Jeffrey B. Kahn, Esq. Discusses Taxes On ESPN Radio – October 24, 2014 Show

Jeffrey B. Kahn, Esq. Discusses Taxes On ESPN Radio – October 24, 2014 Show

Topics Covered:

1. Horror stories of people pretending to be the IRS and stealing your identity or scamming you for your money.

2. What to look out for and how to protect yourself from the IRS scam artists.

3. How to make Halloween candy and costumes deductible.

4. Questions from our listeners:

a. I live in San Diego County and work in Irvine. I need to see you but cannot get to your downtown San Diego office during my work day. How can I see you?

b. You always tell us that you are a “Board Certified Tax Attorney”. What does that entail?

c. I always hear on the radio or see on T.V. those commercials for tax relief companies. How are you different from them?

d. Is engaging the Law Offices Of Jeffrey B. Kahn, P.C. expensive and beyond my means?

Listen to the podcast:

Read the show’s transcript:

Yes we are all working for the tax man!

Good afternoon! Welcome to the KahnTaxLaw Radio Show
This is your host Board Certified Tax Attorney, Jeffrey B. Kahn, the principal attorney of the Law Offices Of Jeffrey B. Kahn, P.C. and head of the KahnTaxLaw team.

You are listening to my weekly radio show where we talk everything about taxes from the ESPN 1700 AM Studio in San Diego, California.

When it comes to knowing tax laws and paying taxes, let’s face it — everyone in the U.S. is either in tax trouble, on their way to tax trouble, or trying to avoid tax trouble!

It is my objective to make you smarter so that you legally pay the least tax as possible, avoid tax problems and be aware of the strategies and solutions if you are being targeted by the IRS or any State tax agency.

Our show is broadcasted each Friday at 2:00PM Pacific Time and replays are available on demand by logging into our website at www.kahntaxlaw.com.

I have a lot to cover today in the world of taxes and helping me out today will be my associate attorney Amy Spivey who will be calling in later in today’s show.

With Halloween coming up, it is just not the neighbor kids looking forward to trick or treat but also people pretending that they are the Internal Revenue Service looking to steal your identity and scam you for your money. That’s right people are pretending to be the IRS and extorting money from innocent law-abiding taxpayers.

Listen to the story of Debra who lives in Memphis. Debra was at work when she got the call. She was very shaken up at the first call when she was told by the caller that there’s a warrant for her arrest. The caller was a man with a foreign accent and called her by name.

He told her that this call concerns a tax liability because you fraudulently filed some taxes for $11,000 and now there’s a warrant for you. He then proceeded to tell her that she needed to hang up and call him back from her cell phone and ask for a person named “David Chambers”. Debra knew better than to call back from her cell, so instead she got a co-worker, and called back from a conference room on speaker phone. The person who answered the call said “This is David Chambers”. It was the same voice of the caller that had told Debra to call back! Debra knew she didn’t owe the government and, as an accountant, she was also skeptical that such a call would come first. Knowing it was likely a scam, she decided to press the caller for more information. So Debra asked this Mr. Chambers “‘Can you please read me the complaint or can I go home with my husband and call you back”? When he told her no, she ended the call.

Listen to the story of Arati who works in New York City and immigrated to the U.S. from India. Arati received a call from a Brian Cruz who called her house early in the morning before Arati left for work. He left his telephone number, name and noted he was calling from the IRS. Arati put the number in her cell phone without searching for it online first. After all it had a 202 area code which is Washington D.C. so she figured it had to be official. Once she got into her car she called, and the man who picked up the call answered that this was the investigations bureau for the IRS. Arati asked for Cruz, but he wasn’t available. The man who picked up the call told Arati to give him the telephone number where Cruz left the message. She did, and then it began.

After the man confirmed Arati’s home telephone number, he stated that she attempted to defraud the IRS, and that the government was now taking legal action against her including issuing a warrant for her arrest within the next hour. When Arati asked what this was all about, he asked if she aware of an investigation against her. Arati replied “I have no clue about an investigation. This is the first time I’m hearing about any of this”. Arati started to panic. The man asked if Arati had a lawyer, and then told her about the investigation ordering her not to interrupt him while he speaks. He then recited the last four digits of Arati’s social security number and recited where she worked. He seemed to know all of Arati’s personal information. He told Arati that she failed to declare all of her income and engaged in tax fraud. He then told Arati that the government was seizing all property and all assets in her name that it had already froze her bank and credit card accounts, suspended her driver’s license as well as her passport. Furthermore, there would be a massive penalty, plus possible jail-time and that her social security number was now blacklisted.

