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Tag: IRS

  • IRS Delays $600 Reporting Rule

    IRS Delays $600 Reporting Rule

    The Internal Revenue Service has delayed a rule that would require gig workers to report earnings of $600.

    The American Rescue Plan of 2021 implemented new rules that would significantly lower the amount of yearly earnings online platforms would have to report, from 20,000 to a mere 600. The rules were initially set to go into effect for the 2022 tax year

    After significant pushback from lawmakers, as well as concerns in the industry at large, the IRS has decided to delay implementation until the 2023 tax year.

    “The IRS and Treasury heard a number of concerns regarding the timeline of implementation of these changes under the American Rescue Plan,” said Acting IRS Commissioner Doug O’Donnell. “To help smooth the transition and ensure clarity for taxpayers, tax professionals and industry, the IRS will delay implementation of the 1099-K changes. The additional time will help reduce confusion during the upcoming 2023 tax filing season and provide more time for taxpayers to prepare and understand the new reporting requirements.”

    Thanks to the delay, entrepreneurs and gig workers will get a bit of a reprieve…at least for a year.

  • IRS Gets $15 Million to Make Free E-Filing Easier

    IRS Gets $15 Million to Make Free E-Filing Easier

    The Internal Revenue Service has received $15 million as part of the Inflation Reduction Act to help Americans e-file easier.

    Any American who makes less than $69,000 a year can legally file their taxes for free. Unfortunately, tax preparation companies often make it difficult for users to find the free option in an effort to push them toward paid options. Lawmakers have taken Intuit to task for such behavior in the past, but the latest funding should help put the IRS on more even terms.

    According to The Washington Post, the IRS will spend the funding studying the best way to roll out an e-file platform for users to be able to file their taxes for free without relying on tax prep companies.

    “The IRS is completely beholden to the software companies at this point because it just doesn’t have anything to replace them,” Nina Olson, who served for nearly two decades as the national taxpayer advocate, the IRS’s internal consumer rights watchdog, told the Post.

    If the IRS is successful, it could revolutionize how Americans pay their taxes, streamlining the process and making it easier and cheaper.

  • IRS Backtracks, Ends Bid to Require Facial Recognition

    IRS Backtracks, Ends Bid to Require Facial Recognition

    The IRS is backtracking on its plans to require facial recognition to access online accounts, following backlash from security and privacy experts.

    The IRS announced in mid-January that it was partnering with ID.me, with plans to require facial recognition for users accessing their online accounts. As Krebs on Security documented, the process involved in setting up facial ID was relatively complicated. Meanwhile, security experts and customers worried about the implications of people’s biometric data being collected.

    According to The New York Times, the Treasury Department is now abandoning the plan, despite awarding ID.me an $86 million contract.

    “The I.R.S. takes taxpayer privacy and security seriously, and we understand the concerns that have been raised,” said Charles P. Rettig, the agency commissioner. “Everyone should feel comfortable with how their personal information is secured, and we are quickly pursuing short-term options that do not involve facial recognition.”

    The agency is evidently working on an alternative method of identification that will not involve facial recognition, although it’s unclear at this time what that method may be.

  • IRS Will Require Photo ID and Live Selfie to Access Online Account

    IRS Will Require Photo ID and Live Selfie to Access Online Account

    The IRS will soon begin requiring a photo ID, paired with a live selfie, in order to access online accounts.

    As online security becomes a growing concern, the IRS is taking a major step forward to verify users’ identities. According to Krebs on Security, the IRS is adopting ID.me’s verification service.

    Beginning in the summer of 2022, users looking to access their online IRS accounts will need to upload a copy of their government-issued IDs, such as a driver’s license or passport. Once the document is uploaded, the new system requires the person to use their computer camera or mobile device to film a video selfie, which ID.me then compares to the uploaded photo ID.

    The system then prompts the user for a mobile or landline phone number — not a VoIP service — along with a copy of a social security card, birth certificate, health insurance card, or utility bill. In fact, Krebs reports the system requires two such “secondary identification documents.”

