DARRIN T. MISH: Welcome to the IRS Solution Attorney show. I am the IRS Solution Attorney, Darrin T. Mish.
KATRINA MADEWELL: I promise he is. I am your co-host, Katrina Madewell. He sounds a little off today because he’s not feeling well.
DARRIN T. MISH: Well, that was a college try, though that really wasn’t all that bad.
KATRINA MADEWELL: It wasn’t bad but you can hear it in your voice.
PAT GEORGE: Sounds perfect to me.
KATRINA MADEWELL: Well, Pat George is spraying the studio down with Lysol and I’m in here hanging next to Darrin, but he is going to make it.
DARRIN T. MISH: There are literally people spraying Lysol up and down the hallway. We are here in a big radio station. There’s multiple stations and lots of studios.
DISCOVER SEVEN SECRETS THE IRS DOESN'T WANT YOU TO KNOW
PAT GEORGE: Well, there is somebody outside the door right now painting a big red cross on the door.
KATRINA MADEWELL: But you can call in today because we have a great show lined up.
DARRIN T. MISH: Yeah, there is fumigation going on. The reason I’m sitting here live is because we have a great guest today. His name is John Sapp and he’s from the website 1040.com. Why don’t we get him on the line there?
KATRINA MADEWELL: He’s on. Hi, John, welcome to the show.
JOHN SAPP: Hey, guys, how are you all doing?
KATRINA MADEWELL: Great.
DARRIN T. MISH: We’re doing really good. Seriously, the only reason I’m sitting here in the studio live is because I had committed to you that you were going to be on the show today. I’m interested and excited to talk to you about the thing that you are here to talk about. Which is filing your taxes and ID theft and the security and refund delays. We talk about the ID theft problems quite a bit here on the show but it’s neat to have an expert such as yourself come on and discuss this information with us.
JOHN SAPP: Well, I don’t know how much of an expert I am on the technology side, but we are definitely very involved in a lot of the IRS’s efforts to combat ID theft and refund fraud.
DARRIN T. MISH: Let me read your bio quick just so people should know why they should listen to you. I think it’s very impressive. John has served in a key role at Drakes Software since 1995. Drakes software is one of the biggest tax preparation software companies in the country. He’s had roles ranging from Chief Financial Officer to Vice President of Drakes Sales Marketing and Education Divisions. Today he serves as the Vice President of Strategic Development where his role is to help shape the future and the growth of one of the largest professional tax software companies in the nation. As a CPA, he has considerable experience working in public accounting and in technology and…
KATRINA MADEWELL: He’s got a whole lot of experience.
DARRIN T. MISH: In private industries. He holds a bachelor’s degree in accounting from Oral Roberts University and he has been a certified public accountant since 1987. Wow.
KATRINA MADEWELL: I would say that makes you more than qualified to be our guest this morning on the show.
DARRIN T. MISH: Most certainly.
JOHN SAPP: Yeah, I had different hair color when that bio was written probably.
DARRIN T. MISH: Yeah, I can relate.
KATRINA MADEWELL: Happens to the best of us, unfortunately.
DARRIN T. MISH: I have a video that plays in my lobby when you come in as a prospect, as a potential client and that video is at least 10 years old…
KATRINA MADEWELL: Oh I know you, yeah, your hair color is different.
DARRIN T. MISH: Back then my spiel was I’m this young, go-getting energetic guy and now I’m like I got a gray beard and all that stuff.
KATRINA MADEWELL: There is a pro and con to that right so the energy level might have dropped but the experience level went up.
DARRIN T. MISH: I don’t need as much experience as I used to need or as much energy as I used to need.
KATRINA MADEWELL: So, John, I’m so glad that Darrin brought this topic up because in my line of work on the real estate side we see this too. So, for example, I had a client apply for a loan and she got ready to do it, everything was in, everything was perfect.
In the state of Florida, we are high fraud and high-risk state so they make you sign what’s called the 4506T to pull your tax transcript. They want to verify what you gave the lender is the same as what you filed with the IRS. She found out that someone had filed a tax return for her and taken the tax refund in California and it was just a mess to unwind from what I understand.
JOHN SAPP: We are seeing that over the last 3 years especially. Our tax system is built with refunds in mind regardless of what financial planners tell us which is to try to get our tax event to close to zero as possible so the IRS doesn’t keep our money all year. Most the people will get a tax refund and a lot of those are refundable credits such as the child tax credit and the earned income credit which means that, not necessarily based on withholding from a W-2. So, it makes it a high priority target for a lot of nefarious criminals out there.
The IRS will tell us that it’s evolved over the last couple of years. What happens is you shut one door when you are dealing with security and they try to come in the window or they try to sneak in a different way. We’ve seen a lot of the folks…
KATRINA MADEWELL: Can you talk about that John for a minute? When you say sneak in a way, how can someone avoid this? I know if I was listening to the show right now I would be thinking, how are these people subject to the tax fraud identity theft to begin with? How can someone avoid that?
