How to Prepare Your Tax Records for Hurricane Season

Hurricane season has started and the IRS recommends that individuals and companies protect their tax records against natural catastrophes by taking one or two easy steps.

Here are 3 tips from the IRS to help prepare you in case of a natural disaster.

Backup Records Electronically

Taxpayers should keep a collection of backup records in a secure area away from the authentic set. Keeping a backup set of records, financial papers, etc. is less complicated now that many documents are provided electronically. Whether or not the original record is available only on paper, it can be scanned into an electronic format. With documents in electronic form, taxpayers can download them to a transportable backup storage device, for instance a CD, external hard drive or DVD that you can take with you should you need to evacuate.

Keep a Record of Valuables

Taxpayers should document or videotape the contents of their home, particularly items of higher worth. A photographic record can help an individual prove the valuation of items for insurance and casualty loss claims. To document your property the IRS has a disaster recovery workbook, Publication 584, Casualty, Disaster and Burglary Loss Workbook, which can help taxpayers compile a comprehensive list of possessions.

Emergency Plan Updates

Emergency plans should be maintained and updated one or more times a year. Private and corporate circumstances evolve over time as do your preparedness specifications. When companies hire new staff, plans should be updated and the staff should be made aware.

Hurricane season can be messy, and so is keeping up with your taxes. If you are facing IRS tax problems, contact JG Tax Group today and let our renown staff map out your plan to get out of trouble.

State Taxes Reduce Budget Cuts, Layoffs

States expect to gather higher tax income in the approaching budget year that together would top pre-recession levels, according to a study released Tuesday.

The increase could reduce strain on states to slice budgets and lay off employees.

A slowly healing employment marketplace and slight economic expansion have increased sales and income taxes, which provide approximately three-quarters of state income. Corporate earnings taxes are also bolstering.

Total state tax income is predicted to rise 4.1% to $690 billion dollars in the 2013 budget year, according to a twice-yearly survey by the National Association of State Budget Officers and the National Governors Association.

It is the 3rd year in a row of monetary expansion and $10 billion more than the budget year that finished in June 2008. The recession commenced in December 2007.

Total state spending will bolster by only 2.2% and stay below pre-recession levels, the report stated.

Approximately one quarter of the anticipated gain in state revenue is on account of suggested tax increases in ten states. Fifteen states advocated tax cuts, though not sufficient to offset the suggested gains.

Layoffs are decreasing at the state level. State governments added a median average of nearly three thousand new jobs monthly for the past six months, after cutting nearly 5,200 the previous six months.

While state economies are feeling benefits from taxes, many U.S. citizens are facing tax issues. If you need help solving your IRS problems, contact JG Tax Group today. Our knowledgeable staff has over 120 years of combined IRS experience and will be happy to evaluate your situation and inform you of your rights as a taxpayer.

Important Summer Tax Deadlines

Don’t forget about the upcoming summer tax deadlines. Before you have too much fun in the sun, make sure you’ve covered all of your tax bases. Here’s a reminder of a few important federal income tax deadlines that may be applicable to you:

July 10th, August 10th

If you happen to work for tips and you made twenty dollars or more in tips in the previous month, you are required to report those to your employer by the tenth day of the month. If that day falls on a weekend, you have until the following Monday to do so. The twenty dollars includes cash and credit card tips, as well as tip outs from other staff members. For instance, if you’re a barback who receives a cut of the bartenders tips at the end of the night, you must report them if they amount to more than twenty dollars in a month. If your employer doesn’t have a reporting method in place, you can use federal form 4070 claim your tips.

June 15th

If you’re a United States Citizen or resident alien living and working outside the United States and Puerto Rico, or if you are active in the military the IRS gives you until June 15th to file your 1040 form. If you are military personnel stationed in a combat zone, the extension is even longer. If you find that you still need more time, you can file an extension with a 4868 form, which gives you up to four months additional time.

June 30th

If you are a United States Citizen with any assets in foreign financial institutions you may be required to file an FBAR. If these assets exceed ten thousand dollars (combined or individually) it is required for you to do so.

These tax deadlines apply mainly to individuals. If you are a corporation or business, it is important to check with a tax professional in order to keep up to date with any other important tax deadlines. The more thoroughly you take care of tax procedures, the easier your life will be in the long run. Taking simple steps to stay up to date on your taxes will make your summer all the more enjoyable.

