Additional Article Links

Making The Most of Your Mentor!


AICPA-Making The Most of Your Mentor

Why The IRS Won't Tell Fraud Victims What Thieves Stole

Here is an article that you may be interested in:

Why The IRS Won't Tell Fraud Victims What Thieves Stole

BEWARE: Criminals Want Your Money by Genevia Gee Fulbright, CPA, CGMA - ggf@moneyful.com

If you have not already noticed, criminals are becoming more aggressive and sophisticated.

Signs of aggression

The other day I received a call from a distraught taxpayer (let’s call her Mandy) stating that she might have made a grave mistake by releasing information to an aggressive shyster who was posing as an “IRS bully.”  

First of all, in my 20+ years as a professional advisor (including a short stint as an IRS Agent) I can assure you that IRS Agents work very diligently to avoid being characterized as a bully.  They have a job to do and have to follow certain protocols.

Warning # 1 ~ If anyone leaves a voice message or tells you, within the first few minutes of your conversation, that you are going to go to jail and/or demands that you provide ANY confidential information, immediately ask for their full name, title, office location and most importantly their badge number.

If the person hangs up, you’ve saved yourself some headaches.  Stay tuned because they might call back or try to use other tactics.  Consider setting up a security or safe word system with your children or other family members that only legitimate callers are provided.  

Do not release any personal data over the phone unless you initiate the call and the individual is authorized to receive this type of protected data. 

Note, if the caller happens to be a legitimate IRS Agent returning your actual phone call and is threatening harsh action, take a message and call your CPA and/or Tax Attorney immediately.

Some of the rules

• At a minimum IRS Agents have to follow certain protocols including:
• Immediate disclose to the Taxpayer the Agent’s name, title and badge number
• No detailed voice messages allowed on machines or with others, to comply with disclosure  rules
• Treating Taxpayers courteously  
• Allowing a reasonable deadline for follow-up (rarely is IMMEDIATE action necessary for initial    contact)

Sophisticated players

Welcome to the age of “Cyber Criminals” who are computer literate, sophisticated script writers, software developers and excellent recruiters.  Checkout our Savvy Cybersecurity Quick Reference

These deviants spend their time training others to develop or acquire computer software capable of making multiple random, auto-dial, disturbing and threatening calls without any human interaction, other than to set up the system.   The sheer volume of calls provides enough follow up responses and data to sell to keep them engaged and profitable.

Warning # 2 ~ Unless you’ve received an official IRS letter (hard-copy) PRIOR to voice contact and you have not  asked them to call you, it is a scam and these shysters are looking for more victims.

If you have asked the IRS to call you following up to a written notice, pull out the letter when they call and ask them to provide you with a code or something from the notice to ensure you are actually speaking to a legitimate IRS Agent.  Again, IRS Agents do NOT initiate phone calls without authorization from Taxpayers.

According to Raymond Dunkle, CPA, CFE, CFF the President of a firm, Red Flag Reporting, that specializes in helping organizations internationally deter and detect unethical activity in the workplace, “Implementing some simple procedures at home can help you avoid fraudsters from gaining access to your personal and financial data.  Computers should always maintain up-to-date Security and fraud detection software, only use secure wi-fi, never give personal or financial information over the phone, be careful what you post on social websites, do not let individuals into your home that you have not scheduled to appointments and check all id for repair and other service providers that you have scheduled.”

Although some criminals attempt strong-arm robberies for purses, wallets and other valuables the rise of more computer savvy criminals will continue and they will become more creative with how they gain access to your precious confidential data.

If you think that your confidential data has been compromised and you do not have LifeLock or a similar highly recommended service immediately:

-       Contact your bank, brokerage house, credit card companies

-       Make sure your computer is secure and virus scan protection is up-to-date and you only use a secure wi-fi or Internet connection

o   Then change all passwords for bank, brokerage house, credit cards, health data portal, newsletters, social media websites, email account access (home and work) 

The IRS recommends that people can report incidents of attempted fraud to the Treasury Inspector General for Tax Administration (TIGTA) at 800-366-4484 via fax (202) 927-7018 or email phishing@irs.gov . 

You can also file a complaint with the Federal Trade Commission at www.FTC.gov    Add "IRS Telephone Scam" to the comments in your complaint.

Remember, the IRS will never initiate a phone call and request personal or financial information by email, texting or any social media.   If you receive ANY emails that look suspicious do NOT open any attachments or click on any links in those emails.

Why Your Tax Refund May Be Slower (or Never Arrive) This Year

Here is an article that you might be interested in:

Why Your Tax Refund May Be Slower (or Never Arrive) This Year

Three Tips To Reduce Individual Taxes - By Genevia Gee Fulbright, CPA, CGMA ggf@moneyful.com

During the beginning of the year many clients seem most concerned about their finances and taxes.  Therefore in this segment we decided to devote this first installment to tips to reduce your individual taxes.

How did I do?

Did you make more or less money than you anticipated? 

Do you think that you paid Uncle Sam enough in advance to avoid a large tax bill when you file by April 15^th?

Are your 2014 records as robust as you would like them to be?

What to do now

As your year-end documents start to arrive, begin gathering your information now and requesting any missing statements, to avoid the April 15^th  deadline rush.