JOHN SAPP: Well there are a couple of things that you are supposed to do. The first thing is to just be aware. You would think it was common sense but, especially a lot of millennials, it’s not really on their radar. They are just getting out of college or whatever. Maybe at college they had to have their social security card for a lot of different stuff so they carried it around with them. Don’t give your social security number to folks.
When you use Wi-Fi, a lot of folks will put a lot of, well let me put it this way…we are seeing a lot of organized crime that is sophisticated with what they can do with identity theft. So, what they will do is they will take, if you think about security questions that your bank might ask you or tax software may ask you. They call those out of wallet questions. Things that you would have to pull your wallet out to know. Like which of these addresses have you lived at in the last 2 or 3 years.
Because organized crime is so good at reading what you post on Facebook or Linkedin or Instagram. All that personal information that people put on the internet, they have computer programs that go out and match those up with information that they can buy on the dark web about you. Your name, your social security number and those types of things and then they can answer those out of wallet questions a lot of times better than the taxpayer.
KATRINA MADEWELL: So they buy this list from someplace. The person I shared, she works at a hospital in the area. They think that themselves and a lot of the employees that their information was compromised. So, you are saying that someone likely would have hacked into that system, downloaded the information and sold it on the black market?
JOHN SAPP: Exactly.
KATRINA MADEWELL: Wow, and that can happen anywhere.
JOHN SAPP: It can happen anywhere. We saw the department of defense was hacked. When they were hacked, it wasn’t just names and social security numbers. There were fingerprints, security clearances all those types of things were.
The advantage those folks in Florida have is they can voluntarily, even without an id theft event go ahead and get what’s called an IP Pin, Identity Protection Pin. They can go online at the IRS website and get one of those and their tax return cannot be filed or accepted by the IRS without that number.
DARRIN T. MISH: Wow, that is interesting, I didn’t know that.
KATRINA MADEWELL: That’s what she ended up doing. She put a lock on her bank account and everything. You can’t even make a deposit without getting a pin or password or something.
DARRIN T. MISH: I will tell you what, though, in handling tax problems like we do in the office, one of the things we do is we pull the transcripts for the taxpayer because it kind of tells me the historical record of what’s gone on. If there are missing returns or if there’s, how much they owe and that kind of thing, if there’s opportunities to evade penalties and when that ID theft hold is on the account it makes it a whole lot harder to get. There is a system to get it but it’s harder.
KATRINA MADEWELL: Yeah, it’s not an easy, breezy process. It’s interesting and anyone is at risk. The problem is, and please correct me if I’m wrong, John, or chime in on this, but it’s not a high priority thing for the FBI which is who would handle this is that right?
JOHN SAPP: Well it’s becoming a higher priority. What you see is the IRS has their own police force. It’s called, and I’m sure Darrin knows about this, it’s called criminal investigation division. They are usually not people that you want calling you on the phone or knocking on your door because it usually means very bad things.
KATRINA MADEWELL: Are those the ones with the guns and the gold badges Darrin that we talk about?
DARRIN T. MISH: Yeah, those are the ones.
JOHN SAPP: But they are intimately involved now in detecting and prosecuting and investigating identity theft. They have, I don’t know if it would be an official term task force, but they do coordinate with the rest of the Treasury agencies, you know secret service and those folks. Also, the FBI whenever there is criminal action they coordinate well. I think each of them, for example, if you report a scam about where CEO’s are getting false emails that look like they come from their CFO’s and they ask for W-2 data or they ask, send me all the W-2’s on that account. That is an email scam that was prevalent the last couple of years and a lot of companies fell subject to it.
KATRINA MADEWELL: You know we see that on the real estate side as well. As a matter of fact, I don’t know any brokerage now in the state of Florida that doesn’t require a seller or a buyer to sign a wire fraud scam disclosure. It happened on one of my files. I represented the seller, the buyer’s agent was new but surprisingly they caught it. They changed my website. For example, my website is tampahometalk.com. They would go register the domain with an S so tampahometalks.com. They would send out, oh, sorry, the wiring instructions have changed, send it here. So, people would reroute their funds to another place.
JOHN SAPP: I hadn’t heard of that but that makes perfect sense. It goes right along with the sophistication of a lot of these criminals that they track individuals that may have access to that data. They have ways of wooing them into providing it to them.
KATRINA MADEWELL: John, hold that thought we must take a quick break we will be back in just a minute. You are listening to the IRS Solution Attorney show when we come back we are going to continue that thought and a few more. Back in just a moment.
