Kay also reports the good news that “Refund Anticipation Loans Under the IRS Gun Again”. She tells us that the IRS is considering prohibiting tax return preparers from “obtain[ing] a taxpayer's consent to disclose or use tax return information for the purpose of soliciting taxpayers to purchase such products.” The IRS says it is "concerned that RALs and certain other products may provide tax preparers with a financial incentive to take improper tax return positions in order to inappropriately inflate refund claims”.
I have long been against Refund Anticipation Loans in general and the sale of RALs by tax preparers in particular, and have posted so here on several occasions in the past. I hope the IRS does initiate some prohibitions.
The MOTLEY FOOL discusses the RAL in “Good Riddance to Tax Refund Loans?”. Fool Rick Aristotle Munarriz provides a personal example of RAL fraud-
“I can vouch for the fraud part. Someone stepped into an H&R Block office last February to file a bogus tax return in my name and a second one in my wife's name. Taking advantage of H&R Block's Instant Money service, they walked out of the office with hundreds of dollars on a pre-paid debit card from HSBC.
Even after clearing the matter, we were unable to file our legitimate taxes electronically last year and had to endure months of harassing phone calls from HSBC.”
* Russ Fox of the TAXABLE TALK blog has announced that the “winner” of the title of “The 2007 Tax Offender of the Year” is Gene Haas. Russ ends his post as follows:
“While I'd love to not have anyone commit such a bozo tax crime as Mr. Haas did, I fully expect to see at least one similar story in the coming year. I have complete confidence in Americans to commit bozo tax crimes.”
* Before becoming Executive Director of the National Society of Tax Professionals, Beanna Whitlock was the Director of National Public Liaison for the Internal Revenue Service for 2003 and 2004. As such she was in charge of overseeing the annual IRS Nationwide Tax Forums.
When she took over the forums were run by PAI, a private company based in Silver Spring, Md. Speaking at the 2006 NSTP regional conference in Chicago, Beanna told us that when she got a report from PAI showing that the Forum did not generate any net income she could not believe it, having seen firsthand the activity at the forums. She called for a change in management and a review of PAI.
An article from WebCPA on Thursday reported that “Tax Forum Host Gets 5-Year Jail Term”. The article said “The president of a company that hosted tax forums for the Internal Revenue Service has been sentenced to five years in prison for defrauding the IRS of more than $1 million” and reported that from 2000 through 2003 PAI president Brosim S. Ekpone and PAI vice president Ketan R. Shah “allegedly under-reported the tax forum income and over-reported the expenses so there appeared to be no surplus income to apply to the management fee at the end of each fiscal year”.
Good catch, Beanna!
* I join TAX GIRL Kelly Phillips Erb in offering congrats to Jim Maule, as Jim’s blog “Mauled Again Wins a Blawgie!”
* NATP’s TAXPRO WEEKLY reports that “Five GM Models Certified as Qualified Hybrid Vehicles”. According to NATP, “The IRS has acknowledged the certification by General Motors Corp. that five of its model year 2008 vehicles meet the requirements of the alternative motor vehicle credit as qualified hybrid vehicles.”
The credit amount for the certified 2008 hybrid vehicles are:
Chevrolet Tahoe Hybrid (2WD) - $2,200
Chevrolet Tahoe Hybrid (4WD) - $2,200
GMC Yukon Hybrid (2WD) - $2,200
GMC Yukon Hybrid (4WD) - $2,200
Saturn Vue Green Line - $1,550
* Now that BO has won the Iowa Democratic caucus TAXVOX comments on his tax proposals in “Obama: Big Win, Small Change”.
“Obama vows to roll back the President Bush's 2001 tax cuts and use some of the money to create a new "making work pay tax credit" of $500 for singles and $1000 for couples. He'd enact an above-the-line credit for homeowners who don't itemize, and a credit for seniors earning less than $50,000. His enthusiasm for tossing out tax credits to various constituencies hardly represents change. It is, in fact, a throwback to the (Bill) Clinton Administration, which made such targeted tax breaks into an art form.
Perhaps more interesting is what Obama is not proposing. He has no plan for fixing the Alternative Minimum Tax—a $1 trillion problem over the next decade that cannot be ignored. And, like Hillary Clinton, he is mute on tax reform.”
* The headline at the Tax Almanac site reads “House Protects Millions of Families from AMT”. Pardon my French, but bullshit! Talk about putting a positive spin on something.
The headline should have read “House and Senate Irresponsibility to Cost IRS Millions and Cause Delays in Processing Returns and Refunds”!
I have seen the headline before regarding the final passage of the AMT fix, and I suspect it is from a House or Republican press release.
* Say it isn’t so!
The blurb on my Comcast home page read, “Bush To Send More ‘Rebate’ Checks?”. I clicked on and was taken to the article “Bush Exploring Economic Stimulus Package”, which said that President Bush is exploring an economic stimulus package to reinforce the U.S. economy, but did not make mention of new rebate checks.
The rebate checks sent out as part of George W’s first “economic stimulus package” were a disaster. Let’s hope there are no plans for a repeat.