Unclaimed Property Blog

This is a true story. The IRS is searching for residents to give them money.

A recent article informed residents of Morris, Sussex and Warren Counties, New Jersey, who have not yet filed their 2002 tax returns that there is still time to do so and claim returns. Time is running out, according to the Internal Revenue Service, they stand to lose $6.9 million in uncollected refunds if they don’t file within the next several weeks. To collect the refunds, tax returns must be filed no later than April 17th.

Do you have your tax goal in mind? It may be one of those things where if you don’t know it can hurt you.

Your goal at the beginning of every tax year should be to have withheld at least 90% of what you think you will owe for that year, but not much more.

Your employer, using tables supplied by the government, determines how much of your paycheck should be withheld based on information you provide on the Form W-4. Many changes could have occurred since you last filled one out. The W-4, can be amended at any time.

Are you interested in what this is?

It just may be an eye opener for you. The tax gap is what the IRS considers the difference between what taxpayers should have paid and what they did pay on time.

For 2001 the estimation is $345 billion. Since tax year 2001, with enforcement efforts the IRS has managed to recover $55 billion of that amount, bringing the net tax gap to $290 billion.

The IRS estimated that by March 2006 the tax gap would fall within a range of $312 billion to $353 billion.

It isn’t the tax man cometh for thee, it is where you can request resolution on a tax issue.

You have a tax return audited and you don’t agree with the auditor’s findings - what do you do? Tax Court? No not yet. At this point you have the right to appeal the audit. The appeal is done and you still don’t agree with the results - what do you do? Tax Court? Yes! You can now take the matter to the U.S. Tax Court, a type of court that handles tax matters.

If you have ever been taken in by the idea that your credit report could be improved for a price, you will be glad to know something is being done about it.

Government regulators are cracking down on companies that claim to remove negative information from consumer credit reports.

The Federal Trade Commission (FTC), along with the U.S. Postal Inspection Service and eight state law enforcement agencies, have identified 20 companies that promise to remove information from consumers’ credit reports for a fee.

Want some helpful hints on how long to save documentation or what documentation is needed? Then this is for you.

Under the statute of limitations the IRS has three (3) years in which to audit a return. So minimally three years of documentation should be kept. However, many experts recommend keeping records for six (6) years. If the IRS suspects that you underreported income by 25% or more, it has up to six years to launch an audit.

Have you ever thought to yourself , the little guy always seems to get it? Well, this time the IRS is changing its view. More corporations and wealthy taxpayers had their tax returns audited by the Internal Revenue Service this year, helping the agency haul in a record $47.3 billion in unpaid taxes.

IRS Commissioner Mark Everson said the audit rate of high-income individuals and families, those who report earning $100,000 or more, is “still too low.” “I haven’t set a specific target,” Everson said. “Our No. 1 area of emphasis has been to increase our work in high-income individuals and corporations. We do that because of the sense of fairness that resonates throughout the rest of the system.”

Some people are concerned that they will be audited by the IRS. Did you know that there are different types of audits?

Here are the four different types with a short explanation of each.

1. A correspondence audit.

A tax audit performed by the Internal Revenue Service through the mail, hence, correspondence. Typically, the IRS sends you a letter explaining any questions they have regarding your return. You send back copies (not originals) of any documents that support your return.

These are usually the easiest type of tax audit to deal with, mostly because you have plenty of time to collect your paperwork.

You could lose money you didn’t even know you had. Your unclaimed property used to be safeguarded by the state. Now states are enacting laws that enable them to use the unclaimed property for publicly funding statewide and legislative campaigns.

This is a true good news, bad news situation. There are needed actions being taken to remove corruption regarding funding campaigns, however, it is the citizen that will still be paying.

In Connecticut such is the case. Governor M. Jodi Rell praised the passage of the landmark campaign finance reforms for which she has been fighting for months, declaring that “Connecticut is now a national model for reform� and that “Connecticut citizens can once again be proud of the way we conduct our campaigns.�

It seems that everyone has different views on how to spend money. What do you do with money that has been dormant and unclaimed for many years? Recently the UK has made known how it wishes to handle its unclaimed assets.

Chancellor Gordon Brown said in his pre-budget report that banks and building societies had agreed that unclaimed assets held in accounts will be diverted to help improve youth services and financial education. It said banks could have an option to focus on their local community charities.

Dormant accounts will be defined as those untouched for 15 years.