    Users may be understandably concerned about giving over so much personal information to a third-party company, but ID.me founder and CEO Blake Hall told Krebs that if a person signs up “in connection with legal identity verification or a government agency we will not use your verification information for any type of marketing or promotional purposes.”

    Despite the hassle, Krebs believes services like ID.me are unavoidable, and may provide significant security benefits.

    Love it or hate it, ID.me is likely to become one of those places where Americans need to plant their flag and mark their territory, if for no other reason than it will probably be needed at some point to manage your relationship with the federal government and/or your state. And given the potential time investment needed to successfully create an ID.me account, it might be a good idea to do that before you’re forced to do so at the last minute (such as waiting until the eleventh hour to pay your quarterly or annual estimated taxes).

  • PayPal, Venmo, Cash App Will Start Reporting $600 Transactions to the IRS

    PayPal, Venmo, Cash App Will Start Reporting $600 Transactions to the IRS

    Popular payment apps will start reporting payments of $600 or more to the IRS to comply with a new tax law.

    While businesses have been required to report payments of $600 or more for years, this is the first time that online payment apps have been subject to that requirement. Previously, PayPal and others were required to report gross income exceeding $20,000 per year.

    Under the new rule, bar is now lowered to $600. Fortunately, according to Fox News, this new rule only applies to payments classified as goods or services. Money sent to friends and family, gifts, reimbursements, and products sold at a loss will not be included.

    For true income, however, users will need to be more careful when filing their taxes, as the IRS will now have a point of reference.

    “For the 2022 tax year, you should consider the amounts shown on your Form 1099-K when calculating gross receipts for your income tax return,” PayPal’s Q&A section says. “The IRS will be able to cross-reference both our report and yours.”

  • IRS Delays Tax Deadline to May 17

    IRS Delays Tax Deadline to May 17

    The Internal Revenue Service (IRS) is extending the tax deadline by a month, until May 17, to help ease the burden on taxpayers.

    The last year has been one of the hardest on taxpayers, thanks to the pandemic. Many taxpayers have lost jobs, or at least partial income. Many others have had to take on additional jobs or freelance gigs, further complicating their taxes. In addition, the IRS is already running behind in its efforts to process returns.

    A press release issued by the Ways & Means Committee makes clear these various factors led to what is sure to be a welcome reprieve for taxpayers.

    “This extension is absolutely necessary to give Americans some needed flexibility in a time of unprecedented crisis,” said Chairman Neal and Chairman Pascrell. “Under titanic stress and strain, American taxpayers and tax preparers must have more time to file tax returns. And the IRS itself started the filing season late, continues to be behind schedule, and now must implement changes from the American Rescue Plan. We are gratified that the IRS has recognized the need and heeded our calls for additional time, and while we are pleased with this 30-day extension, we will continue to monitor developments during this hectic filing season. We look forward to hearing directly from the Commissioner tomorrow afternoon to discuss how the IRS is managing this filing season and the justification for the duration of this extension.”

  • IRS Warns of New Stimulus Scam

    IRS Warns of New Stimulus Scam

    The Internal Revenue Service is warning taxpayers of a new scam that uses promise of a stimulus payment to get bank information.

    According to the IRS, scammers are texting individuals asking for their bank account information. The scammers claim they need the back account info to set up a direct deposit. The text message the scammers send includes a URL that takes the victim to a phishing site that collects their information.

    “Criminals are relentlessly using COVID-19 and Economic Impact Payments as cover to try to trick taxpayers out of their money or identities,” said IRS Commissioner Chuck Rettig. “This scam is a new twist on those we’ve been seeing much of this year. We urge people to remain alert to these types of scams.”

    The IRS also reminds individuals that it never sends unsolicited texts or emails. In addition, anyone receiving one of these text messages should take a screenshot of it and email it to phishing@irs.gov. The email should include the date, time and timezone when the message was received, as well as the number that sent the text and the recipient’s number.

