Archive for July 2016

Tax Scams

You would think that with tax season being “technically” over that you wouldn’t hear anymore about tax scams. Contrary to popular belief, tax scams are still going on as these scammers appear to work year round. The IRS is urgin people to stay vigilant against calls from these scammers that are impersonation as IRS officials.

Here are some tips from the IRS to help you avoid being a victim:

  • Scammers use scare tactics. These aggressive and sophisticated scammers try to scare people into making an immediate payment. They will try to threaten you with arrest, deportation, and even state that they will have your professional license and/or your driver’s licence taken away if you don’t agree to pay. They are also known for robo-calls. Robo-calls are basically just a recording that states that it is urgent that you call back the number that it provides. DON’T CALL THE NUMBER BACK!
  • Scammers spoof your caller ID. This merely means that when you receive a call the scammer can make it look like the IRS or another agency is calling you. The callers use IRS titles and take badge numbers to make themselves appear legit. More often than not they use online resources to get your name, address, and other details about your like to make the call sound official.
  • Scammers also use phishing email and regular mail. Scammers are known to copy official IRS Letterhead to use in email or regular mail that the send to victims. A new trend for these scammers is they will actually provide an actual IRS address where they will tell you to mail the receipt for the payment that you made. This makes the scam look official.
  • Remember that the IRS will not call you about your tax bills without first sending you a bill in the mail. They will not demand that you pay your taxes a certain way. For instance, require that you pay with a prepaid debit card or any specific form of payment. They will not ask you for a debit or credit card number over the phone. In addition, the IRS will not threaten to bring police or other agencies to arrest you for not paying. Nor will they threaten you with a lawsuit.
  • Remember if you don’t owe taxes or have no reason to think that you do contact the Treasury Inspector General for Tax Administration (TIGTA), Us TIGTA’s “IRS Impersonation Scam Reporting” to report the incident. You should also report it to the Federal Trade Commission, us the “FTC Complaint Assistant” on the FTC. gov website. Please add IRS Telephone Scam in the notes.
  • Remember that if you do receive a call do not provide any information to the caller. Hang up immediately. If you know you owe or think you may owe call the IRS at (800) 829-1040 and an employee can help you.


The Future of Interest Rates

In December of 2015, the Federal Reserve hiked interest rates for the first time since 2006. While that hike was modest, many believed it to be the first of many that would take place over the next couple of years. In light of Brexit and weaker than expected jobs reports, that may no longer be the case. Sandy Furuya, Senior Accounting Manager at [Wamhoff Accounting Services] explains.

About Interest Rates and the Fed:

  • After the economic crisis of 2008, the Fed adopted a policy of lowering interest rates as a way to help the economy as interest rates have an impact on the stock market, bond markets, inflation and consumer spending.
  • We’re currently at near-zero interest.
  • In December when the economic outlook appeared more favorable, the Fed made a modest increase in rates. Many anticipated that those increases would continue.
  • In fact, any announcements or anticipation of interest rate changes can impact the overall economy.

Interest Rates – Going up or down?

  • Many analysts predicted at least two more rate hikes in 2016. The markets were operating in anticipation of these hikes.
  • In May, 2016, a weak jobs report, stating that only 38,000 jobs had been added to the economy created uncertainty. On June 23rd, the UK voted to exit the European Union, sending an impact to US and global markets.
  • Economists now believe that the Fed will revert back to a state of “inaction,” neither raising or cutting rates in the foreseeable future.
  • Many are pointing to 2018 as being the first possible point at which rates may rise.
  • Some are anticipating that the Fed will cut rates again, although since we’re near zero, it will be minimal.

What is the impact of cutting the interest rates to the average investor?

  • Lower interest rates can be a good thing in the short term. It’s makes borrowing money to buy things more accessible, which stimulates the economy.
  • Mortgage rates are at an all-time low. This makes investing in real estate – residential or commercial – favorable. It’s a good time to buy a new home, a second home, investment property, commercial property, or even refinance to do home improvement project or pay off higher interest debt.
  • On the flip side, bank accounts, pension funds and investments don’t grow as quickly as they would in normal economic conditions, which impacts savings and retirement funding.
  • Your savings (especially long term savings) must at least keep up with the rate of inflation. The Fed has some control in that changing interest rates can impact inflation, much as it did in the early 80s when inflation was at 14%. They raised interest rates to 20%, which caused a recession but halted the inflation.