Are you ready to pick the perfect tax professional and avoid the pitfalls of problematic preparers? Tune in to this enlightening episode of Money Talk With Tiff as Tiffany Grant welcomes back the knowledgeable Camari Ellis for a deep dive into the red flags of tax preparation.
Camari, an Enrolled Agent, shares invaluable insights on distinguishing between various tax preparers, such as CPAs, EAs, attorneys, and the unenrolled. He emphasizes the significance of never surrendering your original tax documents and the importance of ensuring your tax preparer includes their PTIN on your return to avoid becoming ensnared in their potential audits.
Discover why bigger refunds aren't always better and how choosing a tax preparer who can't answer your questions can lead to trouble. Camari and Tiffany discuss why an informed client is the best client and how to foster a proactive relationship with your tax professional for strategic planning all year round.
Don't let the allure of a large refund or the convenience of a back-of-the-gas-station tax service lead you astray. Listen to this episode and arm yourself with the knowledge to select a tax preparer who is above board, knowledgeable, and invested in your financial well-being.
Share this episode to spread the word and help others stay on the right side of the IRS!
Camari Ellis is a Tax Advisor, with over 30 years of experience in the Financial Services & Tax Industry. He is a Black Wealth Advocate. He graduated from Temple University, majoring in Finance, and loves everything related to business, the stock market, and social media.
Email: camari@phillytaxteam.com
Book a meeting: https://bookme.name/CamariEllis/consultation
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Intro/Outro: You know what it is. That's right. It's time to talk
Speaker:money with your money nerd and financial coach.
Speaker:Now, tighten those purse strings and open those ears.
Speaker:It's the money talk with TIFF podcast.
Tiffany Grant:Hey, everyone. Welcome to another episode
Tiffany Grant:of Money Talk with TiFf. I am excited because today I
Tiffany Grant:have Kamari Ellis on the line again. Now,
Tiffany Grant:if his voice sounds familiar, you probably. Probably heard him in the
Tiffany Grant:previous episode where we talked about black wealth and
Tiffany Grant:taxes. But, you know, I had to bring him back because he was
Tiffany Grant:dropping so many gems. And today
Tiffany Grant:we want to talk about red flags or
Tiffany Grant:what to look for when it comes to picking a tax
Tiffany Grant:preparer, because I've heard of so many
Tiffany Grant:horror stories, and we'll probably get into some that Kamari
Tiffany Grant:has seen as well. So thank you so much, Kamari, for coming
Tiffany Grant:on the show again today.
Camari Ellis:Listen, thank you for having me back. Right.
Camari Ellis:We, ah, had really fun last, time. We talked about a lot of
Camari Ellis:things, black wealth and tax related.
Camari Ellis:But today we're going to talk about something else that's even
Camari Ellis:more fun, probably, for
Camari Ellis:sure.
Tiffany Grant:And, you know, I feel like this episode,
Tiffany Grant:well, last one do, but this one will help a lot
Tiffany Grant:of people, stay out of tax
Tiffany Grant:trouble, and that's just hiring the right person.
Tiffany Grant:Yes. so let's just go ahead and get
Tiffany Grant:started. What are some things that. Well, first of
Tiffany Grant:all, first of all, first of all, let's back up, because this podcast
Tiffany Grant:is all about education. Let's educate the people
Tiffany Grant:on the type of tax preparers that they may run
Tiffany Grant:into. So, for instance, what is the
Tiffany Grant:EA, what is someone that's not
Tiffany Grant:credentialed? What type of things can they do? So
Tiffany Grant:on and so forth.
Camari Ellis:So most times when people think about tax,
Camari Ellis:they think about a CPA, a certified
Camari Ellis:public accountant. And that
Camari Ellis:is kind of the gold standard when it comes to
Camari Ellis:accounting and tax, so to speak,
Camari Ellis:because their organization has done a
Camari Ellis:wonderful job at marketing the
Camari Ellis:CPA certification, and if
Camari Ellis:you don't know, it requires a certain amount
Camari Ellis:of college hours and to do a test,
Camari Ellis:and then you get admitted to each
Camari Ellis:state's CPA.