  • IRS Under Investigation For Illegally Tracking Americans via Their Phones

    IRS Under Investigation For Illegally Tracking Americans via Their Phones

    The IRS is under investigation by the US Treasury’s Inspector General for purchasing smartphone data to illegally track Americans.

    The issue began when Senators Ron Wyden and Elizabeth Warren sent a letter to the Inspector General demanding the IRS be investigated. According to the letter, the IRS had been purchasing bulk data from a company named Venntel. The information contained location data from Americans’ phones, based on the various apps they use.

    According to Motherboard, a Wyden aide has said “the IRS wanted to find phones, track where they were at night, use that as a proxy as to where the individual lived, and then use other data sources to try and identify the person. A person who used to work for Venntel previously told Motherboard that Venntel customers can use the tool to see which devices are in a particular house, for instance.”

    As Wyden and Warren’s letter points out, the Supreme Court ruled in 2018 that collecting significant quantities of historical data from phones was covered under the Fourth Amendment, and therefore requires a search warrant. The fact that the IRS obtained no such warrant puts it in legally dubious territory.

    Putting aside the legal ramifications, it’s a safe bet that few Americans would be OK with the IRS tracking where they sleep at night.

  • IRS Makes It Easier For Taxpayers To Find Free Options

    IRS Makes It Easier For Taxpayers To Find Free Options

    The Internal Revenue Service (IRS) has announced an agreement with Free File, Inc. (FFI) designed to make tax season a little easier.

    Taxpayers earning less than $69,000 a year have the option of filing their taxes for free. Unfortunately, many tax preparation companies hide their free options, making it difficult for customers to find them.

    “This updated agreement is part of a larger effort by the IRS to help taxpayers meet their tax obligations,” said Chuck Rettig, IRS Commissioner. “It continues to show the partnership we enjoy with the Free File partners and the commitment we both share in helping taxpayers since the program’s creation 18 years ago. The improved process will make Free File stronger and give taxpayers another reason to consider this valuable software option.”

    “The IRS and FFI will also continue to work together to identify and explore ways to better help low- to moderate-income taxpayers and to pursue meaningful opportunities to enhance taxpayer awareness and use of the Free File Program beyond the 2020 filing season,” Rettig continued.

    As part of the agreement, Free File partners will not obscure their Free File options from search results, as Intuit has been accused of doing in the past. As part of the agreement, the IRS will begin offering its own Free File alternatives, something it was previously prohibited from doing.

  • Melissa Gilbert Owes IRS $360,000, Which She Blames On Career, Recession and Divorce

    Melissa Gilbert is in trouble with the IRS.

    According to CBS News, the Internal Revenue Service says former Little House on the Prairie star Melissa Gilbert failed to pay more than $360,000 in federal income taxes from 2011-2013.

    The Detroit News reports the IRS filed a tax lien against the actress in February because of her failure to pay taxes.

    Melissa Gilbert, 51, blames the 2011-2013 tax debt on the lack of acting opportunities, the economy and her divorce.

    “Like so many people across the nation, the recession hit me hard,” Gilbert said. “That, plus a divorce and a dearth of acting opportunities the last few years, created a perfect storm of financial difficulty for me.”

    Recently, Melissa Gilbert announced that she and her family are moving out of their rented home in Howell, Illinois, although husband Timothy Busfield said the move has nothing to do with the debt.

    “(The debt) has more to do with the housing crash and divorce in the past,” Busfield said. “It’s a product of what happened with the economy. It’s unfortunate and it’s been happening a lot. It’s not a big deal.”

    Melissa Gilbert, who played Laura Ingalls on Little House on the Prairie from 1974-1983 said she has negotiated a payment plan with the IRS.

    “I’ve set up an installment plan to fully pay off my debt and will continue to work as hard as I can to erase this debt and dig myself out of this hole,” said Melissa Gilbert. “I am absolutely positive that I can do it.”

