June 29, 2015 § Leave a comment
Independence Day, or the Fourth of July, is one of my favorite holidays. It is a day celebrated with outdoor barbeques, music, and fireworks – all to mark the celebration of our great nation’s freedom. I thought it would be fun to share some “fun facts” about Independence Day. Please feel free to dazzle your friends and family with some of these “little known truths” as you are enjoying your celebrations on the Fourth.
Fun Fact #1 – Our country actually became independent on July 2, 1776. On that day, John Adams wrote, “The Second Day of July 1776, will be the most memorable Epocha in the History of America. I am apt to believe that it will be celebrated, by succeeding Generations, as the great anniversary Festival.” The Second Continental Congress made a decree for freedom on July 2, 1776; however, the Declaration of Independence was not signed until July 4, 1776. Interestingly, the Declaration of Independence did not become official until August 2, 1776, when it was signed by most delegates.
Fun Fact #2 – The Declaration of Independence was signed on July 4, 1776 by John Hancock and Charles Thompson .
Fun Fact #3 – It was not until 104 years later, June 28, 1870, that Congress declared the Fourth of July a federal holiday. It became a legal holiday in 1938.
Fun Fact #4 – The printed version of the Declaration was called the Dunlap Broadside. Two hundred were printed, but only 27 have been accounted for.
Fun Fact #5 – The flag we know today with 50 stars and 13 alternating red and white stripes is not the original flag adopted in 1777. The original flag had only 13 stars which were arranged in a circle to reflect that all colonies were equal. The United States is the only nation who has willingly altered its flag, which it has done 26 times.
Fun Fact #6 – The red, white, and blue on the American flag have specific meanings. Red stands for hardiness and valor; white symbolizes purity and innocence; and blue reflects vigilance, perseverance, and justice.
Fun Fact #7 – The Philippines gained its independence from the United States on July 4, 1946.
Fun Fact #8 – John Adams, Thomas Jefferson, and James Monroe all died on July 4. Adams and Jefferson, the 2nd and 3rd presidents of the United States, respectively, both died on July 4, 1826.
Fun Fact #9 – Denmark, England, Norway, Portugal, and Sweden also celebrate the Fourth of July. Denmark and Norway celebrate the day because thousands emigrated to the U.S. in the early 1900’s, while the other countries hold celebrations near U.S. military bases to boost tourism in early July.
Fun Fact #10 – The first Fourth of July party held in the White House was in 1801 while John Adams was president.
June 1, 2015 § Leave a comment
I recently read a quote from a police detective that said, “Why would someone rob a bank with a gun and risk going to prison the rest of their life if all they need is someone’s name and Social Security number, and they can get 100 times what they’d get from a bank robbery?” Identity theft is one of the fastest-growing crimes in our country, and the statistics are quite scary.
In the accounting world, we have seen an uptick in cases of tax-related identity theft. This is where a thief steals your name and Social Security number, creates a fraudulent tax return requesting a refund, and submits it to the IRS. When you go to file your actual tax return, the return is rejected as the IRS tells you they already received your tax return. It can be a lengthy process to prove your identity and get your return processed (especially painful if you are waiting on a refund!). A recent audit found, on average, it took the IRS 278 days to resolve identity theft cases!
The IRS has implemented significant screening mechanisms to detect these fraudulent returns, but the amount of payments these criminals are receiving is still staggering. The IRS estimates it paid out $5.8 billion in fraudulent tax refunds last year (yes, you read that right…billions!). Statistics are not yet available for the 2014 filing season, but the IRS does say it has stopped over 3 million suspicions returns from being processed so far this year using their updated screening process.
With instances of data breaches uncovered each week, this topic is one all Americans have likely seen in the news. From Target to Home Depot to Anthem, data breaches have provided criminals with the information to continue perpetrating these frauds. Even the IRS is not immune to being hacked. Just last week, the IRS reported that criminals had exploited a weakness in the IRS’ own website where taxpayers could request a transcript of their previous returns. Approximately 100,000 taxpayers’ information was released before the IRS discovered the scheme. For these taxpayers, the criminals have information on their income levels, children’s names, bank accounts and details on the specific credits for which they typically apply. This means the criminal has all the information to file a fraudulent return that looks much like a return the taxpayer would usually file – making the return VERY difficult to be detected through the IRS screening process. Yikes!
So, in the face of this threat, what is a taxpayer to do? Really, the best defense is constant vigilance. If you are in the unfortunate population whose information was hacked recently at the IRS, the IRS will be sending you a letter. Check your credit reports by requesting through the three credit reporting companies:
- Equifax – 1-800-525-6285
- Experian – 1-888-397-3742
- TransUnion – 1-800-680-7289
If you see errors on the reports, like accounts you didn’t open or debts you didn’t incur, contact the credit reporting companies and the fraud department of each business that reported an error. Fraud alerts can be put on your accounts, and you have to continually monitor your credit for any unusual items. Filing your taxes as soon as you have the information to do so is also advised. Often you will not know that someone has filed a fraudulent return on your behalf until you file your return. Responding timely to the IRS requests will keep the process moving to get this resolved. The IRS suggests the following steps for taxpayers who think their identity has been stolen:
- File a report with the Federal Trade Commission (identitytheft.gov or 1-877-438-4338).
- Contact one of the three credit bureaus (listed above) to place a fraud alert on credit records.
- Contact financial institutions and close any accounts that have been opened without permission or tampered with.
- Check Social Security Administration earnings statement annually.
- If tax-related identity theft is suspected, work with a CPA to file the appropriate documentation with your tax return to prove your identity.
One final piece of advice is the IRS does not contact taxpayers by telephone, text message or email to request personal or financial information. If the IRS screening process flags your return for more information, you will receive official IRS correspondence via the U.S. mail. As with most things in life, knowledge is power. Being aware of these threats and the steps to resolve them is as proactive as you can be.
Kara Hogue, CPA