Monday, 5 August 2013

Don't get burned twice: Financial fraud and tax liabilities

Taxes

9 hours ago

Image: Bernice Tingle

CNBC

Bernice Tingle liquidated her IRA to invest with a scam artist.

Bay Area resident Bernice Tingle was always an overachiever when it came to saving money. She accumulated more than $1 million by the time she retired at age 45 in 1991. By 2003 she had her 94-year-old mother move in with her as she was her mother's chief caretaker. Being her mother's "long-term care plan," Tingle was concerned about rising health care costs and was looking for a way to make more money.

When she met Maurice Michael McCant in 2007, he presented himself as a successful CEO of Billionaire Catt Entertainment, a rap concert promotion business, and promised to deliver more than 25 percent returns by investing in his company. After seeing these high returns on initial investments, she decided to liquidate her entire individual retirement account and other savings totaling $1.3 million and invest with McCant. It was a disaster.

"For a little over a year, monies were coming in like they were supposed to and allowing me to sustain," Tingle told?CNBC's "American Greed." "Then it was cut off and then I was just left there."

In total, McCant scammed 15 investors like Tingle out of their money. His take?more than $2 million. In 2011, he was convicted of wire fraud and sent to prison for just under four years.

Tingle lost her savings to McCant's scam, but that was not all. Next, the IRS and the state of California's Franchise Tax Board demanded Tingle pay substantial tax penalties accrued because of cashing out her IRA, which McCant had promised to pay himself but of course he didn't.

Tingle feels like she was victimized twice: "Even if I live to be as old as my mother, I will never be able to meet that tax bill obligation," she said.

She is not alone in dealing with tax liabilities because of losses in financial scams.

According to the IRS, thousands of victims of financial scams and identity theft fraud every year deal with potential tax implications. These victims can claim a "casualty and theft loss" deduction on their tax return to offset some of the losses from the fraud, however, which is often decided "based on the case facts and circumstances" by the IRS or the state tax board.

Of the two federal and state tax bills that Tingle received, almost 85 percent of her federal tax liability was forgiven as it was considered a "theft loss."

"The state is not looking at it that way. So that bill continues to tick, tick, tick, tick, tick," Tingle said, referring to the Franchise Tax Board.

Tingle's request for deductions via an amended tax return to the board was recently declined. CNBC asked the board for an updated, but it refused to discuss individual tax matters.

Protections for Ponzi scheme victims

In the wake of Bernie Madoff's Ponzi scheme at the end of 2008 when thousands of investors lost more than $60 billion, the IRS introduced guidance to relieve taxpayers suffering from losses because of financial fraud and Ponzi schemes.

"The provision to claim 'casualty and theft loss' deductions existed even before 2009, but the introduction of?IRS Rev. Ruling 2009-9 made the process and eligibility criterion easy to understand for everyone," said Carlos Guaman, a California-based accountant. He represents taxpayers in disputes with the IRS.

(Read more:?Beware of Bitcoin related Ponzi schemes, says SEC)

Specifically, this ruling serves as a guide to whether an individual's specific loss because of investments in fraudulent Ponzi schemes qualifies for a theft loss deduction for tax purposes or not.

Protect your identity

Identity theft and the resulting issuance of fraudulent tax refunds is also a?huge problem for the IRS as well as a burden on taxpayers.

For the 2010 tax year, $5 billion in tax refunds were issued by the IRS as a result of identity theft tax fraud according to a?report released by the U.S. Treasury Inspector General for Tax Administration. The report issued last year also estimates another $21 billion will be issued in potentially fraudulent tax refunds resulting from identity theft over the next five years.

(Read more:?American heroes: Fighting to protect their money)

Identity thieves may use your Social Security number to be paid by an employer or to file a fraudulent tax return for refunds like in the case of California resident Daniel Ramirez who has been a victim of identity theft.

At the end of 2011, Ramirez started receiving statements for maxed-out new store credit cards. On realizing that somebody has stolen his identity, he took the necessary steps of?informing the credit bureaus and?freezing his credit accounts temporarily. While most people stop there, Ramirez went beyond that and even filed an?Identity Theft Affidavit, Form 14039 with the IRS envisioning potential tax fraud issues.

Yet, when Ramirez tried to file his tax return online in April 2012, the system refused to accept it. "The person who had stolen my identity filed the taxes before I could and they were claiming a refund of like $10,000," Ramirez said.

But thanks to Ramirez's forward thinking and filing the identity theft affidavit, the IRS had flagged his account and stopped the refund from going to the identity thief. Even though it took a "number of follow-up calls to the IRS and a whole year to process," Ramirez eventually received his due refund earlier this year.

"It [identity theft] was one of the worst things ever; I wouldn't wish that on anybody," Ramirez recalled. "Dealing with the IRS, having to close fraud credit card accounts, cleaning all that mess up was very stressful."

(Read more:?Could Obamacare be boon for identity thieves?)

The IRS provided CNBC with data and other information, but a spokesperson declined to comment on individual cases.

