Monday, November 23, 2015
Whether you’re shopping by phone, mail or online this holiday season, here are a few tips to help you shop wisely and save a few bucks, too.
1. Make a list and a budget. Include incidentals, like cards, wrapping paper and eating out.
2. Check out websites that compare prices for items sold online, and at stores in your area.
3. Be aware that shopping apps can collect a lot of information, like your name, address, phone number, email, and Social Security number. Look for apps that tell you what they do with your data, and how they keep it secure.
4. Check out product warranties. Although not required by law, warranties come with most major purchases.
5. Don’t give out personal information for a chance to win the newest tech toy or a free gift card. Your information can be sold or used to commit identity theft.
6. Look for rebates. Some can be redeemed at checkout, but most require you to send documentation to the manufacturer to get your rebate.
7. When shopping online, keep copies of your order number, the refund and return policies, shipping costs and warranties.
8. If money’s tight, consider layaway. You typically make a deposit and pay over time; the retailer holds the merchandise until you’ve paid for the item in full.
9. Shipping to loved ones overseas? Check the U.S. Postal Service’s calendar for shipping deadlines.
10. ‘Tis the season to be wary, especially of charities that don’t — or won’t — provide key information in writing. Search the name of the organization online. Use the words “complaints” or “scam.”
Wednesday, November 18, 2015
If the IRS gives you instructions how to complete a tax form, you can rely on them, right? You would think so. Yet, instructions actually part of the tax law. In fact, there are many tax cases in which well-meaning taxpayers claim their tax position is justified by IRS instructions or publications. In most instances, taxpayers lose, even if they have a credible reading.
Call it the ultimate Catch-22. A long line of cases says the only authoritative sources of tax law are official statutes, regulations, and judicial decisions. Does this impressive weight of authority mean taxpayers can cite form instructions? As is so common with blanket statements in our Byzantine tax system, not always. That is important if you are a confused but well-meaning taxpayer. First, let’s see what you are up against.
Usually, courts reject attempts to rely on IRS instructions, including these:
· Joe claimed a settlement payment was not subject to Social Security taxes, because an IRS publication said settlement proceeds should be reported as “Other Income” on line 21 of Form 1040. Joe lost.
· Sally claimed her housekeeper was an independent contractor, because an IRS publication stated that “individuals who furnish personal attendance, companionship, or household care services to children,” and who are not employees of a placement service, “are generally treated as self-employed for all federal tax purposes.” Sally lost too.
· Jose said that at the time he filed his return, an IRS publication supported his position that a deduction for educational expenses did not have to be reduced by benefits paid by the VA. Jose also lost.
· Ellen claimed her contributions to an IRA were not subject to excise taxes based on language in an IRS publication. It said you can contribute to an IRA if you are not an active participant “during any part of the tax year.” Ellen lost, and the excise tax applied.
· Victor claimed he was a foreign resident despite living in the United States, citing a Treasury Department Tax Guide for U.S. Citizens Abroad that suggested all he needed was a clear intention to return to his country of origin. Victor lost too.
· David argued that an IRS handbook on Domestic International Sales Corporation rules, published after the statute had gone into effect but before the regulations had been issued, was controlling. The IRS won.
· Frankie claimed that a court order regarding custody entitled her to take a dependency exemption on her taxes. After all, the instructions to IRS Forms 501 and 504 were “less than clear and may even be misleading,” although the statute required the custodial parent to sign a release. Frankie lost too.
This is a daunting list. In fact, only a very few courts have held the IRS to what it says in its instructions and publications. But think about the business world. Could a toy manufacturer escape liability by arguing that its instructions how to assemble a toy are not relevant and not part of the product? Hardly, and the IRS should be held to the same standard.
A key taxpayer victory that may give you some hope is , 50 F. Supp. 2d 1281, 1287 (M.D. Fla. 1999). The case is more than 15 years old, but it has apparently never actually been cited by another court on this point! The court stated that “general principles of equity dictate that the IRS should not be allowed to issue instructions for completing its forms and later disavow those instructions.”
The decision shows that the IRS’s own instructions to its forms can sometimes be cited to support a taxpayer’s position. Depending on the facts, it should be possible to hold the IRS to its own forms and its own publications where one is reading them reasonably. After all, shouldn’t the IRS be required to write reasonable instructions, just like a toy manufacturer?
By Robert W. Wood. Source: http://www.forbes.com/sites/robertwood/2015/11/11/amazingly-irs-says-you-cant-rely-on-irs-instructions/
Tuesday, November 10, 2015
According to the U.S. Census Bureau, the nation had more than 9.3 million veterans aged 65 and older in 2013. For most of us, Veterans Day means a time to thank all our former servicemembers. But it’s a sad truth that scammers operate out of greed, not gratitude. Not-so-honest people target older veterans and their families to cheat them out of their hard-earned benefits.
