New Name and Layout

As you have probably already noticed we recently unveiled a new layout for my blog. We also purchased a new name for the blog, which you can now access by typing in RonisBlog.com. In addition to the physical changes we will also be making some changes to the content we feature on my blog. As well as the regular tax news I will also be posting franchise news and special featured articles which will go more in debt into tax law issues. So remember to update your bookmarks with http://ronisblog.com and be sure and check back daily for updates.

Returning Veterans Becoming Franchise Owners

According to US Franchise News, there is an increasing number of veterans returning from the Middle East who are looking to purchase small business franchises. Currently there are over 350 veterans who own a small business franchise in the United States as a result of the Veterans Franchise Initiative (VetFran), which offers discounted franchise fees to veterans who want to purchase a franchise business. The program was given the Support Sector Champion Award from the U.S. Department of Veteran Affairs at the nation’s capital. "The VetFran program is our way of saying thank you to veterans for their service," said Matthew Shay, president of the IFA. "They deserve our help in pursuing the American dream of business ownership because without them to protect our nation, such opportunities would not exist."

The Roni Deutch Tax Center is also a proud member of the VetFran program. To learn more about the special benefits we offer to veterans, please check out the Roni Deutch Tax Center Franchise website.

Tax Evader Sentenced to 63 Months in Prison

Earlier today a federal judge sentenced convicted tax evader Elaine Brown to 63 months in prison. She and her husband Ed Brown were both convicted of tax evasion. He is expected to receive a similar sentence later this afternoon. The two were found guilty by a jury of hiding Elaine’s income from 1996 to 2003, which was $1.9 million, as well as using $215,890 in postal money orders to purchase a compound for Elaine’s dental office. The couple has defended themselves by saying that federal tax laws do not exist, but the prosecuting attorneys claim their theories are "contrary to common sense," and that Elaine "had no excuse for not paying her taxes." Source: BostonHerald.

IRS Grants Virginia Tech Six Month Extension

Following yesterday’s horrific events, the Internal Revenue Service has granted a six-month filing and payment extension to all taxpayers affected by the shootings at Virginia Tech in Blacksburg, VA. The extension applies to all victims and their families, university students and employees, as well as emergency responders. The relief gives the affected parties until October 15, 2007, to file and make payments associated with their 2006 individual tax returns that were originally due on April 17. There will be no filing and payment penalties for those who qualify as long as the returns are filed and payments are made on or before October 15, 2007. "Taxes are the last thing the Virginia Tech family should be worried about at this time," notes IRS Commissioner Mark W. Everson. "Our hearts go out to the people affected by this tragic event." To claim this relief taxpayers need to call the IRS at 866-562-5227 and identify themselves before they file and or make payment.

More Last Minute Filers E-file

According to IRS data, as the tax deadline approaches more and more last minute filers are choosing to e-file. Historically more people e-file at the beginning of tax season, and typically those people are expecting a refund and want to get it fast. Late filers traditionally owe the government money and have more often used paper tax returns. But new statistics are showing that many taxpayers are choosing to pay electronically through credit card or direct debit. According to the IRS nearly 57 million returns have already been e-filed this year. Nearly one-third of those returns were e-filed during March alone, up more than 10 percent over last March. For more information check out the IRS’s website.

Tax Friendly States

CNN has put out a list of the most tax friendly states for 2007. The list was put together by comparing each states total state and local tax burden in 2006. That burden was determined by what residents pay in state and local income taxes, property taxes, sales taxes, luxury taxes and fuel taxes, among others. States that top the list include: Alaska, New Hampshire, Tennessee, Delaware, and Alabama. For the full list go to CNNMoney.com.

Tax Relief For Special Needs Children

According to recent Census data, one in twelve children and teenagers have a physical or mental disability. With special education enrollment costs on the rise, parents are left with the financial burden of paying for special education. Although the Internal Revenue Service does not have any clear cut relief measures for these parents, there are many deductions that the IRS recommends that parents of special needs children take advantage of when preparing their tax return. Intuit has a helpful article on tax relief for special needs children that you can read by clicking here.

US Government Sues Jackson Hewitt

According to the IRS’s website, the United States government has filed civil injunction suits against five corporations that operate Jackson Hewitt tax preparation franchises as well as 24 individuals managing or working at the franchises. The suit claims that the franchises "created and fostered a business environment" at the Jackson Hewitt franchises "in which fraudulent tax return preparation is encouraged and flourishes." Some examples of the fraudulent preparation include phony W-2 forms, fabricated businesses and business, massive fraud involving the Earning Income Tax Credit, etc. The suits also allege that Jackson Hewitt franchise managers and employees got kickbacks from customers to file fraudulent tax returns.
The suit is seeking more than $70 million in losses to the U.S. Treasury Department, as well as seeking court orders barring the franchisees and other defendants from preparing tax returns for others. "When practitioners prepare a false tax return, it has a corrosive impact on the tax system," claims IRS Commissioner Mark W. Everson. "I am deeply disturbed by the allegation that a major franchisee of the nation’s second-largest tax preparation firm is intentionally preparing improper tax returns with inflated refunds. I’m particularly concerned that many taxpayers of modest means could actually end up owing the government thousands of dollars if they claimed an improper refund."