DARRIN T. MISH: Welcome back to the IRS Solution Attorney show. I am the IRS Solution Attorney, Darrin T. Mish.
KATRINA MADEWELL: And I am your co-host, Katrina Madewell. If you are just chiming in for the show, we have Mr. John Sapp. He’s our special guest today with 1040.com. In the earlier segment, we were talking all about ID theft and how it’s become a hot topic. The Feds are getting more involved and that sort of stuff. I’m sorry we had to cut you off, John, and please finish your thought and maybe you can chime in on why we are hearing so much about ID theft. Which is why I’m sure they are now getting involved.
JOHN SAPP: That’s exactly right. It’s the sheer hundreds of millions of dollars. I think through September this year the IRS estimates they stopped over 4 billion dollars in fraudulent refunds. They stopped it that much but, of course, the number that went out is harder to identify but this is the sheer dollars of it.
I think the IRS stopped 1.2 million confirmed ID theft returns last year. So, they are getting better at it. The number of reported first-time affidavits that were filed that there was an ID theft was cut in half last year. We say that with trepidation because it’s constantly evolving but at least there are things being done to make it a little better.
KATRINA MADEWELL: John, I’m curious. Do they usually receive the money like via wire transfer into a bank account or are they getting a check? How do they normally get it?
JOHN SAPP: Well, most folks will have a direct deposit made into an account somewhere that they’ve set up in some type of fraudulent account. Of course, there is a lot more of what’s called “know your custom” rules in the financial industry now that require them to verify the identity. It used to be some years ago, and there is some misconception about this now that you could get an anonymous prepaid card and put it on a prepaid card. But the same rules apply to the prepaid card accounts that apply to a regular bank account now. So, the prepaid cards aren’t indicative of fraud the way they used to be. I think even in Miami you may have seen the story several years ago, where they pulled over a guy and he had a trunk full of prepaid cards that they had loaded up with tax refunds.
KATRINA MADEWELL: Darrin has shared that story a couple of times on the air.
DARRIN T. MISH: There was a story in Tampa where, I have a good friend who’s an auto theft detective in with TPD, and this chrome car caught their attention and the car was literally chromed. That is an expensive kind of thing it’s very flashy. This suspect they couldn’t figure out, they were conducting surveillance or trying to figure out if he was a drug dealer what the deal was.
They couldn’t catch him with anything because he wasn’t dealing drugs so they eventually pull him over, probably a pretext stop. But anyway, they pull him over and the car is full of tax refund checks and prepaid cards and all that stuff and the funny thing about the story is then TPD calls the IRS and say hey this is a bad guy you guys need to do something about this and the IRS is like well we can’t talk to you because of taxpayer confidentially rules. I mean it makes no sense.
JOHN SAPP: That is changing now but in the world, it is on everyone’s radar at the IRS and now their willingness, they are precluded from sharing information unless there is a valid purpose for them sharing information.
KATRINA MADEWELL: So what I want to know is how they are cashing the checks? Do they have a fake ID to go along with that check?
JOHN SAPP: Oh, sure. Fake ID’s are available and I think I mentioned the dark web earlier and if you ever, I wouldn’t suggest any of your listeners to ever, ever go on the dark web. I don’t think that there is any good reason to do that but you know that dark web is like a yard sale for thieves.
DARRIN T. MISH: In some cases you can be prosecuted just for visiting a certain website on the dark web.
KATRINA MADEWELL: So I’m going to be dumb and ask what the dark web is?
JOHN SAPP: Well it is, if you think about the internet I think it’s a very small percentage of the internet is “Googleable”. It’s not something that show up on Google and visit the website that’s less than 20% of the entire internet is that.
A chunk of it is private networks like your bank account, access to your bank. But then there is another section of it that’s not available through your normal web browsers, it takes a special web browser to do it. And it makes the person accessing those websites anonymous and so they can post identities for sale, they can post a lot of drugs…
KATRINA MADEWELL: So these are, they are underground sites you would have to have the web address to go there in a different browser. It’s not anything that you would find or stumble on by accident.
JOHN SAPP: That is correct. It would take a special browser that you have specifically with intent attempted to access the dark web and those that go there are doing it specifically so that they can remain anonymous.
DARRIN T. MISH: So, listen folks don’t get that special browser. Don’t start trying to figure that out just stay away.
KATRINA MADEWELL: Yeah no I’m just like oh my gosh I didn’t even know this existed. I swear I learn something every day on this show.
JOHN SAPP: We have seen for example out on the dark web individual social security numbers, dates of birth, address you know they would be selling for a dollar a piece.
DARRIN T. MISH: I had an ID theft event it happened about 10 years ago. It was before they really figured out how to get the IRS to issue the big tax refunds and what not and somebody ordered about $8000 worth of computers and sent them to the Bronx some vacant apartment on the Bronx. It was irritating cause I had to devote several hours, I mean 10 or 20 hours to try and work this out and I ended up…
KATRINA MADEWELL: He is like I have never even been there.
