The IRS Dirty Dozen List is Suspiciously Familiar

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Wouldn’t David Letterman’s credibility be questioned if he reused the same Top Ten List each night but changed the order of the list?  That’s what the IRS is doing with its “Dirty Dozen” list.  It’s basically the same thing year after year — a stern warning from the Commish about not looking for tax relief amid tax scams, followed by the same 12 scams rearranged in a different order.  Presumably the list is arranged in a logical order with the most common scams at the top.  But is the order of the list based on empirical data, or is it just anecdotal?  Who knows?

This year the obligatory stern warning went something like this:

Taxpayers should be careful and avoid falling into a trap with the Dirty Dozen. Scam artists will tempt people in-person, on-line and by e-mail with misleading promises about lost refunds and free money. Don’t be fooled by these scams.

~ IRS Commissioner Doug Shulman

And the top three scam were . . .

  1. Identity Theft
  2. Phishing
  3. Return Preparer Fraud

Illegal offshore bank accounts was a close 4th on this year’s list, which is not a surprise given how aggressively the IRS has worked shut them down. I don’t mean to make light of tax scams; they are real, and we should definitely stay vigilant. I am just amused by IRS gimmicks, and this looks like another one.

Another Round of Fake IRS Emails

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Don’t be fooled by scam emails purporting to be from the IRS. The IRS does not communicate with taxpayers by email, so you can be sure that anything appearing to be from the IRS is a scam. IRS scam emails often contain links which, if opened, can damage your computer or compromise your private information.

The latest scam email originated in Saudi Arabia, contains the subject line “Tax refund important information,” and the following content:

After the last annual calculations of your financial activity we have concluded that you are eligible to get a tax refund of $464.
You may submit the tax refund application and give us 3-9 days in order to process it.

A refund can be hindered for many different reasons.
E.g., submitting invalid records or not meeting a deadline.

To get information about your tax refund please open this link.

Sincerely,
Tax Refund Department
Internal Revenue Service

 Thanks to the Taxgirl, Kelly Philips Erb, for spreading the word about these nefarious emails.

Tax Relief Available for the 2012 Tax Season!

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Montgomery & Wetenkamp are ready to help you this tax season!  See 2012 Tax Season press release.

The tax attorneys at Montgomery & Wetenkamp, personally handle all aspects of their tax relief cases. Unlike other tax relief firms, the tax attorneys at Montgomery & Wetenkamp do not employee a sales force, legal assistants, or other intermediaries which may increase client fees and diminish the client experience. From the first time a client calls Montgomery & Wetenkamp, they will be speaking directly to one of the tax attorneys who will personally resolve their IRS tax debt.

“The IRS is a very powerful and unforgiving collection machine. This tax season, it is now easy and affordable to be prepared and have an organized and systematic plan for tax relief rather than getting stuck in the bowels of the IRS collection machine. The IRS has several tax relief options available for taxpayers who cannot pay their taxes. Such options vary from allowing additional time to pay a tax debt to reducing the total amount of the tax bill to an affordable amount

~ Christian Montgomery, Tax Attorney

Most tax relief options are driven by a taxpayer’s unique facts and circumstances, and how well and organized those facts and circumstances are advocated to the IRS. The tax attorneys at Montgomery & Wetenkamp are experienced in tax relief matters and will design and implement a systematic resolution to their client’s IRS tax problems.

Contact Montgomery & Wetenkamp now for your free consultation.

Tax Reform? Probably Not in our Lifetime.

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Geithner’s comments on the tax reform timeline:

We’re going to begin to think about laying the groundwork for a series of meetings to be held in the very near future wherein we will lay the framework for a discussion regarding when and how we will start to seriously think about how we are going to make informal suggestions in preparation for real tax reform.

Ok, obviously I’m paraphrasing here.  But it went something like this.  Read his actual statement here.

Tax Preparation Franchise Comparison

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New York Times business writer, Tim Gray, with the help of his dog, recently conducted an experiment involving the tax prep software from three leading companies: H&R Block, TurboTax, and TaxAct. He tried to claim his dog as one would claim their child, just to see if the software would allow it. The unstated hypothesis is that tax prep software companies should steer taxpayers away from errors that may result in an audit and potential tax debt.

The H&R Block and TurboTax software did not allow him to claim his dog because no social security number was entered. The TaxAct software allowed him to claim the dog, but warned him that there was a problem.

He seemed to like the Block software for the customer support, but preferred TurboTax for most other reasons. Interesting tax preparation franchise comparison article.

The Misguided Appification Efforts of TurboTax and IRS

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For some reason I just can’t let it go.  Tax smartphone apps are not as amazing as some would have you believe!

I came across a press release issued on behalf of RoadFish.com this morning praising IRS2Go and TurboTax’s mobile tax software called SnapTax. IRS2Go is a free app that allows users to quickly access the IRS on Twitter and YouTube, check the status of a tax refund, order transcripts, and obtain IRS news and tax tips. SnapTax costs $9.99 and apparently makes it possible to do your taxes “on the go.”

Here’s what RoadFish.com says about SnapTax:

Look, apps are where it is at now. Pretty soon, many people won’t even be using browsers any more, and will be viewing a lot of their content through apps. I know Bill Harris, the guy who started Turbo Tax. He and his company he created ChipSoft, which were acquired way back from Intuit, have been THE leader in this field since Day 1. I am thrilled they are ahead of the curve on this as well.