In one type of scam, unscrupulous advisers claim to offer free help with paperwork for pension claims. But these attorneys, financial planners, and insurance agents persuade veterans over 65 to make decisions about their pensions without giving them the whole truth about the long-term consequences. They tell veterans to transfer their assets to a trust – or to invest in insurance products – so they can qualify for Aid and Attendance benefits. What they don’t say? The transaction could cause the veterans to lose eligibility for Medicaid services or the use of their money for a long time.
For veterans experiencing cash flow trouble, there’s a different pitfall. Some companies offer an advance on your pension to get you the funds you need fast. You sign over your monthly pension checks for, say, five or 10 years, in exchange for a lump sum payment of a lesser amount. Pension advances aren’t a cheap way to get cash; fees can be high. And what’s more, the company often requires retirees to buy a life insurance policy – with the pension advance company named as the beneficiary – to make sure that the repayments continue.
If there are veterans in your life, fill them in about these scams. Encourage them to pass it on to their friends, family, and community to help more veterans dodge a bad deal.
Monday, November 9, 2015
In a recent Pew poll, 72 percent of Americans said that they were bothered by how complex the federal tax system is. These taxpayers are justified in their complaints: as of 2015, federal tax laws and regulations have grown to over 10 million words in length.
This figure includes the federal internal revenue code (2,412,000 words long) and federal tax regulations (7,655,000 words long). It does not include the substantial body of tax-related that is often vital to understanding the tax code.
The length of the federal tax code and regulations has grown steadily over the past sixty years. In 1955, the two documents were 1.4 million words in length. Since then, they have grown at a pace of about 144,500 words a year. Today, the federal tax code is roughly six times as long as it was in 1955, while federal tax regulations are about 2.5 times as long.
The length of the federal tax code is a for the overall complexity of the federal tax system. After all, the more there is to know about federal tax law, the harder it is for Americans to file their taxes quickly or correctly.
Tax complexity creates real costs for American taxpayers and the U.S. economy. Americans 6.1 billion hours and $233.8 billon complying with the tax code. Due to increasing tax complexity, over 90 percent of taxpayers now hire professional tax preparers or use tax preparation software.
Why is the federal tax code so complex? In part, it’s because politicians have used the tax code to administer dozens of areas of federal policy – from to to . In part, it’s because defining income and determining tax liability are inherently difficult tasks. And, in part, it’s because politicians have not made any serious effort to simplify the federal tax code for at least thirty years, instead adding on new provisions on top of one another.
To get a sense of exactly how complex the federal tax code is, I’ve selected 100 words at random from the middle of the code:
(A) In general
The net surrender value of any contract shall be determined—
(i) with regard to any penalty or charge which would be imposed on surrender, but
(ii) without regard to any market value adjustment on surrender.
(B) Special rule for pension plan contracts
In the case of a pension plan contract, the balance in the policyholder’s fund shall be treated as the net surrender value of such contract. For purposes of the preceding sentence, such balance shall be determined with regard to any penalty or forfeiture which would be imposed on surrender but without regard to any market value adjustment.
Now, multiply that selection by 100,000 – and you have the federal tax code. Tax complexity creates an unnecessary burden on taxpayers, and simplifying the tax code should be a major priority of any tax reform.
For years between 1955 and 2005, we used figures from the West Publishing Company provided to us in this . To arrive at 2015 figures, we first took a simple word count of the text of Title 26 of the U.S. Code (about 3.8 million words) and Title 26 of the Code of Federal Regulations (about 14.7 million words). However, these figures overstate the length of the tax code, as they include tables of contents, appendices, references, amendments, and effective dates. To capture the number of words in the main body text of each of these documents, we also took a simple word count of the 2005 code, and deflated the 2015 figures by the proportion by which our 2005 count exceeded the 2005 West Publishing Company figures.
Thursday, November 5, 2015
Don’t miss taking part in Small Business Saturday only to be haunted by others’ success stories. Even though the countdown is on to November 28, 2015, it’s not too late to participate in this shopping holiday dedicated to small business. If you’re not sure where to start, take a look back at customers of holidays past.
Participation is easy, said Small Business Saturday spokesperson Nicole Leinbach-Reyhle, with the help of American Express, who started the shopping day in 2010. They offer small businesses of every kind turnkey marketing resources at ShopSmall.com. The free, customizable assets include event ideas and promotional tools to help you spread the word about your Small Business Saturday plans.