DARRIN T. MISH: I still have never been to the Bronx but I called you know the city law enforcement, the county law enforcement, the secret service, the FBI you name it and everybody just kind of shrugged and said there is nothing that we can do with this.
KATRINA MADEWELL: That way, everyone is pointing to a different direction.
DARRIN T. MISH: And especially the Federal agencies were really, really nice and kind and listened. But at that time at least there wasn’t a whole lot of ideas about what to do about it. So, it’s kind of exciting to hear that they are at least trying to do something.
KATRINA MADEWELL: So what’s changing exactly and when is that supposed to take effect, do you know?
JOHN SAPP: As far as information sharing?
KATRINA MADEWELL: Well just them being involved in a process to avoid and eliminate a lot of these people that are selling stuff on the black market and filing these fake tax returns.
JOHN SAPP: Well, of course, criminal investigations are constantly perusing the dark web and trying to identify folks. They have lots of tools that have helped them in their investigations. But probably the biggest thing going on there is there is collaboration now.
As of 2 years ago, our current IRS commissioner who, by the way, I am a big fan of I think he is doing a great job, one of the smartest guys I have ever met. He has pulled together all the tax software industries so your Intuits of the world who writes Turbo Tax and your H&R Blocks of the world and your Drakes software’s of the world who, we of course you know 1040.com is our consumer facing website.
We all meet on a regular basis, we have calls every week and we talk about different schemes that we are all seeing and we collaborate and figure out ways to help stop that. You will see that as your listeners prepare their taxes this year they will see. Every year it will evolve but they will see additional security this year.
For example, some of your taxpayers if they do prepare their own tax returns for example if they use 1040.com they may be asked this year instead of just getting their normal e-file pin, they may be asked to provide their adjusted gross income from the previous year to file their tax return.
KATRINA MADEWELL: Well, I love that you are involved in the process. I mean that’s fantastic that you are collectively doing something about this every week and regularly. Is there anything that would help someone?
Like any flags that would trigger something to a person that their identities have been compromised?
JOHN SAPP: Well there is a couple of things and some of them may seem obvious but it’s not as obvious as you may think. For example, if they were to get a notice from the IRS saying something looked odd on their tax return they filed and they haven’t filed their tax return yet, that is a something that they should, that would be a red flag.
Probably the biggest flag is and what’s again this seems obvious but when you file your tax return electronically and you receive a notice back that a return has already been filed. That is the number one flag.
KATRINA MADEWELL: That’s it?
DARRIN T. MISH: It takes, and I can tell you from personal experience, it can take months and months to clean that up and fix it and get the taxpayer the refund. Which is kind of aggravating to them, but it just seems like part of the world that we live in at this point.
KATRINA MADEWELL: I would be more concerned about my identity than the refund.
DARRIN T. MISH: Yeah, but there is a lot of people that really count on that refund they are living on it in a manner of speaking they want that money so they can pay for living expenses.
JOHN SAPP: That’s exactly right and that’s another issue that taxpayers are dealing with this year as a result of the Path Act. Those that are receiving the Earned Income tax credit or the additional child tax credit which is the refundable portion of the child tax credit. Those refunds are delayed normally refunds are processed and the IRS says less than 21 days. It’s normally a couple of weeks. Some folks are as quick as 10 days they will get their refund back and they have kind of gotten used to that, kind of cycle this year because of the path act and the additional fraud filters going on in the back end those refunds will be delayed. They won’t be released until February 15th but a lot of taxpayers won’t see them until the end of February. So even if they file now they won’t get those refunds until the end of February which could cause, will cause a lot of taxpayers some financial stress.
KATRINA MADEWELL: What is that Path act exactly is that something you can explain quickly or you need to do that after the break?
JOHN SAPP: Let’s do it after the break.
KATRINA MADEWELL: Ok, so stick around so you can find out what that Path act is. We’ve got a bunch more really good stuff coming up for you. We have John Sapp he’s our special guest today on the IRS Solution Attorney show with 1040.com. Darrin and I will be back in just a few minutes. Stick around if you’ve got a question for John, myself or Darrin you can call us at 888-404-1010. Again program in the speed dial number here for Moneytalk 1010. 888-404-1010 we will be back in just a moment.
DARRIN T. MISH: Welcome back to the IRS Solution Attorney show I am the IRS Solution Attorney.
KATRINA MADEWELL: I am your co-host Katrina Madewell thanks for sticking with us through the break. If you are just chiming into the show, we have John Sapp with us today he’s our special guest with 1040.com. We are talking all about a lot of the craziness with tax fraud, IRS scams just nutty stuff.