Camari Ellis:what are they board to their CPA
Camari Ellis:board. however, you have cpas,
Camari Ellis:certified public accountants who do taxes
Camari Ellis:and prepare taxes. You have people
Camari Ellis:who are enrolled agents, such as myself.
Camari Ellis:and then you have some attorneys who do
Camari Ellis:taxes as well, prepare taxes. And then you
Camari Ellis:have people called unenrolled,
Camari Ellis:agents or unenrolled representatives
Camari Ellis:who do taxes as well. And they're just
Camari Ellis:your regular people who
Camari Ellis:may have gone to school for. It may have not
Camari Ellis:gone to school for accounting and tax, but they do
Camari Ellis:tax returns. So just to kind of
Camari Ellis:break it down again, we have a CPA,
Camari Ellis:and I kind of talked to you about what they do and how you get to
Camari Ellis:that.
Tiffany Grant:Huh?
Camari Ellis:You have enrolled agents again, I'm an enroll
Camari Ellis:agent. An enroll agent is,
Camari Ellis:I'm licensed with the department of
Camari Ellis:treasury, aka the
Camari Ellis:IRS, and I am licensed
Camari Ellis:to help, and represent taxpayers
Camari Ellis:to. How can I best say this? To help
Camari Ellis:them with their tax problems before the IRS.
Camari Ellis:So, for the most part, there's only three
Camari Ellis:kinds of classes or not
Camari Ellis:classes. There's only three
Camari Ellis:designations that the IRS
Camari Ellis:allows to help people with their tax problems.
Tiffany Grant:Gotcha.
Camari Ellis:You have enrolled agents, you
Camari Ellis:have certified public accountants, and you
Camari Ellis:have attorneys.
Tiffany Grant:Gotcha.
Camari Ellis:Those three. Nobody else is really
Camari Ellis:able to represent tax clients
Camari Ellis:in front of the IRS. And what does it mean to represent them?
Camari Ellis:It means that I have the ability to
Camari Ellis:negotiate tax
Camari Ellis:bills, payments with the
Camari Ellis:IRS, for my clients on
Camari Ellis:their behalf with the IRS. Your
Camari Ellis:basic person who does
Camari Ellis:taxes and no shade. Right.
Camari Ellis:They usually are not allowed to do.
Camari Ellis:You know, hopefully, I gave you a good
Camari Ellis:synopsis of that. But what
Camari Ellis:normally happens is people will go to
Camari Ellis:certain people based on how big of a refund
Camari Ellis:they get. We all see the commercials.
Camari Ellis:a lot of times they say, come get your big refund, and you see a
Camari Ellis:guy jumping out of an airplane with a parachute
Camari Ellis:or something like that. Or many of
Camari Ellis:us know their cousin'sister's
Camari Ellis:boyfriend's homeboy who does taxes out of the
Camari Ellis:back of a gas station. And a lot of people will go to
Camari Ellis:them as well. And that can get a little
Camari Ellis:dangerous and a little costly in the long run,
Camari Ellis:also.
Tiffany Grant:Yes. So that sounds like our first
Tiffany Grant:red flag.
Tiffany Grant:If it sounds too good to be true, it probably
Tiffany Grant:is. And they're probably doing something illegal to get you
Tiffany Grant:that big refund that they're, touting
Tiffany Grant:out there. And so that's one
Tiffany Grant:red flag that you might see. and thank you so much
Tiffany Grant:also for going over all of those different
Tiffany Grant:designations and some things that
Tiffany Grant:people can think about as they're searching for a tax
Tiffany Grant:professional. But let's say, for instance, they're like,
Tiffany Grant:I've been going to the same tax preparer. I
Tiffany Grant:just want to use somebody that is an
Tiffany Grant:unenrolled agent. And so if
Tiffany Grant:that's the case, what are some things that they should be
Tiffany Grant:looking for if they use just a regular tax
Tiffany Grant:preparer, to make sure that they
Tiffany Grant:stay safe as far as their taxes?
Camari Ellis:Well, number one. One thing I see a lot of people get
Camari Ellis:jammed up on is they give their tax people their original
Camari Ellis:documents. Never give anybody your original
Camari Ellis:documents. Make sure either they're giving you a
Camari Ellis:copy or you are scanning them and
Camari Ellis:uploading to a portal. But make sure that
Camari Ellis:you do not give anybody your
Camari Ellis:original tax documents. Why?
