Tuesday, June 24, 2008
IRS Mileage Rate Increases For 2008 Reimbursement
Fuel surcharges, explicit and hidden, continue impacting consumer prices. Virtually every travel method from taxis to airplanes to trucking has included hefty fuel surcharges. Even local merchants who deliver are doing the same.
The Internal Revenue Service (IRS) is generally good about increasing the reimbursement rate for mileage used while using your car for business or as a personal tax deduction (perhaps if you itemize and your out of pocket medical qualifies). What the IRS has traditionally not been good at is changing the rate in response to a market condition in the middle of a tax year.
Not anymore.
The agency everyone loves to pound on is cranking the mileage deductible rate to 58.5 cents next week on July 1. The increase is more than 15%, and if your vehicle is averaging 20 miles per gallon, the 8 cent increase in the mileage deduction rate effectively decreases your cost per gallon by $1.60.
The deductible rate for medical purposes will rise to 27 cents.
Labels: energy, IRS, mileage deduction, mileage rate
Saturday, December 1, 2007
Tax Audits
Many tax filers worry that the IRS is going to call on them to be audited. Those tax filers may be stressing out over nothing. The IRS actually only audits a very small percentage of individual tax returns. A computer-based model runs the selection process and goes by a certain set of standards. If the figures on your tax return are largely different from the standards that the computer is using, that would increase your chances of being audited greatly.
The IRS groups tax returns together and from there they choose which ones will be audited. Unfortunately, the IRS does not give information on the actual details that they use to create these groupings. If they did give out such information, there would be many people trying to outwit the system.
Red flags are set off at the IRS when an abnormally low income or large amounts of deductions are reported. You may not be audited but the IRS may contact you for an explanation. Depending on the answers that are given, an audit may ensue.
No one likes to be audited but just because you are, doesn't mean things are going to turn out for the worse. As long as you are honest and double check your figures the first time around, you should be fine.
Be aware though that Congress has given the IRS a bigger budget for conducting audits. It was necessary because hundreds of billions of dollars have been lost by those who cheat on their taxes.
Labels: audit, IRS, tax returns, taxes
Tuesday, October 2, 2007
Taxpayers Beware of Recent E-mail Scams
With internet usage so high these days, e-mail scams are on the rise. The most recent scams have been targeting taxpayers. Here are a few scams to look out for:
The IRS warns of a recent e-mail scam tells taxpayers that the IRS has calculated their "fiscal activity" and that they are eligible to receive a tax refund of a certain amount. Taxpayers receive a page of, or are sent to, a Web site (titled "Get Your Tax Refund!") that copies the appearance of the genuine "Where's My Refund?" interactive page on the genuine IRS Web site. Like the real "Where's My Refund?" page, taxpayers are asked to enter their SSNs and filing status. However, the phony Web page asks taxpayers to enter their credit card account numbers instead of the exact amount of refund as shown on their tax return, as the real "Where's My Refund?" page does. Moreover, the IRS does not send e-mails to taxpayers to advise them of refunds or to request financial information.
Another scam that the Internal Revenue Service is warning taxpayers about is a new phishing scam, in which an e-mail purporting to come from the IRS advises taxpayers they can receive $80 by filling out an online customer satisfaction survey. The IRS urges taxpayers to ignore this solicitation and not provide any requested information. The IRS does not initiate contact with taxpayers through e-mail.
Last but not least, consumers have received a "Tax Avoidance Investigation" e-mail claiming to come from the IRS' "Fraud Department" in which the recipient is asked to complete an "investigation form," for which there is a link contained in the e-mail, because of possible fraud that the recipient committed. It is believed that clicking on the link may activate a Trojan Horse.
The IRS does not send out unsolicited e-mails or ask for detailed personal and financial information. Additionally, the IRS never asks people for the PIN numbers, passwords or similar secret access information for their credit card, bank or other financial accounts.
"Everyone should beware of these scam artists," said Kevin M. Brown, Acting IRS Commissioner. "Always exercise caution when you receive unsolicited e-mails or e-mails from senders you don't know."
Recipients of questionable e-mails claiming to come from the IRS should not open any attachments or click on any links contained in the e-mails. Instead, they should forward the e-mails to phishing@irs.gov.
-- L. Morse
Technorati ProfileLabels: internet fraud, IRS, phising, tax scams