    Most recently, Melissa Gilbert starred alongside Juliette Lewis and Ryan Phillippe in the ABC series Secrets and Lies.

  • Tax Advice: 5 Dirty Tax Scams to Watch Out for This Year

    Some tax advice is not worth the hot air that pushes it out of a crooks mouth. The IRS has put together a list of a dozen tax season pitfalls that Americans need to be on the lookout for.

    Some items on the list are about things that tax filers should refrain from doing, such as falsifying documents or trying to claim credits to which they are not actually entitled. If you try to get a tax preparer to engage in that behavior with you, the IRS’ tax advice to you is that your preparer might turn you in.

    “The mere suggestion of falsifying documents to reduce tax bills or inflate tax refunds is a huge red flag when using a paid tax return preparer. Taxpayers are legally responsible for what is on their returns regardless of who prepares the returns.”

    Other tax advice from the IRS includes looking out for these perennial offenders.

    Phone Scams: These include “aggressive and threatening phone calls by criminals impersonating IRS agents… Scam artists threaten police arrest, deportation, license revocation and other things.”

    Return Preparer Fraud: The IRS calls these “unscrupulous return preparers… There are some dishonest preparers who set up shop each filing season to perpetrate refund fraud, identity theft and other scams that hurt taxpayers.”

    Inflated Refund Claims: While there was the above warning to taxpayers to not try to inflate their own refund claims, the IRS also warns about scams that claim to be able to inflate your refund beyond what you are legally allowed. “Taxpayers should be wary of anyone who asks them to sign a blank return, promise a big refund before looking at their records, or charge fees based on a percentage of the refund. Scam artists use flyers, advertisements, phony store fronts and word of mouth via community groups and churches in seeking victims.”

    Phishing: While this is a problem all year long, the IRS warns about particular dangers of “fake emails or websites looking to steal personal information” during tax season. Always remember: “The IRS will not send you an email about a bill or refund out of the blue. Don’t click on one claiming to be from the IRS that takes you by surprise.”

    Identity Theft: Another year-round problem, but it rears its head even more during tax season because of all the confusion and paperwork already inherent in the process. This includes person who “file fraudulent returns using someone else’s Social Security number.”

  • Microsoft Sues IRS For Not Delivering On FOIA Request

    Microsoft has sued the IRS in relation to a Freedom of Information Act request.

    The company wants information related to an IRS investigation into its tax records as it conducts an audit. The audit focuses on a fee charged between Microsoft’s subsidiaries, or transfer pricing, used between 2004 and 2009.

    Specifically, the company wants details on a contract and proposals related to law firm Quinn Emanuel Urquhart & Sullivan LLP. Microsoft found out that the IRS entered into a contract with it for legal services related to the audit.

    Microsoft filed a Freedom of Information Act request a couple months ago, and the Internal Revenue Service has so far not made good on it, though it requested an extension until December 9, which Microsoft says is a violation of the Administrative Procedure Act.

    Here’s the filing (via Electronista):

    Microsoft versus IRS

    As Reuters points out, the IRS has also looked at Amazon over transfer pricing.

    Microsoft sent us the following statement:

    “Government agencies, funded by citizens, have an obligation of transparency under the Freedom of Information Act. The IRS has failed to meet the deadline to respond to a valid FOIA request, and we’re simply asking a Court to ensure that the IRS meets its obligations.”

    The IRS isn’t commenting.

    The suit (Microsoft Corp vs. Internal Revenue Service, 14-1982) was filed in the U.S. District Court, District of Columbia.

    Image: Microsoft CEO Satya Nadella (via Microsoft)

  • Toby Keith’s Bar Owes $250,000 In Back Taxes

    The tax debt of Toby Keith’s I Love this Bar & Grill at Destiny USA has continued to grow, now totaling over $250,000.

    Earlier this month, New York filed a new tax warrant against the restaurant for $107,000, related to the 2013 fourth quarter taxes that the business owes.