Camari Ellis:If they go out of business,
Camari Ellis:sadly, there are some accountants I know who've died,
Camari Ellis:especially over Covid. It's really hard to
Camari Ellis:get your original tax documents back. Now,
Camari Ellis:in the previous episode that I was on with tiff, I told everybody to
Camari Ellis:go get an IRS account, and I still
Camari Ellis:believe in that today. Go get you an IRS account,
Camari Ellis:because in there, you can also pull
Camari Ellis:your transcripts, your wage and income
Camari Ellis:transcripts. Only problem with that is that
Camari Ellis:they're redacted, meaning that some of the
Camari Ellis:information is blacked out or covered out.
Camari Ellis:And so it can also be a little bit
Camari Ellis:hard to reproduce or redo somebody's
Camari Ellis:tax return, without all the information.
Camari Ellis:But it's kind of.
Camari Ellis:What's the word I'm looking for here? It's another way to go
Camari Ellis:about getting your tax records if you've lost
Camari Ellis:them. the other way is you come to a guy like
Camari Ellis:me and you say, kamara, I need my tax records. You pay
Camari Ellis:me, I pull your tax records
Camari Ellis:unredacted, where you have all the information
Camari Ellis:so you can do, your
Camari Ellis:returns, without a problem.
Camari Ellis:And I've seen that situation happen a
Camari Ellis:lot. Again, sadly, the
Camari Ellis:accounting field, especially with tax count, is very
Camari Ellis:stressful. A lot of us have been
Camari Ellis:retiring again. Like I said, some of us have
Camari Ellis:died and people have had a hard time getting their
Camari Ellis:paperwork back. So it can be very challenging at
Camari Ellis:times.
Tiffany Grant:so that's a need to know. Red
Tiffany Grant:flag.
Camari Ellis:Yeah, it's a need to know. I wouldn't call it a red. Well, the red flag
Camari Ellis:is somebody. Their
Camari Ellis:original documents. Yes.
Tiffany Grant:Right. And if they say, oh, well, I need your
Tiffany Grant:originals, and you can be like, nope, you just need a
Tiffany Grant:copy. Right.
Tiffany Grant:So that's really good information. And if you missed the last
Tiffany Grant:episode, the IRS account is just going to the IRS
Tiffany Grant:website and signing up and creating an account there. And
Tiffany Grant:then you can look at all your information. So I just wanted to put that out there
Tiffany Grant:in case they missed the last episode. And if you did miss the last
Tiffany Grant:episode, go back and listen. but, okay,
Tiffany Grant:so, we have making sure that you don't
Tiffany Grant:give your originals. what else should
Tiffany Grant:people think about or do when it
Tiffany Grant:comes to working with a tax preparer to make sure that they are
Tiffany Grant:protected.
Camari Ellis:Well, anytime you are working with a tax
Camari Ellis:professional, you want to make sure they have what's called a p
Camari Ellis:ten m. It's called a preparer tax
Camari Ellis:identification number. there's a whole problem
Camari Ellis:with people who are what's called ghost preparers.
Camari Ellis:They'll do your taxes, they'll do them in turbotax,
Camari Ellis:you'll pay them, but they won't put their
Camari Ellis:name on it, and it'll be under your name.
Tiffany Grant:And if somebody's listening, they're like, well, what's the problem
Tiffany Grant:with that?
Camari Ellis:Well, the problem with that is especially me. Since I'm
Camari Ellis:an enroll agent, I am held to a higher
Camari Ellis:standard. Right.
Camari Ellis:I have to understand where you're getting
Camari Ellis:said numbers for your taxes from
Camari Ellis:and what are they based on? So,
Camari Ellis:for example, let's say you have a business and
Camari Ellis:you sell water, and you tell me,
Camari Ellis:Kamari, I sold a million bottles of water last year
Camari Ellis:and I made a million dollars. Okay,
Camari Ellis:great. How did you track that? I don't
Camari Ellis:know. I just guessed.