“Even without being a traditional retailer, you can still maximize this day,” Leinbach-Reyhle explained. “Have food, music and raffles that customers can enjoy. Thank past customers and promote upcoming specials on future services they may need. You can even sell gift certificates that they can apply at a future date.”
“The big takeaway, though, is to celebrate your business and invite your customers to join you,” she added. “Just be sure to build a big buzz around why they should—after all, that’s what the day is all about!”
The 2015 Medicare open enrollment period runs from October 15 to December 7. It’s the time when Medicare recipients can comparison shop and make changes to their plans. It’s also a time when scammers take advantage of older consumers with ruses like these:
· Someone calls and says you must join their prescription plan or you’ll lose your Medicare coverage. Don’t believe it. The Medicare prescription drug plan (also known as Medicare Part D) is voluntary and does not affect your Medicare coverage.
· Someone calls or emails claiming they need your Medicare number to update your account, get you a new card, or send you Medicare benefit information. It’s a scam. If you need help with Medicare, call 1-800-MEDICARE or go to medicare.gov.
· Someone claiming to be a Medicare plan representative says they need “to confirm” your billing information by phone or online. Stop. It’s a scam. Plan representatives are not allowed to ask you for payment over the phone or online.
· Dishonest companies may offer you free medical exams or supplies. Be wary. It may be a trick to get and misuse your personal information.
Whenever someone asks for your bank account number or your Medicare number, stop. Only give personal or financial information when you have verified who you’re talking to. Call 1-800-MEDICARE to make sure you’re talking to a legitimate representative.
If you believe you or some you know is a victim of Medicare fraud, report it to the U.S. Department of Health and Human Services. Call 1-800-447-8477 or visit stopmedicarefraud.gov.
If you gave out personal information, call your banks, credit card providers, health insurance company, and credit reporting companies immediately. The FTC’s website has more information on health care scams and medical identity theft.
Need help deciding on a plan? For free personalized counseling services, contact your State Health Insurance Assistance Program at shiptacenter.org or call 1-877-839-2675.
Wednesday, November 4, 2015
It’s more challenging than ever to keep customers happy, so an effective customer retention strategy is key when it comes to small business success. That’s in part due to social media, said Chip Bell, customer loyalty expert, renowned keynote speaker, and best-selling author. The competition is fierce, with big companies like Disney, Nordstrom and Zappos setting the bar, he said. “People don’t brag about good service anymore. It must be over-the-top and uniquely enthralling to make them talk, tweet or favor you on a review.”
Bell offered the following tactics small business owners could use to wow their customers and stand out from the crowd:
· Understand them. Customers change all the time. Find ways to stay up-to-the-minute on their expectations and aspirations.
· Include them. People will care when you share. Find ways to make the customer feel like a partner.
· Teach them. Customers value businesses that help them keep up with trends and that share their wisdom.
· Make it easy and effortless. Customers today are extremely time conscious—they detest waiting and prefer hassle-free, convenient experiences.
· Surprise them. Find unique and simple ways to make customers know you care.
For debt collectors who resort to illegal tactics, it must feel like 110 in the shade because 115 law enforcement actions announced this year by the FTC and local, state, federal, and international partners – including 30 just-filed cases – have turned up the heat on law violators. From Buffalo to San Diego and dozens of jurisdictions in between, companies that flout debt collection standards are feeling the burn.
Operation Collection Protection sends the unmistakable message that law enforcers have locked arms in the fight against debt collection gone bad. Coordinated actions by the FTC, Department of Justice, CFPB, 47 state AGs, 17 state regulators, local authorities, and one Canadian agency target a broad range of illegal conduct – abusive collection calls, bogus threats of arrest or lawsuit, deceptive debt buying practices, phantom debt scams, and violations of pretty much every provision of the Fair Debt Collection Practices Act.
The defendants, too, represent the breadth of the industry. Some actions target egregious practices by rogue individuals. Others in the hot seat include some of the biggest names in the business whose illegal conduct affected thousands of consumers. Remedies include asset freezes, injunctions, and millions in redress and civil penalties.
What can companies take from Operation Collection Protection?
1. Illegal debt collection practices are sitting smack in the center of the FTC’s radar screen. New cases filed by the FTC include actions against Delaware Solutions, BAM Financial, and a third lawsuit still under seal. We also announced settlements in pending actions against National Check Registry, LLC, and K.I.P., LLC. (We’ll dive into the details of those cases in future posts, including more about our partnerships with the New York AG inDelaware Solutions and the Illinois AG in K.I.P.) Add it all up and since 2010, the FTC has sued more than 250 debt collectors and secured judgments of almost $350 million. 86 companies and individuals have found themselves 86ed from the industry – outright banned from ever collecting debts again.
