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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Sprint ends accord with LightSquared - KansasCity.com

Overland Park-based Sprint Nextel Corp. canceled a network-sharing agreement with LightSquared Inc. on Friday, dealing billionaire Philip Falcone his biggest setback since regulators grounded the wireless venture last month.
Sprint said Friday it would return $65 million in payments it had received from LightSquared. In a separate statement, LightSquared said the return of cash gave it “more flexibility” to push toward creating a national wireless network.

For more, click the link below:


Sprint ends accord with LightSquared - KansasCity.com

U.S. Chamber Joins Challenge to NLRB Appointments

Says Dubious Appointments Have Further Eroded NLRB’s Credibility

WASHINGTON, D.C.—The U.S. Chamber of Commerce and the Coalition for a Democratic Workplace (CDW) today moved for leave to intervene in a lawsuit to challenge the authority of the National Labor Relations Board (NLRB) to adjudicate charges absent a three-member quorum. The Chamber and CDW seek a swift and decisive ruling whether the president’s dubious recess appointments of Sharon Block, Terence F. Flynn, and Richard Griffin to the NLRB unlawfully circumvented the Senate’s constitutional power to provide advice and consent to the appointment of executive branch officers. The case, Noel Canning v. National Labor Relations Board, is before the U.S. Court of Appeals for the D.C. Circuit.

“Appointing three of five members to the NLRB in a legally questionable way casts doubt on the work of the entire agency,” said Thomas J. Donohue, president and CEO of the Chamber. “We cautioned in January that shoehorning these nominees into office in this controversial way would throw the legal validity of every decision of the Board into question.  Our concern has now become a reality. We are simply asking the courts to sort out the question of the NLRB’s authority quickly, so that employers and employees alike can have predictability and certainty.”

Noel Canning, a small business operating in Washington state, appealed a ruling by the NLRB that the company had violated the National Labor Relations Act (NLRA). The Chamber’s public policy law firm, the National Chamber Litigation Center, filed a motion on behalf of the Chamber for leave to intervene in the case in support of Noel Canning. The Chamber seeks to argue that the three attempted recess appointments were not legally effective because the President made them when the Senate was in session, not in recess. Accordingly, the Board lacks the statutorily required quorum of at least three members to adjudicate disputes and issue rules.

“Allowing the Board to act when it may not have a quorum adds even more uncertainty to our economic climate,” continued Donohue. “That is why we are looking to join a small business lawsuit to challenge these appointments—we want the authority of the Board clarified. Employers and employees need to know what it means when the NLRB orders an employer to bargain with a union, to modify its compensation and benefit plans, or to cease contracting work—to offer just a few examples.  Is the order legally rendered, or will it be invalidated in the future?  Without this kind of certainty, we cannot foster an environment that will lead to economic growth and job creation.”

The Chamber’s motion for leave to intervene is available here: http://www.chamberlitigation.com/noel-canning-v-national-labor-relations-board

Longtime friends Lieberman, McCain divided over cybersecurity legislation - The Hill's Hillicon Valley

Longtime friends Lieberman, McCain divided over cybersecurity legislation - The Hill's Hillicon Valley

News Release from American Express - Using Twitter #Hashtags

American Express Turns Twitter #Hashtags into Couponless National Merchant Offers and Cardmember Savings Using Its Smart Offer APIs

Cardmembers Can Now Sync their Cards with Twitter, Tweet, and Save at National Merchant Partners including Best Buy®, McDonald’s, Whole Foods Market, Zappos.com & More

New Technology to be Featured During Upcoming Live-Streamed Concert Event from SXSW® featuring Award-Winning Recording Artist

NEW YORK,  March 6, 2012 -- 

American Express today introduced a new experience for US Cardmembers using Twitter, that turns customized Twitter #hashtags into savings. Now, American Express® Cardmembers can sync their eligible Card with Twitter at sync.americanexpress.com/twitter, and when they tweet using special offer hashtags, couponless savings are loaded directly to their synced Cards – no coupons, no print-outs. Then, when Cardmembers use their synced Card for qualifying purchases online or in-store at participating merchants, the savings are automatically delivered via a statement credit within days. Participating merchant partners include Best Buy®, McDonald's, Whole Foods Market, Zappos and more. This unique user experience is facilitated by American Express' Smart Offer APIs, which also enables American Express to provide detailed reporting to merchants about the online and offline spend behavior of their customers.

"American Express is turning Twitter content into commerce by connecting Cardmembers to merchants and delivering real world value to both," said Ed Gilligan, Vice Chairman, American Express. "With the continued convergence of online and offline commerce, our closed loop continues to enable us to bring seamless, relevant ways to connect our cardmembers and merchants on the most powerful social and digital platforms."

"Every day, millions of people use Twitter to get special offers from the brands and retailers they care about," said Adam Bain, Twitter's president of global revenue. "Now, American Express is making it even easier for people to act on those offers simply by sending Tweets with special offer hashtags from retailers. It's exciting to see American Express build on Twitter in a way that benefits both consumers and retailers."

