Thursday, August 28, 2014

IRS Issues Alert for Telephone Scams

WASHINGTON — The Internal Revenue Service issued a consumer alert today providing taxpayers with additional tips to protect themselves from telephone scam artists calling and pretending to be with the IRS.
These callers may demand money or may say you have a refund due and try to trick you into sharing private information. These con artists can sound convincing when they call. They may know a lot about you, and they usually alter the caller ID to make it look like the IRS is calling. They use fake names and bogus IRS identification badge numbers. If you don’t answer, they often leave an “urgent” callback request.
“These telephone scams are being seen in every part of the country, and we urge people not to be deceived by these threatening phone calls,” IRS Commissioner John Koskinen said. “We have formal processes in place for people with tax issues. The IRS respects taxpayer rights, and these angry, shake-down calls are not how we do business.”
The IRS reminds people that they can know pretty easily when a supposed IRS caller is a fake. Here are five things the scammers often do but the IRS will not do. Any one of these five things is a tell-tale sign of a scam. The IRS will never:
  1. Call you about taxes you owe without first mailing you an official notice.
  2. Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.
  3. Require you to use a specific payment method for your taxes, such as a prepaid debit card.
  4. Ask for credit or debit card numbers over the phone.
  5. Threaten to bring in local police or other law-enforcement groups to have you arrested for not paying.
If you get a phone call from someone claiming to be from the IRS and asking for money, here’s what you should do:
  • If you know you owe taxes or think you might owe, call the IRS at 1.800.829.1040. The IRS workers can help you with a payment issue.
  • If you know you don’t owe taxes or have no reason to believe that you do, report the incident to the Treasury Inspector General for Tax Administration (TIGTA) at 1.800.366.4484 or
  • If you’ve been targeted by this scam, also contact the Federal Trade Commission and use their “FTC Complaint Assistant” at Please add &quotIRS Telephone Scam&quot to the comments of your complaint.
Remember, too, the IRS does not use email, text messages or any social media to discuss your personal tax issue. For more information on reporting tax scams, go to and type “scam” in the search box.
Additional information about tax scams are available on IRS social media sites, including YouTubeand Tumblr where people can search “scam” to find all the scam-related posts.

Friday, August 15, 2014

Weekly Roundup from the Accounting World

Today's Hot Accounting Topics - Inversions (cont.)
Our friends at Accounting Today have posted three related stories dealing with Obama's and congressional liberals' vendetta against accepted and legal businesses they don't like. Rather than paraphrase them, check them out yourself and draw your own conclusions.

1. Obama Won’t Return Donations Stemming From Tax Deals He Dislikes

Accounting For America lending accounting support to small businesses
A new non-profit organization, Accounting For America, modeled after the hugely successful program developed by Teach for America, connects "greenhorn accountants, presumably recent college graduates, with small businesses in desperate need of accounting services," according to the Wall Street Journal. Read More

Accrual Accounting Proposal Meeting Resistance
According to Accounting Today, nearly half the members of the U.S. Senate have signed a letter expressing concern about a tax reform proposal to require the use of accrual accounting and are urging the leaders of the Senate Finance Committee to preserve the option of the cash method of accounting for tax purposes. Read More

Women Are More Successful Than Men at Raising Money Online
Thanks to peer-to-peer crowdfunding websites like Indiegogo and Kickstarter have made the challenge of raising capital more attainable thank traditional financing for small businesses and causes. Interestingly, female business owners are meeting with more success than male business owners.

Accordingly to the Wall Street Journal, "on Kickstarter, where backers make contributions in exchange for rewards, women-led companies account for less than 10% of technology projects. But roughly two-thirds of women-led technology ventures reached their fundraising goals versus just 30% of technology ventures with male founders, according to a new academic study."

"Overall, women are 13% more likely than men to meet their Kickstarter goals, even after controlling for project type, amount being raised and other factors, according to the analysis, which examined 1,250 projects in five categories that sought at least $5,000 between 2010 and 2012." Read More

IRS Says Lost Data on Lerner's Computer is Not Recoverable
(Bloomberg) The Internal Revenue Service told a judge its technicians made repeated futile efforts to save data on a malfunctioning computer hard drive used by Lois Lerner, the former official at the center of a dispute between Congress and the Obama administration over scrutiny of Tea Party groups.

In a series of sworn statements submitted by the IRS in its effort to fend off a lawsuit by the activist group Judicial Watch, government technicians described the step-by-step processes they followed to try to recover the data.

The IRS in June told a congressional committee investigating the agency’s review of Tea Party groups seeking nonprofit status that the hard drive crash on Lerner’s computer prevented it from obtaining much of her e-mail from 2009 to 2011. Read More at Accounting Today

If you'd like to learn best practices for making your business more profitable in a time when it seems like everyone wants a piece of you, contact Neikirk, Mahoney & Smith, a Louisville-based CPA firm that is dedicated to your personal and professional profitability. Call for an appointment today at (502) 896-2999.

Thursday, August 7, 2014

Do you know what a tax inversion is?

The president is blaming CPAs for the trend towards corporate tax inversions.

That's is his opinion, I suppose, but in reality it's a technique accountants and accounting firms employ in their efforts to help American companies remain profitable as our tax burden continues to rise at a time when the economy might not have itself back on a sufficiently firm foundation to support continued growth after the worst recession/depression since the 1920s.

So what, exactly, is a corporate tax inversion?

If you don't know, you aren't alone. But suffice it to say that its one of the issues that gets the hackles up of those groups that accuse big corporations of being the "bad guys" when it comes to creating jobs and rebuilding our economy.

According to Investopedia, a corporate tax inversion is the reincorporation of a company overseas in order to reduce the tax burden on income earned abroad.

Corporate inversion as a strategy is used by companies that receive a significant portion of their income from foreign sources, since that income is taxed both abroad and in the country of incorporation. Companies undertaking this strategy are likely to select a country that has lower tax rates and less stringent corporate governance requirements.

President Obama doesn't like the practice. According to Accounting Today, Obama said, “You have accountants going to some big corporations—multinational corporations but that are clearly U.S.-based and have the bulk of their operations in the United States—and these accountants are saying, you know what, we found a great loophole—if you just flip your citizenship to another country, even though it’s just a paper transaction, we think we can get you out of paying a whole bunch of taxes.”

As is so often the case, some are blaming lawyers for the existence of this "profit loophole."

Accounting Today editor Michael Cohn points out that an article in The Wall Street Journal on Wednesday attributed the trend to the legal profession, describing how the international law firm Skadden, Arps, Slate, Meagher & Flom persuaded a number of corporate clients to do inversions, with the help of banks such as J.P. Morgan Chase and Deutsche Bank. So far, many of the deals have occurred among pharmaceutical companies such as AbbVie's recent acquisition of Shire in the United Kingdom. On Wednesday, Walgreen's CEO announced that his company plans to acquire the rest of the European drug store chain Alliance Boots, but its tax address will remain in the U.S. (see Walgreen Stays in U.S. in $15.3 Billion Alliance Boots Deal)

Obama argued that inversions place an unfair burden on other taxpayers. “Well, it’s not fair. It’s not right." Read more

And if you're interested in getting sound tax advice for your business, contact Neikirk, Mahoney & Smith PLLC at (502) 896-2999.