Tax Refunds

In the thick of tax season, a new study suggests that when Americans get their refunds, they file for more bankruptcies - because they can finally afford all the related fees. Researchers from the University of Chicago, Columbia University and Washington University in St. Louis found that, in 2008, the number of people who went broke went through a “significant, short-run” 7% increase after the IRS sent out refunds. Many used the extra money to pay the average $1,477 in fees needed to declare bankruptcy; without the refunds, 3.8% of filers could not have afforded to go through the process, according to the report.

Feeling stressed because you waited until the last minute to file taxes? Making that rare trip to the post office to send off the return? Be careful, warns the Journal of the American Medical Assn.: The chances of getting into a fatal car accident jump 6% on Tax Day. It's not quite clear why, though authors of Wednesday's report postulate that “stressful deadlines distract drivers and contribute to human error.” Lack of sleep, limited patience...

Here is a roundup of alleged cons, frauds and schemes to watch out for. Tax refunds - Special agents with the Internal Revenue Service have arrested a former H&R Block Inc. manager who allegedly used tax clients' personal information to file false returns in their names and steal their refunds. Damon Charles Dubose, 38, who worked at the H&R Block in Van Nuys, was arrested Thursday, the IRS said in a news release. The IRS said Dubose used H&R Block “emerald cards,” similar to debit cards, to claim refunds at ATMs.

You may want to sit down for this one: Americans aren't happy with the U.S. tax system (though 12% of them think it's actually the best one in the world). More than six in 10 Americans say the way the country levies taxes is less than perfect, according to a survey from Rasmussen Reports . More than a quarter aren't sure how they feel. Nearly half think that the average American currently pays out at least 30% of their income in taxes, when most believe the ceiling should be more like 20%. California Gov. Jerry Brown hopes to land a measure on the November ballot that would increase the sales tax and raise the rate for higher earners, with revenue going to schools and to balance the state's budget.

Here is a roundup of alleged cons, frauds and schemes to watch out for. Tax refunds - As the tax-filing deadline approaches, the Internal Revenue Service said consumers should watch out for scam artists who offer to help them obtain tax refunds through the filing of bogus returns. In one common scheme, companies offer to help victims obtain a tax refund through the American Opportunity Tax Credit by claiming deductions for college tuition payments, even if the victim did not attend college during the tax period, the IRS said.

I have a picture of sadists at the Internal Revenue Service chortling over the success of their latest "gotcha!". This ambush of the lowest on the totem pole was planned ("IRS Fraud Drive Slows Refunds to Needy Taxpayers," April 1). The IRS might have gone about discouraging cheating by low- income persons in a more humane fashion. The simplest and least expensive method would have been to print a warning on the cover of the 1994 Forms and Instructions pamphlet that those using form 1040 or its variants and claiming more than $XXXX in credits for earned income or dependents were subject to audit and the attendant delays.

Hundreds of Californians, many of them elderly and nearly broke, are pressing legislators for help in getting compensation for some of the money they lost in a Ponzi scheme run by confessed swindler Bernard Madoff. They're asking lawmakers to change state laws so they can get refunds of past taxes paid on income from Madoff that they might never have received. "I've been victimized once by Mr. Madoff.

Without a hitch, Ed and Kelley Brill had filed their joint income-tax returns from the same home address for 14 years. But last year, after obtaining an extension, the Miami Shores, Fla., couple were shocked to learn that the Internal Revenue Service had rejected their electronically filed return. It turned out that a thief had stolen Kelley Brill's identity, Social Security number and employer's name, then filed a falsified refund claim — beating the Brills to the punch. Now the parents of three school-age children — who still have no idea how they were victimized — must wait six to 12 months to get their $7,918 refund.

Nearly one-fifth of U.S. adults plan to use all or part of their federal, state or local tax refunds this year to pay for a vacation, one survey found. How much they plan to allocate: Less than $500: 36% $500-$749: 25% $1000 or more: 22% $750-$999: 17% Source: Travel Industry Assn. of America

Hoping to say goodbye to paper tax-refund checks, the federal government launched a pilot program to let some people receive their money on a debit card. Next week, the Treasury Department will send letters to 600,000 low- and moderate-income taxpayers offering them the option of signing up for a special MyAccountCard Visa prepaid debit card. Green Dot Corp. in Monrovia, the nation's largest prepaid debit card company, got the nod to provide the cards and manage the pilot program, the Treasury said Thursday.