If you are facing IRS tax problems, don’t hesitate to contact JG Tax Group today. Our knowledgeable staff can help assist you with any IRS questions or concerns.

United Nations May Tax the Internet-Complaints Abound

The UN is contemplating imposing an Internet tax targeting the biggest Web content suppliers, including Netflix, Google, Apple and Facebook that would destroy their abilities to reach users in developing countries.

The European proposal, offered for discussion in a December meeting of a U.N. Agency called the International Telecommunication Union, would modify a pre-existing treaty by demanding expensive fees on the largest websites as well as their network providers for delivering content to non-U.S. Users, according to documents that were recently leaked-perhaps even more disturbing than taxing the Internet is the fact that these negotiations are often done in secret and therefore never realized by the public until they are enacted.

The leaked documents re-iterate concerns raised by the Obama administration and Republican members of Congress last week about how secretive modifications at the ITU to global treaties could lead to a dangerous re-structuring of the Internet infrastructure and permit foreign regimes to control and record citizens Internet usage.

“It’s intensely worrisome,” Sally Shipman Wentworth, senior manager for government policy at the Internet Society. “It could create a huge amount of legal and public unrest.”

Developing nations “could effectively be cut off from the Internet,” asserts Robert Pepper, an ex-policy chief at the United States FCC. It “could have a large number of terribly negative, unintentional consequences.”

The leaked documents were posted by WCITLeaks, which was developed by 2 policy researchers at the free-market Mercatus Center at George Mason University.

Robert McDowell, an FCC member who wrote a piece in the Wall Street Journal last February titled “The U.N. Threat to Internet Freedom,” alluded to the ETNO’s suggested Web taxes during last week’s congressional hearing.

The ITU’s process has raised alarm because most of it is conducted in secret.

“Not all countries like open, transparent process,” asserts Pepper, alluding to the ITU’s members. “This is a huge problem.”

Do you think the Internet should be taxed, even if it affects the availability for users in developing nations? Tell us your opinion, and if you are facing IRS tax problems visit our website to learn more about how JG Tax Group can solve them.

Consumer Complaints of IRS Phone and Email Fraud Still Prevalent

The IRS today warned taxpayers to steer clear of a number of current email and phone fraud attempts that use the “Internal Revenue Service” name as a lure. The IRS expects that the fraud will continue for the next few months.

The IRS warned taxpayers to keep an eye out for scams that offer upfront or fast payment checks. The government has yet to implement such a program, but scam artists are using former IRS proposals to format emails that make it seem like an official offer.

The objective of the scam is to fool individuals into divulging personal and financial information. From there, the thief uses the information in order to commit identity theft which can ultimately destroy your credit and drain your finances. When these crimes are committed online, it allows the culprit to quickly cover their tracks and continue to more victims.

Individuals whose identities have been thieved can spend an indeterminate amount of time and resources cleaning up the mess that’s left behind. Furthermore, victims are often refused loans, denied jobs, and even arrested for crimes they didn’t commit.

The latest scams known by the Internal Revenue Service are described in more detail below.

Refund Telephone Call

One major (and successful) scheme using the word “rebate” has been identified. In this scam, the individual receives a telephone call from somebody identifying himself as an IRS employee. The caller convinces the victim that they are qualified to receive a large check for filing their taxes early. The victim is then told to give up their personal information otherwise the refund cannot be issued.

There has not yet been any legislation passed that would permit the IRS to provide upfront refunds, and there is no way the IRS can force a taxpayer to receive their refund via direct deposit-eliminating the need for a taxpayer to ever be required to give out their bank account information. The IRS will also never ask you to provide your bank account information over the phone.

Refund Email

This scam is the same as the telephone attempt, except it is delievered to you in the form of an email. The email will appear to be coming from the IRS and offer you an extra refund for having filed early or on time. It will usually re-direct you to a landing page where you are asked to type in your personal info in order to receive the money.

The IRS will never send you an unsolicited email regarding your account. If you receive an email like this, disregard it.

If you owe money to the IRS or are facing IRS tax problems, call the professionals at JG Tax Group today and secure your financial future.

IRS Complaints-Too Much to Do, Too Little Resources

The IRS is under pressure as it faces a torrent of new demands while facing budget cuts, implying the service will experience “serious problems in the future.”

