Let's explore this a little bit... I think that grandpa and mommy were in this together. I think that this is a case of hiding assets in the name of a minor while still maintaining controll of it. I believe there is some previous caselaw where a person was penalized for doing this. I think that C needs to get these credit reports asap. The reports will give an idea of where the assets are and what they were. This may have been going on for years, I mean over 15 or more. These kind of shelters were very prevalent in the 80's and early 90's before people found out that a dummy corp or offshoring money was just as effective. The difference is, is that the trust would still have to pay taxes (fiduciary) whereas the offshore would pay nothing. It started with grandpa (he is the original culprit)...and mom took her moral cues from him and followed right along. So C, in a nutshell, your mother may have not known any better. Follow this checklist: 1. file a police report for id fraud 2. write a letter to all cra and send the police report in. 3. get the reports, try to track the mortgages to the parcel numbers (call the mortgage co and find out what the mortgage was for) 4. do the math..if you were under 18, you could not enter into a mortgage or any other contract for credit cards/loans. 5. Come back here to put together a strategy to dispute all items and have them removed from your reports and life. 6. Say good bye to mom, she may be doing some time or community service or both.
Mail Call I've got almost all of my information together for the three credit requests so those should go out soon. I received one 1099 from a part time job I had this year...still waiting for a w-2 from the other. I also received a year end review of my custodial account(Is that what I take with me for tax purposes or am I still waiting on a certain form?) I got the "transcripts" from the IRS from 2006 when I filed single. I think that's it for mail.... My mother called today and said that their CPA is sending me a copy of the amended return. So that is on it's way as well. She said that the CPA wouldn't tell P what was in the letter...I'm assuming that it upset him. *Bonus Points* He also assured P that he didn't see anything wrong in his file, but he would make sure that they never claim me again. Also...what does the police report do in the big scheme of things? Is that for the tax fraud or the credit fraud? Should I Re-amend the 2006 taxes now or wait until I get the copy of their tax return? Thanks ya'll!
If any "monies" were distributed (withdrawn) from the trust account, there should be a 1099-DIV, or 1099-MISC. Review the year end statement carefully to determine what activity happened in 2007. Sounds like you have almost everything.. Good, one more piece of information. Again, review carefully. The police report may help in getting your credit reports, and help in cleaning them up of any accounts that are not yours. Yo don't have to "name" your mother in the report, but filing the report gives you support in obtaining your credit reports (without having to know what's on them). The IRS issue would/will be another issue all together. First things first...
P.S. SInce you state that you received a 1099 for a part-time job, be aware that you will probably have to file a regular 1040 (long) form. Not a big deal, but you will have to put these "earnings" on the Schedule C-EZ or regular Schedule C. Just a heads up...
She could get a 1099 even if nothing was distributed, it there were dividends or earnings paid into the fund. C would be liable for the taxes on those. I get 1099s almost every year on some of my accounts. I haven't withdrawn anything from any of them.
We're Back . . . more confused than ever Greetings, all! Hopefully, C will post w/ further info. However, I just got off the phone w/ her broker and I am confused and frustrated. C asked me to call her broker b/c she herself had called and was just getting the runaround. Where to start? C went to H&R Block for tax prep. She was told she had to pay taxes on approx. $33,500, the balance in her acct (or I suppose, the balance at the first of the year). Not having seen the docs, I am not clear on all this. So C called me from H&R Block - upset - b/c she didn't understand why she would have to pay taxes on that amount. She took out money this past year to pay for her tuition and some other expenses, but I doubt that was over $8000. The tax preparer stated that she owed the money b/c the account was set up as a new acct so that money had to be accounted for. I have not seen C's 1099 but cannot imagine that she is responsible for paying taxes on that full amount. Makes no sense to me. So I said - well let's see the basis for these stocks. So C called the brokerage and they said they had provided her w/ all that info. I was not there so I don't know what was said. That is when C called me. The broker's asst. faxed C something (gain/loss sheet?) but only for a year or two. C called and asked me to call the brokerage. I had no idea what to ask for except that I felt I should let the broker know that I don't think he has handled this acct. correctly and that he needs to send C a copy of the original deposit put into that acct. b/c seemed to me that if the acct. was now less then the original amount deposited, and C had only taken out $10,000 or less dollars . . . that the account had been handled improperly. And that C should not be held responsible for paying taxes on money that was essentially equal to or less than the original "principal" paid into that acct. Does this make any sense? I said - how can one say there were gains on this acct. when it obviously has been pilfered from for years? Of course, this was said after a long argument w/ the broker's asst. w/ her continuing to say that their firm had no records that showed the beginning deposit in that acct. I kept insisting that the broker did b/c he was broker of record from inception. I honestly didn't know what I was talking about,either. However, I did say that C was now having to deal w/ the IRS b/c of her mother's mishandling of this fund and that I felt Mike shared in that responsibility, so either he cooperate or I would see to it that C engaged a tax atty to take this to the "next step." Well, that got her attention and she said she would see what she could "put together" and get back to me next week. We went round and round and the asst. also said she knew nothing about C having ever written any letters re: this account, blah blah blah. She asked for me to send her copies and I said - NO. You have them. You find them. I said - we have our copies and our certified mail info. Not my problem if the broker keeps lousy records. I have no idea what I did or didn't accomplish b/c frankly, I was not sure why I was even calling, LOL. C said her tax preparer said they needed to show the "basis" so I assumed that meant - from when the first stock was purchased (as that is what "basis" means to me when I sell a stock and have to show gains for tax purposes). The asst. said what she had faxed C showed all the "trades" for the year and I said - well how is that possible - all this trading going on and fees being charged when C had not asked him to do that? I still don't understand. I am clueless. I probably have not explained this in a way that anyone can even understand what I am trying to relay. Sorry. I guess my question is . . . what is going on here? What does C need to do to get the right documents (other than her 1099) to show the history on this account? Will it help her in any way to show the history on the account? What do I need to have to show the "basis" for the stocks in this account? And can her broker just indiscriminately dump stuff from one place to another w/o consulting C? I asked C to post to see if she can relay more so this makes sense. Thank you all for any help . . . assuming you can even decipher my babble.