Arati listened with fear to this man who went on to tell me someone would be waiting at her office to arrest her. Arati asked why this was the first time she was hearing about it. His reply: “This isn’t our first attempt to make you aware. We came to your house but you were not home.” Arati then asked what she owed the government. He replied approximately $4,900. Arati then asked why she couldn’t just pay him the amount owed. He told her that the investigation was beyond the point of payment–it was too late.

The man then asked Arati questions like: Have you been part of any previous tax fraud cases? Are there currently any judgments against you? Are there any lawsuits pending against you? The man then stated she could wirie the amount owed or delivering a check to him.

Now at this point Arati was starting to think that something was wrong. Being an IRS agent, wouldn’t he already have records showing that she has a clean record? Wouldn’t she have been audited if the IRS believed she owed taxes? Why would the IRS look to take such drastic action for only a $4,900 liability? Arati started to doubt the man and when she pressed him to independently confirm that he works for the IRS, he replied: “How would you even find me using the IRS 1-800 number? This is my direct line. Do you want to find out if I’m a real IRS agent? You’ll see in an hour when the arrest warrant is issued.” Then, he hung up. Arati then showed up at work and no agents were waiting for her.

I tell you these true stories so you can get an idea on how far these scam artists are willing to go.

Scam artists are now concentrating on Indian Americans and other South Asian Americans which are predominately located in California as part of our state’s huge and lucrative technology industry. Scam artists pretending to be Internal Revenue Service officials threaten to send out an arrest warrant if money is not paid to them immediately over the phone. It happened to Sumeet.

Sumeet who lives in Fremont, California received a call from such a scam artist. The caller said that she owed the IRS $1,648, which had to be paid immediately; otherwise a warrant would be issued for her arrest. Sumeet asked if she could pay $100 a month towards her debt. The caller replied “Are you crazy?” and demanded that at least $500 must immediately be paid to keep the police at bay. When Sumeet replied she could not immediately obtain $500, the caller abruptly stated: “You are refusing to cooperate. An officer will be at your door in a couple of hours.” The caller then hung up.

Sumeet was shaken up by the call and then she called the Fremont, California police department who said that no warrant had been issued for her arrest. The City of Fremont police have received many similar calls in recent months and that they have an investigation team in place that is following up with local victims of the scheme.

These three people were lucky not to fall for this scam but for many not so.

This has been a big problem for the IRS and despite issuing multiple consumer alerts, the bogus emails, the bogus IRS letters and the bogus telephone calls continue and unfortunately taxpayers are still falling for this. The government estimates that taxpayers have lost roughly $5 million to scammers.

Well I do not want you to become the next victim of any such scam nor do we want to ignore true IRS inquiries so stay tuned because after the break we are going to break down each type of fraudulent communication for you and give you the warning signs and tips that you should be aware of.

You are listening to Jeffrey Kahn the principal tax attorney of the kahntaxlaw team on the KahnTaxLaw Radio Show on ESPN.

BREAK

Welcome back. This is KahnTaxLaw Radio Show on ESPN and you are listening to Jeffrey Kahn the principal tax attorney of the kahntaxlaw team.

Calling into the studio from our San Francisco Office is my associate attorney, Amy Spivey.

Chit chat with Amy

Well before we continue I want to remind our listeners of our special offer.

PLUG: The Law Offices Of Jeffrey B. Kahn will provide you with a Tax Resolution Plan which is a $500.00 value for free as long as you mention the KahnTaxLaw Radio Show when you call to make an appointment. Call our office to make an appointment to meet with me, Jeffrey Kahn, right here in downtown San Diego or at one of my other offices close to you. The number to call is 866.494.6829. That is 866.494.6829.

The scam artists exploiting innocent law-abiding taxpayers has been a big problem for the IRS and despite issuing multiple consumer alerts, the bogus emails, the bogus IRS letters and the bogus telephone calls continue and unfortunately taxpayers are still falling for this.

Every week our office receives about a half-dozen inquiries from taxpayers asking whether the communication they just received is really from the IRS. I do not want you to become the next victim of any such scam so listen carefully to what we have to say.

The communication methods used by the scammers are email, letters and telephone calls. The scammers are still going strong doing this to people who are unsuspecting and don’t know how systems work and could very easily frighten them to turn over money. So I am going to break down each type of fraudulent communication for you and give you the warning signs and tips that you should be aware of.

Amy please tell us what people should be aware about emails.

