The Blog

New Agreement Increases Fraud Protection

New Agreement Increases Fraud Protection As a result of a Security Summit that was convened in March, the IRS has announced a comprehensive new agreement addressing the issues of tax fraud and identity theft. The agreement, which has been a work-in-progress over the past twelve weeks, comes as a result of the combined efforts of federal and state tax administrators, tax preparers and tax and payroll software firms. It includes new steps to validate taxpayer identity, increase information sharing between government and the tax industry and identify fraud schemes. According to Tax Commissioner John Koskinen, the agreement “represents a new era of cooperation between the IRS, states and the electronic tax industry.” Over the past twelve weeks, the members of the Security Summit have focused their efforts on several new initiatives, all aimed … Continue reading

IRS Announces Online Security Breach

IRS Announces Online Security Breach On Tuesday, May 26, 2015, the IRS announced the detection of a huge security breach affecting over 100,000 United States taxpayers. This appears to be a significant online breach that occurred during the course of the 2015 tax season. According to the IRS, thieves used an online IRS agency service to obtain the previous year’s tax return information for about 100,000 individuals and families. These identity thieves have been very persistent and sophisticated. From February to May, they have been using stolen social security numbers and other relevant personal information to access tax agency systems in order to file tax returns and get refunds. IRS Commissioner John Koskinen issued a statement saying that approximately 200,000 tax transcripts were downloaded with … Continue reading

Smart Ideas for Spending an IRS Tax Refund

Smart Ideas for Spending an IRS Tax Refund After paying the government all year long, many taxpayers will see some money coming their way now that it is tax refund time. Even better is the fact that tax refunds have been on the rise over the past several years. The average tax refund check has risen from $2,371 in 2009 to $2,893 in 2015. However, before these funds are used to pay for an expensive vacation or a finance a wild spending spree, it might be wise consider some of the following smart ideas for putting your IRS tax refund dollars to work: Invest in your home. Has your leaky roof been worrying you? Has your garage door not been working as well as it … Continue reading

Common Misconceptions about the IRS

A Few Common Misconceptions about the IRS Audits are not as common as they may seem. Although many taxpayers worry that their tax return might be selected for an IRS audit, the fact is that less than two percent of personal tax returns are audited by the IRS each year. On top of this, even if a return is selected for further examination, the IRS usually just contacts the taxpayer by mail and asks them to provide documentation to support certain specific items. Following this communication (aptly labeled a correspondence audit), there are three possible outcomes, none of which are accompanied by a serious consequence. An additional tax amount will be assessed, the return will be accepted as originally submitted or, in some cases, a tax refund may even be issued. Making an … Continue reading

Can the IRS Keep Your Refund?

  It is tax refund time and most taxpayers already have a plan for their tax refund. They will save it, invest it, spend it or maybe do a little of each. However, some taxpayers will file their tax return and never receive a refund. This is due to the fact that the IRS can keep a taxpayer’s refund to cover certain types of debt, some of which are discussed below. A Back Tax Balance with the IRS: If a taxpayer has a back tax balance with the IRS (even if they are currently enrolled in a payment plan), the agency will keep either all or part of that individual’s tax refund and credit it toward payment of their back tax balance. Although the delinquent … Continue reading

The Tax Extension Option

The Tax Extension Option You are not alone if you do not file your tax return on or before April 15th. Although this is the official deadline for the filing of personal tax returns, each year more and more people apply for an automatic six-month tax extension. The number of taxpayers requesting an extension increased from 11 million in 2011 to over 13 million in 2013, an increase of almost 20% over the two-year period! Another interesting fact is that, in tax year 2014, 25% of those individuals who had requested and extension were still working on their tax returns in September, just one month before the October 15th extension deadline. Although procrastination is one reason for requesting a tax extension, there are other factors … Continue reading

Why You Should File Your Taxes

Why You Should File Your Taxes by April 15   April 15th is an important filing deadline for individual taxpayers. If the Internal Revenue Service does not receive either a completed tax return or an application for a six-month tax extension by this date, they will automatically assess a failure-to-file penalty. In addition, they will begin to assess a failure-to-pay penalty on any tax amounts owed. Although the failure-to-file penalty can be diverted by applying for a six month tax extension, late payment and interest assessments will automatically begin to accrue as of the April 15th tax deadline regardless of whether a tax extension has been filed. Because the penalties and interest described above are compounded over time, the financial consequences of failing to file tax … Continue reading

Choose Your Tax Preparer Wisely

Choose Your Tax Preparer Wisely Choose Your Tax Preparer Wisely: With over half of all taxpayers enlisting the services of a tax preparer, tax preparation has become a major industry. This being the case, the selection of a reputable tax preparer is a task at hand for many at this time of year. Although the services of a tax preparer can be an invaluable asset in saving tax dollars as well as meeting tax deadlines and compliance requirements, choosing one that is both competent and ethical and is often a difficult process. When choosing a tax preparer, it is important to select a firm or an individual that has an established licensing history and a verifiable physical address. The absence of either of these could … Continue reading

IRS Becoming Aggressive About Offshore Tax Evasion

IRS Becoming Aggressive About Offshore Tax Evasion One problem the IRS has to tackle is that of United States taxpayers who dodge paying taxes by placing their funds in offshore accounts and then failing to report them. In the last several years, the IRS has made it clear that this is breaking the law and that taxpayer’s who are caught hiding foreign assets may face penalties, fines and even criminal prosecution. “It’s a bad bet to hide money and income offshore,” said IRS Commissioner John Koskinen. “Taxpayers are best served by coming in voluntarily and getting their taxes and filing requirements in order.” The IRS has recently become more aggressive in finding taxpayers who are hiding their money in offshore accounts. In 2009, they started … Continue reading

Are You Prepared for Tax Season 2015?

Are You Prepared for Tax Season 2015? Are You Prepared for Tax Season 2015? While no one looks forward to tax season, there are a few simple ways get prepared and make the whole experience a little less painful. While it is best if some of these steps are taken before tax season starts, timing is not crucial. It is better to get organized now that Tax Season 2015 is underway rather than not get organized at all! The good thing is that each passing tax season presents a chance for the development of a new and better system of organization based on what has worked in the current year. We offer the following suggestions to get Tax season 2015 off to a good start: … Continue reading

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