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Gretna tax preparer is 50th person arrested in statewide tax fraud crackdown

Joyce Marie Gaines

Joyce Marie Gaines

BATON ROUGE – The owner of a Gretna tax preparation business is the 50th person arrested under a statewide initiative to crack down on tax fraud in Louisiana.

Joyce M. Gaines of Harvey (Booking Photo) is owner of Tax Town, LLC. She is accused of filing state income tax returns containing fabricated business losses for hundreds of clients, many of whom were not business owners. The scheme resulted in more than a quarter-million dollars in fraudulent state income tax refunds.

Gaines was booked into the East Baton Rouge Parish Prison on Thursday, September 24, on charges of Filing or Maintaining False Public Records and Illegal Transmission of Monetary Funds. Two of her employees, Tamicka Kitts and Raquel Walker, were arrested on the same charges on Tuesday, September 22.

Gaines is one of dozens of tax preparers, business operators and individual taxpayers arrested since the Louisiana Department of Revenue (LDR) and the Office of the Louisiana Attorney General joined forces in 2013 to investigate and prosecute tax fraud.

When data indicated several years ago that tax fraud was on the rise, LDR hired two full-time investigators and assigned them to work with Louisiana Department of Justice on the issue.

“Louisiana taxpayers need and deserve a strong enforcement program to stop criminals from taking advantage of the system,” Secretary of Revenue Tim Barfield said. “This milestone demonstrates the investment is paying off.”

Since the joint anti-fraud crackdown began in March 2013, LDR has recovered $416,638 in court-ordered restitution of fraudulent refunds. There have been 17 criminal convictions.

“When someone cheats the system by committing tax fraud, the hard working, tax-paying citizens of Louisiana are left with the bill,” Attorney General Buddy Caldwell said. “We are achieving great results through our partnership with the Department of Revenue and will continue to take action against those who threaten the vital services we all depend on.”

The anti-tax fraud initiative is one part of a broader LDR effort to ensure the integrity of the tax refund system. Since 2014, the department has saved taxpayers more than $50 million through identity verification, restitution payments, investigation collections, refund desk audits and reviews, and the Tax Refund Intercept Program (TRIP), which stops fraudulent refunds before they are issued.

Protect yourself from fraud

Even if someone else prepares your tax return, you are legally accountable for its content. If you receive unearned refunds due to a fraudulent return, you are responsible for making restitution to the state. Protect yourself by choosing a reputable tax preparer.

Tips for selecting a preparer:

  • Choose a preparer who will be available to answer questions after the return has been filed
  • Find out what the preparer’s service fees are before the return is prepared
  • Avoid preparers who base their fee on a percentage of the amount of your refund or who claim they can obtain larger refunds than other preparers without first reviewing your returns
  • Avoid tax preparers who ask you to sign a blank tax form
  • Before signing your return, carefully review it and ask questions
  • Ask any tax preparer for references
  • Check to see if the tax preparer has any questionable history with the Better Business Bureau, the state’s board of accountancy for CPAs or the state’s bar association
  • Check to see if the tax preparer belongs to a professional organization that requires its members to pursue continuing education and holds them accountable to a code of ethics
  • Check to see if the tax preparer has a proper Preparer Tax Identification Number (“PTIN”) from the Internal Revenue Service, which is necessary for filing federal tax returns
  • Ensure that the IRS has not obtained a permanent injunction prohibiting the tax preparer from preparing federal tax returns
  • Always question entries on your return that you do not understand; never sign a blank return
  • Insist that the tax preparer sign the return and provide appropriate taxpayer information on the return

Traits of a reputable preparer:

  • They ask multiple questions to determine whether expenses, deductions and other items qualify as legitimate tax deductions
  • They remind clients they should keep careful and complete records in order to substantiate information contained on their tax return
  • They provide their clients with a copy of their completed return for their records

They respond to contacts made by their clients in a reasonable period of time

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Barksdale AFB: ‘Know your local tax law’

The Public Affairs Unit at Louisiana’s Barksdale Air Force Base published the following article to make its readers aware of their responsibilities under state tax law.  It is reprinted here in its entirety:

Know your local tax law

by Staff Sgt. Chad Warren
2nd Bomb Wing Public Affairs

9/27/2012 – BARKSDALE AIR FORCE BASE, La. — Military members are frequently stationed away from their home of record, which can create some unique tax problems that may not affect civilians.