Amy states: When identity theft takes place over the Internet, it is called phishing. Phishing (as in “fishing for information” and “hooking” victims) is a scam where Internet fraudsters send e-mail messages to trick unsuspecting victims into revealing personal and financial information that can be used to steal the victims’ identity. Current scams include phony e-mails which claim to come from the IRS and which lure the victims into the scam by telling them that they are due a tax refund.

Remember, too, the IRS does not use unsolicited email, text messages or any social media to discuss your personal tax issue so if this is the form of communication used – avoid it like you would avoid the plague.

Amy please tell us what people should be aware about letters.

Amy states: If you receive a notice regarding your taxes which does not bear the official seal of the Internal Revenue Service and an official verifiable address of an IRS office or Service Center, that is a sign that it really isn’t the IRS sending you a notice.

The most recent scam that the public has told our office involves a sophisticated fraudulent tax collection notice scam targeting taxpayers for which the IRS has filed a Federal Tax Lien.

Here is how it works: The scammers will search public records for the filing of a Federal Tax Lien by IRS and with the information gathered from that filing will generate a form letter and mail it to the targeted taxpayer. The letter is designed to mimic an IRS notice but it is really coming from a third party having nothing to do with the IRS. If the recipient of the notice contacts the number listed, the person answering your call will purport to be working for the IRS. The intended victim is told he or she owes money to the IRS and it must be paid promptly through a pre-loaded debit card or wire transfer. If the victim refuses to cooperate, he or she is then threatened with arrest, deportation or suspension of a business or driver’s license. In many cases, the person who answered your call becomes hostile and insulting.

Amy please tell us what people should be aware about the telephone.

Amy states: These callers may demand money or may say you have a refund due and try to trick you into sharing private information. These con artists can sound convincing when they call. Scammers use fake names and IRS badge numbers. They generally use common names and surnames to identify themselves. They may know a lot about you and may be able to recite the last four digits of a victim’s Social Security Number and your place of business. They usually alter the caller ID to make it look like the IRS is calling – many times they will use a Washington, D.C. area code. The area codes for the Washington D.C. area are 202, 301 and 703. They will also background noise of other calls being conducted to mimic a call site. If you don’t answer, they often leave an “urgent” callback request and if they have your email address, will send bogus IRS emails to some victims to support their bogus calls. After threatening victims with jail time or driver’s license revocation, scammers hang up and others soon call back pretending to be from the local police or DMV, and the caller ID supports their claim.

Jeff asks How do you recognize that this call is fake?

Amy states: Here are five things the scammers often do but the IRS will not do. Any one of these five things is a tell-tale sign of a scam. The IRS will never:

1. Call you about taxes you owe without first mailing you an official notice.
2. Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.
3. Require you to use a specific payment method for your taxes, such as a prepaid debit card.
4. Ask for credit or debit card numbers over the phone.
5. Threaten to bring in local police or other law-enforcement groups to have you arrested for not paying.

Jeff states So what should you do?

Amy states: If you get a phone call from someone claiming to be from the IRS and asking for money, here’s what you should do:

If you know you don’t owe taxes or have no reason to believe that you do, report the incident to the Treasury Inspector General for Tax Administration at 1.800.366.4484. So far for this year, the government has received more than 90,000 calls.

Jeff states: And if you do owe taxes and you have not already resolved this with the IRS, then that is where we come in.

PLUG: The Law Offices Of Jeffrey B. Kahn will provide you with a Tax Resolution Plan which is a $500.00 value for free as long as you mention the KahnTaxLaw Radio Show when you call to make an appointment. Call our office to make an appointment to meet with me, Jeffrey Kahn, right here in downtown San Diego or at one of my other offices close to you. The number to call is 866.494.6829. That is 866.494.6829.

Stay tuned because after the break we are going to tell you some tax saving ideas including how you can make Halloween candy tax deductible.

You are listening to Jeffrey Kahn the principal tax attorney of the kahntaxlaw team on the KahnTaxLaw Radio Show on ESPN.

BREAK

Welcome back. This is KahnTaxLaw Radio Show on ESPN and you are listening to Jeffrey Kahn the principal tax attorney of the kahntaxlaw team.

And on the phone from our San Francisco office I have my associate attorney, Amy Spivey.

So Amy, with Halloween coming up, I understand that you have some ideas on how to make Halloween candy tax deductible.
Amy replies: It is true. You can in fact deduct Halloween candy if you figure out a way to make it business related. The IRS doesn’t say a lot about this topic because they don’t want to give you “permission” to deduct these items, but they also have not specifically stated that you cannot deduct Halloween candy.
Jeff asks, so how can you deduct those over-priced bags of snack size chocolates?
Amy replies – will I have five different ways!
1. Make a promotion out of it. Attach your business card or a promotional flyer to packets of M&M’s and voila! Deductible.

