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Contributor
Chbraswell
Posts: 101
Registered: ‎07-02-2012

Could be denied due to my taxes???? Need insight please

Hey all,

 

I submitted all my docs last weeks including my 1040 2011 tax returns.  I used a tax person who lived in cleveland and i live in columbus and he came highly recommended.  He explained that I could get a credit for depreciation of my car and that it's perfectly okay.   So he did my taxes and sent me some of my docs and that was the end of it.  Several months later (which is now) i decide to get a home and of course, they want my 1040.  So first i tried to find this guy and he was not responding, so i called the corporate office that he works for and advised that i need my 1040s and he is not being responsive.  So she sends them to me, and to my surprise i see tons of errors. First off he spelled my name wrong like 10 times(minor and exaggerated numbers) he spelled my car wrong and had the details wrong.  But most importantly he did a profit and loss statement and had my car depreciated at a loss of $31,000!!! I was livid so i wrote an LOE explaining that i have never owned

I have never owned a business and that i was unaware that he did my taxes in this manner.  So now my LO is questioning me about it and I don’t know what to do.  My coworker who used to be an EX-LO said that I could be denied due to not being able to verify my income.   I am so upset and just frustrated and I’m trying not to lose it at work but it is very very hard.  Is there anything I can do to rectify this? Please let me know thank you!

Beginning:Explus 630 eq 573 tu 593
Current: EXplus:677 Eq 672 TU 727
Goal: Explus 700 eq 700 tu 800

Merrick: 1550 Capital One:1150 Barclay: 2000 Walmart: 300
Regular Contributor
indecison
Posts: 226
Registered: ‎05-24-2012

Re: Could be denied due to my taxes???? Need insight please

Man, I do not have any answers for you as this goes beyond any knowledge I have on the subject. I hope it works out though and you are able to find a solution.

Valued Member
whipster
Posts: 44
Registered: ‎01-11-2009

Re: Could be denied due to my taxes???? Need insight please

Sounds like you need to amend that return. Might delay your house-hunting a month or so but not the end of the world.

Regular Contributor
deg757
Posts: 118
Registered: ‎08-13-2012

Re: Could be denied due to my taxes???? Need insight please

I can not address this issue from the loan standpoint but as I am a CPA and do taxes for a living I can shed a little light on that side of things. If your tax return is incorrect, you should have an amended return prepared. I imagine that you will owe more tax with it as he has caused you to show a loss on your non-existant business which lowered your tax liability. Should you go this route, be prepared to pay additional tax and penalties and interest for not paying timely. Whether that was your fault or not, the IRS doesn't care. I don't know if this would help with your loan or not, but the IRS can audit your tax return anytime in the next three years. That is unlikely, but a definite possibility.

 

As far as action against the tax preparer, there are not a lot of options there as you were most likely required to sign either the tax return before it was filed or an e-file authorization form which states that you are taking responsibility for the information that is included on your return. If he is a CPA (you don't have to be a CPA to file taxes) I would recommend contacting the state society of CPA's in the state he is licensed in to report him. This would start an investigation by the state society and licensing board. Be aware that this action carries serious consequences to the tax professional (loss or suspension of license) and should not be taken lightly. Once a license has been revoked for unethical behavior, it can never be reinstated.

 

All that being said, good luck. I hope it works out for you. I would be really interested to know how this resolves, keep up posted.

Starting scores 2/27/12 TU 605 EX 576 EQ 560
Current scores lender pull 9/6/12 TU 663 EX 629 EQ 645
Closed on our first home 10/26/2012!
Contributor
Chbraswell
Posts: 101
Registered: ‎07-02-2012

Re: Could be denied due to my taxes???? Need insight please

Thank you guys so much! for giving me this insight! i truly appreciate it!

Beginning:Explus 630 eq 573 tu 593
Current: EXplus:677 Eq 672 TU 727
Goal: Explus 700 eq 700 tu 800

Merrick: 1550 Capital One:1150 Barclay: 2000 Walmart: 300
Community Leader
Senior Contributor
StartingOver10
Posts: 3,011
Registered: ‎03-06-2010

Re: Could be denied due to my taxes???? Need insight please

I agree wholeheartedly with deg757. The main issue here is correcting your tax return.

As to the mortgage approval, if the income as reported is not enough to support your purchase, then the underwriter will deny the file.

You may want to withdraw your application rather than have a denial, especially if you are getting a government type loan (USDA/VA or FHA).

 

You can re-apply after you have corrected the tax return. You may need to supply additional years of tax returns and a LOX to show that the one-time erroneous return is an exception and not the rule. I don't know. Some of the lenders are very wary of an amended return just before mortgage applications.

 

 

 

 

Contributor
Chbraswell
Posts: 101
Registered: ‎07-02-2012

Re: Could be denied due to my taxes???? Need insight please

my realtor recommended an amendment and is going to speak to the LO.  He said because the amount they showed that I made matched the amount on my W2s, we still have a leg to stand on.  As of right now, my LO said it has been escalated to a credit committee review and he explained the situation to the U/W.  I dont even know what that is???

Beginning:Explus 630 eq 573 tu 593
Current: EXplus:677 Eq 672 TU 727
Goal: Explus 700 eq 700 tu 800

Merrick: 1550 Capital One:1150 Barclay: 2000 Walmart: 300
Community Leader
Senior Contributor
StartingOver10
Posts: 3,011
Registered: ‎03-06-2010

Re: Could be denied due to my taxes???? Need insight please


Chbraswell wrote:

my realtor recommended an amendment and is going to speak to the LO.  He said because the amount they showed that I made matched the amount on my W2s, we still have a leg to stand on.  As of right now, my LO said it has been escalated to a credit committee review and he explained the situation to the U/W.  I dont even know what that is???


Now I'm confused. Are you speaking about your adjusted gross income? Normally when the tax person/CPA deducts for business expenses - it reduces your adjusted gross. Of course, that tax person didn't appear to do anything normally by giving you a business you never had!

Contributor
Chbraswell
Posts: 101
Registered: ‎07-02-2012

Re: Could be denied due to my taxes???? Need insight please

yes! I am talking about my AGI.  It matches what's on my W2's and the deductions reduced that amount.

Beginning:Explus 630 eq 573 tu 593
Current: EXplus:677 Eq 672 TU 727
Goal: Explus 700 eq 700 tu 800

Merrick: 1550 Capital One:1150 Barclay: 2000 Walmart: 300
Established Member
TTR79
Posts: 35
Registered: ‎09-13-2012

Re: Could be denied due to my taxes???? Need insight please

I don't have a clue as to how this will affect your mortgage app, I can only speculate. I tend to err on the side of caution, so I'd say to really talk with some other than your LO. Your LO has a stake in the game.... They want approval and are rewarded for them.... Take that how u will. The IRS is a beast.... I'd definitely amend my return bc if the catch this you will pay dearly.... I've seen it happen. Regardless of a mortgage, fix it.
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