IRS Scams Continue to Pose Serious Threats

The Internal Revenue Service has some advice for taxpayers this April Fool’s Day that may prevent them from being the victim of a tax scam: Don’t be fooled by scammers. Stay safe and be informed. Here are some of the most recent IRS-related scams to be on the lookout for:

Telephone Scams: Aggressive and threatening phone calls by criminals impersonating IRS agents remain an ongoing threat. The IRS has seen a surge of these phone scams in recent years as scam artists threaten taxpayers with police arrest, deportation, license revocation and more. These con artists often demand payment of back taxes on a prepaid debit card or by immediate wire transfer. Be alert to con artists impersonating IRS agents and demanding payment.

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IRS: Now Is the Time for a Mid-Year Premium Tax Credit Checkup

If you have insurance through the Health Insurance Marketplace, you may be getting advance payments of the premium tax credit. These are paid directly to your insurance company to lower your monthly premium. Changes in your income or family size may affect your premium tax credit. If your circumstances have changed, the time is right for a mid-year checkup to see if you need to adjust the premium assistance you are receiving. You should report changes that have occurred since you signed up for your health insurance plan to your Marketplace as they occur.

Changes in circumstances that you should report to the Marketplace include, but are not limited to:

Do You Know What “PCORI” Is?

Well, you had better. It is the Patient-Centered Outcomes Research Institute, and it is a new fee under the Affordable Care Act.

And it is a nit-picking little fee filed on IRS Form 720 for any employer with a self-funded plan. Form 720 is a 6-page form that was originally intended to be an excise tax on gasoline and other gasoline type products. It is filed quarterly, but for PCORI it is filed annually in the second quarter.

You need to count up the number of covered persons (including dependents), and if your plan year ended on or before 10/1/13 you owe $1.00 per person, and $2.00 per person for years ending on or before 10/1/14. However, a plan ending March 31, 2015 does not have to file until July 2016. Yes, 16 months later. And the definition in the official instructions does not easily interpret this. We had to get it in writing from the insurance company.

The Inherent Inefficiency of Government Bureaucracy

There are few who will disagree with the fact that, in recent years, the governmental bureaucracy has grown dramatically while its efficiency has deteriorated in an equally dramatic manner.

From 1952 to 1972, the cost of the public payroll multiplied more than fourfold, from $35 billion to $150 billion. The 330% increase over that period exceeds the 247% growth of employee compensation in private industries ($161 billion to $557 billion). In 1952, the average worker in private employment earned 5% more than his counterpart in government. By 1972, he had fallen 10% behind.

IRS Warns of Tax-Time Scams

It’s true: tax scams proliferate during the income tax filing season. This year’s season opened on January 31. The IRS provides the following scam warnings so you can protect yourself and avoid becoming a victim of these crimes:

• Be vigilant of any unexpected communication purportedly from the IRS at the start of tax season.  

More on Internet Sales Tax

The Senate passed the Marketplace Fairness Act in May, requiring websites with more than $1 million in remote sales to collect sales taxes from customers in states that have joined the Streamlined Sales and Use Tax Agreement (which of the greedy states would not sign on to get other states’ businesses taxes). However, the bill provoked opposition among many House Republican lawmakers and has stalled until now.

BRIDGE VERSUS OBAMACARE

I love to play Duplicate Bridge.

The game is totally logical. It requires that you be able to count 4 suits of 13 cards each AND 10 points in each suit and after a few plays you can figure out where the rest of the cards lie.

The same thing cannot be said for the Affordable Care Act (ACA). Despite the fact that we were assured that premiums would go down, they are on the rise. Despite the fact that we were assured that if we liked our policy, we could keep our policy, the truth is that the old policies are going to be squeezed out.

INTERNET SALES TAX

Once again, the United States Senate has demonstrated that it comes from another planet.

They have no concept of what it takes to run a business and the havoc that their so-called “good intentions” will bring.

Is it just me, or does anyone else wonder if it is just “good intentions” or if there is some underlying benefit to a political contributor that drives them?

OBAMACARE

At the end of January, both the Internal Revenue Service and the Department of Health and Human Services issued two sets of proposed regulations related to the individual mandate of the Patient Protection and Affordable Care Act.

And here is what jumps off the pages at me.

If two government bureaucracies have written regulations on the same material, who reviewed it to be sure that there are no conflicts?

If there are conflicts, whose version overrides the other?

SOUTH CAROLINA’S DEPARTMENT OF REVENUE HACKED

South Carolina’s Department of Revenue has been hacked. It has been reported that the hacker had access to 3.6 million social security numbers and 387,000 credit/debit card numbers and/or bank account numbers with the associated bank routing numbers.

For years, I have warned my clients:

1.        Do not give banking information on your tax return.