IRS Warns About Phony Emails

The IRS has issued a press release warning about phony emails claiming to be from the Internal Revenue Service. The emails direct the receiver to click on a link that goes to a page asking for personal financial data such as credit card numbers or social security numbers. This practice of confusing victims into giving away private personal and financial information is known as phishing for information. The IRS is warning that they do not ever send out unsolicited emails, and that they never ask people for their PIN numbers, passwords or similar secret access information for their credit card, bank or other financial accounts. The IRS has created a special email address, phishing@irs.gov, that you can forward fraudulent emails to for further investigation. The email address has been up for about a year and has already received over 17,000 emails.

Expensive Tax Mistakes To Avoid

CNN.com has added a helpful article with advice on some expensive tax mistakes to avoid when preparing your tax returns this year. Some of their advice includes: avoid paying taxes with a credit card, avoiding refund anticipation loans, setting up an installment agreement, and paying on time. You can read the full article by clicking here.

Tax Watch Spring 2007 Edition Available

Tax Foundation.org has posted the Spring 2007 edition of their quarterly tax policy newsletter, Tax Watch. The newsletter includes non-technical research and discussion of current tax issues including Gross Receipts Taxes, the Alternative Minimum Tax, and much more. Click here to see the full newsletter.

E-Filing Up 5 Percent Says IRS

According to the IRS’s official website the number of tax returns being filed electronically is up five percent from the same time period last year. According to IRS Commissioner Mark W. Everson, "taxpayers are filing electronically at a record pace this year, E-file reduces taxpayer errors and gets refunds back quickly." So far 73 percent of all returns have been e-filed this tax filing season, up from 70 percent for the same period last year. Also up is the number of people having their returns deposited directly into their bank accounts. 76 percent of all refunds issued this tax-filing season were directly deposited, up from 71 percent for the same period last year.

IRS Identifies 40 Frivolous Positions To Avoid

Recently the Internal Revenue Service issued an article detailing 40 frivolous positions that taxpayers should avoid when completing their tax returns. These positions have no basis in tax law or have been determined frivolous by tax or federal courts. If any frivolous positions are contained in a tax return, taxpayers could face a fine for filing a frivolous tax return. In 2006 congress increased the penalty from $500 to $5,000 for persons submitting tax returns that are deemed frivolous by the IRS. One of the frivolous positions includes false arguments that wages are not taxable income, among various others. For more details visit the IRS’s official website.

Strangest Tax Deductions

Kiplinger has a new article on Yahoo finance with the top ten oddball tax deductions. All of which seem too be fake, but are actual examples that were held up in court. Some of the deductions include cat food for a junkyard owner, the cost of moving a pet, and a trip to the Bahamas among many others. Keep in mind that these deductions are not typical, and not recommended to include on individual taxpayers' returns.

Free File For Telephone Tax Refund

Because of the confusion over the telephone tax refund the IRS is reminding telephone users who do not normally file tax returns that they can take advantage of the Free File system to request a telephone tax refund. According to the IRS the Free File system is the easiest and quickest way to request the refund, which could arrive in taxpayers bank accounts in about two weeks. IRS Commissioner Mark W. Everson claims, "Fee File is a great choice for people who don’t normally need to file a tax return but who are entitled to this special telephone excise tax refund." For more information on requesting a telephone tax refund through Free File, visit the IRS’s official site.

Help With W2 Forms

Associated Content has added an article with a detailed breakdown of the information on W2 forms. Included is a box by box breakdown of what appears in every box on W2 forms and how it pertains to individual taxpayers. You can read the full article here.

Revisions to Offer in Compromise Application Form

On Monday the IRS announced they had revised the application for an Offer in Compromise, Form 656 package. IRS Commissioner Mark W. Everson notes, "we hope that these changes help more people who qualify satisfy their tax obligations." The changes were made as a result of the Tax Increase Prevention and Reconciliation Act of 2005 and some of the changes include new payment terms and submission rules. For more details on the changes visit the IRS’s website.

$2.2 Billion in 2003 Tax Refunds

According to IRS estimates there is over $2.2 billion in unclaimed tax refunds from over 1.8 million American taxpayers who did not file a federal return in 2003. The IRS estimates that half of the people who could claim refunds would receive over $600 per return. There is no penalty for filing a late return qualifying for a refund, and the IRS is encouraging people to file before the April 17, 2007 deadline, at which point all unclaimed funds become property of the government. You can get all current and prior years tax forms at www.IRS.gov or by calling 1-800-TAX-FORM. For more information check out Times Record News.

E-Filing And Direct Deposit Numbers Up This Year

According to IRS data from March 2, 2006, the number of people using the e-file system, as well as people direct depositing their refunds has risen yet again. Overall the number of e-files has increased by 4% when compared with last year’s data. Including an increase in 7% of e-filing from personal computers and a 2% increase in e-filing from tax preparers. Also more people are requesting their refunds be directly deposited into their bank accounts. So far 82% of all tax refunds have been direct deposited, up from 80% last year. Source: IRS.gov.

Small Business Deductions

Do you own a small business? Nolo.com has compiled a list of the fourteen most important small business tax deductions, as well as another list of other easily overlooked deductions. You can check out the list by visiting Nolo.com.