Camari Ellis:Well, we might run into a situation where you are
Camari Ellis:falsifying your records, and,
Camari Ellis:anytime, per the law, you
Camari Ellis:were supposed to prepare as truthful
Camari Ellis:and honest of a tax return. You can prepare.
Camari Ellis:So you don't want to unintentionally file
Camari Ellis:fraudulent tax return. By the way, there is no
Camari Ellis:statute of limitations on fraudulently
Camari Ellis:prepared tax returns. So if you do some janky on
Camari Ellis:your tax returns, like buy kids
Camari Ellis:and use them, it can come at you
Camari Ellis:forever. So just keep that in
Camari Ellis:mind. But, you want to try to
Camari Ellis:do the best you can
Camari Ellis:and just have all accurate information
Camari Ellis:as much as possible.
Tiffany Grant:Yes, for sure. And when you
Tiffany Grant:said buy kids, I chuckled a little bit because of the way you
Tiffany Grant:put it. But when
Tiffany Grant:people be like, oh, let me file your son, or let me
Tiffany Grant:file your daughter, it's a real thing. Uh-huh. It is.
Tiffany Grant:I've seen it. I've synced it.
Tiffany Grant:yes, you sinked it.
Camari Ellis:And guess what? The IRS knows all about it, too. So a
Camari Ellis:lot of times people think they can get away with
Camari Ellis:a thing for a year or two and that they've been
Camari Ellis:slick. I tell people all the time, you're not that slick.
Camari Ellis:And the IRS is not that dumb. So you might
Camari Ellis:get away with it. Some people do get lucky and they slip
Camari Ellis:through the cracks, but a lot of people get jammed up.
Tiffany Grant:Right? And so that takes me back to the p
Tiffany Grant:ten. So if they put in their
Tiffany Grant:p ten number saying that, hey, I'm the one that
Tiffany Grant:filed these taxes, if they are
Tiffany Grant:janking, it'll go back to them instead of
Tiffany Grant:you.
Camari Ellis:Yeah, well, listen, the taxpayer
Camari Ellis:ultimately has the duty to understand what they're
Camari Ellis:doing. What I mean by that is, when
Camari Ellis:you're filing a return, the person, the client, has
Camari Ellis:to sign their return, so they're signing off on
Camari Ellis:that. However, if
Camari Ellis:a tax preparer did
Camari Ellis:something crazy, janky made up some
Camari Ellis:numbers, didn't tell the client about this,
Camari Ellis:the client wasn't involved with that. That comes back
Camari Ellis:to the tax professional. the other thing
Camari Ellis:is what I've seen over my lifetime,
Camari Ellis:I've lost clients because of this. Right.
Camari Ellis:Especially some of, our,
Camari Ellis:ladies and gentlemen in blue. a lot
Camari Ellis:of times they'll have somebody on the job who can get them a bigger
Camari Ellis:return. And this is a situation
Camari Ellis:that happened with me. I lost a couple of those clients
Camari Ellis:because they went to somebody
Camari Ellis:that, could promise them a bigger refund,
Camari Ellis:and they got a bigger refund. But what happened was
Camari Ellis:that tax preparer got audited by the
Camari Ellis:tax preparer. The IRS saw that there was a
Camari Ellis:pattern of these, quote, unquote,
Camari Ellis:you can't see me, but I'm putting, my fingers in the
Camari Ellis:air, of getting them bigger refunds. And they
Camari Ellis:started digging to those, and they saw that they were
Camari Ellis:all done improperly. And the numbers
Camari Ellis:didn't make sense. So what
Camari Ellis:happened was all the clients, or a large
Camari Ellis:portion of their clients, got audited as
Camari Ellis:well. And so it kind of just trickled down with
Camari Ellis:a trickle down effect that
Camari Ellis:they got some money for a couple of years, but the interest and
Camari Ellis:penalty that they wind up paying
Camari Ellis:at the end, they wind up paying more money.
Camari Ellis:So just try to find people
Camari Ellis:who are
Camari Ellis:integral, have character,
Camari Ellis:and don't work in the back of gas stations.
Tiffany Grant:Right? So that, to me, sounds like red
Tiffany Grant:flags number three and four.
