If you worked in any of these countries, you could be due a Tax Refund

‘What happens if I pick the wrong tax company for my J1 tax return?’ You might be stuck with fines & penalties

Why who you trust with your taxes really matters

Each year thousands of students from around the world visit the US on the J1 Work and Travel program hoping to experience the American way of life.

Of course, if you work in America you’re going to have to pay tax. And what’s more, everyone who visits the US on a J1 visa is required to file a tax return with the IRS. It’s the law. But it’s not all bad news! Many students are entitled to a tax rebate and the average US tax refund with Taxback.com is $800.

The prospect of filing a tax return can be extremely daunting for a lot of people. So it makes sense that many people seek help with completing their J1 tax return. But what happens if you don’t enlist the right help?

There are many dubious tax companies out there who boast about how much they save their customers on their tax bill or claim they can retrieve inflated tax refunds. However, it’s important to ask yourself - are they really the best people to handle your tax affairs? After all, if you choose the wrong tax company, and incorrect information is submitted on your tax return, you will be seen as fraudulent by the IRS and you may have to pay fines and penalties. 

Students should proceed with caution and choose the correct and legal route! If you choose a legitimate tax agent like Taxback.com you can still receive a tax refund, while also remaining compliant with the IRS.

1) It’s you who will be held responsible… not the dishonest company

Filing a fraudulent tax return is a crime. If you are get caught you will have to pay penalties and interest.

And the worst part is you’ll probably not even be aware that any laws were broken. It doesn’t matter if you do it yourself, or a dishonest company does it for you, if a fraudulent tax return is filed on your behalf, it is you that will be held responsible. ‘Not knowing’ will not be considered as a valid excuse by the IRS. In fact, some less than reputable companies actually complete and sign the tax return in your name! In other words, there is no way for the IRS to tell that the return was not filed by you.

2) The benefits of picking an agent with proper qualifications and experience

When you are picking a tax company for your J1 tax return, the best place to start is by asking lots of questions.  And not just about pricing or fees. The first key question you should ask is ‘does this company have the necessary qualifications to competently complete my US tax return correctly?’ The majority of disreputable companies do not employ qualified tax agents. Beware!

Ask the company if they employ US tax qualified professionals. US tax matters can be quite serious and complicated so you want to ensure everything on your tax return is by the books.

Investigate if the company have a PTIN? The PTIN is a paid tax preparer identification number and this is issued by the IRS and should be included on each tax return filed by the preparer.

A PTIN means that the responsibility for the tax return preparations is with that person and is based on the information you provided. Some disreputable companies will ask you to sign and complete a blank 1040NR Form. You should avoid this at all costs. Why? Because they can then file anything they want on your tax return and it will be you who is responsible.

You’ll also need a company that is willing to help you throughout the entire filing process, not just a company that will file the return and run. Ask yourself, if an issue arises with your tax return, do you really want to be the one you deals with the IRS?

If you need to call the IRS from overseas, it can be very time consuming and expensive. In fact, during high season, the average waiting time on the IRS phone is 38 minutes. This is why it’s important your tax preparer can fix any issues that may arise.

3) You could be claiming reliefs and credits that you are not entitled to

One of the main reasons that certain tax companies advertise inflated refund figures is because they are claiming expenses and reliefs for their clients that they are not entitled to. As a result, their clients not only received a lower refund but get fined for filing fraudulent tax returns.

The American Opportunity Tax Credit (AOTC) is a good example of this. Some dishonest companies have been telling their J1 clients that they are entitled to receive this credit as a ‘$1000 bonus’. However, this is false.

The AOTC is only available under certain strict conditions.

Firstly, a J1 visa holder can not avail of AOTC unless you are in your third year in the USA and considered a resident for tax purposes. You must also pass a Substantial Presence Test – e.g. you must be physically present in the United States (U.S.) on at least:

  • 31 days during the current year, and

  • 183 days during the 3-year period that includes the current year and the 2 years immediately before that, counting:

-          All the days you were present in the current year, and

-          1/3 of the days you were present in the first year before the current year, and

-          1/6 of the days you were present in the second year before the current year

To be an eligible student you must also:

•          Be pursuing a degree or other recognised education credential in an approved American educational institution

•          Be enrolled at least half time for at least one academic period beginning in the tax year

•          Not have finished the first four years of higher education at the beginning of the tax year

•          Not have claimed the AOTC or the former Hope credit for more than four tax years

•          Not have a felony drug conviction at the end of the tax year

It is easy to see that to qualify for credits such as the AOTC there are a number of boxes that you must tick. They are not just handed out to every J1 student!

So, like many things in life, if it seems too good to be true, it almost certainly is.

Sure, extra cash is great. But compliance is better. If you get audited (more on this below), it’s you that’s on the hook and not the untrustworthy company.

4) What will happen if there is an Audit?


The IRS can select you for an audit any time within a four year period after you file your return. It’s true that the majority of people are not selected and do not have to deal with the IRS. But what happens if you are chosen for an audit of a year in which a preparer completed your return for you?

Will the company help you? Or will you be left scrambling to find the relevant paper work and to correspond with the IRS?

In some cases the IRS have informed unreliable tax companies that their client has been selected for an audit and the company has simply not informed the client. When the client then attempted to re-enter the US at a later date they were denied entry due to the outstanding audit.

Most people find the prospect of an audit to be stressful. So the more help you can get here, the better. If you get selected for an audit for a year in which Taxback.com filed your tax return, we can handle all correspondence with the IRS. If it is for a different tax year than the one we prepare the return for, we can provide you with any documents and information you might need regarding the tax year we have processed.

In summary

If you’d like assistance in filing your tax return, you should choose a tax agent that is qualified and fit to do the job.

Taxback.com has been processing refunds for students and people all over the world since 1996! That adds up to over 1 million taxes filed to date! An ISO Certified tax preparation company, Taxback.com only employs the most experienced tax specialists. Our team of tax experts can answer any tax questions you might have, file your tax return for you and retrieve the maximum tax refund you are legally entitled to. Our average US tax refund is $800.

You’ll also get any refunds due straight to your bank account! When you apply for your US tax back with Taxback.com, you’ll first get a free, no-obligation estimate and you can then decide if you want to apply.

If you use Taxback.com to file your US tax return, you’ll also have the benefit of 24/7 live chat help and your own personal account manager.

Furthermore, if you have had a previous bad experience with a dubious tax company, don’t worry. Taxback.com can help you too. We can file amendments on your behalf, correct poor tax returns made by dishonest companies and help you to settle any liability or outstanding issue that you may have with the IRS.

Taxback.com is also the only tax agent to become a partner member of the Alliance for International Educational and Cultural Exchange. This Alliance is an association of 76 nongovernmental organisations comprising of the international educational and cultural exchange community in the United States. The Alliance serves as the only collective public policy voice of the exchange community.

The average US tax back we get for J1 students is $800

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About The Author

Mark Corcoran - Digital Content Executive @ Taxback.com

Mark is the Digital Content Executive at Taxback.com. Since graduating from Griffith College Dublin with a degree in Journalism and Visual Media, his work has been published both in print and online.

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