How IRS Tax Preparers Lead People Away From Fraudulent Schemes

I have maintained that you flush out the Auditors you get the black money out in India.

 

The same to be the case in The US.

 

Read On;

 

Internal Revenue Service (IRS) (Photo credit: cliff1066™)

 

All citizens of a nation are bound by law to pay tax to the government. It is one of the major sources of revenue which is used for providing the residents of a nation with the basic amenities of life. In the United States, the Internal Revenue Service or the IRS regulates the entire process of tax imposition as well as collection of tax from the people. Recently, the IRS has encountered a lot of tax fraud cases primarily due to the illegal practices of the tax preparers. In most cases, the tax payers are victims of fraudulent activities of the tax practitioners without their knowledge. The IRS has also taken up some steps to do away with this rising phenomenon.

 

 

 

Spreading Awareness

 

Mostly it can be seen that the non English speaking population of USA are the victims of tax preparer fraud. This kind of fraud takes place when the tax preparer manipulates the tax return of an individual claiming refund from IRS. According to the IRS norms, refunds are instantaneously given to the tax payer, but IRS has the authority to audit the refunds made by it within the next three years and thereafter indict penalties on the tax payer. Thus, the entire burden falls on the tax payer for their ignorance in the course of time. In such cases, they have to consult professional tax fraud solicitors to plead their case before the authorities. To stop such occurrences due to the ignorance of the tax payer, the IRS tax preparers have taken up some serious steps to spread awareness among the ignorant tax payers.

 

 

 

Cancelling Licenses

 

The IRS has come across many tax practitioners who do not posses valid license from authentic organization for filing tax on behalf of tax payers. They are con artists who are taking advantage of the ignorant masses and swindling them. The IRS has found many such con artists who were actually from different vocation. But owing to the easy money that they could make by preparing fraudulent tax schemes, they have taken up this profession as well. Illegal practitioners are taken into custody and legal actions have been taken against them.

 

 

 

Bring About A Change of Attitude

 

No matter how hard the IRS tax preparers try, they would not be able to bring about a dynamic change in the scenario without the help of the tax payer. In most cases, it is being observed that tax preparers are reluctant to approach the white collar tax preparers because of their biased opinion and also because of their lack of confidence. The IRS has taken up many initiatives to inform the commoners about these fraudulent schemes, so now it is their turn to come out of their shell for their own benefit. They should avoid the shady tax preparers who provide them with horrific advice like ignoring the letters of penalties from IRS.

 

 

 

Shop Around

 

Since the tax laws are quite complicated and really vast, they are specialized institutes that train aspirant to deal with it properly. The tax payers must engage in a bit of research to find out a qualified and licensed tax preparer who is aware of the recent updates in the tax laws and will be able to prepare an accurate tax return on their client’s behalf with their expertise. They should learn from the mistakes of the ignorant tax payers and take up some initiatives to safeguard themselves from falling prey to the same trap.

 

 

 

Since paying tax is our primary duty towards the nation, we should take every possible step to accomplish this obligation. In case you have already fallen prey to a fraudulent scheme, then consult a professional tax fraud solicitor to avoid any further trouble. Help IRS to eradicate this problem by being a cognizant citizen.”

 

Guest Blog from Celina jones

 

Related articles

 

• Tax preparer fraud creates big refunds, big problems for taxpayers (mercurynews.com)

 

US,Europe Tax Evasion Corruption Money Laundering

Many Indians ,especially the younger generation including and especially my son, is never tired of telling me how bad India is and how good, orderly and Citizens are in the US and Europe.

I have agreed to the extent that India is corrupt and needs a Clean up and at the same time The West is not a Puritan either.

If the scams in India are in crores of Indian Rupees it is in Millions of US Dollars and Pound Sterling abroad.

This post is an eye opener for those who praise the citizens abroad for their Dutiful citizenship.

You dot evaluate a culture by mere standing in Queues and cleanliness on the road.

I have my brother’s Grand son living in Sweden for quite a few years now.

He used to tell me how responsible and helpful the Swedes are in helping out citizens in need of Government assistance, be it a form filling even.

Yes .

I agreed and informed him that he would find, in the course of time, how corrupt and morally decaying a Society Sweden is in terms of personal Life style and how it ruins family life over there.

Now,though he still appreciates the good things over there, he has realized that a Culture needs to be evaluated on the over all aspects of Life.

