March, 2015

Message from Nelson & Company, P.S., CPAs

2014 Tax Season - Most taxing season in decades

Waiting for a refund? You might be waiting an extra week - or longer.
- IRS Commissioner predicts a miserable tax season.

IRS Commissioner John Koskinen predicts a miserable tax season. He warns that close to half the taxpayers trying to reach the IRS by phone might not get through. “Phone service could plummet to 53%”. For anyone trying to call the IRS, that means an average wait-time of 34 minutes. The 2015 tax filing season “will be one of the most complicated filing seasons we’ve ever had,” he said at an AICPA conference.

Why? He blames more work and less money. Congress passed new regulations to implement new tax laws such as Obamacare and the Foreign Account Tax Compliance Act, but refused to feed the IRS budget to pay for them. The IRS will be forced to operate within its $11.3 billion budget ($850 million below its 2010 funding).

He warns identity theft could increase as services that investigate it dip. Taxpayers who paper file may find their refunds delayed an extra week - or longer. (No word about refunds for taxpayers who e-file). Expect “lengthy delays” to get an answer to written correspondence. If you have a beef with the IRS, you’re in for a long, drawn-out process toward resolution. Shutdowns are another possibility.

A silver lining? Taxpayers might see a reduction in audits. For now, maybe, but make no mistake - you can bet that once workflow and funding are equalized, the IRS will be back with a vengeance.

Obamacare

Now that we’ve had a chance to investigate and work with the ACA (Affordable Care Act), we have some facts to share with you:

There are a lot of moving parts. Purchasing health insurance, in many ways, is  separate from income tax aspects. We strongly recommend consulting a health benefits specialist when purchasing insurance, even if you go through the Washington Healthplanfinder (www.wahealthplanfinder.org). Not only are there numerous plans and levels to choose from, if you qualify for subsidies, you also have options when choosing how to use them. Make the wrong choice, and you could end up with an unexpected tax bill.

The penalty for not having insurance is not $95 as everyone believed. It is $95 or 1% of your income – whichever is higher. The penalty can add up to several hundreds of dollars, depending on your income. Warning: It will be higher next year.

Repair and Capitalization Regulations

We have a flowchart that might help you decide the treatment of materials, supplies, tools and equipment, and improvements to buildings. Send us an email if you would like a copy.

Calls from the IRS?

Aggressive and threatening phone scams continue to be a serious threat. For more information visit:  http://www.irs.gov/uac/Newsroom/Phone-Scams-Continue-to-be-Serious-Threat-and-Remain-on-IRS-Dirty-Dozen-List-of-Tax-Scams-for-the-2015-Filing-Season

David S. Nelson, CPA, CTRS
NELSON & COMPANY, P.S.
Certified Public Accountants



IRS Times & Inquirer

Inside This Issue...

Lawyer Gets 12 Months for Tax Crime
Man Claimed $2.9 Million in False Refund Scheme


 

Lawyer Gets 12 Months for Tax Crime

A Texas lawyer was sentenced to 12 months in prison after pleading guilty to failing to file his federal income tax return.

Craig J. Schexnaider, 63, of Beaumont, Texas, was also ordered to pay a $5,000 fine and serve one year of supervised release. He must pay a tax liability of $98,805.57 to the U.S. Treasury.

According to court records, Schexnaider had gross income in calendar year 2008 of approximately $140,000. After he requested a six-month extension for the filing of his 2008 federal individual income tax return, and the Department of the Treasury approved his request and granted an extension until October 15, 2009, Schexnaider willfully failed to file his return by Oct. 15, 2009, as required by law.

Schexnaider was charged with four counts of failing to file income tax returns when he had the following in gross income: $73,920 in 2007; $143,797 in 2008; $110,669 in 2009; and $43,740 in 2010. The government dismissed the remaining counts after sentencing.


Man Claimed $2.9 Million in False Refund Scheme

Andys Rodriguez, 26, of Allentown, Pennsylvania, was sentenced to 30 months in prison and three years of supervised release. He was also ordered to pay $2.9 million in restitution to the U.S. government.

Rodriguez admitted that he knowingly filed false tax returns in the names of other individuals. The IRS identified more than 600 false returns that were associated with this scheme. These returns claimed refunds totaling $2.9 million.

 

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Nelson & Company, P.S., CPAs Since 1979

====NOTICE REQUIRED BY IRS====
This bulletin is intended to inform you about the services provided by N&C. It is not intended nor should it be used as a substitute for any professional tax or accounting advice. You should seek advice directly from a qualified professional before making any decisions or taking any action on any accounting or tax related issues. We provide this "as is" and disclaim all warranties.

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