    The new debt accompanies the previous debt from the 2013 second and third quarters that totaled $145,000. The bar originally owed $189,000 from that time period, but made some payments after another tax warrant was issued earlier this year.

    The restaurant currently remains open and has events, including concerts, scheduled for the next several months. However, there has been speculation that the Syracuse location may soon close their doors.

    Toby Keith’s bar was one of the first tenants announced for the Destiny USA’s expansion section in 2012. The bar opened in 2013 and occupies 20,000 square-feet of the third floor. Each bar has their unique touches, including guitar-shaped bars, drinks in mason jars, and plenty of plasma televisions. The bars are complete with girls in skimpy outfits, known as “whiskey girls” and live music.

    The tax department will try to make payment arrangements with the bar before having to seize the property. If a seizure was to occur, the tax department offers deals to allow the businesses to eventually re-open.

    In March, the doors closed on the Tuscan Mall location in Tuscan, Arizona. Employees were left without jobs and explained that none of them saw the closing coming. The general manager did not comment on why the doors were closed.

    Toby Keith currently has 16 locations across the United States.

    Image via Wikimedia Commons

  • ER Star Mekhi Phifer Files For Bankruptcy

    ER Star Mekhi Phifer Files For Bankruptcy

    Former ER star Mekhi Phifer is the latest celebrity to find themselves in a hole when it comes to their finances, TMZ reports.

    On April 22, 2014, Phifer reportedly filed for bankruptcy. He claims that he only has $67,701 in assets that includes a leather bed, a 12-year-old Segway (worth only $1,500), and a collection of firearms:1 shotgun and 2 9mm pistols. Phifer allegedly spends nearly $11,600 per month, but only brings in $7,500, which leaves Phifer short $4,100 each month.

    The 39-year-old actor, who most recently held roles in the film Divergent and Showtime original series House of Lies , has accumulated an approximate debt of nearly $1.2 million in back taxes. He also owes an estimated $50,000 for lawyers fees and $4,500 for back child support.

    Phifer joins Meet the Fockers star Teri Polo as the latest celebrities to admit they are broke. According to federal documents, Polo filed for Chapter 11 bankruptcy on April 14. In the documents, Polo revealed that she currently owes $772,000 to the IRS and approximately $36,000 to various credit card companies.

    Polo, who is currently starring in the ABC Family original series The Fosters, explained that she is also being sued by her former landlord Ed McPherson for leaving her apartment in deplorable conditions. Supposedly, the apartment was covered in animal feces and the refrigerator was left with rotten food.

    Image via Wikimedia Commons

  • Gisele Audited by IRS After Listed as Forbes’ Highest-Paid Model

    Brazilian supermodel, Gisele Bundchen, was recently reviewed by the IRS after making “The World’s Highest-Paid Models of 2013” list on Forbes.

    According to Forbes, the 33-year-old earned $42 million last year and “replaced Beyoncé as the face of H&M, reportedly beat out Rihanna for Chanel and took over David Yurman from Kate Moss.”

    This assessment obviously comes at a time when taxes are due for completion tomorrow, Tuesday April 15.

    But, the mother-of-two and wife of NFL player Tom Brady told sources that Forbes’ calculations-determined by merchandising partnerships, photo shoots, contracts, and other fashion gigs-were terribly off.

    “It’s sad because the people who write these things don’t have my bank-account details,” she told Brazilian magazine Mdemulher, according to Mail Online.

    And, it appears that making it on the list doesn’t impress Bundchen whatsoever.

    “I do OK, I earn plenty, but not as much as they say,” she said. “I’ve already been audited by the IRS because of this list, and, truthfully, whether I’m on this list or not doesn’t interest me.”

    She later stated: “I’ve got the same interests, the same day-to-day life, as any woman. I want to raise my children well, be a good wife and work.”

    The supermodel apparently doesn’t view figures as of importance to her daily life. To her, family is what truly matters.

    “This is what I value: Are my children educated, is my husband happy, are people feeling positive energy from me? There should be a magazine to quantify knowledge, understanding and love for people: That is power.”

