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.
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.
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.
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?
Business use Form 5884 to claim the credit and tax-exempt organizations use Form 5884-C. For more information, see the IRS website.
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):
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.
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.
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.
When the Taxpayer Advocate Service (TAS) submitted its 2011 annual report to Congress, it emphasized how “the IRS has changed from focusing on personal, local service to automated, centralized processes” and how this shift has hurt the taxpaying public. At least one author has taken this to mean that the IRS might be more effective in its collection efforts if it would pick up the phone and call taxpayers, particularly in the early stages of collections. See “Personal Finance: IRS Calls to Delinquent Taxpayers?” by Susan Tompor.
First, I’m not sure this was what the TAS had in mind.
Second, I’m not sure this is what we would want.
1. The problem with automated processes is that mistakes are common. Taxpayers are people and real people have real, sometimes unique tax problems that computers and automated letters/processes don’t always recognize. This results in delays and issues with fairness, which in turn results in distrust of the IRS. This is the concern that Nina Olson and the TAS has been harping on for years. While TAS is certainly pushing for an IRS with a more human element, I don’t think TAS is recommending they call everyone as soon as they incur a new tax debt.
2. As Ms. Tompor correctly points out, with identity theft so rampant these days, few people would be comfortable speaking with a caller who purports to be from the IRS and who wants them to provide information such as their social security number, for verification purposes. I think this would be a waste of IRS resources. And while a phone call can be cheaper than the cost of postage, the phone calls would not replace the letters. Knowing the IRS, a confirming letter would have to be mailed after each call confirming the contact and the content of the conversation.
I am definitely in Nina Olson’s corner when it comes to making IRS interaction more helpful and individualized. But there is a time and place for everything, and I don’t think phone calls on standard collection cases are necessary or desirable.
They say that clothing fashions tend to repeat themselves over time. My 20-year-old Metallica T-shirt? Retro. Grandma’s 70-year-old dress? Vintage.
Much like the inner-workings of the IRS, right? Yeah, sort of. Anyone who has worked in the tax relief industry long enough has seen IRS collection efforts intensify and diminish in repeating cycles over the years. Well, some believe that the IRS audit pendulum is tipped one way or another depending on the political party of the president. And I think it’s safe to say that more audits means more revenue collected.
According to the 2005 dissertation by Valentin Estévez at the University of Chicago:
Casey Mulligan, New York Times blogger, agrees. In fact, he claims that IRS statistics released since 2005 have further supported Estévez’ position. See full story here.
Yesterday the IRS announced a nation-wide crackdown on suspected identity theft perpetrators. With the help of DOJ’s Tax Division and local US Attorneys, the IRS conducted a flurry of visits, inquiries, indictments, and arrests over the last week. The IRS almost seems obsessed with their stats:
The IRS has also recently added new content to their website dedicated to curbing identity theft. The reason for all this focus on identity theft is to stop and prevent new cases of refund fraud ahead of the tax filing season.
This unprecedented effort against identity theft sends a strong, unmistakable message to anyone considering participating in a refund fraud scheme this tax season. We are aggressively pursuing cases across the nation with the Justice Department, and people will be going to jail. This is part of a much wider effort underway at the IRS to help protect taxpayers.
~ IRS Commissioner Doug Shulman
I don’t know about you but I wouldn’t want to be one of Shulman’s statistics. The Commish isn’t fooling around.