DARRIN T. MISH: ID theft how to protect yourself. So, that kind of lends us to, well actually we asked at the end of the last segment we had mentioned…
KATRINA MADEWELL: The Path Act is that what we said? Like P-A-T-H?
JOHN SAPP: P-A-T-H Protecting Americans Against Tax Hikes.
KATRINA MADEWELL: So who’s idea was that? Just out of curiosity like anybody we should be giving kudos to?
JOHN SAPP: Well, Congress. Congress passed a bill to make a lot of, I don’t know how aware folks are about tax laws but several years ago, for budgetary reasons and to try to assess the cost of a particular tax initiative they started expiring tax laws. So, you would have a credit but it would only be a credit for 3 years or something like that.
So, they made a lot of those credits permanent. Earned income credits and additional child tax credits, some changes that were made permanent which were very good things. The other good thing about that particular piece of the legislation was the additional fraud filtering to give the IRS additional time to compare data that they might have received in W-2’s with the actual tax returns that were being filed.
Because a lot of fraud revolves around those refundable credits, the additional child tax credit and the earned income credit it gives them more time to verify the information is accurate on the tax return before they release the refund.
I really want your listeners to understand that it’s still to their advantage to file their tax returns early. That’s one of the best things they can do to protect their tax process from being hijacked by criminals is to go ahead and file their tax return as quick as they can.
KATRINA MADEWELL: When is the soonest time they can file? Since you mentioned that.
JOHN SAPP: They can file today.
KATRINA MADEWELL: Ok, great. I thought they had to wait until the end of the month, no?
JOHN SAPP: Nope, it started as soon as they get their W-2, they can file. For most of your listeners, they will receive a W-2 from their employer. As soon as they get their W-2 they should file their tax return as quick as they can. As quick as they have all their information to do it accurately so that if a fraudster were to have their information they can’t file a tax return before they do.
KATRINA MADEWELL: It’s already been filed. Good advice.
DARRIN T. MISH: So that’s one of the things that you can do to protect your identity, your tax identity, is go ahead and file early because then the IRS has more time to sort of examine the situation and see if potentially your ID has been compromised.
KATRINA MADEWELL: What else? Let’s say you are listening to the show this morning and you are like I never visit the black web or whatever they are talking about and my stuff is pretty safe. Is there anything else that someone could, stuff that they could take to make sure that their identity is protected and they are not a victim to the tax files scheme?
JOHN SAPP: Well again living in Florida getting an IP pin is not a bad idea. The other things they can do is watch what they post on Social media. You may want everyone to know that you know you drove a green car in high school and if that is one of your security questions to log into particular websites they can hack that website because now they know you drove a green car in high school.
KATRINA MADEWELL: That is a fantastic example I am so glad you brought that up because that is not something that most people would think of. Is there anything else?
DARRIN T. MISH: I so want to tell you about the car that I drove in high school was the biggest piece of junk but now I can’t even tell you the color of it or the year or anything? It was horrible I spent more time working on that car than driving the car.
KATRINA MADEWELL: Brown pinto.
DARRIN T. MISH: No comment.
KATRINA MADEWELL: I don’t want to guess. So, what else cause that is a fantastic example, John. I’m really glad that you brought that up. But is there anything else that you see that people are posting on their social feeds, you know Instagram, Facebook, Twitter that could sort of contribute to this sort of tax identity fraud scheme?
JOHN SAPP: What is the thing we always think of? Mother’s maiden name, or your mother-in-law’s maiden name or your maternal grandmother’s first name. A lot of that we just post on social media and it’s out there for a lot of these technology-savvy criminals to just gather. They don’t go out and actually browse those sights they have computers and automated programs that go out and do that for them. So, they will find your name, they will keyword it and then they match it all up.
KATRINA MADEWELL: Well, we are connected. How many of us connect our siblings or our parents to our social profiles?
DARRIN T. MISH: In Facebook so conveniently announces your birthday to everyone so you probably shouldn’t go on there and go hey I’m 42 today cause now you just disclosed what your date of birth is right?
JOHN SAPP: And I’m a little paranoid about that, Darrin. I deleted my Facebook account last year just because I was getting so much information on how that was making my information public and how that information was being used. So, I don’t even have a Facebook account to date. Now, my wife does so she keeps me up to date on everything so I’m not a hermit.
DARRIN T. MISH: You weren’t missing anything over the last week or so I’ll tell you about that.
KATRINA MADEWELL: Yes, trust me, be glad you are not on Facebook in the last week.
JOHN SAPP: The other thing that your folks should do is have good passwords. Katrina, a lot of password experts now will say that the longer the password is the better the password it is for logging into especially your tax software if you are preparing taxes. The minimal you want an uppercase letter, a lowercase letter and a special character.
