Basketball Brackets Give Way to Tax Brackets

Basketball Brackets Give Way to Tax Brackets
H&R Block can help on-the-go tax filers save time and money with mobile filing apps

FOR RELEASE MAR 28, 2012

While mobile technology brings the latest tournament basketball scores and bracket updates to fans’ smartphones, it also brings tax filing to the fingertips of tax return filing procrastinators. In roughly the time it takes for a TV timeout, taxpayers can complete and file a tax return using the latest in mobile technology.

In addition to checking brackets on a smartphone or tablet, taxpayers can easily and quickly file a federal form for free with H&R Block. On the iPad tablet, filing the 1040, 1040A and 1040EZ forms is free all tax season. Taxpayers with smartphones can file both a simple federal form and state form completely free through April 17 using the industry’s only fully free mobile tax filing products. Just download the free H&R Block At Home™ 1040EZ app on the iPhone and an Android smartphones, and the rest is a slam dunk. 

“While the hoops tournament is down to its final four teams, taxpayers can score an easy victory with H&R Block’s entirely free mobile filing app for federal 1040EZ and state tax returns using our iPhone and Android apps,” said Jason Houseworth, president of digital tax solutions at H&R Block. 

$100,000 Sweepstakes Count Down
Even if their team is no longer playing, H&R Block At Home clients can still win big in the company’s $100,000 Grand Prize Giveaway. To date more than 1,200 clients across the country have won more than $200,000 in the sweepstakes by using the H&R Block At Home digital tax filing products. 

In addition to the $100,000 grand prize that will be awarded after April 17, daily cash prizes of $50, $100 and $500 are given away every hour, all day through April 17 to taxpayers who file their tax returns using the H&R Block At Home software, online or iPad tablet products. For the official rules and other sweepstakes information, visit www.hrbathomegiveaway.com/shared.

The H&R Block At Home products offer the H&R Block guarantees of free audit support, free audit representation, accurate calculations and the maximum tax refund to which the taxpayer is entitled.

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 smart phones. 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.

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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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Next Time, Greece May Need New Tactics

Excerpt from an article in

The New York Times

Saturday, March 10, 2012

Next Time, Greece May Need New Tactics

By LANDON THOMAS Jr.

LONDON The Greek government was able to legally strong-arm most of its private bondholders into accepting the debt reduction deal it completed Friday. But next time — and experts predict there will almost certainly be a next time — Greece might have much less leverage.

That’s because as a result of Friday’s deal, the bulk of Athens’s 260.2 billion euros ($341 billion) in remaining government debt will now be held by the International Monetary Fund, the European Central Bank and the individual European nations that have lent Greece money and contributed to the region’s bailout fund.

Politically, Greece would be hard-pressed to force debt losses on such a formidable international group, the way it did with the private banks and hedge funds that have just been forced to accept a 75 percent loss on their Greek bond holdings. Greece’s main creditors, in effect, are now foreign taxpayers — who are likely to be much less malleable than the private creditors if Greece needs to renegotiate its staggering debt load a year or two down the road.

“From now on, whatever happens in Greece, it will be a matter between Greece and the taxpayers of the rest of the euro area,” said Jacob F. Kirkegaard, an analyst at the Peterson Institute for International Economics in Washington.

The final private creditor deal announced Friday was agreed to by nearly 86 percent of the bondholders; the number was expected to rise to 95 percent after Athens invoked a so-called collective action clause forcing others to join in. Without such a deal, Greece had strongly implied, it might default altogether, with no one getting paid. The outcome has enabled Greece to reduce its debt load by just over 100 billion euros, or about $132 billion.

Later in the day, the International Swaps and Derivatives Association ruled that the agreement was nonetheless a technical default by Greece — a ruling that will mean payouts on some insurance contracts, known as credit-default swaps, that various investors had taken out on the privately held Greek debt. Around $70 billion in default swaps on that debt are outstanding, although analysts expect the net payout to end up at only $3.2 billion or so.

News release from the FBI, Kansas City Division:

Texas Man Convicted of Medicare Fraud in Kansas

U.S. Attorney’s Office February 16, 2012

District of Kansas (316) 269-6481

— filed under: Health Care Fraud, Press Release

KANSAS CITY, KS—A Texas man has been convicted of fraudulently billing Medicare for power wheelchairs and other medical devices, U.S. Attorney Barry Grissom said today.

A jury convicted Edmund Nwaudobi, 48, Sugar Land, Texas, on one count of conspiracy to defraud Medicare, two counts of health care fraud, and one count of aggravated identity theft.

“Health care fraud is a widespread problem,” said U.S. Attorney Barry Grissom. “We are working hard to protect the American people and safeguard precious taxpayer dollars.”

During trial, federal prosecutors presented evidence that from 2004 to 2009 Nwaudobi conspired with co-defendants Tom Alabraba, Iyaye Ishmael, and George Tasie to fraudulently bill Medicare for power wheelchairs and other medical devices, such as leg and body braces. In some instances, Medicaid was billed for devices that were not medically necessary, including leg braces for an individual who had previously had his legs amputated, and who never received the braces. In other instances, Medicare was billed for medical devices that Medicare recipients never received.

