Posts Tagged ‘irs’

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Operation Double Dip….

In Accounting & Finances,Business,Taxes on May 21, 2013 by Sufen Wang Tagged: , , , ,

MH900239563IRS Agents Caught Dipping Into The Cookie Jar:  24 Employees Indicted for Tax Fraud

Some people just can’t keep their hands out of the cookie jar. And when that cookie jar is filled with taxpayer dollars, you know the culprits are going to get more than a mere slap on the wrist.

Twenty-four current and former IRS employees in Tennessee and Mississippi are about to find that out the hard way. They recently got caught red-handed defrauding the government of more than $250,000 in benefits and have been indicted for their crimes.

MH900150005Thirteen were milking their employee “benefits” for all they’re worth. They’re facing federal charges of making false statements to obtain unemployment insurance payments, food stamps, welfare, and housing vouchers. Basically, they said they didn’t have a job while applying for or re-certifying those government benefits – and then they clocked back in from their lunch break. Seriously though, these individuals are facing some serious time: if convicted, they could be eating prison food for the next five years.

Eleven other former and current IRS employees were charged with theft of property over $1,000. They probably thought it was like taking candy from a baby. Now their goose is cooked and they might be served with a class D felony.

U.S. Attorney Edward L. Stanton III dug into these workers who decided to bite the hand that feeds: “According to the allegations in the indictment, while these IRS employees were supposed to be serving the public, they were instead brazenly stealing from law-abiding American taxpayers. These charges demonstrate our unwavering resolve to work with our law enforcement partners and hold accountable anyone who fraudulently obtains government benefits and violates the public’s trust.”

MH910217103These charges should be food for thought for anybody thinking they can get away with an extra-large slice of the pie. Remember, there’s no such thing as a free lunch.

Sufen Wang, M.S. Accountancy

Wang Solutions, Long Beach, CA (562) 856-0793

Editor: Hannah Huff, M.F.A. Creative Writing: Poetry, (626) 806-5805

Articles

Taxes are Due Monday April 15:

In Accounting & Finances,Business,Taxes on April 11, 2013 by Sufen Wang Tagged: , , , , , , ,

169849_taxYour Guide to Hassle-Free Filing

There’s less than a week to go before your taxes are due to Uncle Sam. If you haven’t submitted your return, you can start panicking right about now OR you can follow these easy steps to ensure submitting your return is as painless as possible. And if you’ve already submitted, it doesn’t hurt to keep these strategies in mind for next tax season.

MH900334322First, get together any documents you might need to file your taxes BEFORE you sit down to fill out your return. You don’t want to be running around like a headless chicken looking for this or that piece of paper. Instead, find receipts, cancelled checks, W-2 Forms, Wage and Tax Statements, and 1099 income statements, and place them all in one convenient location for easy reference.

Now that that’s done, figure out how you want to file. If your income was $57,000 or less, take advantage of the Free File service: Free File Tax Software will do all the tax preparation work for you online, and it doesn’t cost a cent. If you’re more of the DIY type, you can also e-file by using Free File Fillable Forms, which are an electronic version of IRS paper forms. In fact, regardless of income, anybody can use these Fillable Forms to file Form 1040 series tax returns for free.

internet-32340_640If you don’t use the Free File service, you can still e-file by buying commercial tax software, or through a paid tax preparer. Many tax preparers are now required by law to use e-file because it gets you your refund in half the time and it offers more payment options when you owe money. Even the IRS claims that “IRS e-file is the best way to file an accurate tax return.” And most people seem to agree, with more than 80% of taxpayers using IRS e-file last year. Of course, if you want to make things difficult, you can still file on paper…

However you decide to file, direct deposit is the fastest and safest way to get your refund. And combining it with e-file will get your money even faster. That being said, faster is not necessarily better when you’re actually filling out your return. Don’t rush and be sure to double-check everything before you submit: a mistake on something as simple as your social security number could get complicated when processing your return.

black-29972_640If you have any questions, the IRS has all the answers. Visit IRS.gov to browse its resources, such as the Interactive Tax Assistant tool, or check out Publication 17, Your Federal Income Tax.

By the way, just in case you are NOT going to make the April tax deadline… Make sure you file a tax extension by April 15!!!!

Sufen Wang, M.S. Accountantcy
Wang Solutions, Long Beach, CA  (562) 856-0793

Articles

Casual Merchants: Expect Underreporting Notices in the Mail

In Accounting & Finances,Business,Taxes on April 2, 2013 by Sufen Wang Tagged: , , , , , , ,

MH900104746The IRS Didn’t Forget about Casual Merchants: Expect Underreporting Notices in the Mail

Casual merchants might have some official ‘splainin’ to do. The IRS is taking a good, hard look at the gross receipts of food cart operators, mom-and-pop shops, swap meet participants, and sellers on online auction sites such as Ebay. If there appear to be any discrepancies, the agency will likely send out “soft letters” requesting additional information from those small business taxpayers.