But also, you should consider using pass phrases something you will remember like I like to walk my dog, exclamation point or I like to walk by dog Jack so that would have uppercase, lowercase letters something that I can remember. But it’s long enough to where a computer cannot crack that it would take a million years to crack that many letters.
DARRIN T. MISH: That’s a good idea.
KATRINA MADEWELL: Some of the things they know like they will mix like if you have like you said I love to walk my dog you might change the O to a zero. I’m not going to talk about all of them but many people will do that they will mix the letter with a number that way it’s not a real word. For me like mother’s maiden name, anytime anybody asks me that it’s not really my mother’s maiden name.
DARRIN T. MISH: Oh interesting.
KATRINA MADEWELL: Same thing for my husband. It’s different.
DARRIN T. MISH: You just put balderdash in there or something.
KATRINA MADEWELL: It’s a totally different word and it is not either one of our mother’s maiden names.
DARRIN T. MISH: Nice, that is smart.
JOHN SAPP: That is another very smart thing to do is not give real answers to your security questions.
KATRINA MADEWELL: I’m so glad that I am already a step ahead and I didn’t even know it.
DARRIN T. MISH: So my take away from this is the password should not be password…password.
KATRINA MADEWELL: Or your dog’s name.
JOHN SAPP: Or admin.
DARRIN T. MISH: Oh yeah exactly or 1234.
KATRINA MADEWELL: So what’s the step, let’s say someone has experienced this already what do they have to go through because it’s a pretty expensive process from what I understand of what they have to go through to prove they are the person they say they are the person they say they are and not the person that hacked their return?
JOHN SAPP: Right, and it’s not quite as easy this year as it was last year. The IRS had a website last year that you could go through and verify your identity. This year the taxpayer has to call the IRS and they have set up a special 800 line for that. The Identity Verification Service and they will ask them a series of questions. Usually, they will want to have your prior year tax return with them whenever they call that number because you don’t want to be on hold for, I think the average hold published last year was 20 minutes but we had reports of an hour or so on hold.
KATRINA MADEWELL: Is that why you are shaking your head, Darrin?
DARRIN T. MISH: I can tell you depending on the time of day it could be five minutes or it could be an hour or an hour and a half. It just depends.
JOHN SAPP: Time of day, time of year. We didn’t see as many as what the IRS called “courtesy disconnects” last year where, it’s kind of like when you go to a restaurant and they say well it’s going to be an hour wait and then after an hour they come out and say well you have waited long enough why don’t you go home.
KATRINA MADEWELL: And they hang up on you.
JOHN SAPP: They didn’t do as many as that last year they’ve done better this past year. But there is an 800 number, I have it right here in front of me if you would like me to go ahead and give that out in case one of your listeners would need it.
DARRIN T. MISH: Sure.
JOHN SAPP: But it’s 800-830-5084.
KATRINA MADEWELL: And we will post that as well on the IRS Solution Attorney page because I know some people are in the car listening to radio and that sort of stuff we will post it but you said 800-830-5084 is that correct?
JOHN SAPP: Sure, and I am happy to send you a link to the website from the IRS if you would like to do that.
DARRIN T. MISH: That would be great. So only a Federal bureaucracy could come up with the term “courtesy disconnect” I mean it’s crazy. It reminds me of several years ago, when they stopped taking walk-ins to the IRS assistance centers because the press release said to provide better customer service we are no longer going to provide customer service in person. I mean it’s absolutely crazy but that is how they decided to do it. I guess it could make sense budget wise where if you have people picking up the phone in a lower-cost area of the country or what not.
JOHN SAPP: Well the IRS is a little counter intuitive right because most of us see whenever Congress decides to cut the budget at the IRS or maintain the budget with the IRS most of us think that’s probably a good thing. We’ve got overspending in government or whatever but actually, the IRS budget is one for every dollar they put in they get more than that back in revenue so it’s kind of counter-intuitive. We see a lot of customer service problems because of the budget challenges at the IRS.
DARRIN T. MISH: I agree. The figure that I have heard is $40 for every dollar spent I don’t know if that is exactly accurate but it’s a big number. It does make sense if you give more money to the people collecting the money they are going to collect more money that sort of makes sense.
JOHN SAPP: It sure does, it sure does.
KATRINA MADEWELL: It’s interesting, we were talking to about like proving your identity and asking some of those questions and if you’ve ever gone online to dispute anything on your credit report some of those things that they ask, I don’t even know them off the top of my head I have to literally look at a copy of my own credit bureau to answer it.
DARRIN T. MISH: Yeah, sometimes they say what color was the car that you owned in 2001 and you’re like, but at least they give you the multiple choice right so you can kind of guess.
KATRINA MADEWELL: Usually they will ask about your balance or your payment or who you had a loan with or something like that.