Sync. Tweet. Save.
Cardmembers can tweet their way to savings by syncing an eligible American Express® Card with Twitter at sync.americanexpress.com/twitter. To take advantage of the exclusive offers available from a variety of the nation's largest merchants, Cardmembers tweet the special offer hashtags to load offers directly to their synced Cards. When the Cardmember uses that same Card to make a qualified purchase in-store or online with a participating merchant, an automatic statement credit is issued within days.

Participating merchants at launch include 1-800-FLOWERS.COM®, Best Buy®, Century 21 Department Store, The Cheesecake Factory, Dell, FedEx Office, FTD®, Gulf, H&M, McDonald's, Seamless.com, Sports Authority, Ticketmaster, Virgin America, Whole Foods Market and Zappos.com. All of the current American Express special offers are highlighted as "favorites" on the @americanexpress Twitter page.

American Express created @amexsync, an automated notification handle that is activated when someone sends a Tweet that includes one of the special offer hashtags. This sophisticated handle detects if a user is already synced and either confirms their offer enrollment or provides a link to first sync their American Express Card to enroll in the selected offer. Additionally, if an offer is no longer available, @amexsync will direct users to check out the Tweets @americanexpress has "favorited" to find the latest offers. Questions or additional assistance will be provided by @askamex, the American Express customer service team on Twitter.

Experience Sync at SXSW®
American Express will showcase the new Twitter experience during a special, nationally live-streamed concert from SXSW on March 12 at 7 p.m. CT featuring an award-winning recording artist. For details, please visit youtube.com/AmericanExpress. The Amex Sync Show will be broadcast live at youtube.com/americanexpress and also be available on the VEVO mobile and tablet platform.

Local and visiting eligible Cardmembers in Austin can take advantage of a special city-wide offer and get $10 when sync their Card, Tweet the special offer #AmexAustin10 and use their synced Card to spend in Austin during SXSW from March 9 to March 13. Limit one statement credit per Cardmember. Click here for program terms.

About American Express
American Express is a global services company, providing customers with access to products, insights and experiences that enrich lives and build business success. Learn more at americanexpress.com and connect with us on facebook.com/americanexpress,foursquare.com/americanexpress, twitter.com/americanexpress, andyoutube.com/americanexpress.

News Release from the DOE

Eight National Labs Offer Streamlined Partnership Agreements to Help Industry Bring New Technologies to Market

February 23, 2012 

Washington, D.C. – Energy Secretary Steven Chu today announced that eight of the Department’s national laboratories will participate in a pilot initiative to make it easier for private companies to utilize the laboratories’ research capabilities.  The program will harness America’s unique advantages in innovation to create jobs and accelerate the development of new clean energy technologies.

“The Agreements for Commercializing Technology will cut red tape for businesses and startups interested in working with our nation’s crown jewels of innovation, the national laboratories,” said Energy Secretary Steven Chu. “This initiative will also strengthen new domestic industries by helping to bring innovative, job-creating technologies to the market faster.”

Previously, companies wishing to partner with the laboratories for commercial research had two options: signing a Cooperative Research and Development Agreement (CRADA) or a Work For Others (WFO) Agreement.  The eight laboratories participating in this pilot program intend to offer a third, more flexible option: an Agreement for Commercializing Technology (ACT).

ACT was created to address concerns that have been raised by industry and to remove barriers that sometimes got in the way of commercializing technology under a CRADA or WFO agreement.  Specifically, under an ACT:

·         There will be more flexibility in negotiating over the intellectual property rights for technologies created at the laboratory.  While the labs generally have had limited flexibility on IP terms under CRADAs and WFO arrangements, an ACT will allow both parties to develop a specialized arrangement that will facilitate moving the technology into the marketplace as quickly as possible.
·         More flexible terms are also available on other issues ranging from payment arrangements to project structures to indemnification.  The goal is to develop terms that are better aligned with industry practice.
·         Whereas WFO arrangements and CRADAs tend to be tailored for two-party agreements between one company and a lab, an ACT will make it easier to develop a multi-party research and development partnership.  Groups of companies, universities and/or other entities may come together with a laboratory to address complex technological challenges that are of mutual interest.

The participating labs are:

·         Ames Laboratory
·         Brookhaven National Laboratory
·         Idaho National Laboratory
·         Lawrence Livermore National Laboratory
·         National Renewable Energy Laboratory
·         Oak Ridge National Laboratory
·         Pacific Northwest National Laboratory
·         Savannah River National Laboratory

DOE’s laboratories have a long tradition of working with businesses and academia on scientific research and technology development efforts that have generated many advances, spawned new businesses and supported the creation of new industries and jobs.

ACT complements the goals of the Administration’s “Startup America” initiative and is part of DOE’s broader efforts to support startups and small businesses, including the “America's Next Top Energy Innovator” Challenge, which gives startup companies access to the Energy Department's thousands of unlicensed patents at a greatly reduced cost and paperwork.

To view the FAQ on Agreements for Commercializing Technology (ACT), visit http://technologytransfer.energy.gov/ACTpilotFAQ.html