Scam tax refunds 'reach record'

A record 83,000 scam e-mails offering fake tax refunds were reported to the UK's tax authority in September.And on one day this month, 10,000 reports about "phishing" e-mails were made to HM Revenue and Customs (HMRC). The messages tended to start with a claim which read: "Following a review of your fiscal activity you are due a refund of tax of £x." But HMRC stressed that it would never inform people of a tax rebate by e-mail or on the telephone. Sucker listsJohn Harrison, head of HMRC customer contact online, said that the messages tried to extract people's credit card and bank account details. This left them at risk of their savings being stolen and the details sold on to professional criminal gangs, in so-called "sucker lists". The latest version of this scam originated from various different websites, which operated for 20 minutes before changing their domain name. "We only contact customers who are due a refund in writing by post. We never use e-mails, telephone calls or external companies in these circumstances," Mr Harrison said. He urged people not to click on linked websites on these scam e-mails, but to report these e-mails and delete them. This is the latest in a series of warnings about scam messages taking the HMRC name. Losses from all scams in the UK are estimated to total £3.5bn a year. The Office of Fair Trading has calculated that 3.2 million people are caught out by scams each year.

Senate OKs reducing tax refunds for college loan delinquents

The Senate Finance Committee on Thursday voted to allow the state Division of Taxation to reduce a person’s state income-tax refund if the person is delinquent on certain college loans issued by the Rhode Island Student Loan Authority.

The committee approved the measure, 6 to 0. The House unanimously approved it on June 26.

Rhode Island already allows for offsets against state income tax refunds for delinquent federal taxes, state taxes, college loans involving the Rhode Island Higher Education Assistance Authority and some other items.

At a State House hearing on Thursday, Charles Kelley, executive director of the Rhode Island Student Loan Authority, said that the offset provision would make the agency’s borrowings more appealing to firms that rate bond issues.

As a result, the agency could borrow at lower interest rates, and issue loans to students and families at lower interest rates, he said.

State Sen. Daniel DaPonte, D-East Providence, chairman of the Senate Finance Committee, said that the provision would allow the agency to borrow for less and pass those savings on to students and their families. “That’s the big-picture goal,” DaPonte said in an interview after the hearing.

The agency oversees a portfolio of about $1.1 billion in education loans, including loans that are guaranteed by the federal government and about $450 million in private education loans which are not federally guaranteed, Kelley said.

The bill would allow the offset for the agency’s private education loans, he said.

Income Tax Return Clarification

What are income tax returns? Each spring is income tax return time. We all know about filing our taxes, paying them, and getting our tax refund, but somehow the term “tax return” is not always clearly understood.

The annual process begins in January through March of every year when wage earners receive their wage and tax withholding certificate from their employers. Students will receive statements of tuition, scholarship, and aid information covering the previous year. An income tax return form is then used to take the amount earned and figure out the correct dollar amount of taxes for which the individual is liable.

Although a person filing the papers detailing earnings, deductible expenses, and taxes may have some or all of their withheld taxes returned to them, that is not what is meant by the term “income tax return”. Actually, what “tax return” refers to is three parted. First, you are letting the government know, or are returning a report on, how much you made in the previous year. Next you are stating how much you have paid in taxes, up till the end of the year. Finally, your tax return form declares what is the amount you must pay.

So in going through this tax return process many people show that they have overpaid their income tax and therefore have a refund coming. The alternative is of course, that there was not enough money withheld, or that the quarterly payments were not enough and now you owe the government the difference.

To summarize, we offer you to care about everything instead of you and send your document to the IRS and to your state tax department.You don't have to carre about nothing.

Most income tax refunds have been paid

There has been a slowdown in paying individual income tax refunds because of the state’s precarious finances.

While revenue officials are not allowed to discuss individual tax cases, most refunds from uncomplicated individual state income tax returns for 2008 have been paid, or soon will be, Revenue Commissioner Tim Russell said last week.

Because of the recession, Alabama’s income tax collections this year have been anemic. In fact, they’re less than the previous year, requiring careful management of taxes that fund education first and then refunds.
Hundreds of thousands of refunds were slowly released because of cash flow problems this year. Because returns would be so slow in being released, the revenue department advised it would pay 4 percent interest on any refund not made by July 15.
Refunds from uncomplicated federal returns for 2008 were electronically deposited within a week or 10 days of returns being e-filed, but state refunds from uncomplicated returns that were filed early often took more than six weeks to receive.

