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Monday, June 10, 2013

Expect IRS Audits to Decrease

Expect IRS Audits to Decrease
As the IRS continues to work through its latest scrutiny and turmoil from overspending on employee conferences and targeting “Tea Party” groups, it should be very difficult nearing impossible for the agency to obtain additional funding from Congress in upcoming budgets.
In order to obtain increases in funding, they will need to show that they have corrected their problems, and that will take some time.
What will that mean for you?
Less face-to-face audits, although we would expect audits by mail to continue at a normal pace, and longer waits when you call them.
Contact Us for further info.

Will the IRS Have Access to Medical Records?

Will the IRS Have Access to Medical Records?
One of the new requirements within ObamaCare is that those without health insurance coverage will pay a penalty starting in 2014.
Guess who is collecting the penalty monies?  The IRS.
So, how do they know that someone doesn’t have health insurance?
They will get the info from the health insurance companies, who will be sending the IRS a list of those who are covered.  Those not on any of the lists, will get slapped with the penalty, which is limited to $95 for 2014, but increases in later years.
But, they will not have access to the medical records.
Contact Us for further info.

Identity Theft Causes Refund Delays

Identity Theft Causes Refund Delays
There have been many instances of stolen Social Security Numbers being used to file a fraudulent tax return and obtain a refund.  The true owner of the SSN doesn’t realize what has happened until they file their return and it is rejected by the IRS as a duplicate return.  This usually takes a lot of time to get corrected.
Many times, even valid refunds of unsuspecting taxpayers are delayed, as they may fit the profile of some of the fraudulent returns that have been filed.  There have also been cases where verbal communication must be made with the IRS to verify that the refund is valid before the IRS will release the refund.
Expect these delays to continue in the future, as the numbers of fraudulent returns is booming.
This is a good thing, but can be very inconvenient.
Contact Us for further info.

Monday, March 4, 2013

Potential Debit Card Scam

Potential Debit Card Scam
Some time ago, we alerted you to the new rules regarding income tax refunds from the state of Virginia.  To refresh your memory, the state of Virginia has stopped issuing checks for income tax refunds and will only issue refunds via direct deposit or a pre-loaded debit card with the balance of the refund on it.
We recently became aware of a telephone scam related to these debit cards in which an automated caller informs the taxpayer that their “Way2Go prepaid Mastercard is locked for security reasons”.  The automated system then attempts to obtain personal information from the taxpayer.
We were informed that the Virginia Department of Taxation will never make automated calls nor solicit personal information in this manner.  Please ignore any calls of this nature.
Contact Us for further info.

Please Check for Proper Wording with Charitable Contributions

Please Check for Proper Wording with Charitable Contributions
This is a re-iteration of a prior posting.
We are seeing a lot of charitable donation receipts from churches without the proper wording on them.
Back in the summer, we told you about a Texas couple who lost over $25,000 of charitable contributions in an IRS audit, because the year end statements from their church left out the phrase “No goods or services were given in exchange for these donations.” (A phase with similar wording would have been sufficient also.)   When they went back to the church during the audit to get them to correct the statement, the IRS still denied the charitable deductions, because the couple did not have the correctly worded statement in their possession when they originally filed the return.
The couple went to court….and lost.
Therefore, we are checking for this wording very closely now when preparing returns, and are finding that in an alarming number of instances, the wording is not there!  This doesn’t only affect our clients, but also any other donors to those churches who are expecting to deduct their donations.
Please check for this wording on your charitable receipts and statements.
Contact Us for further info.

Friday, November 30, 2012

2013 Social Security Changes

2013 Social Security Changes
For 2013, Social Security benefits will increase by 1.7%, which is much lower than the increase for 2012.  The limit on earnings for those drawing Social Security between ages 62-66 will increase to $15,120 before any benefits are reduced.
For workers, the wages subject to Social Security will rise to $113,700.  The reduction in Social Security withholding from 6.2% to 4.2% is set to end at the end of 2012, and may not be renewed.  We won’t know the fate of that tax cut until later.  We may even be well into next year before we find out.
Additionally, for those with adjusted gross incomes over $200,000 ($250,000 for married filing jointly taxpayers), there will be surtaxes placed on much of your income over these limits for additional Social Security and Medicare taxes.
Contact Us for further info.

NEWS --- Changes at Virginia Department of Taxation

NEWS --- Changes at Virginia Department of Taxation
In an effort to become more and more paperless, the State Tax Department has been making some changes that may affect you, effective January 1, 2013.
Firstly, except for certain processing problems, they will no longer be issuing paper checks for tax refunds for individuals.  Instead, they present two options:  direct deposit or a debit card containing the amount of the refund.  For corporate returns, they will still issue paper checks.
Secondly, corporations can no longer pay income taxes with a paper check.  These payments must be made electronically.  Call us today to help you with the process.
Contact Us for further info.