    Bundchen ranked first place yet again for the seventh year in a row, supposedly making her the richest and most powerful supermodel in the fashion industry.

    However, after thorough investigation, the IRS determined that Forbes’ estimations were actually more than what Bundchen garnered in 2013.

    Additionally, models Miranda Kerr ($7.2M), Adriana Lima ($6M), and Kate Moss ($5.7M) made the list.

    Image via Wikimedia Commons

  • IRS Tax Filing Deadline Pain Lessened With Yummy Deals

    April 15, also known as Tax Day, is upon us again. While some people like to file their taxes with the IRS early on–especially if they’re getting a refund–others wait until the last minute. Whether you were the early bird as far as tax filing goes or are one of the procrastinators waiting until the last minute to do your taxes, April 15 just got a little brighter. Quite a few chains are offering some tasty discounts and freebies on Tax Day, so check out the list below to see some of the deals you can score.

    Arby’s

    Arby’s is offering a free snack-sized order of their curly fries again this year. Unlike some restaurants where all you have to do is show up to get the deal, you will need to print out the coupon from the Arby’s website in advance. There are no strings attached to this coupon, so you aren’t obligated to purchase anything else. That said, it will be awfully hard to pass up downing the free fries with a small Jamocha milkshake from the Arby’s value menu–especially if you made April 15 your tax filing day.

    Great American Cookies

    Got a sweet tooth? Then head to a Great American Cookies store near you. This chain is giving away free chocolate chip cookies on Tax Day. The offer is good for one cookie per customer.

    Post by Great American Cookies.

    Hard Rock Cafe

    This freebie won’t be up everyone’s alley, but if you aren’t bashful in front of crowds, you can earn a free meal on Tax Day at Hard Rock Cafe if you’re willing to sing for your supper. Entree selections will come from Hard Rock Cafe’s revamped menu. Call your local Hard Rock Cafe to find out what time the deal is being offered.

    Schlotzsky’s

    Schlotzsky’s is offering free sandwiches on Tax Day. As you can see from the Schlotzsky’s post below, there is a catch–you have to purchase a 32 ounce drink and a bag of chips to score a free “The Original” small sandwich. At least you don’t have to sing for this deal, right?

    Post by Schlotzsky's Temple-Belton.

    Sonic Drive-In

    As you can see from the tweet below, Sonic Drive-In is offering half-price drinks and slushes on Tax Day. While Sonic offers a similar deal on their happy hour menu from 2:00 to 4:00 p.m., this deal lasts all day.

    Know of any other restaurants or retailers that are trying to lessen the pain of the IRS tax filing deadline? Add the details in the comments section below.

    Image via Twitter

  • IRS: Bitcoins Are Property And Absolutely Taxable

    IRS: Bitcoins Are Property And Absolutely Taxable

    Good news and bad news has just come down the pipe courtesy of the IRS. The good news? Bitcoins have received a huge boost in terms of U.S. government recognition. The bad news? If you were hoping to invest in Bitcoins for the purpose of evading taxation…it’s a no-go.

    The IRS announced on Tuesday that they will treat the virtual currency as property for the purposes of taxation.

    Ajay Vinze, the associate dean at Arizona State University’s business school thinks that the announcement is good for the Bitcoin.

    Vinze said, “[The Bitcoin is] getting legitimacy, which it didn’t have previously.”

    He also feels that this is one act by the United States government that can help put the currency “on a track to becoming a true financial asset.”

    This doesn’t stop the announcement from being a headache for many American advocates of the Bitcoin. It’s thought of by many a currency rather than as property.

    There is some worry that the “clarification” may do more harm than good. If Bitcoins are not only unstable, but taxable property, does this make them not worth the risk?

    Pamir Gelenbe, is a partner at Hummingbird Ventures. The venture capital firm recently invested in online Bitcoin exchange Kraken.