Revenue spokeswoman Carla Snellgrove said the department has issued 1.3 million individual refunds totaling $659.3 million so far this calendar year.

Earlier this month, about 10,000 refunds were released to the comptroller for payment, she said. The refunds were through Sept. 30 and should be paid by the end of October. Refunds are released when funds become available out of income tax collections.

The revenue department batches refunds for payments. During two days in early October, 15,411 refunds worth $20.3 million were issued, and on one day, Oct. 15, another 16,365 refunds were issued totaling $16.8 million.

Snellgrove said any complicated tax return or a return with a filing extension would not be completed quickly but those were few in number.

“Most individuals will have been paid,” Snellgrove said.

10 Ways to Lower Your Taxes

1. Boost your 401(k) contributions.
2. Make the most of your flexible spending account.
3. Buy a house.
4. Buy a car.
5. Sell losing investments.
6. Maximize your tax credits and deductions.
7. Pay college bills.
8. Give to a charity.
9. Max out tax breaks for the self-employed.
10. Keep track of medical expenses.
1. I've been maxing out my 401k for years, so I get the full tax advantages here.
2. Does a HSA count? If so, I put in the maximum allowed each year.
3. I already have a house and it's been paid off for over a decade -- so I don't get the new homeowner credit or the mortgage interest deduction. And I'm ok with that.
4. I thought about buying a car this year and saving the state taxes, but I think my car will last another (hard) winter and it's probably a better deal to keep it longer. So I'll look for a new car in 2010.
5. I have enough investment losses to carry over for years. Ugh.
6. We're looking at buying a new heater/AC and the $1,500 tax credit is one reason why. That and the fact that the repairman said, "Your heater is making a funny noise. My suggestion is to never turn it on again."
7. Our 529 contributions save us on state taxes (a few hundred dollars a year) because we invest with an in-state 529 plan.
8. Our biggest deduction for the past several years.
9. If you have a business (or a side business), you can save a bundle on taxes by having the business cover many costs (such as a deduction for home office use, magazine subscription, books, computer equipment and support, etc.) I could make much better use of this option, but I seem to maximize revenue and minimize expenses (which is not a bad thing.)
10. I'd prefer to have no medical expenses at all than to have massive ones that save me on taxes (which is probably the same way everyone feels about this issue.) But if you do have big medical bills, it's at least some consolation that they can save you some on your taxes.

South Carolina lawmakers aiming to extend jobless benefits

South Carolina lawmakers said Monday they will return to the Capitol next week to ensure thousands of state residents receive extended unemployment benefits.
House Speaker Bobby Harrell and Senate President Pro Tem Glenn McConnell, both Charleston Republicans, agreed to the extraordinary move and criticized the state Employment Security Commission for failing to get the Legislature involved in heading off a problem that this week made 6,700 of the state’s unemployed ineligible for extended benefits.
“The General Assembly will take quick action to fix this oversight by the ESC to ensure that unemployed South Carolinians will not suffer further by being denied this federal benefit,” Harrell and McConnell said in a joint statement.
“It is unfortunate that the Legislature must return to fix this problem, this oversight was completely avoidable” and shows the need to overhaul how the commission operates.
Even before the new wave of workers lost benefits, the state had more than 113,000 people who had exhausted all state and federal regular and extended benefits in the midst of an 11.5 percent unemployment rate, which is the nation’s sixth highest.
The federal government made stimulus money available for 20 weeks of extended benefits.
To get the final seven weeks, states had to tie emergency jobless relief to the unemployment rate. But South Carolina’s emergency payments are instead tied to people receiving jobless checks. Because legislators didn’t temporarily change that law, the extra benefits weren’t available. South Carolina was the only state that needed to make the change that didn’t, according to the National Employment Law Project in New York.
And a quick, one-day return means legislators won’t be in town when the State Ethics Commission releases a report that would fuel more impeachment discussion.

