February 15, 2005 Tax Preparation Scam may cause Unlicensed Tax Preparers to Register In an effort to improve professional standards in the tax preparation industry, the Senate drafted legislation that would require all paid tax preparers who are not already Attorneys, Certified Public Accountants or Enrolled Agents to register with the Internal Revenue Service. Between 25% and 50% of all 1,200,000 known tax preparers are not regulated by any licensing entity or subject to any type of minimum competency requirements. Today, tax preparers can be found in pawn shops, furniture rental stores, massage parlors, check cashing and convenience stores. This proposed legislation is in response to a marketing ploy called a Refund Anticipation Loan in which the tax return is poorly prepared, the tax refund is immediately paid to the customer by borrowing against a loan with interest from 67% to 774%. When the IRS questions the tax return a year later, the customer finds the tax preparer has skipped town and the customer is faced with a large tax bill for the poorly prepared tax return. Financial Planning 1/05 p. 45 Dire Predictions Robots Automation “carries the dark menace of industrial dislocation, increases unemployment and deepens poverty”. - John F. Kennedy, presidential candidate, 1960 Nafta “You’re going to hear a giant sucking sound of jobs being pulled out of this country”. - H. Ross Perot, presidential candidate, 1992 Outsourcing “Labor officials, business leaders, economists, elected officials and ordinary Americans are concerned that this bleeding of American jobs will further slow our economy”. - John Kerry, presidential candidate, 2003 Forbes, 3/29/04 P. 48 But It Doesn’t Feel the Same After three years of pain, New York City’s economy is roaring back, so says Crain’s New York Business. By December, 2004 the City will have added 50,000 jobs taking the count to 3.58 million jobs and marking the first increase in jobs since 2000. The city is within striking distance of the 3.72 million jobs peak reached in 2000. But it doesn’t feel as good. The palpable reason is that the recovery is happening without Wall Street. The growth has been in the retail and tourism areas. Crains NY Business 10/1-17 2004 p.1 Voluntary Amendment Saves IRS Penalties and Interest Filing an amended tax return to pay extra tax has an additional benefit; the IRS will waive interest for part of the time. Under current law, if the IRS does not notify a filer of extra tax due within 18 months of filing, interest stops accruing. It resumes 21 days after the taxpayer is billed for the additional tax. The IRS says it will now apply this rule to amended returns that indicate more tax was owed. The ruling is retroactive to 1998, so the IRS will check its records and send out refunds to taxpayers who paid more interest than required. Don’t hold your breath!! Revenue RUling 2005-4 1/17/05 I Want To Be Poor In AmericaSome of the richest poor live in America. Consider these statistics: 46% of poor households own their homes 76% of poor households have air conditioning 75% of poor households own one car 30% of poor households own two or more cars 97% have at least one color television 62% have cable or satellite reception 25% have cellular telephonethe typical poor American has more living space than the average not poor individual living in Paris, London, Vienna, Athens and other European cities. The preceding was gathered from official government reports, not from the media. How many times have we heard that the rich are getting richer and the poor are getting poorer? The facts are that some rich are getting poorer and some poor are getting richer. The complete evidence suggests that low income is largely a transitory experience for those willing to work. The roadmap out of poverty appears to be simple. Complete high school, get a job, any kind of a job, get married before having children, and be a law abiding citizen. Investors Business Daily 1/13/05 p. A13 Remember, We’re Here For You!!