As Congress has been busy making cuts to administration spending, the Internal Revenue Service has faced a rise in identity theft and a number of tax-code changes meant to stimulate the economy.

The IRS continues to receive an ear-bashing from taxpayers who demand stricter rules forcing foreign financial institutions to report on U.S. account holders, and still has to handle the tax changes associated with President Barack Obama’s 2010 health-care law.

“IRS resources continue being stretched thin, and the current trend of decreased resources coupled with increased complexity worsens the problem,” the IRS Oversight Board said in the yearly report. “The board can’t forecast that a breaking point will occur, but a continuation of current trends increases the danger that the IRS will experience serious problems in the future.”

Identity theft is one of the most difficult burdens for the IRS. The amount of fake refund returns identified by the IRS has skyrocketed more than fourfold over 2 years, increasing to 2.18 million last year from 457,369 in 2009, according to the report. The IRS was able to prevent $14.4 billion dollars’ worth of fraudulent rebates in 2011, according to the report, but that left about $1.8 billion that still made it into the hands of thieves.

The IRS has increased the staff at a specified department that deals with identity theft, up by forty individuals to 440, according to the report. While it is necessary to aid the victims, the report announced that “such efforts take away IRS resources from other service functions” and present “a massive resource drain on the Internal Revenue Service staff.”

The abstract nature of the tax code and congressional utilization of the tax code to steer the economy are other problems the IRS is faced with.

“The tax administration system has been seriously tested in the last few years as the tax code has been employed at length to boost the economy and provide relief to taxpayers,” the IRS Oversight Board recounted.

United States citizens living abroad are also displeased with the IRS as it attempts to enforce the 2010 Foreign Account Tax Compliance Act, or Fatca.

“Criticism has been received from Americans living abroad who believe that the rules impose heavy compliance burdens on them,” the report declared.

IRS staff remain incentivized and committed, the report stated. However, only time will tell whether or not these problems are more than the service can handle.

While the IRS faces a unique set of problems, taxpayers are still burdened by wage garnishments, liens, levies and audits. If you are facing IRS tax problems, contact JG Tax Group today and speak to our staff about securing your financial future.

Should You Disclose Foreign Accounts to the IRS?

Perhaps you have an overseas bank account containing more than $10,000. Maybe you inherited it, or used it to conceal assets due to a conflict with your other half or business colleague, or simply opened it for no particular reason.

Despite your motives, having an overseas account can feel a bit like a weight on your shoulders, holding you down and seemingly becoming more and more dangerous.

While considering your options, you may rationalize keeping it undocumented, noting that the account barely throws off any earnings and you don’t even receive bank statements. Moreover, with the fees that the overseas bank charges, it likely loses value over time. You may feel justified in keeping your foreign accounts undisclosed.

When it’s time to file your taxes, is it important to check the box on Schedule B admitting that you indeed have a foreign account? Do you need to report all of the income from your offshore assets and accounts? Should you file Form 8938? Should you file a Report of Foreign Bank and Financial Accounts (FBAR), Treasury Form TD F 90-22.1? The answer is absolutely.

But if you have not been honest on prior tax returns, how can you do so now? If you did not divulge the accounts or assets on your tax returns and owe back taxes, you are faced with a troublesome choice. Keeping your bank accounts concealed indeterminately is risky and unrealistic.

When you file your first FBAR, and the IRS asks about your past, do not lie. The best thing to do is to hire a tax professional and make sure you are properly represented in order to achieve the best possible outcome.

Can’t you simply close the account and not claim it at all? Or maybe you could donate the funds charity abroad without consequence? These are typical misconceptions, but they rarely exonerate the taxpayer.

Even if you close your offshore accounts, you continue to have income and reporting requirements from past years. The requirement that you expose your accounts will not go away for a minimum of six years, and that’s plenty of time for your past mistakes to catch up with you. Furthermore, disposing of your accounts may be seen as evidence against you proving that you knowingly evaded the IRS. This incrimination carries much harsher penalties (jail, large fines, etc.) than simply filing a voluntary disclosure.

The professional tax experts at JG Tax Group have a wealth of knowledge and experience that can help you if you are facing any problems with the IRS. For questions and all inquiries, please feel free to contact us today.