At airport headed to Vegas for Ceridian conference. Full wk of trng and networking.

IRS Urges Taxpayers to Avoid Becoming Victims of Tax Scams

WASHINGTON — The Internal Revenue Service today encouraged taxpayers to guard against being misled by unscrupulous individuals trying to persuade them to file false claims for tax credits or rebates.

The IRS has noted an increase in tax-return-related scams, frequently involving unsuspecting taxpayers who normally do not have a filing requirement in the first place. These taxpayers are led to believe they should file a return with the IRS for tax credits, refunds or rebates for which they are not really entitled. Many of these recent scams have been targeted in the South and Midwest.

Most paid tax return preparers provide honest and professional service, but there are some who engage in fraud and other illegal activities. Unscrupulous promoters deceive people into paying for advice on how to file false claims. Some promoters may charge unreasonable amounts for preparing legitimate returns that could have been prepared for free by the IRS or IRS sponsored Volunteer Income Tax Assistance partners. In other situations, identity theft is involved.

Taxpayers should be wary of any of the following:

• Fictitious claims for refunds or rebates based on excess or withheld Social Security benefits.

• Claims that Treasury Form 1080 can be used to transfer funds from the Social Security Administration to the IRS enabling a payout from the IRS.

• Unfamiliar for-profit tax services teaming up with local churches.

• Home-made flyers and brochures implying credits or refunds are available without proof of eligibility.

• Offers of free money with no documentation required.

• Promises of refunds for “Low Income – No Documents Tax Returns.”

• Claims for the expired Economic Recovery Credit Program or Recovery Rebate Credit.

• Advice on claiming the Earned Income Tax Credit based on exaggerated reports of self-employment income.

In some cases non-existent Social Security refunds or rebates have been the bait used by the con artists. In other situations, taxpayers deserve the tax credits they are promised but the preparer uses fictitious or inflated information on the return which results in a fraudulent return.

Flyers and advertisements for free money from the IRS, suggesting that the taxpayer can file with little or no documentation, have been appearing in community churches around the country. Promoters are targeting church congregations, exploiting their good intentions and credibility. These schemes also often spread by word of mouth among unsuspecting and well-intentioned people telling their friends and relatives.

Promoters of these scams often prey upon low income individuals and the elderly.

They build false hopes and charge people good money for bad advice. In the end, the victims discover their claims are rejected or the refund barely exceeds what they paid the promoter. Meanwhile, their money and the promoters are long gone.

Unsuspecting individuals are most likely to get caught up in scams and the IRS is warning all taxpayers, and those that help others prepare returns, to remain vigilant. If it sounds too good to be true, it probably is.

Anyone with questions about a tax credit or program should visit www.IRS.gov, call the IRS toll-free number at 800-829-1040 or visit a local IRS Taxpayer Assistance Center.

Do I have to File a Tax Return?

Below is some valuable information form the IRS about whether you need to file a tax return this year.

Do I have to File a Tax Return?

You must file a federal income tax return if your income is above a certain level; which varies depending on your filing status, age and the type of income you receive.

Check the Individuals section of the IRS website at http://www.irs.gov or consult the instructions for Form 1040, 1040A, or 1040EZ for specific details that may help you determine if you need to file a tax return with the IRS this year. You can also use the Interactive Tax Assistant available on the IRS website to determine if you need to file a tax return. The ITA tool is a tax law resource that takes you through a series of questions and provides you with responses to tax law questions.

There are some instances when you may want to file a tax return even though you are not required to do so. Even if you don’t have to file, here are seven reasons why you may want to:

1. Federal Income Tax Withheld You should file to get money back if Federal Income Tax was withheld from your pay, you made estimated tax payments, or had a prior year overpayment applied to this year’s tax.

2. Making Work Pay Credit You may be able to take this credit if you had earned income from work. The maximum credit for a married couple filing a joint return is $800 and $400 for other taxpayers.

3. Earned Income Tax Credit You may qualify for EITC if you worked, but did not earn a lot of money.EITC is a refundable tax credit; which means you could qualify for a tax refund.

4. Additional Child Tax Credit This refundable credit may be available to you if you have at least one qualifying child and you did not get the full amount of the Child Tax Credit.

