Wednesday, October 15, 2014


You may be able to claim the child and dependent care credit if you paid work-related expenses for the care of a qualifying individual. The credit is generally a percentage of the amount of work-related expenses you paid to a care provider for the care of a qualifying individual. The percentage depends on your adjusted gross income. Work-related expenses qualifying for the credit are those paid for the care of a qualifying individual to enable you to work or actively look for work.

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Expenses are paid for the care of a qualifying individual if the primary function is to assure the individual's well-being and protection. In general, amounts paid for services outside your household qualify for the credit if the care is provided for (i) a qualifying individual who is your qualifying child under age 13 or (ii) a qualifying individual who regularly spends at least 8 hours each day in your household.

The total expenses that may be used to calculate the credit are capped at $3,000 (for one qualifying individual) or at $6,000 (for two or more qualifying individuals). The dollar limits may differ depending on the tax year in question. The expenses qualifying for the computation of the credit must be reduced by the amount of any dependent care benefits provided by your employer that you exclude from gross income. In general, you can exclude up to $5,000 for dependent care benefits received from your employer. Also, generally, the expenses claimed may not exceed the lesser of your earned income or your spouse’s earned income. A special rule applies if your spouse is a full-time student or incapable of self-care. For additional information, refer to Publication 503, Child and Dependent Care Expenses.

For purposes of the child and dependent care credit, a qualifying individual is:

Your dependent qualifying child who is under age 13 when the care is provided,

Your spouse who is physically or mentally incapable of self-care and who has the same principal place of abode as you for more than half of the year, or

Your dependent who is physically or mentally incapable of self-care, and who has the same principal place of abode as you for more than half of the year. For this purpose, whether an individual is your dependent is determined without regard to the individual's gross income, whether the individual files a joint return, or whether you are a dependent of another taxpayer.

An individual is physically or mentally incapable of self-care if, as a result of a physical or mental defect, the individual is incapable of caring for his or her hygiene or nutritional needs, or requires the full-time attention of another person for the individual's own safety or the safety of others.

For more information on who is a dependent or a qualifying child, refer to Publication 501, Exemptions, Standard Deduction, and Filing Information.

A noncustodial parent may not treat a child as a qualifying individual for purposes of the credit, even if the noncustodial parent may claim an exemption for the child. For more information on divorced or separated parents or parents who live apart at all times during the last six months of the year, refer to the topic Child of Divorced or Separated Parents or Parents Living Apart in Publication 503, Child and Dependent Care Expenses.

If a person is a qualifying individual for only a part of the tax year, only those expenses paid during that part of the year are included in calculating the credit.

In addition to paying for the care of a qualifying individual, you must meet all of the following conditions to claim the credit:

1. Your payment must be made to a care provider who is not your spouse, the parent of your child who is your qualifying individual, your child under age 19, or a dependent of you or your spouse.
2. You must file a joint return if you are married.
3. You must provide the taxpayer identification number (usually the social security number) of each qualifying individual on the return on which you claim the credit.
4. You must report the name, address, and taxpayer identification number (either the social security number, or the employer identification number) of the care provider on your return. If the care provider is a tax-exempt organization, you need only report the name and address on your return. You can use Form W-10 (PDF),

Dependent Care Provider's Identification and Certification, to request this information from the care provider. If you do not provide information regarding the care provider, you may still be eligible for the credit if you can show that you exercised due diligence in attempting to provide the required information.

If you qualify for the credit, complete Form 2441 (PDF) and Form 1040 (PDF) or Form 1040A (PDF). If you received dependent care benefits from your employer (this amount should be shown on your Form W-2 (PDF), you must complete Part III of Form 2441. You cannot claim the child and dependent care credit if you use Form 1040EZ (PDF).

If you pay a provider to care for your dependent or spouse in your home, you may be a household employer. If you are a household employer, you may have to withhold and pay social security and Medicare taxes and pay federal unemployment tax. For more information, refer to Publication 926, Household Employer's Tax Guide, or Topic 756.

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Saturday, October 4, 2014


A Detroit-area hematologist-oncologist pleaded guilty today for his role in a health care fraud scheme, admitting that he administered unnecessary chemotherapy to fraudulently bill the Medicare program and private insurance companies. According to court records, the scheme enabled the doctor to submit approximately $225 million in claims to Medicare over six years.

Farid Fata, M.D., 49, of Oakland Township, Michigan, pleaded guilty today before U.S. District Judge Paul D. Borman of the Eastern District of Michigan to 13 counts of health care fraud, one count of conspiracy to pay or receive kickbacks and two counts of money laundering. At his sentencing, scheduled for Feb. 23, 2014, Fata faces a statutory maximum of 175 years in prison.

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“At a time when they are most vulnerable and fearful, cancer patients put their lives in the hands of doctors and endure risky treatments at their recommendation,” said Assistant Attorney General Caldwell. “Dr. Fata today admitted he put greed before the health and safety of his patients, putting them through unnecessary chemotherapy and other treatments just so that he could collect additional millions from Medicare. The mere thought of what he did is chilling. Thanks to the quick action of our partners, he was arrested and has now admitted his guilt.”

