All IRS Tax Audits Not Created Equal

All IRS Tax Audits Not Created Equal
H&R Block advises compliance contacts don’t have to be costly

FOR RELEASE MAR 26, 2012

Data for last year shows the IRS audited the tax returns of approximately 1 percent (1.6 million) of taxpayers. However, further inspection indicates that the tax returns of an additional 6.5 percent (9.2 million) of taxpayers were subjected to recently defined type of compliance contact. The National Taxpayer Advocate called these compliance contacts “unreal” audits in a recent blog post¹.

No matter what an IRS notification or compliance contact is called, H&R Block advises on the benefits of having professional assistance when responding to an IRS notification. 

The 9.2 million taxpayers who were notified the IRS had recalculated their taxes due, also could have been assessed added penalties and late fees. The notifications happened for the following reasons:

• 4.7 million returns were corrected for math errors
• 3.9 million returns were determined to have underreported income based on third-party reporting, which is done by employers, banks, etc.
• 600,000 substitute returns were filed by the IRS on behalf of taxpayers based solely on income reported by third parties, perhaps resulting in taxpayers not claiming the tax credits and deductions to which they are entitled.

 “While it might seem the only appropriate response to an IRS notification is to pull out the checkbook, it’s important to understand the request,” said Elaine Smith, H&R Block tax professional and enrolled agent. “The IRS has several ways it corresponds with taxpayers to correct underreporting errors. So, not all audits are created equal.”

H&R Block, which prepares approximately 1 in 7 tax returns nationally, also provides audit services to current and new clients. Only enrolled agents, certified public accountants and lawyers may represent taxpayers through the entire IRS audit process. H&R Block employs the nation’s largest single staffing of enrolled agents, who have experience with audits involving hundreds to millions of dollars. In fact, in an audit situation H&R Block is able to reduce the overall tax liability for 3 out of 5 taxpayers whose returns were not prepared by H&R Block.

Audits hit all income levels
The primary targets of audits are no longer small business owners and those whose income exceeded $1 million; 64 percent of the 1.5 million taxpayers audited in 2010 earned $50,000 or less, including taxpayers who claimed the Earned Income Tax Credit, but were not eligible. This means an overwhelming majority of taxpayers subjected to audits and other forms of compliance contact are low- and middle-income taxpayers. Following are other factors that may make taxpayers attractive audit candidates:

• Handwritten returns
  • Miscalculations and omissions that could be avoided by using tax preparation software and e-filing can cause even the most straightforward returns to be audited
    
• Unreported income and inconsistencies
  • A document-matching program makes it easy for the IRS to check income stated on a tax return against what is reported on forms W-2 (wages), 1099-MISC (self-employment income),1099-INT (interest paid), 1099-B (sale of stock), etc.
  • The IRS also uses a program to compare taxpayers’ deductions (e.g., mileage and charitable contributions) with others in the same tax bracket to check for inconsistencies
    
• Schedule C (self-employment form)
  • Returns are more likely to be audited if they include claims for expenses not within the IRS’s guidelines and include a majority of cash business transactions.

Like audits, not all tax preparation companies are created equal. Only H&R Block’s guarantee provides free audit support for returns prepared by its tax professionals in tax offices, and free, full audit representation for returns filed by taxpayers who used its digital, online and mobile filing solutions. IRS notifications are sent year-round, and these services are available year-round.

“Avoiding errors on tax returns starts with choosing the right tax prep method based on individual needs, and it can help a taxpayer avoid an audit situation,” Smith said. “Taxpayers shouldn’t panic or ignore IRS notices. Instead, they should seek professional assistance to make sure the changes the IRS made to their return are accurate. H&R Block may find you actually owe less than what the IRS indicated.”

H&R Block tax professionals are offering free Second Look® reviews on 2008-2011 tax returns not prepared by H&R Block to identify overlooked tax breaks, such as the Earned Income Tax Credit. Free Second Look reviews are available at participating H&R Block retail tax offices through April 30 to new and existing clients. To find the nearest H&R Block office, visitwww.hrblock.com or call 800-HRBLOCK.

