It’s a safe bet to file a return, whether its required or not

Charlie Jones, Chief Compliance Officer, JK Harris and Company

Tax season is upon us, but you say you aren’t sure whether or not you should file a tax return. The safest thing to do is to go ahead and file, even if you are not required to.

You need to file a return if your income is above a certain level. That income level varies depending on your current filing status, age and the type of income you received in 2007. For example, if you and your spouse are both under 65 you are not generally required to file until your joint income reaches $17,500. If however, you are self-employed, you generally need to file a tax return if your net income for 2007 reaches at least $400.

Even if you are not required to file a return, I recommend that you file so that you can get back any money that may have been withheld from your pay in 2007. You may also qualify for a refundable credit such as Earned Income, Additional Child or Health Coverage tax credits. The Earned Income Tax Credit and the Additional Child Tax Credit are the most common refundable credits. The EITC is for eligible low-income workers and it reduces the amount of tax an individual owes and may be returned to you as a refund. The Additional Child Tax Credit may be available if you have at least one qualifying child and you did not use the full amount of your Child Tax Credit.

If you are still uncertain as to whether or not you should file, you can refer to IRS Publication 501 ‘Exemption, Standard Deduction and Filing Information for 2007’ on the IRS’ website at www.irs.gov/pub/irs-pdf/p501.pdf.

Charlie Jones is the Chief Compliance Officer at JK Harris, LLC. Charlie worked with the IRS for 30 years, with 27 of those years being in the Collection Division. This has allowed him to serve JK Harris as a Technical Advisor and Director of Operations for Tax Resolution Services.

Frivolous tax arguments do not sit well with IRS

If you follow celebrity news, you may have heard that Wesley Snipes has a tax trial underway in Orlando, Florida. The IRS is alleging that Mr. Snipes earned $38 million between 1999 and 2004 from appearing in more than a half-dozen movies. During this time, the IRS says that he paid $0 in taxes. The Associated Press reported that prosecutors in Snipes’ case say he claims he was not required to pay income tax.

In court papers and interviews, Snipes says he was the victim of unscrupulous advice from two known tax protestors who advised him to follow the 861 provision. The 861 provision is a popular tax argument among tax protestors. These protestors claim that provision 861 does not list wages earned in the United States as taxable. Trial and appellate courts have all rejected this interpretation and it has landed eight protestors in prison for relying on the 861 defense.

Snipes is being charged with two felonies: conspiracy to defraud the government and filing a false refund claim. Snipes is also charged with failing to file tax returns for six years starting in 1999. It has been reported Snipes maintains he is not guilty and that he acted on the advice of Douglas Rosile and Eddie Kahn, both under federal court order to stop promoting tax evasion. If convicted, Snipes could face up to 16 years in federal prison; Rosile and Kahn could face up to ten years each.

While it remains to be seen what the verdict will be in Snipes’ tax case, tax protestors and their arguments are not uncommon to the IRS. According to the IRS’ website, there are a variety of civil and criminal penalties that can be used against those who use frivolous tax arguments to avoid paying their income tax. In the eyes of the IRS, these frivolous arguments are a waste of time and money. Taxpayers or tax practitioners who use them to avoid paying their proper income tax will be penalized in one form or another.

And take it from me, we have seen some of these tax protestors end up at JK Harris for help solving their tax problems. If you feel you have received bad tax advice and need help getting back in the IRS’ good graces, contact a tax professional to find out how you can resolve your tax problems.

We are trained professionals…do not attempt this at home

Scott Spann – CERTIFIED FINANCIAL PLANNER™, JK Harris Advisors, LLC

You go to a mechanic when your car breaks down. You go to a doctor when you’re sick. You go to an attorney when you need legal advice. So why are you trying to plan your financial future on your own?

That is a question that everyone should ask himself or herself. Here’s another. Are your financial future, your children’s college fund, and your retirement savings not important enough to hire a skilled, professional financial planner?

I would hope most people would answer that question with a huge, resounding “Yes!”

For those of you who said no, maybe I can change your mind. Many people don’t truly understand the intricacies of investments. Some of you may not realize that even success with investments can throw your investment strategy off.

Say you want to have 60 percent of your portfolio invested in stocks. Let’s say the market does well and you are realizing higher than expected returns on those stocks. Now, after a couple of years, instead of 60 percent invested in stocks you have 80 percent. But the kicker is you haven’t changed a thing in your portfolio.

