Monthly Archives: June 2015

Tax-Related Identity Theft Is Exploding – What Is The IRS Doing And What Can You Do?

While identity theft continues to present a great burden to businesses, organizations and governments including the IRS, it’s individual victims are left to bear the lions share.  In the past few years tax-related identity theft has become rampant.  Tax-related identity theft occurs when someone uses your personal information including your social security number to file a tax return and claim a refund.  The IRS paid out 5.8 billion in falsely claimed refunds in 2013.

For what it’s worth, the IRS has ramped up its efforts to combat identity theft.  Some of the steps the IRS is taking include:

  • Identify new steps to validate taxpayer and the tax return information at the time of filing, such as reviewing transmission of the tax return including improper and repetitive use of internet protocol numbers, internet address from where the return originated, computer device identification data tied to the return’s origin.
  • Sharing of suspected identity fraud information and analytics from the tax industry to identify fraud schemes and locate indicators of fraud patterns
  • Increased taxpayer communication regarding identity theft

But is this enough to protect against potential tax-related identity theft?   I don’t think so. Remember that in a tax-related identity theft typically the perpetrator has already obtained, from other sources, your social security number, birth date, address, etc.

This past filing season we have had the unhappy task of telling a handful of clients that they likely have become an identity theft victim.  When we electronically submit a return and the IRS rejects it because a return for the taxpayer has already been filed, this is a case of identity theft.

So here are some of the things you should do to protect yourself against identity theft.

Know the warning signs

  • You do not receive your refund within 20-30 days after filing your tax return.
  • You receive an IRS letter or notice in the mail that indicates that
    • You owe additional tax,
    • Your refund has been offset to pay for additional tax,
    • You have collection action taken against you for a year you did not file a tax return,
    • More than one tax return was filed for you,
  • You receive a call from someone claiming to be an IRS agent or officer.

Note that the IRS will never make contact with you via phone or e-mail.  The IRS only sends mail correspondence in order to communicate with taxpayers.

 

Reduce your risks

  • Don’t carry your social security card or any document with your social security number on it.
  • Do not give your social security number to someone just because they ask – unless it is absolutely necessary and you know who is asking and know they have a valid reason for asking.
  • Regularly check your credit report – possibly annually. A credit report can be obtained from www.annualcreditreport.com, or call toll-free 1-877-322-8228, or by completing an Annual Credit Report request form and mail to: Annual Credit Report, Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.
  • Review your bank and credit card statements regularly.
  • Protect your personal computers by using firewalls, anti-spam/virus software, update security patches and change passwords for internet accounts frequently.
  • Don’t give personal information over the phone or via mail unless you have initiated the call/correspondence or are sure you know who is asking.
  • Protect your personal financial information at home and on your computer, especially if you have roommates, employ outside help, or are having work done in your home.
  • Do not ever respond to any phone call, e-mail, text message, social media channels, or any type of electronic communication, from anyone claiming to be an IRS agent/officer. The IRS initiates contact with taxpayers by mail only. Contact us before you share any information with any individual claiming to be from the IRS or any other tax authorities.
  • If you are not currently affected by identity theft, but you may be at risk because your wallet/purse was stolen, or you have questionable credit card activity, contact the IRS Identity Theft Hotline at 1-800-908-4490.

Steps you should take if you do become a victim of identity theft

  • Contact us if you believe you have become a victim of identity theft.
  • Respond immediately to any IRS notice that you have received by regular mail (assuming you have received one).  Call only the number provided in the notice.
  • Contact IRS Identity Theft Hotline at 1-800-908-4490.
  • Complete and submit to the IRS, Form 14039, Identity Theft Affidavit.
  • Continue to pay your taxes and file your tax return even if you must do so on paper.
  • Contact your state tax authorities to see if identity theft has impacted your state tax filings.
  • Contact one of the three major credit bureaus to place a “fraud alert’ on your credit records:

Don’t become a victim of identity theft. Be aware that this is an exploding problem.  Protect yourself to avoid becoming an identity theft victim.