Having said this,let me add that if only we develop the Industriousness, attention to Detail, Public Spirit and  responsible citizenship…!

The following information is not to justify our corrupt practices but to point out that the West is decaying excepting in a material comforts  which is contributing to it s decay.

Corruption

“Tax evasion poses an acute challenge to developing and developed countries. From 2000 to 2010, illicit financial flows deprived developing countries of US$5.86 trillion. Tax evasion is not a victimless crime – for people in the developing world, the consequences of tax evasion can be a matter of life and death. If developing countries could recover this untaxed wealth, it could mobilise enormous resources for improving their public services and their citizens’ lives.

The new Eurodad report “Secret structures, hidden crimes” finds that the hidden ownership of companies and other legal structures facilitates tax evasion, corruption and related crimes. It outlines the different ways that individuals abuse companies, trusts and other vehicles in order to evade taxes.

It argues that better information about who owns and controls these companies and other set-ups is key to bringing trillions of dollars of offshore wealth back into the tax net and helping to prevent capital flight in the future.

It argues that all forms of tax evasion can be more effectively fought where they are recognized as a “predicate offence” of money laundering as this makes it a criminal offence to help someone to hide and shift tax-evaded money. For some countries tax evasion is already a predicate offence, but only in a limited set of circumstances”…

According Oxfam, tax evasion by
individuals costs developing countries
US$124 billion. Christian Aid has found that,
even using a very conservative estimate,
developing countries lose the equivalent of
US$160 billion per year to tax evasion by
multinational companies using false invoicing
and blatant transfer mispricing. If this sum
were channelled to developing countries’
budgets, with allocation unchanged it
would be enough to save the lives of 1,000
children every day. Over the past decades,
tax evasion by individuals has led to the
accumulation of US$21–32 trillion of untaxed
offshore wealth, according to recent research
by the Tax Justice Network (TJN). About
25-30% of this (US$5.3–9.6 trillion) is from
developing countries.
Money laundering is the process of
concealing the source of money obtained
by illegal means. It can be easier to hide
tax-evaded income because, unlike other
criminal proceeds, the money generally
comes from a legitimate source initially. This
money only becomes illegal later on, when
the full amount of tax due is not paid. This
generally involves the taxpayer concealing
or under-declaring their income. Tax evasion
and money laundering therefore go hand”..

Hidden ownership facilitates
corruption and crime
Beneficial ownership transparency would
also help address illicit capital flight, which
cost developing countries an estimated
US$859 billion in 2010. These flows comprise
proceeds of corruption, crime and tax
evasion. The United Nations Office on Drugs
and Crime (UNODOC) estimated the total
value of money laundering to be around
US$2.1 trillion in 2009 – equivalent to 3.6% of
global GDP.
The UN and World Bank STAR (Stolen Asset
Recovery Initiative) published some 150
corruption cases involving hidden ownership
of a corporate vehicle either to launder
money or as part of the initial scam. Global
Witness has produced a number of case
studies on corrupt officials laundering their
money abroad, while researchers have found
that sub-Saharan Africa has lost US$700
billion to illicit capital flight since 1970,
dwarfing its outstanding debt of US$175
billion. Corruption could also be curbed with
strong AML rules.
Hidden ownership masks
accountability for human rights and
environmental violations
When a human rights violation takes place,
those affected can find it difficult to take
a case to court if the parent company or
management further up the ownership chain
cannot be identified. The same goes for
environmental violations.”…

Use of complex structures to
circumvent financial regulation
Before the financial crisis, many banks
used complex and even illegal structures to
hide losses that would later be bailed out
by taxpayers. UK bank Northern Rock did
this using an investment vehicle based in

Guernsey registered in the name of a real
charity, without the charity’s knowledge. If
ownership information was made publically
available online people and organisations
would be able to check if their identity was
being abused in this way.
Tax avoidance
Greater organisational transparency and
beneficial ownership disclosure would
make it easier to understand aggressive tax
planning and avoidance schemes that exploit
legal loopholes when transactions take
place between jurisdictions with different
rules. Many of these schemes exist in a
contested grey area between what is legal
and illegal. One telling example of the impact
of tax avoidance in developing countries
is ActionAid’s case study of UK brewing
giant SABMiller.”

http://eurodad.org/wp-content/uploads/2013/01/Secret-structures-hidden-crimes_summary-online.pdf

http://www.financialtaskforce.org/2013/01/14/secret-structures-hidden-crimes-urgent-steps-to-address-hidden-ownership-money-laundering-and-tax-evasion-from-developing-countries/

Related articles

• Criminal crackdown on tax evasion (bbc.co.uk)
• Bern plans to make tax evasion a Swiss crime (thelocal.ch)

Fiscal Cliff US Bill Details Overreaction From Corporates

There is furor in the US over the US Bill on Taxes which was passed yesterday with a lot of maneuvering by Obama Administration.