In my opinion, her first mistake was going to H&R Block. She should get everything back from them NOW. This is very complicated. For this year, at least, and maybe for the next few years, she needs to engage a tax attorney or a CPA who specializes in personal taxes and is familiar with this. The preparer at H&R Block has had some minimal training, and can do routine things. This is far from routine. At the point that she has a lawyer or accountant engaged, she should authorize them to speak directly to the broker. Did she ever follow up with the IRS? What did they tell her?
Well, this situation is like taking two (or three)full boxes of jigsaw puzzles, and dumping them into one box, then trying to put the pictures together. First, as Hedwig suggested, pull out of H&R Block, these types of situations are way over their head. So, next, file for an extension. Look over what you have for records and statements, get a feel if you may need to pay taxes, and pay that amount with the extension request. You need time right now. The rep at H&R "could be right", if the brokeage firm did issue a "new account". This would constitute a transfer (release from the trust), which MAY (or may not) make these funds taxable. You need to get to the bottom of this. Find a good CPA or tax attorney. If you want to get some ideas first, PM me with details.
Where to begin... Since Ani posted we have been able to figure out the bias of the funds that were transfered to make the "new account" and I won't have to pay taxes on all $30,000 transfered. I have talked to the IRS..and after I finish filing for this past year I'm going to RE-amend the taxes from the year before and file for fraud b/c out of stupidity my mother has actually admitted to stealing my mail, breaking into my home to take copies of my original tax return, and then FORGING my signature herself. She claims I was in India at the time, but now that I have gotten copies of EVERYTHING from their CPA I know this is not the case. So they are in big trouble and they know it. I'm hoping that I can at least slap the wrists of the broker with something because he has treated me like crap this entire time and has withheld information from me. makes me sick... I can't talk much right now, but i'll be back with more info soon! Thanks guys.
"New" account? There shouldn't be a new account. There should only be a change in the name on the trust account (from your Mother's to yours). There should be NO "transfer". Verify this with the brokerage firm. Things to look out for are a change in account number, change in account type (i.e. UGMA to "cash" account). You should only be paying taxes on what YOU withdrew from the account. Before you go that far, realize that you will need the information of 1) what was withdrawn from the account, and what "cost basis" was used for tax purposes. File a complaint anyway with FINRA/NASD. You have more than enough to warrant an investigation. Believe me, an investigation ALWAYS leads to an (expensive) slap.
This is really great information here. I was always curious about the process and steps necessary in Identity Theft. Good Info!
what has been happening with this I was wondering if this issue had been addressed. Has there been an update.
I don't have any advice, but I want to send you support on clearing up your credit. It angers me when parents do this to their children. It's not only selfish, but literally steals from their future. My credit is shot, but I never considered opening credit in my child's name, and I had plenty of opportunities, especially after 18 when a work history began. Instead, I taught my child how to avoid walking in my shoes. By the way, four of the credit cards on my report, were opened by a loved one without my permission, who is now estranged and unemployed, so I know exactly how you feel. I won't consider pressing criminal charges, but I've ceased contact with this loved one, because there is no trust. I hope things work out.
Thanks for the support I just wanted to let ya'll know that i'm still working on trying to get my credit fixed up. I'll also be filing against my mother for tax fraud for forging my signature AND breaking into my home...It's been pretty crazy around here so I haven't had nearly as much time to get through this stuff. Sorry for the delay in updates. Also how do i get my car back under MY name...considering I PAID FOR IT! I'm very concerned that it could get ripped out from under me..any ideas? Thanks again! Hope everyone is doing well