If you have any questions or concerns about identity theft, please contact us.

Herman & Company CPA’s proudly serves Bedford Hills NY, Chappaqua NY, Harrison NY, Larchmont NY, Rye NY, Scarsdale NY, White Plains NY, Mt. Kisco NY, Pound Ridge NY, Bronx, Manhattan, Greenwich CT and beyond.

 

Are You Teaching the “Mental Game?”

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“Golf is 80% mental, 10% ability, 10% luck” - Jack Nicklaus

Mind over Body

If so much of the game is mental, as so many top touring pros contend, why do so few club pros teach the mental game? Many focus almost exclusively on the physical game: swing, stance etc.

I’ve been wondering about this for a while.

It started about five years ago when I was watching an amateur golf tournament. As the winner walked off the 18th green, he nodded to a man in the crowd. I’ll call that man Fred.

I was curious why the golfer had done this and asked Fred about it. It turns out that Fred was the winner’s “golf psychologist”. Fred said he helped the golfer with his mental game.

I wasn’t familiar with the term golf psychologist. But since then, I’ve done a lot of research and become convinced about the importance of the “mental game”.

I now spend a lot of time on my mental game. I think I’ve lowered my handicap as a result.

According to Douglas Juola, author of “GolfNosis: Tee Time for Your Mind” “ … it has been proven that concentrating on the mental side of the game can help golfers by improving their focus, concentration, consistency, and by removing distractions and negative self talk “…

He adds that almost every top professional golfer on the tour uses a golf psychologist or hypnotist.

The Opportunity

Of course, a typical club golfer will probably not hire rock star golf psychologists such as Bob Rotella or Gio Valiante (both PhD’s). But that golfer could hire his or her club pro.

In an era of declining play and diminishing lesson revenue, teaching the mental game could be a win-win-win for your members, your club, and you.

It could help your members improve their games and increase their loyalty to the club. It could also mean more revenue for you.

Getting Started

Your members might be initially reluctant to hire you as their golf psychologist. They might not even know what one is.

They may understand the importance of mental fitness. But you’ll need to educate them about the mental game and how it can improve their overall performance on the course.

You might start by offering a series of one hour workshops.  Topics could include:

  • Maintaining a positive attitude
  • Improving your concentration
  • Visualizing your swing
  • Playing under pressure
  • Monitoring your performance

You might limit attendance in any one workshop to, say, 10 members. Also, you could charge by the workshop or for the entire program.

Use your clinic fees as a benchmark. Perhaps, a single workshop would cost $50 and the entire five workshop series would cost $200.

This may, initially, not be a huge money maker for you. But it could be an effective way to introduce your members to the concept.

The Club Pro as Golf Psychologist

If a member finds the workshops useful, he or she may hire you as his/her golf psychologist.  That is the Holy Grail.

You are no longer waiting around for members to schedule a lesson. You are now a “Coach,” not just a teacher.

As I pointed out in the January and February issues of The Golf Pro Advisor, there are many advantages to being a coach. These include: higher fees and an ongoing relationship with a member.

When you launch your “mental game” program,” you’ll need to promote both the workshops and the coaching program.

Mental Game Teaching Qualifications

If you’ve never taught the mental game, you may wonder whether you’re qualified to do so. You probably are.

You know the mental game even if you’ve never taught it. Otherwise, you wouldn’t be a successful golf pro.

But in order to teach the mental game, you need a formal program. You need to “preach what you practice.” That means putting it on paper.

There are a variety of ways to develop your program. One is to get certified to teach the mental game.

To find out more about certification, ask your fellow head pros for recommendations. Otherwise, you can do a Google search for certification programs.

There is also plenty to read on the subject. Amazon lists 526 titles under the term “mental game of golf.”