Tiffany Grant:So three would be, make sure they
Tiffany Grant:have a p ten. and they're putting it on
Tiffany Grant:your tax return
Tiffany Grant:because it's not enough for them to just have it. They need to put it on
Tiffany Grant:there saying that I did this, and
Tiffany Grant:then also making sure
Tiffany Grant:that they are a reputable preparer.
Tiffany Grant:Because if not, I didn't even know that
Tiffany Grant:tax preparers get audited, too.
Tiffany Grant:So now I'm over here
Tiffany Grant:thinking about some people that.
Tiffany Grant:Thinking about some people that are always claiming
Tiffany Grant:they get big refunds for people. And I'm like, oh,
Tiffany Grant:so if they get audited, then all their clients is
Tiffany Grant:going down with them? Kind of. From my
Tiffany Grant:understanding, from what you said, right?
Camari Ellis:Potentially, yes.
Tiffany Grant:Potentially. Wow, that's scary.
Camari Ellis:Listen, I will say this right.
Camari Ellis:there are a lot of people out there that just key
Camari Ellis:in numbers. I call them tax data entry people.
Camari Ellis:And so they just get the numbers and they put them in. Right.
Camari Ellis:But this notoriously
Camari Ellis:happens to me. I have business owners
Camari Ellis:and even some, real
Camari Ellis:estate rental, investor clients that have
Camari Ellis:terrible books. They don't keep track of anything. They ask
Camari Ellis:me, well, what's deductible and what's not
Camari Ellis:deductible. So a good person should be able
Camari Ellis:to guide you down that road about
Camari Ellis:what's legally deductible, what's
Camari Ellis:not deductible, and help you put that
Camari Ellis:together. And those are things that you can file in your tax returns.
Camari Ellis:So here's a prime example.
Camari Ellis:new start business owners, they're like,
Camari Ellis:I don't know what to file. And so I'll just start
Camari Ellis:with, do you use your phone for business?
Camari Ellis:Yes. You call your
Camari Ellis:booth or your bay on your phone also?
Camari Ellis:Yes. Okay. So you can write
Camari Ellis:off a portion of your cell phone.
Tiffany Grant:Uh-huh.
Camari Ellis:But you can't write off the whole thing because you use
Camari Ellis:it for business and you use it for personal. And the
Camari Ellis:IRS loves to target cell phone usage and
Camari Ellis:write offs because they know most people don't
Camari Ellis:have separate lines for their,
Camari Ellis:business, for their cell phones.
Camari Ellis:But you can take a portion of it. Let's say
Camari Ellis:your bill is $100 a month. I know that's probably unheard
Camari Ellis:of these days, but you can write off
Camari Ellis:$50. I know that they have
Camari Ellis:that right because everybody uses it by
Camari Ellis:asking them, some questions, and that then becomes a
Camari Ellis:legitimate write off on their tax
Camari Ellis:returns.
Tiffany Grant:Got you. So I just took
Tiffany Grant:away red flag number five is
Tiffany Grant:if you can't ask your tax
Tiffany Grant:repair questions and they can't answer for you.
Tiffany Grant:And this is true story. I've had somebody tell
Tiffany Grant:me that they asked their tax repair, and they said, I don't
Tiffany Grant:know, I just put in the numbers. Then
Tiffany Grant:that is a red flag that that is probably
Tiffany Grant:not someone that you would want to be working with because they
Tiffany Grant:don't know the tax code and
Tiffany Grant:can't help you if things you should.
Camari Ellis:Be able to ask questions of the people you're working with.
Camari Ellis:Now, I do have some people who want to ask
Camari Ellis:you what I call ask holes. they
Camari Ellis:want to ask you a million and one questions, don't care
Camari Ellis:about your time. and
Camari Ellis:I have a friend of mine who's a client who
Camari Ellis:loves to send me questions. And that's kind of how
Camari Ellis:my whole social media experience started,
Camari Ellis:was, I'm tired of answering these questions
Camari Ellis:a thousand times or saying questions.
