Government Report Shows Former IRS Employees Still Accessing Taxpayer Data

According to a recent Government Accountability Office report, the IRS continues to leave its vast computer systems without proper security. Private taxpayer data is vulnerable to hackers, fraudsters and former IRS employees. This GAO report tells of significant deficiencies relating to the financial reporting systems. Millions of Americans are rightfully concerned because they are required by law to file tax returns but worry about fraud.

The IRS must continue making improvements to taxpayer financial data controls. This news comes in the wake of a very unpleasant six weeks for taxpayers and the IRS. Taxpayers have entered this filing season with greater fears over fraud. TurboTax recently announced it was suspending tax return filings due to fraud.

Taxpayer distress became more severe when some learned that their tax return had been filed by someone else who received their refund. At first, it did not involve federal taxes, only state returns. The FBI began investigating returns filed using TurboTax. Those interviewed about this spoke of data being compromised and returns may have been filed on the basis of 2013 returns.

IRS Employees
GAO Office

The report tells of easily compromised IRS passwords and outdated software having improper security functions. Worse yet, at times the IRS fails to delete access for employees who quit or have been fired.

Additionally, former employees of the IRS retain access to its data system when they should have been immediately cut off. A co-author of the report says that there is a plethora of taxpayer data that remains at risk for identity theft.

Taxpayers have no confidence in the credibility and security of the IRS especially after the Treasury Inspector General for Tax Administration stated that 1.6 million taxpayers had been affected by identity theft early in 2014. It was a fraction of that four years before. Electronic filing likely plays a role.

The GAO warns that gaining access to IRS files does not require much sophistication on the part of hackers. At the same time, it reports that some security weaknesses have been addressed, but more improvements must be made.

TurboTax Responds Well To Issues

We are currently in the midst of the tax season, and many tax filers already received their refunds. These individuals should feel happy and lucky because there is an issue currently afflicting the tax industry. Based on recent reports from the TheBestCompanys.com, some individuals are not receiving the refunds they were expecting. Apparently, identity thieves found a way to claim and steal from these unsuspecting individuals. Try using TurboTax 2015 next year.

Since the start of the year, internet fraud on the Turbotax 2015 free platform increased by approximately 37%. This percentage includes suspicious filers and filers who had their information compromised by hackers. TurboTax 2013 creators were not aware of this glitch for quite some time. When they discovered the issue, they started making changes to their interface, and now these issues are becoming less frequent.

The chief tax officer of Intuit, David Williams, believes internet fraud will be an ongoing problem. If they correct one problem, he expects a similar problem to pop up somewhere else. Intuit plans to do their part by placing safeguards and deterrents in vulnerable spots within the interface. Make sure to keep your data safe by updating the software often and working in a secure environment.

TurboTax 2015
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This will help out the tax filer tremendously, but the tax filer needs to do their part as well. Intuit encourages tax filers to guard their information when they are filing a tax return. This will put another barrier in front of any hackers and thieves. Use a firewall on your personal computer, run virus scans, and do not use public wifi services that are not secure. Thinking about doing your taxes from a hotel room, wait to get home as hotel wifi signals are not secure.

Maximize Your Refund With TurboTax

If you are using TurboTax 2015 to Maximize Your Refund while filing, the software can save you a lot of time by transferring last year’s information into the current year, explains Frank Ellis, a tax specialist.

In an article in the Traverse City based Tax Preparation Examiner, Ellis explains in detail how users can simply use last year’s information and then submit their return to the IRS with the up to date information.

Users are also able to use TurboTax 2015 to get the largest possible refund, and Ellis tells you how to do this by explaining how to access many of last year’s details and entries that have been saved on your computer.

This saves time as you do not need to retype much of your information, and also ensures more accuracy. The convenience of TurboTax 2015 doesn’t stop there; the software also allows you to transfer important and relevant information from other files.

Maximize Your Refund
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The fact that TurboTax 2015 looks for important documents and enters financial details automatically is one of the biggest appeals for most users filing their 2014 taxes. The software is designed to make the filing process as easy as possible, and to maximize the refund amount.

Ellis also points out the security and safety of the software – two things important to anyone dealing with personal financial information. Also pointed out are those all important little known deductions and credits, the many innovative tools of TurboTax 2015, and any important deadlines for filing.

Using a tax refund calculator is highly recommended during the entire process, to give users a fairly accurate idea of how much refund to expect. The entire tax filing process is easier and goes much more smoothly when you are able to make any necessary adjustments, based on your estimates of any tax refund.

Many users like to have some idea of their refund amount during the filing process, and the tax refund calculator allows you to be informed every step of the way. You can prepare more efficiently for the financial year when you are able to estimate the amount of your tax refund in advance.

Sales Tax Rules And Prepared Foods

Sales taxes are a fact of American life, and they are really noticeable in the area of fast food. Lets review some Sales Tax Rules to make sure you are following the law.

For instance, when a hungry consumer drives through his favorite drive-thru, he should expect to pay the price of his burger plus additional coinage to cover sales tax. Most states, counties and municipalities feed their coffers by charging a local sales tax on most every kind of purchase imaginable. Local law regulates what purchases are taxable and at what rate.

Sales Tax Rules
English: Picture of an authentic Neapolitan Pizza Margherita taken by Valerio Capello on September 6th 2005 in a pizzeria (“I Decumani”) located on the Via dei Tribunali in Naples. Italiano: Fotografia di un’autentica pizza Margherita napoletana scattata da Valerio Capello il 6 settembre 2005 nella pizzeria “I Decumani” situata in Via dei Tribunali a Napoli. (Photo credit: Wikipedia)

Application of sales tax regulations is not always straightforward, though. “Prepared food” sales tax rules are different from sales tax rules on single items such as milk or bread. For example, a take and bake pizza at your local eatery incurs sales tax, but some people, and states, are confused and upset about that. Is a cold pizza that the customer has to take home and bake actually prepared food?

Amazingly, the states of South Dakota and Arkansas wrote and published rules which say that pizza which is put together in a store and the baked at home is actually a prepared, and taxable, food because the restaurant had to assemble two or more ingredients to put the product together.

The Streamlined Sales and Use Tax Governing Board says a take and bake pizza is prepared food and therefore, taxable. The state of Wisconsin has a flow chart that its Department of Revenue employs to apply sales tax regulations to pizza and everything else.

Recently, an amendment to the Streamlined Sales and Use Tax Agreement says all states can make their own decisions on which pizzas are subject to sales tax. Yes, even pizza can get complicated when it comes to the tax man.

H&R Block specializes in navigating the muddiest of tax waters for the American taxpayer.

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Bitcoins Ruled As Taxable Property by the IRS

The US Government has recognized Bitcoins which is good in a way but at the same time they have decided to view them as property, making them taxable. If they had decided that the virtual currency actually was a currency then a tax could not be placed on them when they gain in value. Some view this as making the currency legitimate, and a good thing.

Bitcoin Magazine
Bitcoin Magazine (Photo credit: zcopley)

The fact that they can now be taxed reduces the interest for some who see the risk in the fluctuations in value and don’t want to take on the additional tax risk. Spending them would trigger the taxation while holding onto the property would not create a taxable situation. An odd part of the IRS decision is that miners would need to count their Bitcoins as income.

Stability in the marketplace is what many hope for with a couple exchanges having financial trouble in recent months. This decision by the government should increase stability.

It will be interesting to see if there’s a form to claim Bitcoin income in the future or if exchanges will need to issue 1099 tax forms to miners at the end of each year.