If you have not already done so, set up a folder to store all of the paper documents and if you are computer savvy consider scanning the documents and saving as password protected files.  Also consider setting up a computer spread sheets using Excel or another software  to summarize and capture important deduction details such as  charitable donations, unreimbursed employee business expenses, rental property repairs, investment expenses, etc…

3 Tips to save taxes

-         Understand the difference between a deduction versus a cash outflow 

-         Ensure all brokerage statements are complete  

-         Report all income  

Deductions versus cash outflow item

Over the years you have probably found out (hopefully not the hard way through a tax audit) that not all cash outflow items are tax deductible.

Try this exercise with three columns for computer users or 3 stacks if using the manual method:

-         Deductible (i.e. church contributions, charitable foundations)

-         Not sure if deductible (i.e. radio-a-thon fundraiser, mortgage payments for rental)

-         NOT deductible (i.e. political contributions, girl scout cookies)

For the items that are in the “not sure” column/stack either do more research  to determine deductibility or bring to your CPA or professional tax preparer to help determine if any portion is allowed.

Report all brokerage activities

Often times brokerage statements are amended after they are received or you may have switched companies and forgotten about the activities. 

You can avoid missing year-end statements by gather a quick list of broker relationships, look at the previous year’s tax documents, check out mid-year if there are additional brokerage relationships and at year-end if less. 

Remember, although Uncle Sam uses fairly complex software that identifies and captures sales of investments, unfortunately the cost basis is sometimes missing (not reported by the brokerage house to the IRS) so you might receive a threatening letter stating that you forgot to report some much larger amount on your return.

Unreported money is NOT tax-free money

Just because you did not receive a 1099-Misc for that 1-day freelance activity or bank savings account that you rarely use, these figures were probably reported to the IRS, especially if the payer uses a CPA or professional tax preparer.

All income is reportable, even if you do not receive a year-end form.  The form might be late or  lost in the mail.

What if you are audited?  You will want to make sure that all of your deposits and funds spent  can be accounted for properly and there are no sources “unknown.” 

Most likely you have expenses to account for some or all of the income and would miss out on these if you fail to keep up with this data.

Always remember “Big Brother” is watching (trusting but always re-verifying).

Use this time to get a jump on gathering your deductible expense and taxable income so you can have an uneventful season.



4 Money Blunders That Could Leave You Poorer - Presented by Ed Fulbright, CPA, CGMA, PFS

A “not-to-do” list for the new year & years to follow.

How are your money habits? Are you getting ahead financially, or does it feel like you are running in place?

 

It may come down to behavior. Some financial behaviors promote wealth creation, while others lead to frustration. Certainly other factors come into play when determining a household’s financial situation, but behavior and attitudes toward money rank pretty high on the list.

 

How many households are focusing on the fundamentals? Late in 2014, the Denver-based National Endowment for Financial Education (NEFE) surveyed 2,000 adults from the 10 largest U.S. metro areas and found that 64% wanted to make at least one financial resolution for 2015. The top three financial goals for the new year: building retirement savings, setting a budget, and creating a plan to pay off debt.¹

 

All well and good, but the respondents didn’t feel so good about their financial situations. About one-third of them said the quality of their financial life was “worse than they expected it to be.” In fact, 48% told NEFE they were living paycheck-to-paycheck and 63% reported facing a sudden and major expense last year.¹

 

Fate and lackluster wage growth aside, good money habits might help to reduce those percentages in 2015. There are certain habits that tend to improve household finances, and other habits that tend to harm them. As a cautionary note for 2015, here is a “not-to-do” list – a list of key money blunders that could make you much poorer if repeated over time.

       

Money Blunder #1: Spend every dollar that comes through your hands. Maybe we should ban the phrase “disposable income.” Too many households are disposing of money that they could save or invest. Or, they are spending money that they don’t actually have (through credit cards).

 

You have to have creature comforts, and you can’t live on pocket change. Even so, you can vow to put aside a certain number of dollars per month to spend on something really important: YOU. That 24-hour sale where everything is 50% off? It probably isn’t a “once in a lifetime” event; for all you know, it may happen again next weekend. It is nothing special compared to your future.

 

Money Blunder #2: Pay others before you pay yourself. Our economy is consumer-driven and service-oriented. Every day brings us chances to take on additional consumer debt. That works against wealth. How many bills do you pay a month, and how much money is left when you are done? Less debt equals more money to pay yourself with – money that you can save or invest on behalf of your future and your dreams and priorities.

     

Money Blunder #3: Don’t save anything. Paying yourself first also means building an emergency fund and a strong cash position. With the middle class making very little economic progress in this generation (at least based on wages versus inflation), this may seem hard to accomplish. It may very well be, but it will be even harder to face an unexpected financial burden with minimal cash on hand.

 

The U.S. personal savings rate has averaged about 5% recently. Not great, but better than the low of 2.6% measured in 2007. Saving 5% of your disposable income may seem like a challenge, but the challenge is relative: the personal savings rate in China is 50%.²

    

Money Blunder #4: Invest impulsively. Buying what’s hot, chasing the return, investing in what you don’t fully understand – these are all variations of the same bad habit, which is investing emotionally and trying to time the market. The impulse is to “make money,” with too little attention paid to diversification, risk tolerance and other critical factors along the way. Money may be made, but it may not be retained.

 

Make 2015 the year of good money habits. You may be doing all the right things right now and if so, you may be making financial strides. If you find yourself doing things that are halting your financial progress, remember the old saying: change is good. A change in financial behavior may be rewarding.   

         

Ed Fulbright, CPA, CGMA, PFS edf@moneyful.com  919-544-0398