Enhancements in scam productivity. The IRS-impersonator-scammer community seems to be seeking improved productivity through automation. A robo-call to my house yesterday threatened us with dire consequences, including being sued, for unpaid taxes if we didn’t immediately call a New York City phone number — presumably with credit card and bank account information so they could loot our savings.
It was, of course, a scam call. The last year has seen the rise of the IRS-impersonation phone scam. My wife took the call, and wisely didn’t fall for it, but she found it convincing enough to call me just to make sure I hadn’t gotten us in tax trouble (trust, but verify!).
The IRS doesn’t do this. They will never call unless they write first. You won’t be in dire tax trouble without knowing about it before they call you. If somebody calls you claiming to be from the IRS, assume it’s a scam. Hang up. Provide no personal information, no credit card numbers, no bank info. If you have any questions at all, call your tax pro before you do anything the phone caller asks.
The scam phone number was 347-809-5928, by the way.
The IRS has put up an information page about phone scams. People who receive these calls are encouraged to report them to the Treasury Tax Inspector General for Tax Administration. I did.
Laura Saunders, No, That’s Not the IRS Calling. Just Hang Up.
A Des Moines tax sentence. I missed this when it happened last month, but a Des Moines pharmacist has been sentenced on drug and tax charges arising out of an investigation of illegal sales of painkillers. The Des Moines Register reports that the pharmacist received a two-year sentence in federal prison.
The tax charges are what I find interesting. The pharmacist apparently went through a lot of work to fool the tax preparer for his small family-owned pharmacy, according to the plea deal:
Prior to providing the monthly credit card statements to the accounting firm, Defendant altered the credit card statement by (1) deleting the personal benefit purchases, and (2) increasing the amounts represented as additional inventory from wholesale distributors. Defendant would then provide the altered credit card statements to the bookkeeper, who entered that information…
He also improperly deducted purchases of sports memorabilia, which he now has to surrender to the Feds as part of his sentence. The federal inmate locator website places him at Leavenworth now. The pharmacy remains open, obviously under new management.
Prior coverage: The crime of deducting Cal Ripken’s bat.
Mortgage Credit season. Iowa Finance Authority Announces Launch of 2015 First-Time Home Buyer Tax Credit:
The program provides eligible home buyers with a tax credit against their federal income tax liability every year for the life of their mortgage. The amount of the tax credit for the 2015 program is set at 50 percent of the mortgage interest paid, up to a maximum of $2,000 per year, for up to 30 years. The remaining mortgage interest may be taken as a deduction from taxable income if the home buyer itemizes.
Eligibility for the Take Credit Program requires home buyers to meet household income and purchase price limitations and meet the definition of a first-time home buyer. The federal income limits vary by county, the limits currently range from $65,300 to $111,300 per year. A purchase price limit of $250,000 applies statewide with the exception of federally Targeted Areas where the limit is $305,000.
I think the credit is bad policy, but if you qualify, it would be silly not to use it.
William Perez, Personal Exemptions Reduce Taxable Income
Keith Fogg, More Bad News for Late Filers (Tax Procedure Blog). “The First Circuit in Fahey joins the Fifth and the 10th in holding that the hanging paragraph at the end of Bankruptcy Code Section 523 excepts from discharge the tax liability for any year in which the taxpayer files the return late – even by one minute.”
Robert Wood, NY Tax Preparer Indicted On 31 Tax Counts Could Face 3 Years Prison—For Each. That’s a lot of years.
TaxGrrrl, After BBC Sacks Top Gear’s Clarkson, Viewers Say They Won’t Pay Tax. The UK has an awful tax on televisions to fund the (literally) state-owned media. That system turns programming decisions into political ones.
Tax Justice Blog, Thank You for Being a Friend: States Make Golden Years a Golden Ticket. This left-side blog shows its righteous side:
Poorly targeted tax breaks for the elderly are a costly commitment for many states—and long-term demographic changes threaten to make these tax breaks unaffordable since older adults are the fastest growing age demographic in the country. Moreover, while poverty has often been associated with advanced age, a 2014 US Census report found that Americans over 65 are less likely to be poor than people in their prime working years, further exacerbating the mismatch between the tax breaks offered and needs within the population.
Despite these concerns, lawmakers in many states have proposed further tax breaks for the elderly (click here to read an ITEP brief on this topic). Here are five states where senior tax proposals are on the table:
Iowa: State Sen. Roby Smith recently filed legislation (SF 277) that would remove pensions, annuities, and retirement income from the personal income tax base. So far, the legislation has 23 cosponsors and a similar bill is being sponsored in the House. Note that Iowa already allows a $6,000 exclusion ($12,000 for married couples) for retirement income…
If you want to protect the poor from high taxes, fine. But poverty and age aren’t the same thing.
Prior coverage of SF 277 here.
Jim Maule, Yes, Tax Uncertainty Hurts. ” Tax uncertainty causes economic harm. It also cause other problems, not the least of which is taxpayer anxiety and the opportunity for politicians to grandstand on the issues and to use taxpayer fear as leverage for gathering up campaign contributions.”
Howard Gleckman, The Medicare “Doc Fix” That Isn’t. “The doc fix doesn’t fix much, and what it does repair likely will add hundreds of billions of dollars to the debt in coming years.”
TaxProf, The IRS Scandal, Day 687
Caleb Newquist, Let’s All Enjoy This Story of a Rich Guy Who Procrastinated on His Taxes and Missed Out on a $1 Million Refund (Going Concern). It tells of somebody who made estimated payments, but never got his act together to file — costing him $1 million. Ouch.