Despite following all of the rules and regulations, several Airmen have gotten into financial hot water over one issue in particular, Louisiana state taxes.

As employees of the federal government, income from military pay and allowances is not subject to Louisiana state taxes. However, non-military income earned in the state is taxable, according to the Louisiana Department of Revenue.

Each state has different tax requirements, and military members are subject to the rules of their respective state of residence.

“Louisiana currently does not have a system in place to determine which members are exempt,” said Capt. Anna Magazinnik, 2nd Bomb Wing Assistant Staff Judge Advocate.

The problem arises when people file their federal tax return. Even though the member may not be a legal Louisiana resident, they still must list a current physical address. The LDR then receives a list from the Internal Revenue Service of all physical addresses that did not file state taxes, this is called the Federal-State Match Program.

Once an individual is identified as delinquent, the LDR sends them a notice.
“A major issue is that the program is a few years behind,” said Magazinnik. “Members who have moved to their next duty station have notices sent to their former residence.”

An Airman may not even be aware of a collection attempt until the LDR garnishes their federal return, she added.

The 2 BW legal office is working with LDR to come up with a program to ensure local military members are taxed in accordance with the proper state laws, but in the mean time, any non-resident receiving a notice to file state taxes should contact the legal office immediately.

“The most important thing is to not ignore the notices,” said Magazinnik. “Bring a copy of your orders and a W-2 form to the legal office and we will handle the issue for you.”

The legal office has a process in place to notify the LDR of the error and prevent any future problems resulting in garnishment or legal action.

For more information regarding Louisiana tax law, contact the 2 BW legal office at 456-2562.

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‘Get your tax return quicker’

From WBRZ-TV:

If you file by paper, the Louisiana Department of Revenue estimates it will take between 12 and 16 weeks to get your return. E-file on the state’s website here, and you could get your return in ten business days, according to Byron Henderson with the Department of Revenue.

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WBRZ-TV: ‘Tax refunds available as debit cards’

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‘State to begin preparing $198 million in additional budget cuts’

The Times-Picayune reports:

The panel that watches over the flow of state revenues said Wednesday that collections are off by about $198 million this year, forcing cuts in the budget adopted by lawmakers last spring. The Revenue Estimating Conference voted 4-0 to accept the lower estimates prepared by the Legislative Fiscal Office, the arm of the Legislature that tracks economic activity and tax revenues.

Current estimates “appear to be too high,” fiscal office chief economist Greg Albrecht told the panel. He said the biggest shortfall is in the state’s collections of personal income tax, which is off about $142.5 million from earlier projections.

The oil and gas severance tax followed it closely, Albrecht said, down about $128.5 million from what had been projected.

Other areas of state revenues were holding up, such as the state tobacco settlement and sale of lottery tickets. Vehicle sales taxes also are running about $15 million ahead of projections.

The downturn in the numbers means the governor has 30 days to bring the budget in line with the new revenue estimates.

More.

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Report: ‘Delinquent taxes won’t hunt’

From the Minden Press-Herald:

Louisiana is a sportsman’s paradise, it says so on the license plates. Hunting and fishing are an integral part of that paradise. However, Louisiana taxpayers who don’t want to pay their taxes may not get to do either. Ignoring delinquent state income tax bills can result in suspension or denial of hunting, fishing or driver’s licenses.

According to state law, taxpayers who owe more than $500 in delinquent individual state income tax may have their hunting or fishing licenses suspended or denied. Those who owe more $1000 may have their driver’s license suspended or denied.

The laws came into effect on Jan. 1, 2004.