    Gelenbe understands that many who have gotten their hands on Bitcoins may be less inclined to spend them following the IRS’s decision.

    “People might just be tempted to hoard rather than spend, because as soon as they spend they would be liable to incur capital gains taxes,” said Gelenbe.

    The IRS not only expects taxes on capital gains. The government agency is also demanding that “miners”, persons responsible for introducing new Bitcoins into the market via unique algorithms, report the Bitcoins as part of their income.

    The guidelines being set by the IRS may feel like growing pains, but growth and stability is what is needed if the Bitcoin is to maintain its global presence.

    Image via Wikimedia Commons

  • IRS: Bitcoin is Property, Not Legal Tender

    IRS: Bitcoin is Property, Not Legal Tender

    Despite the wild swings in the virtual currency markets and the recent scandal involving the Mt. Gox exchange’s loss of $400M, Bitcoin continues to hold some value online. As the most popular virtual currency, Bitcoin is becoming increasingly popular with investors looking for risky, (though potentially lucrative) investments and tech aficionados who want to be in on the ground floor of a currency that answers to no government.

    This has led to debate and legal questions in recent years about just how legitimate virtual currencies are as legal tender. Though recognized by no official entity, Bitcoins are regularly traded and used for transactions on many parts of the web (and deep web, of course).

    The popularity of virtual currencies has also offered consumers a new way to invest or convert their real-world money, causing a bit of confusion when it comes to taxing Bitcoin and other similar products. Now the Internal Revenue Service (IRS) has weighted in on the matter, clarifying how virtual currencies should be listed on tax forms.

    The IRS this week issued a notice stating that virtual currencies such as Bitcoin are to be treated as property for U.S. tax purposes, not as legal tender. The agency does acknowledge that Bitcoin operates much like a “real” currency in many places, but cites the fact that it does not hold the distinction of being legal tender in any real-world jurisdiction.

    The IRS also outlined a few different outcomes that follow from this decision. Wages paid in virtual currency are taxable to employees; are subject to income tax and payroll tax; and must be disclosed on W-2s. The same applies to payments made to independent contractors. Also, payments made using virtual currencies are subject to the information reporting required of other property transactions.

    Governments around the world have begun to take an interest in Bitcoin, as the technology could potentially impact or even threaten real-world currencies in the future. The FBI has taken an interest in Bitcoin almost purely for its link to illegal inter-state sales, an interest which culminated last fall in the shut down of the popular online black market Silk Road. China has taken a hard-line approach to Bitcoin, outright banning its banks from accepting the virtual currency as deposits.

    Image via Wikimedia Commons

  • IRS Selfies on Instagram Help Man Avoid Audit

    Time Magazine reports that a Pennsylvania architect is using social media tech to stay a step ahead of the tax man. Andrew Jarvis probably never thought that his Instagram selfies would land him in the news, but his idea was a brilliant one, and we hope he gets plenty of recognition for his business as a result.

    You see, Jarvis lives in Pennsylvania. But he opened up an architecture office in New York. According to tax laws, of Jarvis spends half or more of his time in New York, he has to pay taxes as a New York resident. But Jarvis maintains that he lives more than half of the time back in Philadelphia.

    The problem? How to prove that. Jarvis was concerned that, in the event of an audit, the tax man would rule against him.

    Jarvis hit on the idea of taking a selfie every day he was in Philadelphia in front of his home. Some days he was holding a snow shovel. Others a copy that day’s Philadelphia Enquirer. Every time he did it, the pic was time stamped.

    Sometimes he took pics in other locations too, just to cover his tail in other ways.

    “I hate to admit this but I sometimes take pictures of myself pumping gas [to prove I’m the one using the credit card at that location],” Jarvis said. “I would have liked to have smiled in a few of the pictures had I known people were going to be looking at them.”

    Then his daughter, Anne, considerably more tech savvy than Dad, saw the series of photos going back months on his camera. She got a kick out of them and asked to post them to Instagram. Jarvis did not know what Instagram was.

