The tax filing deadline is fast approaching, although it’s been extended this year. Get last-minute tax advice from IRS spokesman Bill Brunson and find out about enforcement efforts against tax cheats from IRS criminal investigator Jim McCormick.
Ted Simons: It's that time again -- tax time. This year's filing deadline's a touch later than usual. It's been moved to back to April 18th. There are some last-minute tips that may be helpful if you still haven't filed or need an extension. Joining us now is Bill Brunson, a spokesman for the IRS in Arizona. Also here is IRS special agent James McCormick. Good to have you both here.
Bill Brunson: Thanks for having us.
Ted Simons: Bill, let's start with you. We're getting down to crunch time. Common mistakes?
Bill Brunson: Four major ones we see all the time. Math errors. People don't add or subtract. Double check your math. If you're going to submit the return, sign it. Married couples both need to sign, that's an area. If you're claiming a dependent on a return break out the social security card for that individual, check the name, last name's spelling as well as the social security number so that you don't have an error match or a misinformation in that area. And then if you're going to direct deposit a refund, break open the checkbook and make sure you provide the correct routing identifier and account number. Those four areas are areas we see errors in and the best way to avoid that is to electronically file your tax return because it's not going to let you submit the return without signing it, it's going to make sure you do the math correctly and so an electronically filed tax return is error free.
Ted Simons: I didn't mention this, I wanted to mention this in the intro, the deadline extension. Talk to us about what that means. How much extra time do folks get and do you get extra time to avoid a penalty?
Bill Brunson: There's six additional months, there's no charge. You can request one whether or not you have a balance due. It's for submission of the information, not for paying the tax. If a person did have a balance due return where they owed money, and they requested the extension to file, they would avoid a late filing penalty of 5% they would still incur a late payment penalty, of one half of one percent. But they're not incurring that larger payment of penalty. So if you don't know if you're going to get a refund and you don't have the paperwork together, you can request an extension to file automatically. Go to irs.gov and click on the "free file" icon and all of Arizonans can use that service for free to submit electronically a request for their 2010 return.
Ted Simons: Good information. What types of investigations do IRS agents get involved in? I mean - we all understand that someone is messing around with their taxes, we understand that but you guys cover the waterfront, don't you?
James McCormick: We do, originally starting in 1919. We have about 2600 agents. Currently, some of the cases are things like the ones who had a Ponzi scheme of $25 million and promotions of concerts and things like that. And other individuals are like Robert Ray and Joann Skaggs in Tucson, taking money out of a fund set for social security for disabled and elderly and collecting about $175 million. So I mean, our investigations vary but it's an exciting field.
Ted Simons: I imagine, it sounds like it's not limited to just filing season.
James McCormick: No, it's not. Unfortunately, it goes on year-round and so a lot of times we'll do -- Bill and I go around telling people about our top 12 schemes.
Ted Simons: Give us a couple.
James McCormick: A couple are, for example, pfishing, which is spelled P-H, which is a good name for it. Because what it is is it's basically individuals trying to get you to bite and pull you in by utilizing false sites. They look legitimate. For example, false IRS sites. You never expect for example schemes for I.D. theft with the IRS. But they're trying to get that information to file returns and obtain the refund you were probably due.
Ted Smons: Is preparer fraud very common? A lot of us we walk into our tax preparer, it's like, please, help. Do we see a lot of fraud?
James McCormick: The majority of the preparers out there are great. About 60% of the people use preparers, unfortunately, there's nefarious preparers out there. There's signs you should look for. We try to let people know never sign a blank return. Never sign returns done in pencil. Don't go to the people who are going to guarantee a refund and don't go if they are looking and saying I want a percentage of the refund. Those are the things that stand out. And Bill's going to kill me for saying this, but the phrase is don't be lax when it comes to tax. Do your due diligence. I'm going to copyright that.
Bill Brunson: I'm impressed.
Ted Simons: I was going to say not necessarily in iambic pentameter. But can you tell us how - let's say maybe you owe money, a little more than you anticipated and you need to set up a payment plan. How do you do it?
Bill Brunson: Call the IRS, but wait until you've been formally billed. That way we know how much you owe and if there are specific options that are affordable for the amount you owe, we'll offer them to you. If you enter into a direct debit, there won't be a direct lien filed against you to ensure the government's money is paid eventually. If you do owe, call the IRS and we'll work out a payment arrangement. We do it all the time.
Ted Simons: Obviously, a few days left. You've got the weekend to --
Bill Brunson: People have plenty of time to file taxes.
Ted Simons: What if -- what is there still time to do?
Bill Brunson: You can electronically file and submit a paper return if you wanted to. Get the information together and work through it and take your time. It might take a couple of hours or it might not. But approaching it in a systemic matter and taking your time, you can file it online through IRS.gov or if you don't feel comfortable with doing it, you have time to contact a paid preparer and they can request a extension while they gather your information and later file the tax return. If it sounds too good to be true, it probably is with the dirty dozen and the --
Ted Simons: Extended hours?
Bill Brunson: Oh that's right, thank you. Phoenix metropolitan area all have extended hours. There's three offices Glendale, Phoenix and Mesa. And they have extended hours on Thursday, for an additional hour, Friday for an additional hour and Monday April 18th, crunch day, for an additional hour. So they're open from 8:30 to 5:30 for those days. Saturday, the Mesa and Phoenix offices have Saturday hours 9:00 a.m. to 2:00 p.m. The Mesa office 1818 E Southern and the Phoenix office 4041 N Central, corner of central and Indian School.
Ted Simons: Real quickly, we've only got about 30 seconds. How common is the IRS investigating someone who just ran over their tax return with a tire and wrote whatever they wanted? How often do you see stuff like that?
James McCormick: Not often, fortunately, but we don't go after those individuals who make common, simple mistakes. You have to be -- if it's intentional and willful. So if you're making common mistakes don't worry about that. As far as criminally --
Ted Simons: Then start worrying. Gentlemen, we have to stop it there. Thanks for joining us we appreciate it.
James McCormick: Thank you.
Bill Brunson:IRS spokesman;Jim McCormick:IRS Criminal Investigator: