According to reports, the number of taxpayers attempting to claim inflated refunds was on the rise. When the economy falters people start looking for more cash. And that means more people are willing to “push it” on their taxes. Good luck, when the audits start rolling in.

From Yahoo Finance:

The IRS identified 335,341 tax returns claiming $1.9 billion in fraudulent refunds as of March 4, 2011, according to the findings of an audit conducted by the Treasury Inspector General for Tax Administration. That's a whopping 181% increase from the same period last year.

While the IRS has become more effective in its screening process, a weak economy has also driven more people to cut corners, said Tim Gagnon, assistant academic specialist of Accounting at Northeastern University.

"When the economy gets really bad, people get more touchy about how much they're paying in taxes and look at where they think they can push the envelope a little more," said Gagnon. "100 extra dollars really makes a difference to people now."

Many taxpayers tried to boost their refunds or reduce their tax liability by claiming deductions and credits they didn't qualify for, TIGTA found.

For example, the Earned Income Tax Credit, aimed at helping lower-income taxpayers, has been a large source of fraud, with people falsely lowering their income to qualify or claiming children they don't have. The IRS estimates that 23% to 28% of EITC credits are wrongfully paid to Americans every year, totaling $11 to $13 billion.

More here

Due to tighter standards from Frannie Mae and Freddie Mac, getting approved for a mortgage is getting more and more difficult for average Americans. People are getting denied left and right, sometimes for things beyond their control.

CNN reports:

Banks are reluctant to make loans without the Fannie and Freddie guarantee, and loans backed by them account for just about every mortgage written these days.

In 2009, the agencies lifted the minimum credit score that borrowers must have from 580 to 620. That's probably for the best.

But they've pushed through a host of other requirements as well, and that means real estate deals don't get done, even for some relatively low-risk borrowers.

"You can have one Fannie/Freddie guideline you violate and that gets you rejected," said Alan Rosenbaum of GuardHill Financial.

A quarter of all mortgage loan applicants get denied for loans, according to the Federal Reserve. Many other potential homebuyers never even try to get loans, said Jerry Howard, president of the National Association of Home Builders.

I've posted stories before about attempts to get the IRS to provide information about child abductors, but did you know there are parental abductors some who blatantly claim their kidnapped children on their federal returns? The hubris here is astonishing.

Washington Examiner reports:

Hardly a week passes without hearing something about missing children in this country. Some are believed stolen for sexual purposes, some are found murdered, and thousands of other children are kidnapped by one of their own parents.

Today, let's focus on parental abductors.

For the parent left behind after a former spouse has kidnapped their child, there is the agony of not knowing when -- or if -- they will ever see their baby again. Even the tiniest clue as to their son's or daughter's whereabouts is vitally important if there is ever to be a reunion.

To those heartsick parents, I say: The IRS may very well know where your missing child is, but the agency won't tell you.

Believe it or not, there are some parental abductors who file tax returns and blatantly claim their kidnapped child as a dependent!

Some of them apparently need the refund money, while others don't want to attract attention for failure to pay. When they file their return, they list their employer and their home address, along with the child's name and Social Security number.

All are major pieces of information the abandoned parent would love to know. But the IRS cloaks itself in Watergate-era privacy laws, shrugs its bureaucratic shoulders and says it just can't help the grieving parent locate the missing child.

Tax Audit Defense is one of those insurance products that you think you can do without, but when you get one of those large envelopes with the return address of the Internal Revenue Service you wish a thousand wishes that you had Tax Audit Defense. There are very few pieces of mail that you receive that makes your stomach flutter than getting anything from the IRS let alone an audit notice. If you have Tax Audit Defense Insurance and you get an audit notice, just fax or mail it to your insurer and they take care of the rest. You will not have to even correspond with the IRS. They do it all.

There are other advantages to having Tax Audit Defense insurance than just having protection in the event of an audit. First of all there is a tax hotline, where a number of tax professionals are standing by Monday through Friday every week of the year to answer any tax question that you have. You can ask as many questions as you like and call as many times as you like. The second major service of Tax Audit Defense is they will review your tax return for accuracy to make sure you are taking advantage of all the deductions available to you. They will also review your tax return to identify any audit triggers. They will not only review your most recent return, but they will review any return that you prepared in the last 3 years. Another advantage of Audit Insurance is a Quarterly Tax Bulletin. This quarterly publication provides you with current information on any IRS legislation that could impact your tax status. It helps you learn more about how to minimize your tax liability while enhancing your financial well being. It also offers helpful tips on avoiding tax audit pitfalls and lets you know what is happening within the IRS on an ongoing basis.

Tax Audit Defense Insurance is definitely a pay me now or pay me later proposition. Since it involves one of those things that make your stomach flutter and prevents you from sleeping nights, I think it is better to pay now. Believe me you will be glad you did.

Tax Audit Defense

Tax Audit Defense

Personal Membership

Business Membership