5. American Opportunity Credit The maximum credit per student is $2,500 and the first four years of postsecondary education qualify.

6. First-Time Homebuyer Credit The credit is a maximum of $8,000 or $4,000 if your filing status is married filing separately. To qualify for the credit, taxpayers must have bought – or entered into a binding contract to buy – a principal residence located in the United States on or before April 30, 2010. If you entered into a binding contract by April 30, 2010, you must have closed on the home on or before September 30, 2010. If you bought a home as your principle residence in 2010, you may be able to qualify and claim the credit even if you already owned a home. In this case, the maximum credit for long-time residents is $6,500, or $3,250 if your filing status is married filing separately.

7. Health Coverage Tax Credit Certain individuals, who are receiving Trade Adjustment Assistance, Reemployment Trade Adjustment Assistance, or pension benefit payments from the Pension Benefit Guaranty Corporation, may be eligible for a Health Coverage Tax Credit worth 80 percent of monthly health insurance premiums when you file your 2010 tax return.

For more information about filing requirements and your eligibility to receive tax credits, visit http://www.irs.gov.

Reg Baker, CPA PFS
http://www.regbaker.com/
Ph: (702) 283-0784

IRS Announces Tax Filing Delay

Per the IRS, if you file a Schedule A or take an education deduction, wait until mid Feb to file your returns!  IRS needs time to reprogram their systems due to late tax law changes.

Need help with your taxes?  Please let me know how I can help.

Reg Baker, CPA

http://www.regbaker.com/

The CFO & Marketing

CFO Perspectives

By Reg Baker, CPA PFS

The first question that might be asked is; what does a CFO know about marketing? Well the answer is really quite simple; it depends.

Some CFO’s may know a lot about marketing while others may know very little or nothing at all. But one thing is certain; CFO’s know how to measurer results. And everything that happens within an entity needs to have results; hopefully positive results.

As the old cliché goes, “if you can’t measure it, you can’t manage it”.

Every marketing initiative needs to have a stated objective that can be measured. What do you want to accomplish? When do you want to accomplish it? And how will we measure success? These basic questions need to be answered in order to determine whether the resources being used are being used wisely.

Marketing cannot be a silo and operate independently from the other managers and areas of the company. To create an effective marketing campaign there must be a team effort. The Sales department needs to provide feedback on what the customers value most and where customer service improvements can be made; operations needs to be involved to ensure what is being promised can be delivered, IT may need to design specific reports for different purposes and finance needs to monitor budgets and tract results. This Team works together, supports each other and tweaks the process as necessary. The objective is to have an effective marketing campaign that is successful in achieving the stated goals and objective; not protecting personal turf with the company. An effective CFO can contribute much to this process.

Of course some folks might not like the “measurement” idea. Who does like to be held accountable and evaluated based on achieving stated goals if they can avoid it? Especially if it has never been done before? If this is the case in your company then the time for change has come. No one can afford to be potentially wasting valuable resources (labor or cash) on projects that cannot be effectively managed and evaluated.

Summary –

A successful CFO can contribute in many ways to ensure a company is successful. The more integrated the CFO is involved with all aspects of a company’s operations the more effective they can be. The ramp up time may be different depending on the background and experience of the CFO but is certainly worth the effort.

Please contact me with your feedback at reg@regbaker.com.

I am looking forward to hearing from you or your staff with suggestions for future columns.

Reg Baker, CPS PFS
http://www.regbaker.com/

IRS Change-of-address Procedures

IRS Updates Change-of-address Notification Procedures

 If you have or are planning to move - whether it's a change of personal residence or a change of business address - you want the IRS to know about your change of address. The IRS has recently updated its procedures for taxpayers to follow when notifying the IRS of a change of address. The IRS uses a taxpayer's "address of record" for mailing certain notices and documents that the agency is required to send to a taxpayer's last known address.

The IRS's process for updating changes of address is important for both individual and business taxpayers because a notice or document sent to your (or your business') "last known address" is legally effective and binding, even if you never receive it because you have moved. This presumption of delivery includes such important correspondence as notices of deficiency, liens and levies.

Have you moved since April 15?

