How can I get a refund on taxes I overpaid?

Question

I received a letter from a CPA saying I overpaid $500 in taxes last year and that they can get it back for me. However, they will be charging half of the refund amount. I am wondering if I can do this myself? Which forms do I use? Can anyone help?

The letter states that I did not take a homeowner's credit and that they will file all the necessary paperwork to get me the credit and the $500 + refund but their fee is 50% of the refund

The letter states that I did not take a homeowner's credit and that they will file all the necessary paperwork to get me the credit and the $500 + refund but their fee is 50% of the refund.( It is not the same CPA is was a random letter I received)

Answer 1

sounds like a scam to me

Answer 2

Is this the CPA that prepared your return for last year? No legit CPA would ever send you a letter such as that. And if it wasn't the one who prepared your return last year there is NO WAY that they could have knowledge of your tax situation to make such a claim.

Quite frankly, it's illegal for any tax preparer to base their charge on the amount of any refund. And any CPA who made such a claim would be subject to being stripped of his or her license.

I would forward that letter to your State Board of Accountancy with a copy to the AICPA. It's not likely that the person who sent that letter is a properly licensed CPA but if they are they should be brought up for disciplinary review.

Addendum: There is no $500 "Homeowner's Credit" at the Federal level. You might be entitled to a homestead exemption on the real estate taxes on your home; some states do offer that. You don't need to pay anyone to do that for you, just stop by your Tax Assessor's office and file the paperwork. Usually it's a very simple form with your name and the property address on it and a sworn statement that the property is your homestead. If you live in the home, it IS your homestead by definition.

If your state offers some type of credit for homeowners, it would be explained on your State's Department of Revenue website. Again, you wouldn't need to pay some clown an absurd amount of money to claim it, you'd just follow the State's instructions to claim it.

I smell a SCAM here, pure and simple. Most likely they'll take your $250 (non-refundable of course) and then come back and say that they're sorry but you don't qualify for the "credit" after all.

Answer 3

You file an amended tax return.

First, you are going to have to figure out if you really did overpay your taxes. I find it a little odd that some CPA out of the blue sends you a letter telling you that you have overpaid. How would they know? How did they see your original tax return to know if you did or not? The IRS doesn't exactly publish everyones tax returns somewhere so that CPA's can go around checking them for mistakes.

My guess is that this is some sort of scam and I would NOT give that CPA any information whatsoever. For one thing, in order for him to check your return from last year, you would have to give him you SS number so he could get a copy of the return. Once you have given them your SS number, they have your identity.

I would ignore the letter.

If you do feel that you may have made a mistake on your return last year, then you need to file an amended return. You can get the forms to do that on the IRS website.

Additional information --- I just found a warning from the IRA (link below) that these scams are going around. It is an attempt to get your personal information and social security number. That information is then used to steal your identity and financial assets. Do NOT respond to the letter. It is a scam. There are phone numbers to contact the IRS if you are still unsure of whether or not you have a refund coming.

ADDITIONAL INFO BASED ON YOUR LAST INFO ABOUT HOMEOWNERS CREDIT:

There is no such thing as a $500 homeowners credit. Besides that, there is no way they could know what you filed on your tax return. The only ones that know what deductions you took are you and the IRS. DO NOT respond to that letter. They are trying to get your personal information. They will ask you for the $250 up front and promise you you'll get the $500 from the IRS but you will just be out the $250.

If you don't believe me, please call your local IRS office.

Answer 4

How would they have access to your return to know that you'd overpaid?

If you look carefully I think the letter says the AVERAGE taxpayer overpays by $500 and they'll look at your previous returns in search of deductions that were missed.

It's not a scam as long as you don't pay anything up front and you take some precautions to make sure it's not a front for identity theft.

You might do it yourself (you'd file an amended return on form 1040X) but you need to know what deductions you missed which is the type of specialized knowledge this CPA is offering.

A better idea: take your previous returns to any reputable store front tax prep service (H&R Block, Liberty, Jackson Hewitt, etc.) along with the letter and ask what services they can provide. They're not geniuses but they know the tax code and the deductions most commonly missed. You have the peace of mind of knowing that they're legitimate.

Good luck.

Answer 5

Thats disgusting!

That is considered a contingency fee.

RUN RUN RUN Away................ How dare he do this!

All you do is File Form 1040 showing your total payments on Page 2. The difference
of amount paid over the tax liability - is either a refund or whether you want the refund
applied to next years taxes.

Answer 6

Are you serious, is this the first time you have ever filed your taxes? First of all, dont pay over $50 to have someone file your taxes. Filing you tax return form is what determines how much you overpaid. you can use your CPA if you have one. If you want to do it yourself you can, go to the IRS website and download the appropriate form depending on income/status. this is all very simple process but i recommend finding an accountant to do it.. like i said dont pay over $50 for just a single tax return- more like $25 should be the fee..

Answer 7

It depends on the complexity of your return if you can do it yourself, only you know your comfort zone there.
The process is straight forward. Prepare the taxes again as they should be and then prepare the amended return on a 1040x .
A 1040x says basically this what i put on line whatever (Column 1 ) I should have said this (Column 2) this is the difference (Column 3) At the end give me the addition money i deserve. You will need to to notate your reason for amending. ( EITC i get quite often ) . This year you can still amend 2003 2004 2005

Answer 8

How would they know that you overpaid?

Something sounds fishy.

Any tax firm that promises to get you more back than the other guy is usually not on the up and up.