forever and that technologies inevitably change. Well-designed products, such as CD-R and CD-RW, allow for seamless transition to the next generation and ultimately, since they embody digital information, contents can be transferred to future storage systems as becomes necessary to preserve whatever has been stored on the discs.

[Jack from Ohio]

Sounds like someone from the Obama Administration wrote that article. Many words and nothing of value!

[SCL]

sounds like an embittered republicon on the cusp of the wrong side of history...and headed toward political extinction.

[Jack from Ohio]

For the record. I am a Conservative. I am NOT a Republican. There is a difference.

[jainen]

>>I am a Conservative. I am NOT a Republican. There is a difference<<

I wish there were a way to make Republicans understand that. No, I mean I wish there were a way to make Democrats understand that. Oh well, I can't even understand it myself, so I just wish everyone would stop using using all those labels.

[Jack from Ohio]

Conservative is an adjective. It defines a set of beliefs and life choices. it describes me. Political party names become labels. There was a time when Conservative and Republican were very much the same. Not for the past 20+ years.