2. There are many companies who will print candy wrappers with your logo on it. An even better and more advanced way to promote your business and still have something for trick-or-treaters.

3. Send a box of candy to potential or existing clients during October. This promotes your business and would likely not be questioned as a business deduction.

4. Donate any leftover candy to the US troops. “Charitable organizations with 501(3)(c) status like Operation Gratitude (EIN 20-0103575) and Soldiers’ Angels (EIN 20-0583415) collect leftover Halloween candy to include in care packages for soldiers. They are two of many 501(c)(3) organizations on the IRS-approved list to donate tax deductible charitable goods. Always be sure to check the IRS list before claiming your donations are tax deductible, as status can change.”

5. Make it a party. You can deduct a portion of a Halloween party if the party is to conduct or promote business. Typically this looks like an open house of some sort where you mingle with current and potential clients, play a few Halloween games, give out candy and treats, and discuss business. The IRS does not specify how much time you must spend discussing the business to claim a deduction but you must invite people that you do business with or are looking to do business with.
Jeff says: Amy those are some great ideas.

PLUG: You know that at the Law Offices Of Jeffrey B. Kahn we are always thinking of ways that our clients can save on taxes. We will provide you with a Tax Resolution Plan which is a $500.00 value for free as long as you mention the KahnTaxLaw Radio Show when you call to make an appointment. Call our office to make an appointment to meet with me, Jeffrey Kahn, right here in downtown San Diego or at one of my other offices close to you. The number to call is 866.494.6829. That is 866.494.6829.

Jeff says: Now when I think of Halloween, I look forward to seeing all of the different costumes that people wear. Some are very extravagant and I am sure pricey. And for some they would like to know how that can be deductible. Since costumes fall under the category of clothing or uniforms, Amy please explain what the tax law requires.
Amy says: The tax law requires three elements for clothing useful only in the business environment to be deductible. They are:
1. The clothing is required or essential in the taxpayer’s employment;
2. The clothing is not suitable for general or personal wear; and
3. The clothing is not so worn for general or personal wear.
If these three requirements are satisfied, not only is the cost of the closing deductible but also its upkeep.
Examples of workers who may be able to deduct the cost and upkeep of work clothes are: delivery workers, firefighters, health care workers, law enforcement officers, letter carriers, professional athletes, and transportation workers (air, rail, bus, etc.). Musicians and entertainers can deduct the cost of theatrical clothing and accessories that are not suitable for everyday wear.
Jeff asks: How about a white cap, white shirt or white jacket, white bib overalls, and standard work shoes a painter is required by his union to wear on the job and there is nothing on any of the clothes that indicate the company this person works for?
Amy replies: No that would not be deductible because it is not distinctive. Similarly, blue work clothes worn by a welder are not deductible even if the foreman requires them. However, required protective clothing like safety boots, safety glasses, hard hats, and work gloves are deductible.
Likewise, just by adding the company’s logo on the clothing will make it deductible even if it can be worn outside the scope of employment because you are advertising your company. In that case you are a walking billboard.
Jeff says: Given today’s dot.com and casual era environment, people are not coming to work as dressed up as they used to. So could lawyers and others argue their suits are just like uniforms and therefore ought to be tax deductible?
Amy replies: No. Where business clothes are suitable for general wear, there’s no deduction even if these particular clothes would not have been purchased but for the employment.
Jeff asks: Is being on TV any different?
Amy replies: While these tax rules are pretty circumscribed, they are also intensively factual. Someone is always pushing the tax envelope. Such was the case with an Ohio TV news anchor, Anietra Y. Hamper. She was claiming approximately $20,000 a year in 2005, 2006, 2007 and 2008 in clothing expense that included not only what she wore for each broadcast but also lounge wear, a robe, sportswear, lingerie, thong underwear, an Ohio State jersey, jewelry, running shoes, dry cleaning, business gifts, cable TV, contact lenses, cosmetics, gym memberships, haircuts, Internet access, self-defense classes, and her subscriptions to Cosmo, Glamour, Newsweek, and Nickelodeon. Her argument was that as a TV anchor she was required to maintain a specified appearance described in the Women’s Wardrobe Guidelines. These guidelines say the “ideal in selecting an outfit for on-air use should be the selection of ‘standard business wear’, typical of that which one might wear on any business day in a normal office setting anywhere in the USA.”
Jeff asks: Was that enough?