How would you feel about getting a check for only 8 cents in the mail? That is just one reason why Georgia's lieutenant governor is slamming the state's department of revenue -- criticizing the way the department handled this year's tax refunds.
Mike Aiken said he isn't quite sure what to do with the check he just got from the state of Georgia -- a check that would boost his bank account by 8 cents.
He had to wait more than three months for his Georgia tax refund. The state owed him interest -- 8 cents. It cost the state 33 cents to mail it.
"They should have put a minimum somewhere," Aiken said. "Anything less than a dollar forget it. I don't know how the rest of the public may feel about it -- maybe they want their eight cents."
Facing a budget shortfall, the Department of Revenue had to reduce the staff that processes tax refunds -- the cuts to that staff saved the department $2.4 million. Because the checks slowed getting out refund checks, the state wound up paying approximately $2 million in interest to those who had to wait.
Add to that, about $100,000 in extra postage to send those interest checks.
Lt. Gov. Casey Cagle calls the situation unacceptable.
"The Department of Revenue was cut less than some other state agencies," Cagle said. "And more important, the core mission of the Department of Revenue is to collect taxes and process those -- and when you're not doing it in a timely manner, you're violating your core principle."
The revenue department had to cut a total of $12 million from its budget. Cagle says those cuts should have come in places other than the people who process tax refunds. As for that 8 cent check -- by law the state has to pay interest to anyone who gets their refund as late as Mike Aiken got his -- no matter the amount.
Aiken says he may keep the check as a souvenir.
Twice, Revenue Commissioner Bart Graham has declined requetsts from 11Alive News for an interview. Late Monday afternoon, his department e-mailed answers to several questions. The department says it made cuts to avoid closing offices or discontinuing any services - and says it was not a foregone conclusion that cuts would have caused refund checks to go out late.
As for the lieutenant governor''s statements - the revenue department had no comment.

Worst of recession over, Conference Board says

The Canadian economy will grow 2.9 per cent next year, bolstered by government stimulus programs, the Conference Board of Canada said yesterday. "The darkest days now seem to be in the past," the Conference Board said in a report. "Over all, real GDP [gross domestic product] is now forecast to contract by 2.1 per cent in 2009, down 0.4 percentage points from what we forecast in our summer Canadian outlook. As private sector activity stabilizes and strengthens next year, planned capital spending by all levels of government will help boost real GDP growth to 2.9 per cent in 2010," the Conference Board said, adding that "stronger, post-recession-type growth of 3.6 per cent is in the cards for 2011." Private sector spending is expected to plunge by 13.7 per cent in 2009 and is forecast to grow by less than 1 per cent in 2010. "For now, government policy remains the economic stabilizer," the Conference Board said, with Canadian infrastructure spending levels forecast to surpass $50-billion in 2009 and peak at $60-billion in 2010.

State forced to pay $2 million in interest to taxpayers

More than 278,000 Georgia taxpayers are receiving a little extra dough this week from the state.
The Department of Revenue has mailed out more than $2 million in interest to taxpayers whose refunds were not issued within 90 days of the April 15 filing deadline.
Delays in processing individual income tax returns led to the backlog, which Revenue officials say was caused by $12 million in budget cuts at the agency in the past year. More than 300 Revenue employees were laid off, many of them in the tax return processing unit.
Georgia law requires the state to pay interest on any return not processed within 90 days of April 15, or 90 days from the date the return was filed if after April 15.
The taxpayers receiving interest payments will get an average of $7.42, although 90,000 are receiving $1 or less. Some were $20 or more.
Under state law, the interest accrues at 1 percent per month after the 90-day limit. But the 90-day clock doesn't begin ticking until April 15, no matter when the taxpayer files a return. Any taxpayer who filed a return on time but did not receive refund before July 14 should receive an interest payment.
All taxpayers getting interest payments filed paper returns, and they should have already received their refunds, said Graham, who reports to Gov. Sonny Perdue. The interest is being sent out separately because the agency had to reprogram its computer systems to calculate interest owed. It's the first time since at least 2003 that the state has had to pay interest for late refunds.
But on six occasions during the past legislative session Graham warned lawmakers that budget cuts would result in processing backlogs. Graham said that proposed cuts would lead to an average three-month delay.
Lawmakers cut Revenue's budget by $12 million, or 9 percent. Of that, $2.4 million came from the processing center. Graham cut two of the three shifts of part-time processors hired during tax season.
Cagle also said in the interview that the state gave the Department of Revenue an additional $26 million "to create efficiencies of scale to process these much faster."
But that $26 million did not go to the processing unit. Much of it was bond money to create a new data warehouse that eventually will make it easier and more efficient for Revenue agents to investigate fraud. Some was for an ongoing project aimed at making it easier for sales tax and employers' withholding taxes to be filed and paid electronically.Perdue defended the agency. Bert Brantley, the governor's communications director, said the Revenue Department has recovered more than $500 million in recent years through improved operations and new ways to collect back taxes.
"Our goal is always to meet those higher expectations," Brantley said. "We regret it any time we don't reach that goal, even when it is due to budget cuts."