DARRIN T. MISH: Ok, so.
JOHN SAPP: The other thing a victim of Identity theft should always do is speak to credit reporting agencies so they can report that and at least put a 90 day hold on their credit accounts, Equifax, Experian, TransUnion. Actually, if you could just do it to one of them they will go ahead and report it to the other credit agencies and they will put a prod hold on your account for 90 days.
You can do it permanently and you can do that for free. At least that protects that piece, you can file a complaint at FTC the Federal Trade Commission you can file a complaint at their website and let them know what’s going on. You always want to contact your bank if you do have that happen.
KATRINA MADEWELL: Having a lock on your credit’s not a bad thing either at all.
DARRIN T. MISH: No, I have one as well. I use one of those services because I had the problem with the computers being sent to the Bronx. I use one of those services and literally any time any inquiry is made on my account I get a text immediately. It really did, it stopped everything in its tracks.
So, it’s unfortunate that I have to pay whatever it is $30 or $40 a month. I know what you are saying, John, is I don’t even have to pay for that but for me, it just gives me that piece of mind I won’t have to go back through that and fix it all again.
JOHN SAPP: And one of the nice things is those services do and there are some good ones out there and some bad ones just like Darrin in your business there are good folks out there with the IRS resolution and there’s bad…
DARRIN T. MISH: Yep that’s true.
JOHN SAPP: But the….
KATRINA MADEWELL: There are good realtors and there are horrible realtors. Well, John, I don’t know if you hear the music but we have to take a really quick break and when we come back after the break Darrin’s going to hop in and ask you a couple more questions, we are going to tell our listeners how to reach you and how to get more information. Be back in just a minute.
DARRIN T. MISH: Welcome back to the IRS Solution Attorney show, I am the IRS Solution Attorney.
KATRINA MADEWELL: Mr. Darrin Mish.
DARRIN T. MISH: Mr. Darrin Mish.
KATRINA MADEWELL: I’m your co-host Katrina Madewell, I’m throwing him off a little bit here.
DARRIN T. MISH: We are so glad to have John Sapp our guest today from 1040.com. He’s been doing a great job providing lots of value in terms of how to avoid ID theft and what to do if you’ve had an ID theft problem with regards to the IRS.
KATRINA MADEWELL: Today’s show was amazing and if you missed it, if you missed the show pick it up in its entirety on the podcast.
DARRIN T. MISH: You can pick it up on the podcast, the Apple store and the Android store as well as our app on those stores as well.
KATRINA MADEWELL: And so on the IRS Solution Attorney and we will post the show on the Facebook page to.
DARRIN T. MISH: For sure and also you can pick it up at getirshelp.com or at least you can find your way there from there. John, I have one last question is there anything a taxpayer can do to speed up their refund if they have one of those 2 tax credits that we referred to the EITC or the ACTC?
KATRINA MADEWELL: What are those tax credits?
JOHN SAPP: The additional child tax credit and the earned income tax credit mainly for mid to lower income individuals. It’s an anti-poverty measure up in the IRS it contributes a lot to larger refunds for lower income individuals. Yeah, sure.
So, the biggest thing they can do of course is insure they electronically file their return and utilize direct deposit for that refund. Paper check can take weeks to get so there’s no reason to do that anymore. Most folks will have access to some electronic account. Of course, you can give just a gratuitous plug for our website?
DARRIN T. MISH: Absolutely.
JOHN SAPP: So 1040.com, of course, can prepare all individual return, most individual returns. It uses the same calculation engine for taxes that our professional software uses so we give an accuracy guarantee, fastest refund possible guarantee, you know the maximum refund guarantee. They can actually, if they are qualified for 1040ez, they can file that for free. So there’s no cost to it especially for folks in Florida that don’t have, don’t worry about state tax returns.
DARRIN T. MISH: It’s a beautiful thing.
JOHN SAPP: The other thing that we do is, you know one of our core values is to support socially responsible type initiatives and one of those things is we give $2.00 for every tax return that is done even the free tax returns. We will give $2.00 to an organization called Healing Water International. Last year we gave enough funds through that program to provide clean water in 3rd world countries to over 14,000 people.
DARRIN T. MISH: Wow, that’s impressive.
KATRINA MADEWELL: That’s awesome.
DARRIN T. MISH: My charity of choice is to help solve world hunger so I can really relate to that, that is nice I like to hear things like that. Well, you guys have a great website and, in particular, your blog. What post can we expect to see on the blog in the near future?
JOHN SAPP: Well, we are going to do some on the PATH Act so that will be very quickly coming, mistakes to avoid when filing your tax returns, what are the different ACA forms you can expect and confused tax terms.
