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 atwww.tigta.gov.
• If you’ve been targeted by this scam, also contact the Federal Trade Commission and use their “FTC Complaint Assistant” at FTC.gov. 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 www.irs.gov 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.

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

2. Schumer Seeks Interest Deduction Limits to Slow Inversions

3. Democrats Urge Obama to Deny Federal Contracts to Companies Using Tax Inversions

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.

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.

Thomson Reuters Releases Report on IRS Examinations

BY MICHAEL COHN, Accounting Today

Thomson Reuters has released a special report for tax professionals on how to respond to Internal Revenue Service examinations.

The report, Handling the Increasingly Common Automated IRS Examination, examines two compliance programs used by the IRS to address underreporting: the correspondence examination, also known as the “corr exam,” and the automated underreporter, or AUR, program.

In fiscal year 2013, the IRS conducted over 1 million corr exams and closed 4.1 million AUR cases, compared to 344,000 field exams, according to the report.

The report discusses these compliance programs, addresses problems associated with automated examinations, and offers step-by-step guidance on how to respond to a letter or notice from the IRS.

Read more

Are you ready - really ready - to retire?

If you are, please accept a big pat on the back! But if you're like most people, you aren't ready.

Scary thought, huh? A couple or three thousand bucks a month if you've worked hard all your life and less if you haven't. If you're married, you can double it.

You're not going to buy any yachts with that kind of income but you won't starve or waste away on the streets...which is why Social Security is around in the first place. No politician wants to see old folks dying of starvation or malnutrition - kinda ruins the chances of re-election. So we have Social Security.

And it's a darn good thing we have it because we as a culture are pretty bad at saving money these days. And baby boomers like the author are worried.

I was surprised when a close friend was critical of people who draw Social Security retirement. He said it was leeching off working people. I reminded him that was his money, not the "working people's" money. That didn't change his opinion, though. It was too deeply ingrained.

But this is not a debate about Social Security. It's a discussion about your retirement savings and the first thing we should examine is making the determination as to how much money you're going to need. Here's a great retirement planning calculator - along with a library of additional financial calculators - that may help, at http://nmscpas.com/resources.

Accounting Today had an interested article by Michael Cohn  yesterday in which he reports some interesting recent (May 14 - 19, 2014) Harris Poll numbers.

"Three-quarters of Americans are worried about having enough money for retirement, according to a new survey that found three out of 10 Americans are not saving for later years.

"However, 69 percent of the 2,286 adults surveyed by the Harris Poll say planning for retirement is a key priority to them. Only 35 percent say they have faith in Social Security being there when they retire. That figure drops to 27 percent of Millennials and 30 percent of Gen Xers.

"While 39 percent of Millennials indicated they are saving for retirement, 62 percent of Gen Xers and Baby Boomers say they are.  Millennials are also more likely then the three older generations to be saving money for a car purchase (24 percent vs. 11 percent, 10 percent and 15 percent) and a home purchase (24 percent vs. 7 percent, 4 percent and 3 percent).

"About 69 percent of Americans say they are currently putting money toward any savings. One reason for those who aren’t may be that 46 percent of unretired U.S. adults say they live paycheck to paycheck and can't afford to put money in savings. Among those saving, the top goals are rainy-day funds for unexpected costs (65 percent) and retirement (52 percent). Those who are saving are also doing so for other reasons, with 31 percent saving for a vacation.

"Health care is another worry for Americans, with 67 percent saying they worry about being able to afford unexpected health care costs. Among those who are not yet retired, 70 percent of the respondents said they worry about being able to pay for their health care costs when they retire.

Asked about what they would do if a sudden windfall of $100,000 came their way, 57 percent said they would use the money to pay off an existing debt and/or loans, while 42 percent would put the money into a rainy day fund and save for unexpected expenses. One-third (33 percent) of Americans would invest toward their retirement while over one in five would go on vacation (23 percent) or buy a car (21 percent).

Smaller numbers of U.S. adults said they would treat themselves to something they would not normally spend money on (16 percent), donate to charity (16 percent), buy a house (15 percent), pay for their kids' college (10 percent) and go back to school (6 percent).

If you are interested in setting up a retirement plan with the advice of experienced, knowledgeable CPAs, contact Neikirk, Mahoney & Smith. They can help put some reason behind the rhyme.

Check out our new calculators

Should you refinance your mortgage? What type of retirement account should you set up? As accounting professionals, these are some of the questions that are posed to us on a daily basis by our accounting firm's customers and clients. Neikirk, Mahoney & Smith is providing some interactive financial calculators and other tools to assist you with some of the day-to-day questions and concerns that may arise. While these financial tools are not a substitute for financial advice from a qualified professional, they can be used as a starting point in your decision making process.

GAO slaps IRS' internal controls

The Internal Revenue Service is suffering from several new deficiencies in its internal controls, although it has managed to address a number of older problems, according to a new report from the Government Accountability Office.

The report comes in the midst of lingering questions over the IRS’s loss of two years of emails between the former director of its Exempt Organizations unit, Lois Lerner, and people outside the agency, after her computer crashed in 2011. The agency has been struggling with a series of budget cuts in recent years that have negatively affected taxpayer service.
If you have any questions or concerns regarding the status of your own business' internal controls, contact Neikirk, Mahoney & Smith today!

Read more in Accounting Today