IRS Tax Fraud Increasing

turbotax

IRS Tax Fraud Increasing

Identity theft linked to IRS tax fraud has been increasing. However, according to a recent government report, the IRS is actually unaware of the number of persons who are running scams on the system.

Based on a study from the Government Accountability Office (GAO), a watchdog that collaborates with Congress, between January and September 2012, there were approximately 642,000 incidents of identity theft which involved tax fraud, which is 62 percent more than 2011. The report further stated that during that same period of time, the IRS would have paid some $754 million in refunds that were suspicious.

The report also shared that returns that involve identity theft are hard to track. The IRS informed the GAO that it is unable to determine why and how this is happening. American taxpayers who have been victims of identity theft and false returns, may experience delayed refunds and have to pay additional costs for re-filing, in addition to the tons of paperwork.

The Government Accountability Office is an imp...
The Government Accountability Office is an important information-gathering agency for Congress. (Photo credit: Wikipedia)

Unfortunately, the tax and fraud professionals advised that this problem in increasing because it is easy to run the scam via electronic filing such as turbotax 2011. Once scammers have someone’s Social Security number and name, they can apply for the refund to be transmitted via direct deposit. Therefore, it is difficult for the IRS software to determine the legitimacy of the returns that are filed.

This problem is estimated to burden the US Government by billions of dollars. CNBC reported that the IRS inspector general forecasted an estimated $21 billion that could be paid out over the next five years in tax refunds that are fraudulent.

One of GAO’s directors, James White, shared with The Huffington Post that this problem is hard to solve and partnering with the banks could be one of the solutions. During the first nine months of 2012, 116 banks reported information to the IRS about over 193,000 accounts that were linked to tax fraud. White further stated that this type of crime is hard to catch and measure.

The IRS was able to block an estimated 262,000 fraudulent tax returns in 2011. However, according to CNNMoney, approximately $5.2 billion was lost to identity theft.

Back Taxes – Getting Back Tax Money

Back Taxes

Getting professional help with your 2011 Federal Tax Filing would allow you to get your Back Taxes and obtain the money that belongs to you. If you have not been able to get your information ready in time, you probably missed out on the date that you were supposed to file your taxes. When this happens, you likely have money that is owed to you. However, not filing also means that you are not able to obtain this money because of the fact that you took too long to complete the filing process. If you find yourself in this position, you want to do what it takes to get the money that the government has been holding for you. Instead of allowing them to keep the money, you can have someone help you to get this money back into your pocket.

Doing 2011 Federal Tax Filing is not something that you should worry about when you have the assistance of a team that knows what they are doing. Through the use of these services, you would be able to get your taxes done quickly, this would allow you to get the money that belongs to you into your bank account as quickly as possible. It is very likely that you do not have a large amount of extra money, you should do what it takes to claim what is yours today.

Tax Carnival Ecstasy – April 5, 2012

Welcome to the April 5, 2012 edition of Tax Carnival Ecstasy. In this edition we start with Learning About Tax Liability by Bill Smith. We also have an article on starting a small business, Home Business, Yay or Nay? from the site 2010 Tax. Jeffery Weber looks at Using Credit Card Rewards to Reduce the Cost of Paying your Taxes. Finally, Edward Webber examines How Much Can a tax payer can Earn Without Paying Taxes 2012. Hope you enjoy the articles, bookmark, share, tweet, like on Facebook and come back real soon.

Amy Gardner presents Social Media Marketing Basics for Small Businesses posted at Small Business Credit Cards.

Jill Thompson presents What Debt Collectors Cannot Do To Collect Your Debts posted at How Does Rent To Own Work?.

Maria Clark presents Phrases to Avoid When Negotiating With Lenders posted at Credit Cards for Bad Credit Resource.

filing

Bill Smith presents Learn About Tax Liability posted at 2010Taxes, saying, “Tax liability can have you make wrong choices. However, the IRS has been helpful to some people in difficulties such as these.”

taxes

Bill Smith presents Home Business, Yay or Nay? posted at 2010 Tax, saying, “While the old American dream was once to land a steady job with good benefits and an early retirement, the updated version often entails becoming an…”

Jeffery Weber presents Using Rewards to Reduce the Cost of Paying Taxes with a Credit Card posted at Smart Balance Transfers, saying, “Paying taxes with a credit card is costly, but these costs can be mitigated with certain rewards credit cards.”

Edward Webber presents How Much Can You Earn Without Paying Taxes 2012? posted at TaxFix Feed Update, saying, “Each year the amount that you can earn tax free changes. This article will look at how much you can earn in 2012 without being taxed”

That concludes this edition. Submit your blog article to the next edition of tax carnival ecstasy using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

Technorati tags: tax carnival ecstasy, blog carnival.