    But soon Internal Revenue Selfies was born.

    “No one was ever meant to see these, these were for his future imaginary conversation he might have hypothetically with the IRS,” Anne said. “And seeing that no one was supposed to see them made me want to show the world. What’s so funny is how deadpan he is. He has such an earnest nature. I know where all of this is coming from is he’s just through and through an honest stand-up guy and this is a manifestation of that.”

    Image via Instagram

  • Online Tax Filing: Send It Straight To The IRS Free

    You might have noticed the many e-file websites that offer “free” tax-filing options, but somehow seem to add fees or consistently try to trick you into clicking the upgrade button while you plow through your taxes.

    IRS takes matters into their own hands with its Free File program that provides free federal tax preparation and e-file through brand-name software or websites. If your income was less than $58,000 in 2013, you are free to use it. IRS provides customer service through their online or telephone assistance setup or via telephone with the tax software company that you choose. The IRS also proves an “Interactive Tax Assistance” that covers most tax questions a person would have to waylay any unnecessary questions.

    Understandably, the IRS is very secure with the proceedings. They protect your information just as thoroughly as they do theirs, so it may be the way to go. Unlike some online private tax websites, the IRS has a policy to never allow the use of permanent Internet cookies, and the programs in the Free File Alliance have been ordered to comply with the strict IRS privacy standards in accordance with Treasury regulations.

    The IRS is not providing information from past tax years, so you’ll have to have that on hand along with the usual things such as your income and deduction documents. If you were sent a six-digit Identity Protection PIN from the IRS, make sure you also have that.

    It may be a safe thing to say that this could be the best choice for your e-filing purposes. It is likely to be the most secure avenue, as there are no schemes to scrape money from you reminiscent of some private tax filing software and there is probably a good chance that you will receive your money faster, too. You have until April 15th to use it; if you have already, let us know if its a good choice.

    Warning: Be on the lookout for callers claiming to be a part of the IRS looking for tax information. They are scammers.

    Image via Wiki Commons

  • Identity Theft on the Rise this Tax Season, IRS Warns

    Identity theft is on the rise this tax season as millions of Americans file tax returns and claim their refunds. In February, the Internal Revenue Service placed identity theft at the top of their “Dirty Dozen” tax scams list. Criminals simply use their victims’ names and social security numbers to receive the corresponding tax return.

    The IRS isn’t the only organization working to warn and protect citizens this tax season. Both for-profit and non-profit corporations are tackling the issue as well, for good reason. According to a press release from Fellowes, Inc., the Identity Theft Resource Center has found tax related identity theft has been the number one factor in the increase in the rate of identity theft over past eleven years. The Federal Trade Commission identified it as its number one complaint of 2013.

    The non-profit Identity Theft Council has been at the forefront of the anti-tax fraud battle this year. Last week, they released this video, documenting and warning taxpayers of fraud this season:

    What’s a victim of identity theft to do? The IRS recommends victims contact their Identity Protection Specialized Unit immediately toll-free at 1-800-908-4490. But after the fact, how does one restore an identity? The new company, ID360, may have an answer. In a press release announcing their formation, ID360 claims to be able to do the heavy lifting for victims, networking with law enforcement from all over the country.

    But for those tax payers just looking to avoid identity theft this spring, the ITRC has a few tips:

    -File your taxes as soon as possible. The longer you wait, the more time an identity thief has to file a return for you.
    -Protect your computers and mobile devices with firewalls, anti-virus software and complex passwords.
    -Don’t carry your Social Security card or any other documents with your Social Security number with you.
    -Order a copy of your free annual credit report from each of the three credit reporting agencies. Stagger these requests throughout the year.
    -Shred all no-longer needed tax-related documents that contain sensitive information with a Cross-Cut shredder. Documents include receipts, W-2 forms and tax preparer invoices.

    So take heed as you file you taxes this year, because nobody wants to end up like those people from those old Citibank commercials:

    Image via The Identity Theft Council, YouTube