Woman Goes to Jail for Filing False Claims

A woman from College Park, Ga. was sentenced to 10 years in prison after she pleaded guilty in May to bank fraud and filing false claims with the IRS. Cynthia Annette Elliot was part of a scheme to steal income tax refund claims and economic stimulus checks belonging to others by fraudulently filing claims with the IRS. Elliot was ordered to pay $948,648.72 in restitution.

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Identity theft is a crime where someone uses your personal information such as social security number, bank account number etc to steal from you. As far as identity theft pertaining to your taxes, for example, identity thieves may use your details to obtain a tax refund. As with all criminal cases, prevention is always better than cure. Here is what you should do to prevent identity theft and if you suspect your identity has been stolen.

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The IRS has announced that from next year onwards, they will no longer provide taxpayer debt positions to tax preparers and financial institutions, bringing an end to a practice carried out by the IRS since the 1990s. The tax preparers and banks use such information to disburse Refund Anticipated Loans (RALs) which are short-term loans given to taxpayers while they await their tax refunds. The loans are repaid when the tax refunds arrive.

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By the middle of next month, the IRS will begin implementation of a new online application process for paid tax preparers. Under this new process, all individuals and companies who are paid for preparing federal taxes after December 31 must be registered with a Preparer Tax Identification Number (PTIN). The PTIN requirement goes according to IRC section 6109 (a) (4) that states that every tax preparer must indicate their PTIN with the returns they prepare. Tax preparers are allowed to use their PTINs in place of their Social Security numbers.

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Starting from 2012, the IRS regulations for Form 1099 will undergo a drastic change. Up to now, businesses are required to file a Form 1099 for every independent contractor they do business with. But with the new regulations all businesses will have to submit a Form 1099 for every purchase of goods or services from all sources worth over $600 a year, including those like office stationary purchases and vehicle maintenance.

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