Archive for August, 2010
Lessons Learned – Lesson 5: Community Service
Posted by: | CommentsHere is the latest video in my Lessons Learned series. This one relates to the lessons I have learned when it comes to a business’ role in community service.
Here are the key lessons:
- Contributing to the community in which you operate is good for business. Business and social goals can often be attained simultaneously for the same cost.
- It is important to encourage and enable your employees to make social contributions and be sure to capitalize on the recognition received by you, your employees and your company.
- Achieving success as a community volunteer can be very gratifying and can also level out the psychological roller coaster.
Please check out my previous videos in the Lessons Learned video series and be sure to comment and share the lessons you’ve learned throughout your career.
RALs Not Going Away
Posted by: | CommentsI am at the NYC IRS Tax Forum and have talked with my contacts at several RAL banks. The SBBT successor has funding and a bank partner and will be providing RALs, as will a few other RAL banks. The same thing has happened in the past when the DDI was pulled in late December 1994 for the 1995 tax season by then Treasury Secretary, Lloyd Benson. The result was higher RAL fees and fewer RAL approvals. The same will happen for the 2011 tax season. We will encourage our RAL clients to switch to a lower cost stored value credit card, also called a prepaid credit card, which is the equivalent of a RAC. This option will be offered by the RAL banks as well as by several credit card providers. Many prior RAL customers should still be able to get RALs in 2011, but they will pay a higher fee.
Lesson 4 – Career Transition to Entrepreneurship
Posted by: | CommentsIn this video lesson, I talk about my transition into entrepreneurship and the lessons learned along the way.
If you’re enjoying my videos, please subscribe to TaxSchool on YouTube and feel free to leave comments. Also be sure to check out my previous Lessons Learned videos.
IRS Removes Debt Indicator for 2011 Tax Filing Season
Posted by: | CommentsIR-2010-89, Aug. 5, 2010
WASHINGTON — The Internal Revenue Service today announced that starting with next year’s tax filing season it will no longer provide tax preparers and associated financial institutions with the “debt indicator,” which is used to facilitate refund anticipation loans (RALs).
“As we prepare for tax season every year, we look at past practices and consider whether they still make sense. We no longer see a need for the debt indicator in a world where we can process a tax return and deliver a refund in 10 days,” IRS Commissioner Doug Shulman said. “We encourage taxpayers to use e-file with direct deposit so they can get their refunds in just a few days.”
So far this year, more than 95 million tax returns have been e-filed, representing more than 70 percent of tax returns.
“Refund Anticipation Loans are often targeted at lower-income taxpayers,” Shulman said. “With e-file and direct deposit, these taxpayers now have other ways to quickly access their cash.”
The IRS has been reviewing refund settlement products, such as RALs and Refund Anticipation Checks (RACs), as part of the Return Preparer Review released in January. Specifically, the IRS announced that it would study refund settlement products.
RALs are loans secured by a taxpayer’s anticipated tax refund. Currently, tax preparers who electronically submit a client’s tax return receive in the acknowledgment file an indication of whether an individual taxpayer will have any portion of the refund offset for delinquent tax or other debts, such as unpaid child support or delinquent federally funded student loans. This acknowledgment is known as the debt indicator, and is used as an underwriting tool for RALs.
The IRS announcement would remove the debt indicator starting with the upcoming 2011 tax filing season. The IRS noted that taxpayers will continue to have access to information about their tax refunds and any offsets through the “Where’s My Refund?” service on IRS.gov.
RACs are temporary bank accounts established on behalf of a taxpayer into which a direct deposit refund can be received and out of which a bank typically issues a payment to the taxpayer.
With both RALs and RACs, tax preparation and product fees are subtracted directly from the refund, and the taxpayer does not make any “out-of-pocket” payments. They are frequently marketed to taxpayers who do not have cash to pay for professional tax preparation services.
In a related effort, the IRS plans to explore the possibility of providing a new tool for the 2012 tax filing season to give taxpayers a mechanism to use an appropriate portion of their tax refund to pay for the services of a professional tax return preparer. The IRS plans to engage with taxpayers, consumer advocates and the tax return preparer community to consider whether providing this option would be a cost-effective way for consumers to pay for tax return preparation services.
Lesson 3: Return to Formal Education
Posted by: | CommentsHere’s my 3rd video in the Lessons Learned series in which I talk about the key lessons I’ve learned throughout the course of my professional career. In this video, I talk about the circumstances that led to my return to formal education and the many benefits gained from continuing my studies.
The key lessons learned are:
- Both practical experience and formal education are necessary for one to be truly educated and successful.
- When academic theories are applied to real world business situations and personal interests or related to experiences, the knowledge is internalized.
- Becoming educated does not necessarily require formal college education. Many highly successful people have become self-educated through reading and mentoring by successful people.
- Skills in reading and especially writing are invaluable tools of success.
- Lifelong learning is essential for one to continue to grow as a person and as a professional.