If you have already filed your federal income tax return (or any other respective business tax return, such as Form 1065, U.S. Return of Partnership Income), and have since moved from the address that you provided on your return, you need to inform the IRS. This is because the IRS automatically uses the address on your return as its "address of record." Thus, when a taxpayer files a tax return, such as a Form 1040, U.S. Individual Income Tax Return, the address on your return is automatically updated by the IRS after the return has been properly processed (tax returns are considered properly processed after a 45-day period that begins on the day after the return is received by the IRS.)

Therefore, if you move to a new address after filing your return, you need to ensure the IRS has your new address. This can generally be done in one of several ways. First, when a taxpayer provides the U.S. Postal Service (USPS) with a new address, the IRS automatically updates the taxpayer's address of record with the address maintained in the USPS's National Change of Address database. So, when you change your address with the USPS to have your mail forwarded to your new address, the IRS may also update you address of record based on the new address you provide the USPS. However, take caution. You should nonetheless notify the IRS directly of your change of address to ensure the IRS has your correct address. This can be done by filing Form 8822, Change of Address, with the IRS.

However, you can also provide the IRS with your change of address by giving the agency "clear and concise notification" of the change. This can be done electronically, written, or orally, and is discussed below. We recommend such follow-up notification just in case the IRS fails to follow one of its updating procedures.

Types of returns automatically updated when filed:

The IRS's updated procedure (Revenue Procedure 2010-16) not only lists the types of returns on which address provided thereon are automatically updated into its "address of record" database, it also makes clear that certain forms are not considered returns and therefore not automatically updated if a new address is listed. Specifically, a new address listed on (1) Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, or (2) Power of Attorney and Declaration of Representative, are not used by the IRS to automatically update a taxpayer's address. The IRS does not consider these to be returns. Therefore, if you file these forms providing a new address, you will need to use another method for informing the IRS of the address change, such as filing Form 8822.

The types of returns from which addresses are automatically updated by the IRS include, but are not limited to:

-- Individual income tax returns (e.g., Forms 1040, 1040A, Form 1040X, 1040-SS, 1040EZ, 1040NR, 1040NR-EZ); -- Gift, estate, and generation-skipping transfer tax returns (e.g. Forms 706 series, 709 series); and -- Returns filed under an employer identification number (e.g., Forms 720, 730, 940, 941 series, 943, 945, 940, 990 series, 1041, 1042, 1065 series, and 1120 series.

Comment. Because the IRS maintains address records for gift, estate, and generation-skipping transfer (GST) tax returns that are separate from records maintained for individual income tax returns, an individual's notification of a change of address should identify whether any gift, estate, or GST transfer tax returns are affected.

Documents and notices

The IRS uses the last known address for mailing a number of important documents and notices, as well as any refund you may be owed. Therefore, it is imperative for taxpayers to ensure that the IRS has your proper change of address information. Such notices and documents include, among others, deficiency notices, notices of intent to levy, notices and demand for tax, employment status determinations, notices of third party summonses, notices regarding interest abatements, and notices of final determinations regarding spousal support.

Clear and concise notification

Taxpayers that want to change their address of record can do so by providing the IRS with a "clear and concise notification" that is in accord with the agency's procedures. As previously mentioned, clear and concise notification may be made in writing, electronically, or orally. You must in any case, must provide the your full name, new address, old address, and Social Security number (SSN), individual taxpayer identification number (ITIN), or employer identification number (EIN) when providing the "clear and concise notification" procedures.

Written. The filing of Form 8822, Change of Address, is one way to meet the "clear and concise notification" requirement, for example. You can also provide the IRS with a written statement signed by you, informing the IRS you wish to change your address of record. You must include information such as your full name, new and old address, SSN, ITIN, or EIN as well. If you file a return with your spouse, you should both provide this information as well.

Electronic. You can also satisfy the "clear and concise" requirement by electronically notifying the IRS. You must use a secure application located on the IRS's website, www.irs.gov. A "secure application" is one that requires the taxpayer to verify the taxpayer's identity before accessing the application. However, other forms of electronic notice, such as emailing an IRS email address, do not constitute clear and concise notification.

Verbal. You can also provide the IRS with a change of address orally, by providing a statement - whether in person or directly via telephone -- to an IRS employee. Again, it is a good idea to follow up your telephone call with another call to verify that your address has in fact been inputted properly.

If you have any questions about change of address procedures, please call my office.