To keep your plan on track, you need to revisit your asset allocation periodically and determine whether adjustments need to be made or not.

A skilled professional, such as those you will find at JK Harris Advisors, can help you identify investments that achieve the greatest absolute return over the years and subject you to the lowest overall taxes along the way.

Financial planning is more than just piece of mind. Little changes during the planning process can make big differences.

So, just as you see a doctor for checkups, your lawyer for legal advice, and your mechanic for tune-ups, you should consult a qualified financial advisor for financial planning.

For more information on this subject, visit www.jkharrisadvisors.com.

Scott Spann is a Certified Financial Planner™ with JK Harris Advisors.

IRS has refund checks that are looking for a home

It never seems to fail. When some people move and change their address, they let everyone know…everyone, that is, except the IRS.

Once again, the IRS has refund checks from tax year 2006 that have not found their rightful owners. Believe it or not, these checks are worth a whopping $110 million dollars and average approximately $953 per check. That’s not all. Some taxpayers have more than one check waiting for them.

But don’t fret. This money can still be claimed. If you are one of the 115,478 taxpayers who moved and never received your refund, it’s as simple as updating your address with the IRS using Form 8822. This form can be downloaded (Click here) or you can call the IRS toll-free 800-829-3616 to request one.

You can also visit the “Where’s My Refund?” page on the IRS website to track your refund. Simply enter your Social Security number, filing status and the amount of the refund shown on your 2006 tax return. If the check has come back to the IRS, you will be prompted to enter your correct mailing information.

If for some reason you are not in a hurry for your refund, the IRS does keep the returned check information on file and will forward the money to you as soon as a valid address is on file. In other words, you will receive your refund check when you file your 2007 tax return listing your current and correct address.

However, I don’t suggest you wait. It’s always best if you let the IRS know right away of any address change. Even if you have changed your address with the U.S. Postal Service, it’s best to let the IRS know directly.

And here’s just one more little tidbit about refunds for the 2006 tax season. The undeliverable refund checks account for less than one-tenth of one percent of all refunds, or about one in a thousand. In 2007, the IRS processed approximately 105 million refunds totaling about $240 billion.

Excellence in customer service and satisfaction our #1 goal

Bernard Bandish, Executive Vice President – Operations

One of the first things I wanted to accomplish for JK Harris when I was put in charge of Tax Resolution Operations was to improve our communications with our customers.  So, based on feedback from some of our best Case Specialists and Supervisors we established teams of employees who work on the same kinds of cases.  The entire team mans the phones and covers for one another.  As a result, a live person now answers calls to JK Harris almost every single time.  Since whoever answers the phone is on the same team as the person completing the client’s work and has access to the case, the person answering the phone can usually help the client immediately.

Our employees have to balance their time between contacting clients for required data, preparing documents, and contacting the IRS.  They still need to be available to answer calls and reassure clients who are calling for updates.  Dealing with a huge government bureaucracy like the IRS is sometimes a slow process.  Our representatives often have to wait on hold for twenty or thirty minutes to talk to the IRS.

If our clients could somehow walk around the office like I do and actually hear our Case Specialists and Licensed Taxpayer Representatives talking to clients and the IRS, I think they’d take great comfort in the fact that we are working very hard for them.

When I agreed to accept the position of Executive Vice President for Operations at JK Harris, I told John Harris that my goal would be to improve our customer service to the point that Business Week Magazine would consider us when it does it’s annual awards for best-of-the-best companies for customer service.  I’d like to continue to improve communications with clients through better phone and e-mail systems and give them the ability to check progress of their cases online by logging into a secure portion of our website.  At the same time, I’d like to improve our turnaround time for completing cases and getting them into the hands of the IRS.

As we look towards the future, I expect us to continue our dominance of the industry and set new standards of excellence for tax preparation, tax representation, tax problem resolution, tax and financial planning, business valuation, and small business bookkeeping and accounting services.

Bernard, who joined JK Harris & Company in 1999, was named Executive Vice President of Operations for JK Harris & Company, LLC in March of 2007.  In his current role as Chief Operating Officer, Bernard manages a staff of nearly 300, including the professionals and paraprofessionals who provide tax and financial services to clients. Bernard has more than 30 years of business experience, including 20 years in the financial services industry.  He is a CERTIFIED FINANCIAL PLANNER™ practitioner, a Chartered Financial Consultant, and an Enrolled Agent.