Amy replies: No. Where business clothes are suitable for general wear, there’s no deduction even if these particular clothes would not have been purchased but for the employment. For this TV anchor, that was no help. She claimed the requirement to dress conservatively made the clothing unsuitable for everyday, and that’s how she treated it. She wore the business clothing only at work and even kept it separate from her personal clothing. But the IRS and Tax Court denied her wardrobe deductions. And they added penalties.

Jeff asks: Well in the history of tax law is there anyone who prevailed in getting their costumes deducted?
Amy replies: Well Jeff you remember the Swedish disco group ABBA?
Jeff replies, I sure do – I know there songs well. Maybe we can get our engineer to play one for our break.
Amy continues: Well according to ABBA: The Official Photo Book, released to commemorate the 40th anniversary of the group career-making Eurovision victory for Waterloo, the Swedish foursome adopted their outlandish dressing style in order to ensure they could deduct the cost of their costumes under Swedish tax code. Like U.S. tax law, Swedish laws allowed work wear to be tax deductible so long as it was demonstrably apparel that couldn’t be worn on the street – which, with its garish coloring and liberal use of sparkle, ABBA’s certainly was.
PLUG: Now while you will find no one on the kahntaxlaw team wearing outrageous costumes, we will provide you with a rock solid Tax Resolution Plan which is a $500.00 value for free as long as you mention the KahnTaxLaw Radio Show when you call to make an appointment. Call our office to make an appointment to meet with me, Jeffrey Kahn, right here in downtown San Diego or at one of my other offices close to you. The number to call is 866.494.6829. That is 866.494.6829.

Stay tuned as we will be taking some of your questions. You are listening to Jeffrey Kahn the principal tax attorney of the kahntaxlaw team on the KahnTaxLaw Radio Show on ESPN.

BREAK

Welcome back. This is KahnTaxLaw Radio Show on ESPN and you are listening to Jeffrey Kahn the principal tax attorney of the kahntaxlaw team along with my associate attorney, Amy Spivey.

If you would like to post a question for us to answer, you can go to our website at www.kahntaxlaw.com and click on “Radio Show”. You can then enter your question and maybe it will be selected for our show.

OK Amy, what questions have you pulled from the kahntaxlaw inbox for me to answer?

Question from Doug: I live in San Diego County and work in Irvine. I need to see you but cannot get to your downtown San Diego office during my work day. How can I see you?

Jeff replies: Well Doug you should know that I have multiple offices so that people can see me at the location that is most convenient to them whether it be close to their residence or place of work. My office in Orange County is in Newport Beach near the airport so you can see me sometime during your workday or perhaps at the beginning or end of your work day. Just give us a call and we will make it happen.

Question from Cheryl: You always tell us that you are a “Board Certified Tax Attorney”. What does that entail?

Jeff replies: Just like doctors, attorneys can get a special designation for their area of practice. The State Bar governs this process. This requires having at least 5 years of experience, satisfying a peer review, taking extra continuing education in the tax field and passing a comprehensive tax exam. While the tax exam is taken once, all the other requirements must continue to be maintained in order for an attorney to hold out this special designation. It really is the highest designation that an attorney can attain in tax law.

Question from Todd: I always hear on the radio or see on T.V. those commercials for tax relief companies. How are you different from them?

Jeff replies: I have been practicing tax law for over 26 years and I personally meet with every client. I let them know that I am accountable to them to resolve their tax problems. I take this commitment so seriously that my name is in the name of my firm, the Law Offices Of Jeffrey B. Kahn, P.C., and our clients know where and how to reach me and my staff with any questions or the status on their case.

Question from Barbara: Is engaging the Law Offices Of Jeffrey B. Kahn, P.C. expensive and beyond my means?

Jeff replies: Our purpose at the Law Offices Of Jeffrey B. Kahn, P.C. is to help people resolve their tax problems. We are very efficient and effective in doing this because this is what we know and do everyday. With our expertise in solving tax problems we personally meet your needs and do it for the same price if not less than those tax relief companies you always seem to hear about on radio or see on TV.

PLUG: Remember only the Law Offices Of Jeffrey B. Kahn will provide you with a Tax Resolution Plan which is a $500.00 value for free as long as you mention the KahnTaxLaw Radio Show when you call to make an appointment. Call our office to make an appointment to meet with me, Jeffrey Kahn, right here in downtown San Diego or at one of my other offices close to you. The number to call is 866.494.6829. That is 866.494.6829.

Thanks Amy for calling into the show. Amy says Thanks for having me.

Well we are reaching the end of our show.

You can reach out to me on Twitter at hashtag kahntaxlaw. You can also send us your questions by visiting the kahntaxlaw website at www.kahntaxlaw.com. That’s k-a-h-n tax law.com.

Have a great day everyone!