Reg Baker, CPA PFS
Cell: (702) 283-0784
Email: Reg@regbaker.com
Website: http://www.regbaker.com/

http://regbakercpa.blogspot.com/

www.linkedin.com/in/regbaker

Budgeting

CFO Perspectives

By Reg Baker, CPA PFS

How does a CFO create and manage a budget? And how does this help an entity be successful?

At this time of the year these are the types of questions being asked at all levels of an entity. There are many individuals involved with the budgeting process that, from my experience, do not fully appreciate their role or the importance of the process.

First and foremost, a budget is the road map of where an entity wants to go (please do not confuse a budget, which is a stretch target, with a cash projection, which is actual forecast; these are two entirely different reports). Some might say that the Business Plan is the map and they won’t be wrong. But it the budget that is the working document or tool that an entity and its leadership will use on a daily, weekly and monthly basis to reach the desired destination. The budgeting process has two primary (big picture) components. There first component is the Creation of the budget and then there is the Monitoring component.

Creation: The creation of a budget requires great coordination and teamwork. The CFO begins the process by designing the format that will be used by the entity, communicating specific assumptions (like sales growth, payroll increases, inflation rate, etc.) to the managers and educating the entities managers and staff on how to complete the budgeting forms. The CFO’s staff may even complete a large portion of the budget forms to assistant the line managers and ask for them to review, tweak, correct and submit for approval. The CFO will then review the results, determine whether the individual (departmental) budgets are consistent with the recommended assumptions, consolidate the various departmental totals into a combined entity wide budget and discuss with the “C” Suite Team the results. If necessary, the “C” suite will either refine the budgets and communicate the final results (top down approach) or ask the line managers to rework the budgets and resubmit for approval (bottom up approach). Regardless of the process, the ultimate goal is to have a final budget that all managers and have participated in creating and they “buy in” to the result. Some entities are m ore successful with this final “buy in” than others.

Monitoring: Once the final budget is approved and communicated to all managers the real work begins. Every month, as soon as possible after the month-end close so the month’s results are still fresh on everyone’s minds, a comparison of the actual results for the month are compared to the budgeted amounts. Significant variances are reviewed, analyzed and explained. Corrective action is taken as necessary. Most important are the trends and what is being done to keep the entity on track to meet or beat the budget! This analysis includes both revenues and expenses. Although the primary objective is the success and profitability of the entity, the budget can also be used to monitor the effectiveness of the entities managers.

An effective budgeting process can be a very effective tool in managing the entity and keeping the managers focused on a common goal.

Please contact me with your feedback at reg@regbaker.com.

I am looking forward to hearing from you or your staff with suggestions for future columns.

Reg Baker, CPS PFS

Internet Sales Increase 14%

Internet sales up over 14% this weekend!  Are you online and got your share?  If not, let me know.  I can help!

I have a technology client that is one of the best in Hawaii.  Well recognized and respected.  Been in the business for almost 20 years.  They can have you up and running on the internet for much less than you think.

Follow this link and check them out.  http://www.supergeeks.net/   Deal directly with Kim Kerr (the owner) and let Jim know that Reg sent you.  Let me kow if I can help.

Reg Baker
http://www.regbaker.com/ 

Small Businesses Need Help!

According to the SBA, "the cost of doing business is 36% higher at small companies compared with their larger counterparts, a representative of the Small Business Administration told the Senate. The added costs are the result of government regulations including tax-related costs and environmental requirements. The disparity makes it more difficult for small businesses to compete, said Winslow Sargeant, the agency's chief counsel for advocacy".

A couple of interesting facts; small businesses employ the majority of all workers and are usually the first to recover from a slow economy.  Contrary to popular thought, small business owners are not wealthy and struggle just like everyone else.  In most cases they struggle even more than their employees!

We need to reduce regulation, cut small business taxes and do everything we can to promote small business.  We need to help small businesses to survive so that they can begin hiring again and put America back to work!

Reg Baker, CPA

Getting Better?

Business is beginning to pick up. Getting real busy! Anyone else see this?

I have closed several new accounts in the past month. I am seeing signs that more business is coming. I haven't seen this type of activity for over a year or more. Is it possible that the end of the Great Recession is coming to an end?

Let's hope this trend continues for a long time........