Camari Ellis:So I'll record a video, and then when he
Camari Ellis:asks it, I'll just send it to him. But
Camari Ellis:it's okay to not understand and
Camari Ellis:not be. It's okay to be ignorant in
Camari Ellis:the beginning. It's a process of
Camari Ellis:learning and developing. So, yes,
Camari Ellis:you want somebody you can ask questions to. You
Camari Ellis:also want to be on a journey to educate yourself as much
Camari Ellis:as possible. Because I say my best clients
Camari Ellis:are informed clients because they're
Camari Ellis:proactive. They're talking to me all year
Camari Ellis:long about strategy and how to implement it
Camari Ellis:correctly. And they're doing good books
Camari Ellis:for my business owners and real estate investors.
Camari Ellis:So it's good to ask
Camari Ellis:questions, but don't be
Camari Ellis:the person that's just asking a question just for the sake of asking
Camari Ellis:questions. I get people that ask me about trust all the
Camari Ellis:time. You don't even make any money,
Camari Ellis:right? You ask me about trust.
Tiffany Grant:I was going to say that sounds.
Camari Ellis:Like I don't want my baby mama to,
Camari Ellis:get, my assets because I
Camari Ellis:haven't been paying child support.
Camari Ellis:Listen, I know I'm joking, right? But that's
Camari Ellis:real. And there are a lot of problems with child
Camari Ellis:support. However.
Camari Ellis:Ah, I feel the energy that we put in
Camari Ellis:trying to dodge child support with trust
Camari Ellis:would simply be solved just by having
Camari Ellis:a conversation or several conversations and
Camari Ellis:paying your child support.
Tiffany Grant:Exactly. Bad part.
Camari Ellis:Your issues would probably go away.
Tiffany Grant:And since we're on the topic of taxes, they will snatch up
Tiffany Grant:that refund if you're behind, too. So
Tiffany Grant:keep that in mind. So thank you so much,
Tiffany Grant:Kamari, for coming back on the show today
Tiffany Grant:and shedding light on some of these red flags that
Tiffany Grant:people could potentially run into when they're
Tiffany Grant:looking at tax professionals or tax
Tiffany Grant:preparers. And so I hope people are listening
Tiffany Grant:to this episode and take it to heart. It's January.
Tiffany Grant:It's time to get your taxes together. Make sure you listen
Tiffany Grant:to this episode. Share this episode to let people
Tiffany Grant:know what they should be looking for so everybody can stay
Tiffany Grant:out of tax problems. for the most part, we can't solve
Tiffany Grant:everything here on the show.
Tiffany Grant:But, Kamari, if people were interested
Tiffany Grant:in finding out more about you utilizing your
Tiffany Grant:services, where could they find you?
Camari Ellis:So if you want to utilize my services, just send me an email,
Camari Ellis:which is
Camari Ellis:kamari@phillytaxteam.com
Camari Ellis:and I'll spell that out for you.
Camari Ellis:Kamari@phillytaxteam.com
Camari Ellis:cammari
Camari Ellis:at
Camari Ellis:philly p. Ah. H-I-L-L-Y.
Camari Ellis:Tax. T-A-X-T-E-A-M
Camari Ellis:m.com again,
Camari Ellis:kamari@phillytaxteam.com
Camari Ellis:and you could also find me on most
Camari Ellis:socials@phillytaxteam.com. Also,
Camari Ellis:or phillytaxteam on my instagram, on my
Camari Ellis:facebook, on my YouTube.
Tiffany Grant:Yeah, that was going to be my next question so people can get those
Tiffany Grant:videos you'd be sending.
Tiffany Grant:but thank you so much for joining me on the podcast.
Tiffany Grant:Again, this was great information and I'm sure it'll
Tiffany Grant:help somebody. So I appreciate you.
Camari Ellis:Thank you, Tiff. I appreciate you.
Tiffany Grant:All right, bye.
Tiffany Grant:Intro/Outro: Thank you for listening, joining and being a part of the Money
Tiffany Grant:Talk with TIFF podcast this week. You can check Tiff
Tiffany Grant:out every Thursday for a new money talk podcast.
Tiffany Grant:But if you just can't wait until next week, you can listen
Tiffany Grant:to previous podcast
Tiffany Grant:episodes@moneytalkwitht.com
Tiffany Grant:or follow TIFF on all social media
Tiffany Grant:platforms at moneytalkwitht.
Tiffany Grant:Until next time, spend wise by spending
Tiffany Grant:less than you make. A, word to the moneywise is
Tiffany Grant:always sufficient.