$10 billsSpecifically, the IRS will be checking whether gross receipts – as reported by credit card companies and third-party networks – match up with income stated on tax returns. Since 2011, certain taxpayers have had credit, debit, and certain electronic transactions reported on Form(s) 1099-K, Merchant Card and Third Party Network Payments. A high amount of receipts that appears on this form, but not in income levels on the tax return, is obviously going to raise eyebrows.

MH900401126Thus, a soft letter means the taxpayer isn’t in trouble (yet), but the IRS wants answers. After all, the IRS knows there are legitimate reasons why a merchant’s numbers might not add up with the third parties’. For example, there could be a difference between parties’ calendar year versus fiscal year accounting systems. Or it could arise from the fact that Form 1099-K does not take into account on sales returns and refunds processed by the merchant, or a merchant’s cost of goods, or other legitimate deductions from gross income.

These valid excuses are exactly why the IRS plans to begin with soft letters of inquiry. If the taxpayer agrees with the assessment of underreporting, the IRS will request that they amend their returns. The goal is not punish taxpayers, but to increase voluntary compliance.

Sufen Wang, M.S.Accountancy

Wang Solutions, Long Beach, CA (562) 856-0793

Articles

Tested or Not?! Calling all Registered Tax Return Preparers!

In Accounting & Finances,Business,Education,Family,Taxes on February 21, 2013 by Sufen Wang Tagged: , , , , , , ,

ExamRTRP Program Up in the Air: Testing and Continuing Education are Voluntary


Calling all Registered Tax Return Preparers! You know how the IRS now requires every paid tax return preparer to pass a competency test and meet continuing education requirements in order to be called an RTRP? Not anymore. On January 18, a federal judge ruled that the mandatory RTRP regulatory system is invalid because the IRS had to stretch a law to make it apply to preparers in the first place. Prepare to be very, very confused.


In short, the ruling means the IRS does not have the authority to license tax preparers. Which means that as of right now, according to the IRS, “tax return preparers covered by this program are not currently required to register with the IRS, to complete competency testing or secure continuing education.” The regulatory practice requirements for CPA’s, attorneys, enrolled agents, enrolled retirement plan agents, or enrolled actuaries are unaffected by the ruling.


MH900054685Required is the key word in all of this. The IRS filed a motion to suspend the injunction, which was denied on Feb.1 by the same judge. However, he did clarify that the IRS can allow preparers to “voluntarily obtain credentials that might distinguish them from other preparers.” Thus, the IRS’ testing and continuing-education centers will remain open. Indeed, it might be a good idea to complete the RTRP requirements anyways: the IRS can appeal the judge’s full ruling and his decision could eventually be reversed.

The judge also clarified that the injunction does not affect PTINs, which means that those requirements and fees are still active. The IRS has reopened the online PTIN system, but it’s being updated to reflect current requirements. All of this confusion comes at a bad time with tax filing season just ahead. Tax return preparers need answers from the IRS and they need them fast.

Man pointing chartAnd what does all this mean for us, the tax payers?  Always check your tax preparer‘s background, credentials and ask for references!  “Google” the tax preparer’s name and check out his/her background as much as you are able before you make the hiring.  Just because it is NOT required to be licensed, does not mean that anyone off the street can and should prepare your tax returns!  Hire a reputable tax preparer will paid off in the long run!


On the Money, Sufen Wang, Wang Solutions

M.S.Accountancy, Long Beach, CA 562-856-0793

Articles

Whistleblowers Wanted:

In Accounting & Finances,Business,Education,Taxes on January 27, 2013 by Sufen Wang Tagged: , , , , , , ,

MH900084382Report Suspected Tax Fraud

To catch a thief, the IRS needs your help. If you suspect someone might be bending certain tax laws, don’t just stand there – do something! There’s a variety of tax frauds, so the IRS has conveniently created a chart to explain which form you’ll need to fill out in order to make the tax world a better place.

Direct your pen to Form 3949-A, Information Referral, if you suspect an individual/business of false exemptions or deductions, kickbacks, false/altered documents, failure to pay taxes, unreported income, failure to withhold, or organized crime. Then congratulate yourself on doing the right thing.

MH900422392Identity theft is also a type of tax fraud. If you believe that someone is posing as you and has used your SSN for employment purposes or to file a tax return, pick up Form 14039, Identity Theft Affidavit. The sooner you submit the form, the sooner the impostor will be caught.

Maybe your friendly neighborhood tax preparer has been getting rich a little too quickly. If you suspect fraudulent activity or an abusive tax scheme by a tax return preparer/company, report it on Form 14157. You’ll need both this form and Form 14157-A if you also think a tax return preparer filed or altered your return without your consent.