Ok, maybe apps are where it’s at, but it’s not where taxes should be. I don’t know much about SnapTax, but I cannot imagine why anyone would prefer to do their taxes on their phone as opposed to sitting down at their computer. Most people have what they need to file by the end of January. Are we that busy that we can’t find a couple hours between Feb 1st and April 15th to plop down in front of our computer and knock it out? Are people really going to file their taxes “on the go” in between turns in Words With Friends? I’m not sure if TurboTax is ahead of the curve on this one or if they made a wrong turn.

Here’s what RoadFish.com says about IRS2Go:

With these helpful apps, taxpayers can now spend a ton less time and money filing their taxes and more time focusing on improving their finances, things like their monthly budget, credit score, and chipping away at debt

Really RoadFish?  Did you even look at the app? How does it save you tons of time and money?

Sign me up when there’s a tax relief app with a “Pay Less Taxes” button. When it comes to apps, only 1 in 10,000 is truly useful (or fun, or serves its intended purpose). Most apps are pointless because, even though everybody wants to push their goods or services with the newest technology, you really can’t appify EVERYTHING.

Veterans Tax Credit Expanded

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Today the IRS released new guidance on the tax relief available to employers who hire veterans.

The Work Opportunity Tax Credit was made available under the VOW to Hire Heroes Act of 2011. For-profit employers may qualify for a credit of up to $9,600 per veteran hired. The actual amount of the credit depends on how long the veteran was unemployed before being hired and a whole host of other factors. A veteran who is hired after being unemployed for 2 years is worth more than one who took a 6-week vacation between jobs.

So what’s new with the credit?

  1. Now certain tax-exempt organizations may qualify for the tax credit ($6,240 max).
  2. Form 8850 — the form used to collect pertinent details about the veteran job applicant — previously had to be filed within 28 days after the veteran hire date, but now the rule is the form must be filed by June 19, 2012 for veterans hired before May 22, 2012.
  3. Employers can submit Form 8850 electronically or by fax.

Business use Form 5884 to claim the credit and tax-exempt organizations use Form 5884-C. For more information, see the IRS website.

IRS Introduces Mobile App “IRS2Go 2.0″

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If you own a smartphone, chances are you probably use it throughout the day to post, tweet, like, and follow. Maybe your addicted to Words with Friends or Angry Birds. You’re probably NOT ordering tax transcripts or checking on the status of your refund. But according to the IRS, at least 350,000 of you have the app that allows you to engage in said geeky mobile activities. And who knows, that number may have shot up even further after today’s announcement that the IRS is rolling out the updated version of its mobile app “IRS2Go 2.0.”

I don’t know, there’s something about the IRS and technology that reminds me of the time I witnessed my mother trying to communicate with Siri. A little awkward.

~ John Wetenkamp, tax relief attorney

IRS2Go has 7 main features (#4, #5, and #6 are new in version 2.0):

  1. Get Your Refund Status
  2. Get Tax Updates
  3. Follow Us
  4. Watch Us
  5. Get the Latest News
  6. Get My Tax Record
  7. Contact Us

For whatever reason, I’m doubting that 350,000 downloads figure. How many times have you installed a free app only to uninstall it minutes later after discovering you don’t like it? Does the 350,000 include that scenario? It’s not that the IRS doesn’t know technology. It’s not that the app has completely unusable features either. I just can’t imagine very many people would want to be reminded of their tax obligations (or tax problems) 6,000 times a day — each time they glance at their phone. Most people only want to think about the IRS one time per year, and even then they don’t want to have to ponder the thought for too long.

Mini / Pseudo / “Unreal” Audits

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IRS audits are among the most dreaded tax problems. Even though the IRS audited only 1% of returns in 2010 through traditional audit procedures, the IRS sends “unreal” audit letters (Nina Olson’s term) alerting taxpayers to underreported income and math errors at a much higher rate.  Full-blown audits are infamous for sapping taxpayers’ time, money, and sanity. But the “unreal” audit letters often have a similar effect.

[T]raditional audits are just one way the IRS enforces the tax laws. Increasingly, the IRS is relying on what IRS Taxpayer Advocate Nina Olson calls “unreal” audits. These typically come in the form of a letter alerting you to errors or omissions on your return. While these audits are less intrusive than full-scale audits, they can still cost you real money.

~ Sandra Block, USA Today

Read more here.

The Latest Phishing Expedition

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Phishing: “a scam typically carried out by unsolicited email and/or websites that pose as legitimate sites and lure unsuspecting victims to provide personal and financial information.” A phishing victim often finds himself burdened with tax problems that are not his own. See IRS website for full detailed information about phishing and everything you need to know about identity theft.

Be on the lookout for the following email subject lines in your inbox:

“Urgent update of tax information is requested”

or

“Tax information required within 30 days.”

It is recommended that you delete these emails immediately because it’s a scam. If you do decide to risk opening the email, the text will look something like this:

Dear Account Holder,

In our continuing effort to guarantee that exact data is being sustained on our systems, as well as to provide you better quality of service; INTUIT INC. has participated in the Internal Revenue Service [IRS] Name and TIN Matching Program.

We have discovered, that your name and/or Taxpayer Identification Number, that is stated on your account does not correspond to the data on file with the Social Security Administration.

In order to check the data on your account, please click here.

Regards,
INTUIT INC.

Corporate Headquarters
2632 Marine Way
Mountain View, CA 94043

Thanks to Kelly Philips Erb for pointing out these scam emails from time to time. If bloggers will repost these scams all over the internet, maybe we can minimize the damage to innocent taxpayers.