The 165 Services Choice

 

Before making a decision as important as the 165 deduction, there are factors you should consider prior to moving forward.  The 165 deduction is fairly technical and is increasingly coming under scrutiny by the IRS.  As there are many qualifications that need to be met before an approval can be obtained, below is a compilation of what 165 Services considers the “top” questions to ask before signing on the dotted line.  As the 165 deduction is often times a victim’s best source of recovering lost investments, attention to detail and the use of an experienced firm could be the difference in the claims approval.   

 

What is the amount of your loss?

Depending on the amount of your loss, you should take into account your ultimate benefit before deciding on a service provider as their fee could eliminate any potential benefit.  In order to maximize our clients benefit, 165 offers a variety of service contract options.  From full service, audit representation contracts to more simplified forms of representation, 165 has a solution to meet your needs.

 

What is the source of the lost investment funds?

Unfortunately at this time, qualified funds such as IRA’s, 401K’s and other non-taxable funds are ineligible for the 165 deduction.  Funds must have been taxed at some time in order to be considered appropriate for this deduction.

 

What is your current taxable income situation?

The 165 deduction is an offset against ordinary income.  If no income is currently being reported, there would be no basis for an offset and therefore, no benefit to the victim.

 

How long has the firm you’re considering been processing 165 claims?

JK Harris/165 Services, LLC is the founder and leader in providing Section 165 services to taxpayers and professional tax consultants.  This is not to say others don’t utilize this important benefit, but to our knowledge we are the first to offer this service as a fully integrated company with professionals on staff to assist the process.  Our staff has been assisting investment victims since 2001.

 

How many 165 claims has the firm processed?

165 Services has assisted 1,507 clients with their claims since its inception. 

 

What percentage of those claims was selected for review?

165 Services estimates approximately 80% of its claims are/will be selected for some form of review.  The different forms we’ve experienced have been a standard review, more detailed audit or a full appeal.  

 

How many of those claims selected for review, were argued successfully?

Being the pioneer in the theft loss deduction industry, 165 Services has learned a lot over the past six years. By working daily with the IRS, 165 has been given the opportunity to improve its systems and pass on those improvements to its clients. From the period of July 2005 to July 2007, 165 has ironically been proud to assist 165 clients in the audit process. Of those clients, 103 clients have been approved, 13 have been denied and 49 are pending further review.

 

How many claims were won on appeal?

There are many instances where a 165 claim will require going so far as arguing our clients case within an appeal setting. An appeal is often called for simply because the deduction is novel to many agents and a more detailed and informed investigation is called for. From the period of July 2005 to July 2007, 165 Services processed 44 appeals on behalf of our clients. Of those clients, 13 appeals have been approved, 6 have been denied and 25 are pending further review.

 

Has the firm completed a client’s 3-year cycle with the IRS?

Since the IRS has 3 years to challenge a claim, a service provider must be in business at least three years to be able to say their process works.  Some cases do receive refunds without examination, but until the three years from date of filing are up, the application is not officially approved and is subject to review and reversal. 

 

Describe the staff’s cumulative experience and capabilities?

165’s staff has a cumulative experience of over 31 years.  With our least experienced staff member being 2 years, it is clear that 165 not only has the experience and knowledge to process a 165 claim but also a loyalty to its clients and company.

 

How long does it take to gain approval of a 165 claim?

Our guiding principal is not to raise our client’s expectations unrealistically.  You should expect this process to be lengthy (Minimum of 12 – 18 months for approval).  The IRS, in good faith, tries to honor all requests timely, however, the 165 deduction is novel to many agents so this is not always possible.  We will do everything in our power to move the claim as quickly as possible.

 

What are the expectations for victims during the overall recovery process?

Assistance with the filing is just a part of our service.  From there, your submission receives hands-on attention throughout the approval process.  Diligent monitoring of your claim is required to assure it is handled within the promised timeframes.  Our goal is to avoid any possible delays within our control, as delays are imminent on the side of the IRS due to their processing of enormous amounts of information.

 

If and/or when the IRS requests clarification or additional information, our experienced staff handles the requests personally.  This is a very important part of the process and the client should depend on 165 for this service. Again, to avoid possible delays, the IRS is looking for informed, competent, experienced professionals who can handle the inquiries expediently and with a thorough knowledge of the code so as to make their job as simple as possible.

 

As part of a successful strategy, we encourage our clients to contact us throughout the process.  It is imperative to keep each other informed of any developments.  In fact, we require clients to notify us immediately if they have received any contact from the IRS on this matter.  By working close with our clients, we assure no developments that need attention shall be missed. 

 

What kind of warrantee does the firm you’re considering offer on their services?

Over the past 6 years, 165 Services has refunded over $280,000 to clients who were unsuccessful in their pursuit of a 165 claim.  165 Services stands behind its work and is willing to warrantee its services as a show of good faith.  165 Services sets aside 30% of its revenues to allow for disqualifications and/or cancellations due to disallowance.