 

There has been a hue and cry over the Bill stating that it will increase inflation for it aims at increasing Revenue without a cut in spending.

 

US ‘Fiscal Cliff Bill’ Reaction

 

Those who object to this Bill really mean  spending on Social Welfare and expenses  accruing on account of relief  to the middle Income and Lower Income Group.

 

As expected these Groups welcome the Bill.

 

No body suggests that there should be a cut in Military spending or conspicuous consumption.

 

They are enraged that The Corporate are not given more, forgetting the doles for Corporate misadventures in the recent past.

 

If the US Economy is to improve,it is only effecting a curb on military spending and Conspicuous consumption.

 

These are the details  of The US Bill.

 

Story:

—Income tax rates: Extends decade-old tax cuts on incomes up to $400,000 for individuals, $450,000 for couples. Earnings above those amounts would be taxed at a rate of 39.6 percent, up from the current 35 percent. Extends Clinton-era caps on itemized deductions and the phase-out of the personal exemption for individuals making more than $250,000 and couples earning more than $300,000.

—Estate tax: Estates would be taxed at a top rate of 40 percent, with the first $5 million in value exempted for individual estates and $10 million for family estates. In 2012, such estates were subject to a top rate of 35 percent.

—Capital gains, dividends: Taxes on capital gains and dividend income exceeding $400,000 for individuals and $450,000 for families would increase from 15 percent to 20 percent.

—Alternative minimum tax: Permanently addresses the alternative minimum tax and indexes it for inflation to prevent nearly 30 million middle- and upper-middle income taxpayers from being hit with higher tax bills averaging almost $3,000. The tax was originally designed to ensure that the wealthy did not avoid owing taxes by using loopholes.

—Other tax changes: Extends for five years Obama-sought expansions of the child tax credit, the earned income tax credit, and an up-to-$2,500 tax credit for college tuition. Also extends for one year accelerated “bonus” depreciation of business investments in new property and equipment, a tax credit for research and development costs and a tax credit for renewable energy such as wind-generated electricity.

—Unemployment benefits: Extends jobless benefits for the long-term unemployed for one year.

—Cuts in Medicare reimbursements to doctors: Blocks a 27 percent cut in Medicare payments to doctors for one year. The cut is the product of an obsolete 1997 budget formula.

—Social Security payroll tax cut: Allows a 2-percentage-point cut in the payroll tax first enacted two years ago to lapse, which restores the payroll tax to 6.2 percent.

—Across-the-board cuts: Delays for two months $109 billion worth of across-the-board spending cuts set to start striking the Pentagon and domestic agencies this week. Cost of $24 billion is divided between spending cuts and new revenues from rule changes on converting traditional individual retirement accounts into Roth IRAs.

 

http://news.yahoo.com/details-senate-bill-averting-fiscal-cliff-083204095–finance.html

 

Reactions:

That’s not what the Pledge says. Signers pledge to the taxpayers of their Congressional district (or state in the case of senators) and to the American people that they won’t support a net income tax increase. The Pledge is made in writing to voters before a politician is elected so that these voters can hold the politician accountable on the tax issue. Pledge enforcement is done by voters, not by Grover Norquist or Americans for Tax Reform.

freedomoutpost.com

 

On Income Tax Increase.

Become so hysterical that they have a petition signed.

 

‘

Fact: That’s not what the Pledge says.  Signers pledge to the taxpayers of their Congressional district (or state in the case of senators) and to the American people that they won’t support a net income tax increase.  The Pledge is made in writing to voters before a politician is elected so that these voters can hold the politician accountable on the tax issue.  Pledge enforcement is done by voters, not by Grover Norquist or Americans for Tax Reform.

---

Myth: The Taxpayer Protection Pledge “Ships Jobs Overseas.”