According to Louisiana Department of Revenue (LDR) Press Secretary Byron Henderson, the driver’s license suspension program was implemented in March of 2008, with the hunting and fishing license suspension program following in May of 2010.

Prior to license suspension, the LDR sends delinquent bills and finally a certified letter.

Read more here.

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La. voters to consider constitutional amendments

From the Daily Comet:

Voters statewide will consider five proposed constitutional amendments Oct. 22 and another Nov. 19.

The first set, on the Oct. 22 ballot, deal chiefly with the state budget.

Amendment 1 redirects tobacco- settlement proceeds to the state’s TOPS college-scholarship program. It also makes permanent 4 cents of the state’s 36-cent tax on cigarettes.

About one-third of the state’s full-time college students receive TOPS scholarships, according to the Public Affairs Research Council of Louisiana.

The rising cost of tuition at Louisiana schools has increased the cost of TOPS, which will cost about $154 million this school year. TOPS now gets most of its money from state tax dollars in the general fund, and the state has been strapped financially for the past several years.

While some anti-tax interests may eventually take Amendment 1 to task, it already has a few high-profile boosters, including House Speaker Jim Tucker, R-Algiers.

Tucker, who is running for secretary of state, said he plans on campaigning for the proposal because it offers a long-range plan and funding source for the popular scholarship program.

“It’s a win-win,” he said.

Visit DailyComet.com for explanations of the remaining amendments.

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IRS: Tax-related scams popping up around Louisiana

The IRS is warning Louisiana taxpayers of scams targeting churches around the country. The Times-Picayune reports:

The fliers increasingly popping up around many community churches seem harmless enough. They are handwritten, include a first name and local phone number, and offer exactly what any taxpayer would want: more money back on your tax returns.

But as unsuspicious as the flier may seem, following up on the enticement could leave your bank account and your identity vulnerable to theft.

The Internal Revenue Service has seen an increase in these types of tax-return-related scams targeting church congregations across the country, especially in Louisiana.

The way the scam works is simple: An unsuspecting taxpayer calls the phone number on the flier, seeking help with filing tax returns. The scam artist then solicits the caller’s Social Security number, and in many cases, bank account and credit card numbers, giving them all the information necessary to steal the caller’s money and identity.

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‘Shoppers in St. Charles Parish to get 9 percent sales tax break’

The St. Charles Parish School Board voted to waive its 5 percent local sales tax during the same weekend as the 2011 Louisiana Annual Sales Tax Holiday. This means that on Friday, August 5, and Saturday, August 6, shoopers in St. Charles Parish will save 9 percent on most purchases.

The Times-Picayune reports:

Beginning at 12:01 a.m. Aug. 5 and ending at midnight Aug. 6, no sales tax will be applied to the first $2,500 of the purchase price of consumer goods, including furniture, clothing and appliances.

The exemption does not apply to vehicles requiring a license and title or most meals. It also does not apply to hotel occupancy, admission to athletic events and laundering services among other things.

Shoppers could save $225 in taxes if they spent $2,500 or $9 if they were to spend $100.

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‘Jindal OKs tax break legislation’

Governor Bobby Jindal has signed into law several tax breaks lawmakers passed in the recently completed legislative session.

The signing ceremonies took place at several Louisiana businesses.

The Advocate reports:

At Sasol North America Inc.’s chemical complex near Lake Charles, Jindal signed legislation that offers payroll rebates and other incentives to businesses.

Senate Bill 72 by state Sen. Mike Michot, R-Lafayette, rewards certain employers with a rebate for paying at least $14.50 an hour in wages and health benefits. Sales tax rebates and investment credits also are possible.

The legislation renews the program, called Louisiana Quality Jobs, for six years.

[...]

Later in the day, the governor signed House Bill 597 at TraceSecurity Inc. in Baton Rouge.

HB597 by state Rep. Michael Jackson, D-Baton Rouge, restarts the Angel Investor Tax Credit Program that ended in 2009.

The program encourages investment in start-up companies.

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