The Importance Of Having A Good Accountant

While it may seem that any bookkeeper or even keeping track of your own books will do, there is much to be said for employing a good accountant for your personal and business finances.

Save Money

Of course a good accountant will cost a fair amount of money, but in the long run having a capable accountant in charge of the books will save much more money than it costs. A good accountant will be able to see areas where expenses can be reduced as well as those instances where income can be increased. A really good accountant will even be able to make suggestions as to where productivity can be increased and save even more time and money.

Prevent Fraud

A good accountant will be able to spot fraud where you may not be able to.  Accountants are trained to recognize suspicious patterns and occurrences that a standard bookkeeper or even a business owner may not notice.  They can see when payroll is not quite right or when ghost deliveries area being made, and because they understand what is going on they can catch the culprit before he even knows anyone is onto him.  A potential perpetrator of   fraud will realize they stand a much less chance of being successful and fraud will be deterred.

Save Time

While bookkeeping software and basic accounting knowledge can get you far, there is too much at stake when it comes to accounting.  Difficult accounting issues can arise when you least expect, and having a good accountant on your side will save time, and time is money of course.  An example that involves both fraud and cost would be if the business owner suspected fraud.  He might spend a lot of time trying to figure out what is going on, while an accountant will know exactly what to look for to prove definitively whether fraud is an issue in very little time.  Another way time will be saved by employing a good accountant is in basic training.  Business owners have to spend the time to understand accounting and train on any software being used, while an accountant has already spent this time and is ready to get to work.

Better Productivity

As a business owner, you will be free to deal with other aspects of the business if you have a good accountant dealing with the finances.  With an accountant to keep you informed, you can rest easy knowing that if the budget or other financial issues need your attention, you will be notified.  This allows you to concentrate on whatever other business matters you need to and nothing slips through the cracks because you are trying to do too many things at once. If you are trying to deal with payroll and other financial issues while other areas need your attention, something important is likely to not get done.
It all boils down to specialization.  No one does finances better than a trained accountant, and having one handle your finances give you peace of mind, frees up your time, and saves you money.

Dennis works for one of Australia’s biggest accounting firms and knows the importance of finding a good accountant to manage both personal and business finances. Such is his expertise in the industry, Dennis is regularly used as a consultant to provide his fellow accountants with tips and advice for a range of situations.

The Mega Millions Jackpot Has States Dreaming About Taxes From Possible Winners

As the Mega Millions jackpot grows to a record $540 million, those buying tickets are not the only ones with dreams about what a win could mean.  State governments facing hard times understand a local winner would bring a bonus tax to the home state.

The taxes on the lump-sum payment option to any single winner would bring several million dollars of revenue to the state.  That revenue in could restore the entire cuts being faced by social services programs, pay for several hundred low-income housing units and help to increase the number of state police.

The sale of ticket has grown to the point that the current jackpot is the highest in the history of the lottery in the US.  A lump sum payment for a winner would bring that person almost $400 million if they are the only winner.

States like Rhode Island, with a 5.99 % tax rate would gain over $23 million with the win.   Currently the state has a $7.9 million budget and is $22 million short.

Each state sets its own tax rate for the winnings on the lottery.  In New York, citizens pay 8.82 percent, but in California and several other states there are no state taxes.

Ohio would also collect $23 million in taxes, a fraction of the $56 billion 2 year budget, while Montana would collect $50 million for an in-state win.  The winnings could help with state buildings as well as infrastructure.

In February and March of this year, Rhode Island saw two Powerball wins, one of $336.4 million and the second of $ 60 million.  These two wins have brought $17 million that may replace a $20 million bond.

While states cannot depend on lottery winnings, any state where the tickets are sold would be happy to collect the windfall.

E-File And Get Your Tax Return Sooner

At the beginning of every year literally millions of people across the country are rushing to get their tax returns. A lot of people choose to file on paper which can be plagued by the usual delays of using the mail. If you would like to get your return more promptly then the best option is probably to e-file.

Doing taxes used to be a mess of paperwork for most people. Many people used to use expensive preparation services to help them deal with this chore. Now there is no need to go through endless papers or to take your taxes to someone else. Millions of people now choose to file electronically and you could say that this has become the norm.

E-filing has advantages. First of all there is software designed to help make it much easier than in the past. You can make sure you do not miss out on any deductions as well as maximize your refund with this help. No more getting confused sorting through reams of papers looking for obscure instructions. Another nice advantage of filing electronically is that your refund will be processed right away and can be direct deposited to your account within days of filing in some cases.

So if you are looking for the best ways to take care of your tax returns, perhaps you should look at the many ways to e-file. You will save time and money as well as receiving any money owed you quicker than through the mail.