We will have kind of a glossary out there that will explain credit, what is a credit, what’s a deduction and those kinds of things. And other just helpful posts like how to pick your filing status and claiming dependents and itemizing deductions and those kinds of things. So, we will keep, that blog gets updated very regularly so they can keep checking back for additional tax tips.
KATRINA MADEWELL: One more question. I know we were talking about doing the automatic deposit with sort of the rapid refund. Is there any type of risk or how great is the risk when you put that account number to do the auto deposit into your bank account?
JOHN SAPP: Well, that’s a good. I’ve been doing this a very long time. When we first started electronic filing that was a big concern for folks because they weren’t used to doing business over the internet but it is encrypted and all those transmissions are secure between processing centers like 1040.com and the IRS. All that transmission is all from secure websites which encrypt that data.
KATRINA MADEWELL: And John, don’t be startled that was our train that comes in about this time every week.
DARRIN T. MISH: That was our producer Pat just giving you a hard time. John, you’ve been a fantastic guest I want you to know that we really appreciate it, we really appreciate the fact that you dedicated this much time to be on the show and it’s…
KATRINA MADEWELL: Great stuff, good topics.
DARRIN T. MISH: For sure for sure but right now…
JOHN SAPP: I had a great time thank you for having me.
DARRIN T. MISH: Thank you, take care. At this point, it’s time for the IRS train wreck of the week. This is the segment of the show were somebody, I tell the story about somebody who came in and they were a train wreck and after they got involved, we got involved in the case they usually end up smelling like a rose.
This is an interesting type case as most are. I really love truck drivers and I think that truck drivers are hero’s in a lot of respect, I mean they work long hours, they sleep in the cab a lot.
KATRINA MADEWELL: They are lucky to get a shower.
DARRIN T. MISH: Truck stops are not super nice places and if you think about it just about everything that we use on a daily basis is brought to you by a truck or a truck driver. There are some things that are brought by rail but most things are handled by trucks anymore. I mean this laptop I’m sitting in front of, this microphone that I am talking on were brought here by a truck driver.
This particular gentleman was a truck driver and he was in independent owner/operator for a few years and he ended up owing the IRS a significant amount of money. It was $118,570.00. It was just for 3 years.
What happened is these were some of the years where fuel is the most expensive and so he ended up racking up this tax debt. After those 3 years, he ended up getting current with the IRS meaning he got the message, he started filing his returns on time and didn’t have any more problems.
Well, he came to me after he filed an offer in compromise, this thing was a mess, it was in the rejection stage and the IRS had come back and indicated to him that they thought that he could afford to full pay. So, we looked at it and we visited and discussed some strategic things that we could do. We let that offer go because it was beyond saving it just couldn’t be saved.
Then we employed some strategic measures about how to spend his money a little bit differently and we filed another offer in compromise and I am pleased to announce just the other day it was accepted at $23,693.00. So, he owed about $118,000 and he settled for about $23,693.00.
He is really happy, he gets to have his life back. He is not a bad guy he’s not a guy that didn’t pay his taxes intentionally, he just got himself in a mess. Now he is going to pay his way out and he’s going to be able to go on with his life. He is newly married and he and his wife are looking forward to their financial future.
KATRINA MADEWELL: How long does he have to pay that? 23 grand is still a good amount of change.
DARRIN T. MISH: He has 5 months to pay that after the offer is accepted so yeah, he is really going to have to hustle but he’s a can-do kind of guy. He’s the kind of guy that is going to make that happen.
KATRINA MADEWELL: I love that.
DARRIN T. MISH: Yeah, I do too.
KATRINA MADEWELL: Great story because they are not always settling for a thousand to two thousand bucks.
DARRIN T. MISH: No they don’t always settle for little tiny amounts of money and sometimes you just have to do what you’ve got to do as a person you just have to make things happen and that he is very much like that and it’s always a pleasure working with him for sure.
KATRINA MADEWELL: They are definitely a special breed and I can’t even imagine having a tax problem that big, but I’m glad I know you if I did.
DARRIN T. MISH: And that’s on the low end of things, right?
KATRINA MADEWELL: Definitely. Thanks for listening to the show this week if you want to catch up with John Sapp he’s over at 1040.com just like the tax return and Darrin’s at getirshelp.com.
DARRIN T. MISH: As well as the podcast and the app at the Apple and Android stores. Our phone number at the office is 888-get-mish that’s 888-438-6474, 888-438-6474.
KATRINA MADEWELL: And we love that. Hope you got some value out of today’s show and if you have a suggestion or an idea or a topic for the show we would love to hear from you. Got to meet a couple of our listeners last week at the vision board workshop it was amazing. I love hearing from you guys. Thanks for listening to the show, thanks for tuning in we will be here tomorrow at 9 a.m. for Tampa home talk. For this week…
DARRIN T. MISH: For today we’re out.