If worried about being at risk of identity theft:

1. Contact the?IRS Identity Protection Specialized Unit at 1-800-908-4490

2. Order a?tax account transcript from the IRS that verifies basic personal data along with details of your tax return filed, which may come in handy if you are checking to see whether someone else filed a fraudulent return on your behalf

The?Federal Trade Commission also lists several steps you must take if you have been a victim of identity theft.

This episode of "American Greed" airs Sunday, August 4 at 10p ET/PT on CNBC. Follow on Twitter?

@AmericanGreedTV.

?By Divya J. Verma, Special to CNBC.com.?Follow her on Twitter?

@divya_verma.

? 2013 CNBC LLC. All Rights Reserved

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The former MoHit Record bosses performed three of their hit songs at Dbanjs sisters Wedding today. They performed Fall in Love, Endowed and my favorite, Suddenly. Dbanj called Don Jazzy to join him on stage and he obliged. Heard they gave a good performance.Dbanj and Don Jazzy Spotted together at Dbanjs younger sisters Wedding, Saturday ... ...

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Winnie Berry Humane Society offering $5 spay/neuters with PetSma ...

LUFKIN, TX (KTRE) -

The Winnie Berry Humane Society is hoping to make a significant impact on the number of unwanted pets and lower the euthanasia numbers in Angelina county by offering $5 sterilizations thanks to a new grant.

For the first time ever in Angelina County, a sizeable grant from PetSmart Charities will shine a light on what the animal welfare community is doing to curb the growing unwanted pet population.

Winnie Berry Humane Society, Board of Directors Member, Reece Hubbard says, "We've gotten a grant from PetSmart Charities and it's basically to lower the unwanted pet population in parts of Angelina county and in Lufkin."

The grant allows for Winnie Berry Humane Society to offer $5 sterilizations to nearly 1,000 pets in the 75904 zip code in Lufkin.

"It gives us the opportunity to give a discounted spay/neuter program to the people in zip code 75904," said Hubbard. "In doing this, it actually lowers the euthanization numbers for the county."

The concept is fairly simple, the grant provides funds to sterilize 960 dogs and cats in geo-specific area.

"Every single animal that isn't spayed or neutered in that area to get them all done within a year," said Executive Director of Winnie Berry Humane Society, Paula Divello. "What that does is it wipes out the chance of unwanted pets being born in that area in a very short period of time so it has a direct effect on euthanasia numbers."

And judging by the number of people inundating the humane society to sign up for the $5 spay-neuter program, there is a lot of work to do. ?

But Director of Kurth Memorial Animal Shelter, Aaron Ramsey, says there's more to it.

"The critical piece to controlling the animal population is educating the public on the importance of spaying/neutering their animals so it's a team effort and all of us working together will definitely make a difference," said Ramsey.

Of course, the ultimate goal for any animal welfare caretakers is to reduce the pet euthanasia numbers, if not eliminate them all together.

"The end goal of any city who continuously tries things like trap-neuter-release, low-income or low-cost geo-targeted spays and neuters is to eventually become no-kill,"said Divello.

So what about if you don't live in zip code 75904, there are other low-cost programs available in the area.

The humane society also receives an annual grant from the T.L.L. Temple Foundation to fund the low-income program.

"The low-income program that we receive from the T.L.L. Temple Foundation is designed for those people who cannot afford to have a surgery and it covers Angelina county and the surrounding areas," said Divello. "If anybody makes $30,000 or less per year, it's $35-$55 for the surgery and we can also include the rabies shot."

This annual grant allows for about 760 low-cost spay neuters.

You can get more information about the $5 sterilizations and low-income spay-neuter program by calling the humane society at: 936-639-1880 or stop by the shelter located at: 1102 N. John Redditt Drive, Lufkin, TX, 75904 during business hours.

Copyright 2013 KTRE. All rights reserved.

Source: http://www.ktre.com/story/23042822/winnie-berry-humane-society-offering-5-spayneuters-with-petsmart-charities-grant

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Hollywood Celebs With Rock Star Dads!

Hollywood Celebs With Rock Star Dads!

Minka Kelly's dad is Rick BufayMany of today’s celebrities in music, movies, and television have parents that are rock legends. You may recognize some of these famous last names, while others will surprise you. Check out these famous people with rocker fathers! Minka Kelly Actress Minka Kelly’s father, Rick Dufay, is the former guitarist for Aerosmith in the early 80s. ...

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Source: http://stupidcelebrities.net/2013/08/hollywood-celebs-with-rock-star-dads/

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Sunday, 4 August 2013

Blackmagic drops Cinema Camera price to $1,995

Blackmagic drops Cinema Camera price to $1,995

Do you like the prospect of shooting 2.5K video with Blackmagic's Cinema Camera, but turn pale at spending $2,995 for the privilege? We have good news: Blackmagic just dropped the pro video camera's price to $1,995. While that isn't exactly impulse purchase territory, it's low enough to put the greater-than-HD shooter in the same price bracket as semi-pro DSLRs. Think of the discount as consolation for delays in launching the Production Camera 4K.

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Source: Blackmagic

Source: http://www.engadget.com/2013/08/04/blackmagic-drops-cinema-camera-price-to-1995/?utm_medium=feed&utm_source=Feed_Classic&utm_campaign=Engadget

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President - APA Search, Inc. - Major Midwest City

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