H&R Block’s tax professionals provide guaranteed tax return preparation services in-person at retail tax offices open year-round and through Block Live^SM, the only face-to-face online tax preparation experience available in the industry. Do-it-yourself filers benefit from the expertise and guidance of The Tax Institute at H&R Block when using H&R Block At Home™ on their computers, tablets and smartphones. Because understanding taxes is an integral part of managing personal finances, H&R Block keeps the conversation going with clients all year via blogs, tweets and Facebook status updates.

¹What’s an Audit, Anyway? Jan. 25, 2012

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News Release from Cisco - Contact Center

PRESS RELEASE

AAA, CareCore National and Skowhegan Savings Bank Improve and Speed Interactions with Customers with Cisco Contact Center Solutions

Cisco Blends Telephony Technology with New Solutions to Help Companies Deliver Better, Faster and Targeted Customer Service

Related Information

John Hernandez, Vice President and General Manager, Collaboration Business Applications Business Unit

SAN JOSE, Calif., March 12, 2012 – Cisco today announced continued contact center solution momentum with a host of new customers that have deployed products from the Cisco® Customer Collaboration suite, including Cisco Unified Contact Center Enterprise, Cisco MediaSense, and the Cisco SocialMiner™ solution. New customers include AAA, a motor club and leisure travel organization; CareCore National, the largest evidence based healthcare solutions company in the U.S.; and Skowhegan Savings Bank, an independent Maine-based mutual savings bank. Through the use of Cisco Customer Collaboration solutions, AAA, CareCore National and Skowhegan Savings Bank are increasing efficiency while providing the best customer care possible.

AAA

Following goal-setting sessions in 2008 and 2009, AAA of western and central New York saw a need for more effective and efficient interactions with its employees and customers. AAA wanted to put together a member service infrastructure that connected its contact center and branch offices and supported interaction across multiple channels (such as phone, instant messaging, and e-mail). As a result, it deployed Cisco's Unified Contact Center Enterprise system with existing workforce and quality management solutions.

AAA's incorporation of Cisco's contact center solutions allowed for consistent processing, training, and call quality monitoring/scoring, providing a simplified infrastructure while lowering costs. By integrating Cisco's customer relationship management solution, AAA is able to easily associate call recordings and screen captures with the appropriate member's records, all while saving an average of 45 seconds per call by proactively presenting agents with comprehensive customer information during the call.

CareCore National

CareCore National, a company that has contracts with more than 25 health plans and works closely with 650,000 physicians, sought a solution that would lessen the burden on physicians using CareCore's contact center to gain authorization more quickly for crucial patient medical procedures.. Through the use of Cisco's Unified Contact Center Enterprise, CareCore is able to route physician contacts to the best available health plan resource, streamlining communications to improve the physician's experience while reducing costs. CareCore uses Cisco MediaSense to efficiently record conversations on the network for regulatory compliance and to potentially mine for business intelligence to improve customer interactions and processes. Through the implementation of Cisco's solutions, CareCore has improved service-level agreements by reducing the average amount of time it takes a doctor to reach a contact center agent resource from 90 to 60 seconds.

Skowhegan Savings Bank

Skowhegan Savings Bank, an independent mutual savings bank, recently deployed Cisco SocialMiner, a social media customer care solution, in order to respond to customers and prospects communicating through public social media channels. By enlisting the help of Cisco's SocialMiner, Skowhegan is able to monitor conversations surrounding its brand without incurring too much of a contact center agent's time, allowing them to focus on building deeper relationships with customers. SocialMiner helps support Skowhegan Savings' innovative and progressive approach to banking by providing a platform to listen and respond to customers' conversations across various social channels, enhancing its service and improving customer loyalty across all 10 of its banking branches.

As a worldwide market leader in contact center technology, Cisco is helping businesses and organizations elevate their customer care by combining traditional contact center technology and processes with key innovations in social media, Web 2.0 agent workspaces, video, and network-based recording and analytics.

Supporting Quotes

• Bob Leach, CIO, AAA

"Our members communicate with us in a number of ways and regardless of the channel they use, we want to be able to get that member to the best associate, whether in one of our brick –and- mortar locations, or in one of our call centers. However, we realized that we had a major gap between our vision and the technology we had to get us there.. With Cisco, we are able to provide high-quality interactions to any of our 750 handsets anywhere within minutes."

