Tax clients often worry that their preparers may have missed something, or that they’re not getting the full refund they deserve.
Capitalizing on those worries are two Colorado Springs, Colo. businessmen who are building a booming business by specializing in filing amended tax returns.
Entrepreneur Brace Barber and Darren Oliver, a former securities and insurance broker, claim they are recovering up to $700,000 a month for their clients, who are mainly small to mid-sized businesses. They say seven out of 10 returns they’ve reviewed since 1995 show clients overpaid taxes by an average of $8,000.
That means their business, Tax Recovery Group, is collecting an average of $4,000 on those returns because the company will take half of whatever they find.
"The choice is to let the IRS keep all of it, or you can let us keep half," said Oliver.
Of course, not every review turns up thousands of dollars in overpaid taxes. Oliver said about one in 10 clients have not paid enough taxes. "We don't do anything with them,'' he said. "Clients wouldn't think that was very good: `Hey, we finished your amendment and you owe the IRS 20 grand.' "
Oliver and Barber, who are not CPAs themselves, spent six years assembling a team of tax experts focused on finding overpayments. The company has a network of more than 600 independent sales partners and franchisees across the country.
The men acknowledge that they hope to take clients away from other tax consultants, but they also say they are trying to get out the word that the tax preparation industry is inaccurate because it is unregulated. In fact, the company said in a press release that it would pay $1,000 to any accountant or tax consultant who could "provide a single piece of solid, empirical evidence'' that the tax preparation industry is accurate.
CPAs are unconcerned. "It's an easy claim to make," said Mary Medley, executive director of the Colorado Society of Certified Public Accountants. "There is nothing new here."
Even the best tax consultants can overlook deductions, and any two preparers can come to different conclusions. The Tax Recovery Group isn’t offering an unusual service — just about every CPA or tax preparation firm will review old returns and file amended returns if necessary.