Nwaudobi conducted business on behalf of Good Care, Inc., an Overland Park, Kan., company that supplied durable medical equipment such as orthotics. Nwaudobi shared patient information with Tom Alabraba, who owned or operated Tal-Med, Inc., a Kansas City, Kan., company that supplied durable medical devices; George Tasie, who owned or operated Central Medical, Inc., a Kansas City, Kan., company that supplied durable medical devices; and Iyaye Ishmael, who was a manager of Central Medical, Inc.

The companies billed more than $2.9 million in Medicare claims for 397 beneficiaries living in Missouri and Kansas, and received more than $1.5 million from those claims.

Prosecutors presented evidence at trial that Nwaudobi:

• Submitted false statements to Medicare that physicians had prescribed durable medical devices;
• Provided durable medical devices to Medicare recipients that were different than stated in bills to Medicare;
• Did not require Medicare recipients to make co-payments required by Medicare; and
• Used doctors’ identities without permission to make fraudulent claims to Medicare.

Brian Truchon, FBI Special Agent in Charge, said: “The FBI is fully committed to investigating health care fraud and working with our law enforcement partners to stop individuals or groups that commit fraud against government sponsored programs such as Medicare and Medicaid as well as fraud against private insurance companies. This verdict puts those individuals on notice that these crimes will be fully investigated and brought to successful prosecution.”

Tom Alabraba and Iyaye Ishmael are fugitives. George Tasie, who pleaded guilty to one count each of conspiracy and health care fraud, failed to appear for sentencing.

Sentencing is set for April 30. Nwaudobi faces a maximum penalty of 20 years in federal prison and a fine up to $250,000 on the conspiracy count, a maximum penalty of 20 years and a fine up to $250,000 on each of the health care fraud counts, and a mandatory two years consecutive to any other sentence and a fine up to $250,000 on the identity theft count.

Grissom commended the Federal Bureau of Investigation, HHS-OIG and Assistant U.S. Attorneys Chris Oakley and Jabari Wamble for their work on the case.

In all cases, defendants who have been indicted are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.

IRS e-News for Small Business; Feb 1, 2012

Issue Number:  2012-3

Inside This Issue

1. Reporting 1099-K income for 2011
2. IRS compliance directors discuss top priorities and challenges
3. Upcoming phone forums from Employee Plan phones
4. Recent IRS announcements  

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  1.  Reporting 1099-K income for 2011

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IRS.gov has information for reporting the amount from Forms 1099-K, Merchant Card and Third-Party Network Payments, on tax returns including Form 1040 Sch. C, Sch. E and Sch. F; and Forms 1065, 1120 and 1120-S.

Report all gross receipts on the line indicated in the instructionsand enter zero on the "Merchant card and third party payments" line.

Related links:

• Understanding Your 1099-K
• Third Party Reporting Information Center

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  2.  IRS compliance directors discuss top priorities and challenges

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The recent webinar, Small Business Tax Compliance Priorities for 2012, is now available on the IRS Video Portal.

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  3.  Upcoming phone forums from Employee Plans

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IRS is offering two free phone forums on retirement plan topics:

• Feb. 23, Funding-Based Benefit Restrictions
• March 6, 401(k) Questionnaire Interim Report

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  4.  Recent IRS announcements

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• Tax Tip 2012-16, Tax Tips for the Self-employed
• Tax Tip 2012-17, Online Tax Center Offers Tools and Resources for Small Businesses and Self-Employed
• IR-2012-13, Identity Theft Crackdown Sweeps Across the Nation; More than 200 Actions Taken in Past Week in 23 States
• IR-2012-11, On Earned Income Tax Credit Awareness Day, IRS and Partners Launch Outreach Campaign to Low- and Moderate-Income Workers

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.

IRS Announces 2012 Mileage Rates

IRS Announces 2012 Standard Mileage Rates, Most Rates Are the Same as in July 

WASHINGTON — The Internal Revenue Service today issued the 2012 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Beginning on Jan. 1, 2012, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

• 55.5 cents per mile for business miles driven
• 23 cents per mile driven for medical or moving purposes
• 14 cents per mile driven in service of charitable organizations

The rate for business miles driven is unchanged from the mid-year adjustment that became effective on July 1, 2011. The medical and moving rate has been reduced by 0.5 cents per mile.

The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs as determined by the same study. Independent contractor Runzheimer International conducted the study.

Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle. In addition, the business standard mileage rate cannot be used for more than four vehicles used simultaneously.

These and other requirements for a taxpayer to use a standard mileage rate to calculate the amount of a deductible business, moving, medical or charitable expense are in Rev. Proc. 2010-51.

Notice 2012-01 contains the standard mileage rates, the amount a taxpayer must use in calculating reductions to basis for depreciation taken under the business standard mileage rate, and the maximum standard automobile cost that a taxpayer may use in computing the allowance under a fixed and variable rate plan.