Brian McFarren

Many of our blog posts discuss tax fraud and identity theft in relation to individuals. It is important to recognize the significance and frequency of tax ID theft that can happen with businesses as well.

Jennifer Primrose and Amanda Ward, in an article published in the Journal of Accountancy, list warning signs of identity theft, actions to be taken if fraud occurs, and preventative measures that businesses can take to avoid fraud.

Warning signs can include notices from the IRS regarding an already filed return or unknown employees, and recent activity on closed accounts or transcripts.

If you suspect business tax fraud, it is important to respond to the IRS notices right away. In addition, report the fraud to the police as well as the Federal Trade Commission. Any accounts with fraudulent activity should be closed.

Some of the preventative measures a business can take include:

• Protecting Social Security numbers – only give out numbers if needed, truncate whenever possible, and keep the numbers in a safe place,
• Using safety precautions in the workplace such as, shredding documents with private information, using anti-virus software on computers, and changing your passwords frequently,
• Monitoring your credit report periodically.

While the IRS continues its efforts to combat tax fraud, technological advancements make it easier for hackers to access businesses and individuals information. To read the full referenced article, please click here. For more information on business tax fraud and protecting your business, contact Brian McFarren at (231) 726-5815 or bmcfarren@brickleydelong.com.

Learn more about our business taxation services here.

The Internal Revenue Service recently announced the 2016 optional standard mileage rates, which features lower amounts than 2015.

Starting January 1, 2016 the rates will be:

• 54 cents per mile for business miles driven. This is a decrease from 2015 (57.5 cents per mile).
• 19 cents per mile for medical or moving purposes. This is a decrease from 2015 (23 cents per mile).
• 14 cents per mile driven in service of charitable organizations. This is a fixed rate by Congress.

The rate for business miles driven is based on fixed and variable costs of operating a vehicle. For example, variable costs include gas, oil and maintenance, and fixed costs include insurance, depreciation, and registration fees. The medical/moving rate is based only on variable costs (gas and oil).

The lower mileage rate reflects the decrease in gas prices nationwide.

It should also be noted that taxpayers may use the actual costs of using their vehicle instead of the standard mileage rate.

For the full announcement, click here. For more information on the 2016 standard mileage rates, please contact Brian McFarren at (231) 726-5815 or bmcfarren@brickleydelong.com.

Learn about our business and individual tax services.

Over the recent years, there has been an increase in stolen Social Security numbers and fraudulent tax returns being filed. The Internal Revenue Service has continued efforts in combating tax fraud. They recently announced a collaborative effort of 34 state revenue departments and 20 tax industry members to put strong new safe guards in place for the 2016 tax season.

Sally Schreiber, in a recent article published in the Journal of Accountancy, reports on the announcement.

The effort, known as the Security Summit, involved the IRS, tax preparation firms, tax software firms, and state tax administrators. Three working groups are focusing on three key issues of authentication, information sharing, and cyber security. The effort also includes verifying identities in tax software, adding security questions, increasing password requirements, and timed locked outs.

For more information on this announcement, please visit the referenced article, or contact Brian McFarren at (231) 726-5815 or bmcfarren@brickleydelong.com.

Learn more about our individual tax services.

Michael Cohn, in a recent article from Accounting Today, reports that the Treasury Inspector General for Tax Administration (TIGTA) issued a notice recently about the continuation of fraudulent IRS phone calls.

The inspector stated that while progress is happening and scammers have been prosecuted, the investigations are still a priority until all individuals associated with the fraud have been brought to justice.

While the October 15^th tax deadline has past, it is important for taxpayers to continue to be suspicious of unsolicited calls from people claiming to be the IRS. The IRS will contact individuals first by mail about unpaid taxes, not phone, and will not ask you to use a prepaid debit card or a wire transfer. The TIGTA notes that the callers who commit this fraud often:

1. Employ an automated robocall machine.
2. Use common names and fake IRS badge numbers.
3. May know the last four digits of the victim’s Social Security Number.
4. Make caller ID information appear as if the IRS is calling.
5. Send bogus IRS e-mails to support their scam.
6. Call a second or third time claiming to be the police or department of motor vehicles, and the caller ID again supports the claim.

Since October 2013, TIGTA has received approximately 736,000 contacts, become aware of 4,550 victims who have jointly paid over 23 million dollars because of scams.

It is important to recognize these callers and hang up when they call. In addition, they can be reported on the TIGTA’s website or with the Federal Trade Commission.

For more information on IRS phone scams, please read the full article or contact Brian McFarren at (231) 726-5815 or bmcfarren@brickleydelong.com.

Learn more about our individual tax services.

Governor Snyder signed a package of bills aimed to assist school districts in receiving faster help in a financial emergency.

The package, House Bills 4325-4332, combines:

1. More financial reporting,
2. The expansion of deficit elimination plan programs,
3. The creation of enhanced deficit elimination plans, and
4. Changes how the Michigan Department of Education and Treasury Department can withhold state aid payments to school districts.

The goal of this package of bills is to help school districts fix financial difficulties. To read the entire referenced article from MLive, click here.

For more information on school districts and the significance of these bills, please contact Brian McFarren at bmcfarren@brickleydelong.com or (231) 726-5815.