Fact: This baseless assertion had its origins in the bowels of the DCCC.  It makes no logical sense.  It has been debunked by several large fact checking services, including FactCheck.org, Politifact, and the Associated Press.  FactCheck.org called the charge, “blatantly false.”  They further noted that, “[The Pledge] leaves ample room for elimination of any number of special tax breaks so long as the overall level of taxation is not increased. To claim that this ‘protects’ any particular provision of the tax code is simply untrue.” The AP said that, “the pledge… makes no promise to protect [particular tax preferences or taxpayers]. It says nothing about jobs. It’s a pledge to oppose tax increases.”  As you will see below, the Pledge does not protect any particular tax preference.

---

 

 http://atr.org/myths-facts-taxpayer-protection-pledge-a6979#ixzz2Gp4mNQh0 

 

“

Iowa Republican Party Chairman A.J. Spiker on Tuesday urged the two Iowa Republicans in the House, U.S. Reps. Steve King and Tom Latham, to vote no on the “ill-advised bill.”

“The bill passed by the Senate (Tuesday) morning raises taxes without any meaningful spending cuts. The so-called fiscal cliff deal will only hurt middle class families, continue out-of-control government spending and fails to address the $16.5 trillion federal deficit,” Spiker said in a release.

Another U.S. representative from Iowa, Bruce Braley, a Democrat, said he would vote for the measure. The positions of U.S. Reps. Leonard Boswell and Dave Loebsack, the other two Democratic representatives from Iowa, were not known.

U.S. Sen. Tim Johnson, D-S.D., was among the 89 affirmative votes early Tuesday. He said the package is imperfect, but protects the middle class from tax increases.

“It will keep tax rates the same for the vast majority of Americans,” Johnson said in a release.

“It was also important for me that the legislation asks millionaires and billionaires to pay the same rates they did during the Clinton Administration. We can’t get our fiscal house in order on the backs of the elderly and students. The richest among us will now pay a little more to improve our fiscal situation.”

 

http://siouxcityjournal.com/news/local/govt-and-politics/tri-state-reaction-to-fiscal-cliff-deal-is-mixed/article_b17ca176-e1fb-5817-a2f2-90ce91fc130a.html

 

Check out Indian taxes and I leave it  to your judgement.

 

http://www.allindiantaxes.com/

 

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• With Lame Fiscal Cliff Deal, Congress Can’t Even Kick The Can Right

 

‘Sin Tax On Tobacco, Alcohol’ Why Not ‘A Bribe Tax’

The 12th Plan document by the Government of India is to submit a proposal to The National Development Council‘(NDC) a Sin Tax on Tobacco and Alcohol.

Laudable indeed.

Sin Tax On Tobacco and Alcohol

How about a Sin Tax on Bribe?

Even a .1% on those who contest elections based on their current assets/income and subsequent increase in the assets would definitely net a better return!

It might also consider Sin Tax on ‘Rape’ and on  ’Politicians over 60′!

India has mooted the introduction of a designated “sin tax” to finance a part of the health budget during the 12th five year plan (2012-2017).

The 12th plan document, to be submitted to the National Development Council (NDC) presided over by Prime Minister Manmohan Singh, says “a sin tax can lead to reduced consumption of harmful items such as tobacco and alcohol and could be considered”.

http://articles.timesofindia.indiatimes.com/2012-12-22/india/35968481_1_sin-tax-tobacco-people-in-india-drink

What is a Sin Tax?

“A sin tax is a kind of sumptuary tax: a tax specifically levied on certain generally socially proscribed goods and services, for example alcohol andtobacco, candies, soft drinks, fast foods, coffee, and gambling.’(wiki)Philippine President Benigno Aquino III defeated the Catholic Church and the tobacco lobby by using his popularity to push through twin laws to provide free condoms to the poor and boost taxes on cigarettes and liquor.

 http://www.sfgate.com/world/article/Philippines-OKs-sin-tax-free-condoms-4136956.php#ixzz2FwFOmbQS

‘

 

How to File Income Tax Returns in a Kiosk

The Income Tax Department has introduced a facility  to file Income Tax Returns.

Kiosks are being established in various centres of Bangalore especially in Malls and other places where people turn up in huge numbers

A Kiosk on the line of ATM will be installed and you can file your Tax Returns there.

How to use the Kiosk.

At the kiosk, Press the ‘Start ‘Button’.

Enter your Name, PAN number and Email.

The insert  your Form 16.

Your documents will be scanned and returned.

Tick the check list where you will be asked about the documents you have submitted.