2. The stakes just got higher: Violations can result in prison time. Illegal debt collection practices don’t just risk the wrath of civil enforcers and regulatory agencies. They can land collectors behind bars, too. As part of Operation Collection Protection, 19 individuals face indictment, have pleaded guilty, or have been convicted of criminal charges. One scammer was sentenced to more than 17 years in prison for actions stemming from a phantom debt collection operation that targeted Spanish-speaking consumers. A federal judge in Miami handed down a 13-year sentence against a related defendant.
3. Enforcement partners have created a united front against debt collection abuses. Why this historic Operation Collection Protection partnership? In 2014, consumers filed more than 280,000 complaints with federal agencies related to debt collection, earning the industry the unenviable chant of “We’re #1.” When law enforcers join forces, we can work more effectively to help protect the 35% of Americans with credit records who have past-due debts on their reports. And today is just the beginning of this partnership.
4. Industry members have a role to play, too. There’s another partner whose cooperation is key in rooting out illegal practices and encouraging compliance. The FTC has reached out to members of the debt collection industry to work collaboratively to stop questionable practices before they start. Our Debt Collection Dialogues in Buffalo and Dallas focused on that topic and we’ll continue the conversation at our November 18th Dialogue in Atlanta.
Tuesday, November 3, 2015
You walk out of a VA facility, and see a booth with people offering free phones and cell service for veterans, all thanks to a government program. It sounds compelling, right?
“Free” might end up costing you a lot of money. The FTC has heard about booths like these — and what happens next. Months later, veterans who signed up for the program get notices saying they need to provide personal information and documents to prove they meet the income requirements — something the people pitching the program never mentioned. Many veterans find that their incomes are too high to qualify for the program, and face losing service or paying for something they thought would be free.
Here are the facts: there is a government program — called Lifeline — that offers free or discounted phone service. It’s supported by the Universal Service Fund — a fund all telephone companies and other telecommunications providers pay into (a cost you might see passed on to you in the form of a “Universal Service” line charge on your phone bill). But the program is based on income, not whether you’re a veteran. If you don’t meet the income requirements, you don’t qualify.
To learn more about the Lifeline program, check out the FCC’s Lifeline: Affordable Telephone Service for Income-Eligible Subscribers.
Think you might be eligible for the program? Go to lifelinesupport.org and use the pre-screening tool from the Universal Service Administrative Company (USAC) to see if you might qualify for a free phone. The site also lets you search for Lifeline providers in your state.
Even if you don’t qualify, try checking with your phone service provider to see if they offer any discounts for veterans.
Among the many challenges service-oriented businesses face is knowing how to bill for their “product.” Hourly versus fixed-rate billing is an issue that lawyers and accountants have grappled with for years. Trends in those professions indicate the model that small-business billing may also adopt in coming years.
Hourly billing is still the most popular model in professional-service firms. During the recession, however, many law firms and CPAs moved away from the billable hour in favor of flat-rate arrangements.
Flat-rate billing is seen as a simpler model that puts the customer first. While hourly billing is standard in many contracting and service industries, it may seem like a foreign practice to some customers. To them, the hours may seem to add up too fast, or the invoices arrive too frequently. Many customers simply prefer a one-and-done invoice and payment schedule rather than ongoing hourly bills.
On the other hand, hourly billing is an efficient, reliable way to account for the labor that your business puts into delivering services. It may be intimidating to think about setting fixed-rate pricing. What if your total price is too high or too low? What if labor on a project runs over?
Avoid these pitfalls by reviewing the billing records of your hourly accounts. An analysis of past projects’ time to deliver, total hours billed and customer satisfaction will help you set your flat rates.
There are pros and cons to both billing models. Analyze your options and go with the rates that are right for you and your customers.
If you enrolled in insurance coverage through the Health Insurance Marketplace, you are required to report changes to the Marketplace when they happen, like changes to your household income or family size, because they may affect your eligibility for the advance payments of the premium tax credits.
Changes in circumstances that you should report to the Marketplace include, but are not limited to:
· increases or decreases in your household income, including lump sum payments like a lump sum payment of Social Security benefits
· marriage or divorce
· the birth or adoption of a child
· starting a job with health insurance
· gaining or losing your eligibility for other health care coverage
· changing your residence
For the full list of changes you should report, visit HealthCare.gov.
Reporting changes will help you avoid getting too much or too little advance payment of the premium tax credit. Getting too much means you may owe additional money or get a smaller refund when you file your taxes. Getting too little could mean missing premium assistance to reduce your monthly premiums. Therefore, it is important that you report changes in circumstances that may have occurred since you signed up for your plan.
When you report a change, you may be eligible for a Special Enrollment Period. For more information, visit HealthCare.gov.