• William Moore, Executive Vice President / CTO, CareCore National

"Cisco contact center products empower CareCore National to provide industry-leading care for our customers today, while laying a strong foundation for the future.  Cisco Unified Contact Center Enterprise helps our physician clients reach the right care resource the first time.  For example CareCore National has reduced the overall time for a physician to talk to one of our medical directors from about 90 second to about 60 seconds, significantly improving the experience while lowering costs.  Cisco MediaSense lets us record calls using the network, providing optimum efficiency and scalability.  The recorded calls not only help us comply with industry regulations, but they also enhance our ability to performance-manage our care processes by integrating the call recordings directly into our cloud-based storage and care management platforms."

• Fred Haberberger, CIO, Skowhegan Savings Bank

"The customer experience is paramount at Skowhegan Savings Bank, so it's important for our clients to be able to contact us in the manner in which they prefer.  Cisco Unified Contact Center Express helps us ensure that every call gets answered by a helpful person, while Cisco SocialMiner gives us the power to engage with current and prospective customers via social media.  Cisco Customer Collaboration solutions are helping Skowhegan better serve our clients and grow our business."

• John Hernandez, Vice President and General Manager, Collaboration Business Applications Business Unit, Cisco

"Customer Collaboration encompasses exciting new technologies such as social media and network-based recording, as well as traditional contact center capabilities," said John Hernandez, vice president and general manager, Customer Collaboration business unit at Cisco. "With Cisco, companies and organizations can choose the right mix of capabilities most suited to their needs.  We're excited to see CareCore National, Skowhegan Savings Bank, and AAA of Western and Central New York exemplify this strategy."

Supporting Resources:

• For more product details and information, visit the Cisco Customer Collaboration page.
• For more information about Cisco's collaboration news and activities visit the Collaboration Blog or follow us viaTwitter @CiscoCollab.

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The Network Week in Review and Look Ahead: March 5-9

The Network Week in Review and Look Ahead: March 5-9

How to Contact the IRS

Link to e-mail received from IRS Jan. 4, 2012

How to Contact the IRS

Call Us With Your Tax Questions Live assistance is available Monday through Friday. There is also a 24 hour recorded assistance line for your convenience. Contact Your Local IRS Office IRS Taxpayer Assistance Centers for when you believe your issue is best handled face-to-face. Hours of service and other local information is provided on a per state basis. IRS Mailing Addresses ("Where to File") For those who don't file their federal tax returns electronically, the "Where to File" pages provide mailing addresses for filing all paper tax returns. You may also use your appropriate "Where to File" address for other written correspondence with the IRS. Contact Us for Status of Your Refund Want to check on the status of your refund? You can check online with the Where's My Refund application, or call 1-800-829-4477. (Please wait at least four weeks before calling.) Contact Your Taxpayer Advocate If you have an ongoing issue with the IRS that has not been resolved through normal processes, or you have suffered, or are about to suffer a significant hardship/economic burden as a result of the administration of the tax laws, contact the Taxpayer Advocate Service. We have offices in all 50 states, the District of Columbia, and Puerto Rico. How to Make an Offshore Voluntary Disclosure  Taxpayers wanting to report undisclosed income or assets should come in through the IRS Voluntary Disclosure Program. Call the Health Coverage Tax Credit (HCTC) Customer Contact Center The Health Coverage Tax Credit (HCTC) pays 80% of a qualified health plan premium for eligible individuals, either monthly as their health plan premium becomes due or yearly as a credit on their federal tax return. If you have questions about HCTC, give us a call. Contact IRS Internationally International Services: IRS contact information for taxpayers who live outside the United States. Suspicious e-Mails, Phishing, and Identity Theft The IRS does not send out unsolicited e-mails asking for personal information. An electronic mailbox has been established for you to report suspicious e-mails claiming to have been sent by the IRS. How Do You Report Suspected Tax Fraud Activity? If you have information about an individual or company you suspect is not complying with the tax law, report this activity. Contact the IRS.gov Web Site Help Desk If you need help finding something on the site, understanding our different file formats, printing files you've downloaded, installing or using the tax products CD-ROM, or any similar technical problem, here is the place to seek assistance. Send Us A Comment About the Web Site This is NOT the place for tax law questions or questions regarding your specific tax return, but you can give us some constructive feedback regarding the web site if you like. Give us your email address if you want a response, but don't include any social security numbers or other personal tax account information.