In addition, there are articles and resources galore on the Internet. A Google search under the term “Mental Game of Golf” yields 32 million results.

By combining what you already know with some research, you can develop the raw material for your program.

Then, you’re on your way to creating a new line of business. It’s also a new way to maximize your income and value to your club.

Could Wal-Mart spur tax reform?

Westchester NY accountant Paul Herman of Herman & Company CPA’s is here for all your financial needs. Please contact us if you have questions, and to receive your free personal finance consultation!

By Bankrate

Wal-Mart, the world’s largest retailer, is both loved by millions of bargain-seeking consumers and hated by millions of others, including activist groups who see it as the epitome of corporate greed.

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The Bentonville, Arkansas-based company also might be the catalyst that prompts Congress to finally act on long-stalled tax reform.

This week the Americans for Tax Fairness, or ATF, a liberal-leaning Washington, D.C., consortium of other advocacy groups, released a report charging Wal-Mart with using an “extensive and secretive web of subsidiaries located in countries widely known as tax havens.”

And although ATF questions the legality of some of Wal-Mart’s financial moves, most tax experts say the company is adhering to convoluted corporate tax laws.

Wal-Mart in Luxembourg

So just what is Wal-Mart accused of doing in the international tax arena?

ATF says that research compiled by the United Food & Commercial Workers International Union shows Wal-Mart has 22 shell companies in Luxembourg. Twenty of the companies were established since 2009 and five in 2015 alone, according to the report.

But as for retail outlets, ATF says that Wal-Mart does not have one store in that European nation, which is infamous as a tax haven country.

Dollar-wise, ATF says Wal-Mart has transferred ownership of more than $45 billion in assets to Luxembourg subsidiaries since 2011.

And as for taxes, the company reported paying less than 1 percent in tax to Luxembourg on $1.3 billion in profits from 2010 through 2013.

Added to a long international tax list

Wal-Mart is not alone in using its global presence to trim, or even eliminate, its U.S. tax liability. Other well-known American firms with worldwide reaches — Apple, Amazon, Starbucks, Goodyear Tire and Wynn Resorts to name a few — have managed to pay the U.S. Treasury very little or even nothing by making specific tax code moves.

Typically, these companies set up subsidiaries in lower tax nations and get U.S. tax credits for the payments they make abroad. Others move their corporate headquarters to a foreign location, on paper at least — a process known as inversion.

Problem with repatriation

But would changes to the U.S. international tax system be better or worse? One of the most frequently discussed ways to return U.S. companies fully to the domestic tax fold is to offer incentives.

This possibility, contends ATF, is part of what it calls the big box retailer’s long game.

Wal-Mart, says the advocacy group, “apparently hopes the U.S. Congress will reward its use of tax havens by enacting legislation that would allow U.S.-based multinationals to pay little U.S. tax when repatriating current low-taxed foreign earnings (such as to fund infrastructure spending) and pay no tax with the adoption of a territorial tax system.”

Tax change isn’t easy or cheap

Point taken. But any tax code changes will produce winners and losers. The goal is to offset the short-term losses in exchange for longer-term corporate tax benefits – not for just the companies, but also for Uncle Sam.

Changes to U.S. taxation of multinational companies already have been getting a closer look. Our combined state/federal corporate tax rate of 39 percent is the highest among global developed countries and there is bipartisan agreement that changes need to be made to bring that rate down so that truly U.S.-based firms remain internationally competitive.

Now that Wal-Mart’s role in corporate tax-reduction maneuvers is under the spotlight, the company’s size and notoriety might just spur Congress to finally make some Internal Revenue Code changes.

Herman and Company CPA’s proudly serves Bedford Hills NY, Chappaqua NY, Harrison NY, Scarsdale NY, White Plains NY, Mt. Kisco NY, Pound Ridge NY, Greenwich CT and beyond.

Any U.S. tax advice contained in the body of this website is not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.