New Zealand hit with record number of tax refund scams.

The New Zealand Government released new figures highlighting the constant problem of phishing techniques tailored to collect information about individuals for financial gain.

A record 83,000 scam emails offering fake tax refunds were reported to HM Revenue & Customs (HMRC) in September. The online attacks, known as ‘phishing’, have continued this month, with an unprecedented 10,000 reports of the fraud made to HMRC on one day alone.

The press release goes on to show how the scam continues unabated:

The scam email tells the recipient they are due a tax refund and then asks for bank account or credit card details. Anyone who gives these details to the fraudsters risks their bank accounts being emptied and credit cards maxed to their limit. The victim also risks having their personal details sold on to other criminal gangs. The latest version of this scam originates from various different websites, which operate for 20 minutes before changing their domain name.

It’s pretty wild that a con artist would use the tax department to get your money. I had to grin and believe that, the citizens rarely get refunds, because they are reporting the scam to the government. I don’t think even Al Capone would try to use the government’s tax department as a source of information to start a fraud! How times have changed!

Taxes paying through the nose

The problem with taxes isn't just that we have to pay them, but taxes in general create thousands of pages of laws, amendments and decrees that determine how much we have to pay.

We also like to tax our sins, so to speak. The state of California has decreed that the sin of smoking should cost the sinner 87 cents a pack. That's on top of a federal tax of $1.01. Legislators would like, mightily, to raise that another buck-fifty a pack in hopes of saving sinners from themselves and raising more money. They also cite savings in health care, not to mention longer lives.

We think that the evidence that smoking is harmful to health is very strong, and if Congress members were serious about it, they would just ban smoking altogether. That won't happen soon. Not to mention that the black market in cigarettes would flourish, and the feds and states wouldn't get a dime in taxes. Talk about conflicting goals.

Government likes to tax just about every sin under the sun. For the sin of reading this newspaper, you will be assessed a sales tax. If you drink sugary soft drinks, you pay sales tax, and now some folks at Princeton and Harvard are proposing a one-cent-per-ounce tax on that sin.

The soda tax advocates claim that a 10 percent increase in the cost of sugary drinks would result in a 10 percent decline in usage and a health care savings in the billions.

Why not just cut the subsidy to farmers for producing the corn fructose syrup used to sweeten drinks, instead of giving them tax money to grow the stuff and then taxing its consumption?

Then there are the discrepancies in what is taxed. Ice and soda are subject to California sales tax, but chips aren't. Our favorite, however, is this one, from the Board of Equalization: If you hop down to your favorite convenience story and buy a cold cheese dog, and take it with you, it's considered a grocery item, and you pay no sales tax. However, if you buy one from the rotisserie, it's considered takeout, and you pay sales tax. So what happens if you buy a cold burrito and heat it in the store's microwave? Depends on where the microwave is located. In some cases, the state gets a bite of the burrito; in others, it doesn't.

It's just one more reason why you have to love a full-time Legislature, which has never met a tax it didn't like, even when the laws that govern taxes don't make a lick of sense.

Student Tax Refund in the UK

Working casual jobs as a student gets you that much needed cash; but it also gets you paying taxes. The UK tax system is pretty straightforward, but can be complicated if you work part-time and for more than one employer.

Most students are taxed on the PAYE (Pay as you earn) scheme, which is designed to deduct the taxes you owe with each pay. This way you won’t end up owing a huge amount of tax at the end of the tax year. But the PAYE system does not take into account periods of unemployment. Income tax is calculated at a rate that’s only right if you work the full tax year on the same pay rate.

If you only work casually to supplement your studies, your annual income may drop to a lower tax bracket and you can end up having paid more taxes than you actually had to. You are then entitled to receive a tax rebate for the amount that was overcharged.

US tax return deadline.

The April 15 deadline for US tax returns is coming faster than you may think, so if you’ve worked in the USA it’s about time you started to organize your tax return.

First off, your employer will mail you your W2 form, which has all of your earnings and deductions for 2008. By law, employers are obliged to send W2 summaries by the end of January. If you live outside the USA, make sure you update your US employers with your current address.

If you have any trouble getting your W2, you can still file your tax return using your final payslip.