If you have information about a suspicious tax promotion or promoter, whip out Form 14242 and show that fake promotion who’s boss. And finally, if you notice misconduct or wrongdoing by an exempt organizationor employee plan, complain about it on Form 13909, Tax-Exempt Organization Complaint (Referral) Form.

MH900383616Reporting tax fraud is a good deed and should be reward enough by itself. However, for anyone who needs extra motivation, check out Form 211, Application for Award for Original Information. Sometimes it pays to be a whistleblower.  Do the right thing, it is hard, but it is very, very rewarding!!!

 

Sufen Wang, M.S.Accountancy

Wang Solutions, Long Beach, CA (562) 856-0793
Editor: Hannah Huff, M.F.A. Creative Writing: Poetry, (626) 806-5805

 

Articles

Looking for Tax Penalty Relief?:

In Accounting & Finances,Business,Taxes on November 19, 2012 by Sufen Wang Tagged: , , , , , ,

The IRS Made it Hard to Find…

Failed…

That’s the only word to describe the IRS’ actions concerning penalty forgiveness. How else could you explain forgetting to inform 1.45 million taxpayers that they qualified for and had a right to ask for relief from tax penalties totaling $181 million? If you’re like most people and have never heard of this tax penalty relief, here’s the reason why:

The IRS fines taxpayers when they don’t file a tax return or pay the full tax shown on any tax return. However, any taxpayers who have demonstrated full compliance over the previous three years can have these fines waved in something known as “first-time abate” (FTA). The only catch is that you need to first request the penalty waiver – and that’s hard to do if you don’t even know the waiver exists.

And the IRS has certainly kept its lips zipped and its fine print invisible. The potential penalty relief is not mentioned anywhere on Form 1040, nor is it on the IRS website’s page about penalties, or on any balance due notices – not even within the text on those documents mentioning penalties for failure to file or pay. Even worse, over 90% of the people who actually did qualify for the penalty relief were not granted it.

Of course, the IRS’ failure does not mean that all taxpayers are perfect angels. The TIGTA found that a number of taxpayers who received the FTA waivers failed to fully pay off their taxes six months after the postponement. Accordingly, the TIGTA suggested that the IRS also use the FTA waiver as a compliance tool: make taxpayers aware of their potential to receive an FTA waiver based on their past compliance history and make receipt of the waiver dependent on taxpayers paying their current liability. That way, it’s a win-win situation for everyone involved.

If you to read all of the juicy legal tidbits regarding the TIGTA’s findings, you can check out the full report here.

On the Money,  Sufen Wang,  Wang Solutions

Articles

Beat the Tax Penalty Heat with….

In Accounting & Finances,Business,Taxes on May 20, 2012 by Sufen Wang Tagged: , , , , , , ,

A Fresh Start from the IRS

If you still owe taxes, you might be feeling the heat from deadlines and failure-to-pay penalties. Luckily, the IRS is cool enough to give you relief in three areas with its “Fresh Start” initiative.
 
1. PENALTIES: That’s right folks, the Fresh Start Penalty Initiative gives eligible taxpayers a six-month extension (until Oct. 15, 2012) to fully pay their 2011 taxes, without any penalties. This won’t get you out of paying interest on your owed taxes. But as long as you pay those taxes and the interest by the October deadline, you won’t be charged any nasty failure-to-pay penalties.

All the people who aren’t getting a lot of business/unemployed people in the house raise your hands! Your bad luck is good news for you, because the Fresh Start Penalty Initiative is only available to:  Wage earners who have been unemployed at least 30 consecutive days during 2011 or in 2012 up to this year’s April 17 tax deadline – OR – Self-employed individuals who experienced a 25 percent or greater reduction in business income in 2011 due to the economy.

To find out more about this limited time offer, you’ll need to visit the IRS website and read over the brand spankin’ new Form 1127A.
 
2. INSTALLMENT AGREEMENT: The Fresh Start initiative also offers expanded and improved streamlined installment agreement provisions. Sounds fancy, but it actually makes things simpler. Under this option, more people will have more time to catch up on back taxes, which means fewer penalties for everyone involved. Best of all, streamlined installment agreements require limited financial information.
 
3. OFFER IN COMPROMISE: What’s the difference between an agreement and a compromise? Well, the “Offer in Compromise” is an agreement between a taxpayer and the IRS that settles the taxpayer’s tax liabilities for less than the full amount owed. Under the Fresh Start initiative, the IRS decided to get real and has been working on more common-sense changes to the OIC program.
 
Tired of reading, but want to find out more? Then grab some popcorn and enjoy the IRS Fresh Start YouTube video and the IRS video series “Owe Taxes: Understanding IRS Collection Efforts.” They’re not as boring as they sound.
 
On the Money,
Sufen Wang
Wang Solutions