The Blog

    In 2012 the IRS uncovered a mounting problem involving the thefts of innocent taxpayers’ refunds. According to the IRS, investigators found 898 identification theft cases in 2012. This is a number that has tripled in comparison to the previous years. The IRS has issued numerous media alerts and has hired an additional 3,000 employees to be on high alert for such thefts. Here is how it works: Somehow the criminal gets access to a person’s social security number and then they file a fraudulent claim and receive the refund check. One couple found out when they went to file their tax return electronically and they were told by the IRS a claim had already been filed. Certified public accounts across the country are … Continue reading →

 This years’ election debate hot topic issue was one that plagued this country since income tax was born 100 years ago. Should the wealthy pay more in taxes? Just to give some background information from the recent election President Barack Obama believed that the rich need to pay more taxes to aid the budget deficit and to provide the government with the help it needs. Meanwhile, his opponent, Mitt Romney counterd that deficit can be lowered without raising taxes on the wealthy. He thought this to be unfair and unwise to this bracket of people. “Who is right Obama or Romney? Both.. Or neither,” says Joseph Thorndike, a tax historian. This is a debate that has gone on in our country for over a hundred years. … Continue reading →

It seems that some taxpayers that are looking for a “quick” refund make have to wait a bit longer than normal these days as the Internal Revenue Service tries to halt criminals that file fraudulent returns and who attempt to steal others identities. The IRS began accepting 2012 returns on January 30th. It has been making its automated system more receptive to signs of possible fraud. This means that certain returns will be looked at more closely. Just last year alone the IRS stopped $20 billion fraudulent refunds being issued, up from $14 billion the previous year.” “It’s a difficult responsibility for the IRS,” said Benson Goldstein, a senior technical manager at the American Institute of CPAs in Washington. “They’re there to get prompt refunds, … Continue reading →

Tax Time! It’s that time of the year again! People need to start thinking about their taxes. Wednesday, January 30th marks the beginning of tax season for 2013. The IRS had originally planned for tax season to begin on January 22nd, but the fiscal cliff debate pushed the start date back. Everyone needs to start organizing and preparing to file their taxes. Generally you can expect your refund three weeks after the IRS receives your return. Last year, over 110 million taxpaying citizens received an average refund of $2,803 each. However, there are certain taxpayers who will need to wait to file. Those taxpayers that are claiming either Lifetime Learning Credit or the American Opportunity Tax Credit,  two well liked education credits, will have to wait … Continue reading →

  The fiscal cliff has been the talk of the news for the last part of 2012. The nation did not go over the fiscal cliff, however due to the delays tax refund information is uncertain. Congress’ tardy action on the fiscal cliff tax provisions has caused problems for the Internal Revenue Service. The Internal Revenue Service now has to program its system and issue tax forms based on the revised laws. The IRS has not announced when taxpayers can start filing their 2012 returns, which means refunds will probably be late. Filing usually begins in mid-January. “The IRS is currently reviewing the details of this week’s tax legislation and assessing what impact it will have on this year’s filing season,” said the agency, adding … Continue reading →

A Notice of Deficiency is a formal written claim by an agency that you owe income taxes with interest and penalty dues. The Notice of Deficiency also explains that an assessment is being calculated in regard to your income taxes owed. A Notice of Deficiency is also referred to as a “ninety day letter”; because once you receive the letter you have 90 days to take action. Most people react in fear when receive such a notice in the mail. They feel overwhelmed and are not sure how to act appropriately. Keep in mind that not responding to a Notice of Deficiency is the worst possible course of action. If a tax agency does not receive a timely response after issuing an official Tax Notice, … Continue reading →

The Internal Revenue Service is not ready to retire the legacy e-file system. The e-file system became operational nationwide in 1990 and transformed the way taxes were filed. The e-file has proven in its time to be win-win for everyone. The taxpayers get their refunds by as fast as 10 days. Or, they have payment options to file now and pay later. The e-file returns are also very accurate. They have an error rate of 1% compared to 20% for a paper return. The next phase for the IRS filing system is the Modernized e-File (MeF) System. The MeF will send acknowledgments out in minutes opposed to 48 hours. The IRS had planned to replace the legacy e-file with the MeF after the 2012 filing season. However, there seems to … Continue reading →

Time is running out on a tax break that is aiding troubled homeowners from paying thousands of dollars to the IRS. The Mortgage Forgiveness Debt Relief Act of 2007 will need to get extended by Congress by the end of this year or many homeowners will owe the IRS money. These homeowners would have to begin paying income taxes on the portion of their mortgage that was forgiven due to a short sale, foreclosure, or principal reductions. For example if a person owes $150,000 on their home and it sells for a $100.000 in a foreclosure situation, the IRS could tax them on the remaining $50,000. Someone in the 25% tax bracket would pay $12,500 on the foreclosure. Short sales and principal reductions would also … Continue reading →

The United States government is alerting the public about a phony Internal Revenue Service site. The government is worried that the site may con people into disclosing personal and private information. Officials have stated that this website has been created to look like an IRS e –Services on-line registration page. The fake site’s URL address will end in a .com or .net or some other similar designation. The revenue service’s official site is IRS.gov. “The actual IRS e-services page offers Web-based products for tax preparers, not the general public,” the agency stated, “The phony Web page looks almost identical to the real one.” “If you find a suspicious website that claims to be the IRS, send the site’s URL by email to phishing@irs.gov, “the agency … Continue reading →

The Internal Revenue Service (IRS) Commissioner Doug Shulman has announced officially his plans to step down the end of this term. Mr. Shulman is the 47th commissioner to serve and he has been in office since March 24th, 2008 and plans to step down on November 9th, 2012.  George W. Bush appointed Shulman to office. Commissioners generally serve one term and no commissioner has ever served longer than five years since the office was created by Congress by the Revenue act of 1862. Shulman has held office during difficult times in this economy. According to Shulman, “The IRS team has made remarkable progress in the last few years during a challenging period. It has been an honor to serve the American people during this dynamic … Continue reading →