Here is a roundup of alleged cons, frauds and schemes to watch out for. Tax refunds - Special agents with the Internal Revenue Service have arrested a former H&R Block Inc. manager who allegedly used tax clients' personal information to file false returns in their names and steal their refunds. Damon Charles Dubose, 38, who worked at the H&R Block in Van Nuys, was arrested Thursday, the IRS said in a news release. The IRS said Dubose used H&R Block “emerald cards,” similar to debit cards, to claim refunds at ATMs.

In the thick of tax season, a new study suggests that when Americans get their refunds, they file for more bankruptcies - because they can finally afford all the related fees. Researchers from the University of Chicago, Columbia University and Washington University in St. Louis found that, in 2008, the number of people who went broke went through a “significant, short-run” 7% increase after the IRS sent out refunds. Many used the extra money to pay the average $1,477 in fees needed to declare bankruptcy; without the refunds, 3.8% of filers could not have afforded to go through the process, according to the report.

Here is a roundup of alleged cons, frauds and schemes to watch out for. Tax refunds - As the tax-filing deadline approaches, the Internal Revenue Service said consumers should watch out for scam artists who offer to help them obtain tax refunds through the filing of bogus returns. In one common scheme, companies offer to help victims obtain a tax refund through the American Opportunity Tax Credit by claiming deductions for college tuition payments, even if the victim did not attend college during the tax period, the IRS said.

Without a hitch, Ed and Kelley Brill had filed their joint income-tax returns from the same home address for 14 years. But last year, after obtaining an extension, the Miami Shores, Fla., couple were shocked to learn that the Internal Revenue Service had rejected their electronically filed return. It turned out that a thief had stolen Kelley Brill's identity, Social Security number and employer's name, then filed a falsified refund claim — beating the Brills to the punch. Now the parents of three school-age children — who still have no idea how they were victimized — must wait six to 12 months to get their $7,918 refund.

A federal grand jury has indicted 55 people connected with two Southern California companies accused of filing hundreds of falsified tax returns seeking hundreds of millions of dollars in bogus tax refunds. The owners of the two companies, Fontana-based Old Quest Foundation and De la Fuente and Ramirez and Associates of Rancho Cucamonga, were charged along with customers, attorneys, tax preparers and other professionals who worked with them. The indictment accuses Old Quest of filing false tax forms that reported more than $1 billion in withheld income tax and sought more than $250 million in tax refunds.

A former Los Angeles County welfare worker was sentenced Monday to 46 months in federal prison for filing nearly 200 fraudulent tax returns in the names of people who had applied for public assistance. Trang Van Dinh of El Monte pleaded guilty in February to two felony counts of filing false tax returns, admitting that he used needy clients' personal information to file false tax returns in their names in 2009 and 2010. In addition to the prison time, U.S. District Judge Jacqueline Nguyen ordered the 63-year-old Dinh to pay $667,000 in restitution to the Internal Revenue Service for refunds he received through the scheme.

The Times carried an editorial, "It's Ridiculous" (Feb. 12), covering the Costa Mesa surplus taxes collected from its citizens and businesses. You cite the premise of the ill-conceived Gann Initiative. Ill-conceived? For what? The Gann Initiative came about because of state government circumventing the Jarvis Amendment, Proposition 13. What The Times editorial is really restating is the socialist-democratic thesis of large central government knows best and must be allowed sufficient resources (taxes)

Bigger tax refunds this year, and more on-time payments by the Internal Revenue Service, are contributing an extra $10 billion to the economy's rejuvenation this spring. The IRS sent taxpayers 41.6-million refunds, averaging $1,252 each, through March 29. That's up from 38.8 million refunds averaging $1,076 a year earlier. The total, $52.1 billion, is up 25%. "It's not insignificant," said economist Mark Zandi of Regional Financial Associates in West Chester, Pa.

A man accused of stealing a nearly $1.4-million tax refund check from billionaire Irvine Co. Chairman Donald Bren has pleaded guilty to one count of bank fraud. Federal prosecutors say Moundir Kamil, a 41-year-old convicted bank robber, obtained Bren's Social Security number, date of birth and other personal information and opened an account in Bren's name in February 2010 at an East West Bank branch in Cerritos. Bren, a 79-year-old real estate tycoon, is listed as Forbes magazine's 64th richest person in the world and has an estimated net worth of $12 billion.

Executives from four large U.S. companies told lawmakers that they would give up lucrative tax breaks in exchange for significantly lowering the 35% corporate rate, spurring efforts to overhaul the tax code. Executives from Boeing Co., Sears Holding Management Corp., Emerson Electric Co. and Perrigo Co., a leading pharmaceutical manufacturer, said Thursday that they prefer the simplicity and certainty of a rate as low as 25% over the complexity of calculating frequently shifting tax breaks.