The IT Return will be sent to you at your email ID.

Then you can file the returns independently or go to the kiosk and select File option.

Kiosks are internet enabled and they prompt you at evry step of the operation.

The initiative will ensure that the taxpayers are not required to travel to I-T offices or other special camps for performing tasks like filing of returns, tracking refunds and applying for fresh PAN cards.

‘For the first time, the Income Tax department has decided to set up special ‘tax kiosks’ in residential areas and localities for facilitating a host of taxpayer related services in view of the forthcoming tax returns filing season.

The initiative will ensure that the taxpayers are not required to travel to I-T offices or other special camps for performing tasks like filing of returns, tracking refunds and applying for fresh PAN cards.

The department has also decided to run and station ‘mobile vans’ in smaller cities, manned by I-T trained personnel, who would help taxpayers perform their tasks in view of the July 31 deadline of filing I-T returns.

The innovative measure has been taken by the department after Finance Minister Pranab Mukherjee had recently asked the I-T top brass, during their conference held here, to execute new and innovative ideas for the welfare of taxpayers.

“The department had run a pilot project in this regard last year. The plan will be executed this year countrywide”, a top I-T department official said.

The department, in various cities in the country, will talk to the Resident Welfare Associations (RWAs) and other such bodies for establishing these temporary kiosks at apartment blocks, large office complexes and other central locations of the city, the official said.

The ‘mobile vans’, in smaller cities, will act as a ‘single window’ for salaried and other small and marginal taxpayers.

Metros and other big centres will have the ‘tax kiosks’.

These vans and kiosks, which will be stationed at one location for 1-2 days, will be manned by trained Tax Return Prepares (TRPS) who help the taxpayers in filing returns.

The department will also issue advertisements in order to publicise the location and timing of these kiosks and vans.

http://www.firstpost.com/investing/now-file-your-i-t-returns-at-a-kiosk-mobile-van-near-you-356458.html

Related.

http://www.quikr.com/Taxation-Audit/y229?gclid=CNWkp-GW8LACFQp76wod3yb8uQ

If you are an NRI, you would have to file yourincome tax returns for 2011-2012 if you fulfill either of these conditions:

-Your taxable income in India during the year 2011-2012 was above the basic exemption limit of Rs 1.8 lakh OR
-You have earned short-term or long-term capital gains from sale of certain investments and assets, even if the gains are less than the basic exemption limit.

“What this means is that firstly, NRIs do not get the benefit of differential exemption limits on basis of age or gender that is available to Resident Indians. Secondly, for NRIs, certain short term or long term capital gains from sale of investments or assets are taxed even if the total income is below the basic exemption limit. These include short term capital gains on equity shares and equity mutual funds where tax rate is 15% and long term capital gains on securities and assets where tax rate is either 20% or 10% without indexation,” explains Vaibhav Sankla, Director, H&R Block India.

There is an exception: If your taxable income consisted only of investment income (interest) and/or capital gains income and if tax has been deducted at source from such income, you do not have to file your tax returns.

Having laid down the ground rules, let us look at some of the important practical aspects on filing tax returns in India.

1. Mandatory e-filing if taxable income is more than Rs 10 lakh

Recently the Central Board of Direct Taxes ( CBDT) in India issued a notification which has made it mandatory for individuals who have annual gross total income (that is, income before any Chapter VI deductions like Sec 80C etc) in excess of Rs 10 lakh to file their returns online from financial year 2011-2012.

This applies to all individuals including non resident Indians. So as an NRI with gross total income exceeding Rs 10 lakh in 2011-2012, you must file your returns electronically. There are several options for you to do that. You can file your returns on the income tax website for free. But the process can be cumbersome. You would need to download a software, fill in your details and upload an XML file. If you do not attach a digital signature, you would need to print and send a copy of the acknowledgement (known as ITR-V) to the tax office in Bangalore within 120 days from the date of uploading the xml file.

The other, more user-friendly option is to use an online filing website such as hrblockindia.com, taxsmile.com or elagaan.com. These websites offer end-to-end e-filing service with an option to subscribe for digital signature as well. The fees and features vary among these.

A detailed article on e-filing websites will follow soon.

http://timesofindia.indiatimes.com/nri/other-news/5-tips-for-NRIs-while-filing-income-tax-returns-in-India/articleshow/14435552.cms

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• Video: Who Needs to File an Income Tax Return? (turbotax.intuit.com)