“This defendant not only stole funds from taxpayer funded insurance programs, but he also deliberately administered unnecessary chemotherapy so that he could bill insurers for expensive chemotherapy treatments,” said U.S. Attorney McQuade. “His exploitation of patients for his own profit caused victims to suffer physically and emotionally.”

“A little more than a year ago, the FBI and its law enforcement partners acted swiftly to arrest Dr. Farid Fata and shield his patients from further harm,” said FBI Special Agent in Charge Abbate. “Today’s plea is the culmination of the diligent investigative work jointly conducted by the FBI, IRS, the Department of Health and Human Services, and prosecutors to protect the public and ensure that justice is served. Our hope is that this outcome offers some measure of solace to the victims and reassures the community of our collective resolve to prevent similar violations of patients’ trust.”

“Dr. Fata’s utter disregard for his patients’ welfare was quite simply deplorable,” said HHS-OIG Special Agent in Charge Pugh. “The OIG will ceaselessly work to bring such criminals to the justice they deserve.”

“It’s exceptionally distressing to see this kind of fraud committed by individuals in occupations that profess high ethical standards," said IRS-CI Chief Weber. “When doctors commit fraud through their profession, it is not only a violation of the public trust but also a complete renunciation of their Hippocratic oath. Those who commit Medicare fraud are pick-pocketing from every American taxpayer.”

Fata admitted that he is a licensed medical doctor who owned and operated a cancer treatment clinic, Michigan Hematology Oncology, P.C. (MHO), which had locations in Rochester Hills, Clarkston, Bloomfield Hills, Lapeer, Sterling Heights, Troy and Oak Park, Michigan. He also owned a diagnostic testing facility, United Diagnostics PLLC, located in Rochester Hills, Michigan.

In his guilty plea today, Fata admitted to prescribing and administering aggressive chemotherapy, cancer treatments, intravenous iron and other infusion therapies to patients who did not need them in order to increase his billings to the Medicare program and other insurance companies. Fata then submitted fraudulent claims to Medicare and other insurers for these unnecessary treatments.

Fata submitted approximately $225 million in claims to Medicare between August 2007 and July 2013, of which approximately $109 million was for chemotherapy and other cancer treatments. Medicare paid over $91 million to Fata, of which over $48 million was for chemotherapy and other cancer treatments.

Fata also admitted to soliciting kickbacks from Guardian Angel Hospice and Guardian Angel Home Health Care in exchange for his referral of patients to those facilities.

Fata further admitted to using the proceeds of the health care fraud at his medical practice, MHO, to promote the carrying on of additional health care fraud at United Diagnostics, where he administered unnecessary and expensive PET (positron emission tomography) scans for which he billed a private insurer.

This case was investigated by the FBI, HHS-OIG and IRS-CI and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan. This case is being prosecuted by Deputy Chief Gejaa T. Gobena, Assistant Chief Catherine K. Dick and Trial Attorney Matthew C. Thuesen of the Fraud Section, and by Health Care Fraud Unit Chief Wayne F. Pratt, Deputy Chief Sarah Resnick Cohen and White Collar Crime Unit Chief John K. Neal of the U.S. Attorney’s Office for the Eastern District of Michigan.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,000 defendants who have collectively billed the Medicare program for more than $6 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

CONTACT US (800)790-8574


Identity theft remains a top priority for the Internal Revenue Service in 2014. Identity theft is one of the fastest growing crimes nationwide, and refund fraud caused by identity theft is one of the biggest challenges facing the IRS. This year, the IRS continues to take new steps and strong actions to protect taxpayers and help victims of identity theft and refund fraud.

Stopping refund fraud related to identity theft is a top priority for the tax agency. The IRS is focused on preventing, detecting and resolving identity theft cases as soon as possible.

The IRS has more than 3,000 employees working on identity theft cases. We have trained more than 35,000 employees who work with taxpayers to recognize and provide assistance when identity theft occurs.

Taxpayers can encounter identity theft involving their tax returns in several ways. One instance is where identity thieves try filing fraudulent refund claims using another person’s identifying information, which has been stolen. Innocent taxpayers are victimized because their refunds are delayed.

Here are some tips to protect you from becoming a victim, and steps to take if you think someone may have filed a tax return using your name:


Tips to protect you from becoming a victim of identity theft
Don’t carry your Social Security card or any documents that include your Social Security number (SSN) or Individual Taxpayer Identification Number (ITIN).
Don’t give a business your SSN or ITIN just because they ask. Give it only when required.
Protect your financial information.
Check your credit report every 12 months.
Secure personal information in your home.
Protect your personal computers by using firewalls and anti-spam/virus software, updating security patches and changing passwords for Internet accounts.

Don’t give personal information over the phone, through the mail or on the Internet unless you have initiated the contact or you are sure you know who you are dealing with.

If your tax records are currently affected by identity theft, call us now at (800)790-8574.

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