eFiling with the IRS is Unavailable

Not Good for Tax Deadline Day!

Dead ComputerAt 8:46 EDT on April 17, 2018 the IRS sent out an alert announcing their eFile systems are down.

They ask that software providers not send any returns nor try to receive acknowledgements from the system right now.

There will be a lengthy delay in retrieving acknowledgments once the system is back on-line.

Taxing authorities that are independent of the IRS (FBAR, CA, TX, 5500, and some Michigan and Ohio cities) will be sent and process normally.

The IRS will issue another QuickAlert when the systems are back online. Please monitor the IRS’ MeF Status Page for updates to this issue.

Based on an Accounting Today article the IRS will be waiving all penalties for late filing caused by its technical difficulties today.

FLASH!

IRS Extends Tax Deadline by one day (to April 18th) because of its computer problems on April 17th), according to the Wall Street Journal and other news media,

A Low-Risk Way to Pick an Accountant

Sterck Kulik O’Neill accounting group invites prospective clients to a free introductory meeting in our office. Why?

Lots of professionals charge the first time you meet them because they think their time is so valuable that they never want to give it away.  If you go to talk to a surgeon, they will ask you to pay for your first appointment, even if you decide you don’t like them and don’t want them touching your body! These professionals don’t want to waste time on non-revenue producing activities.

But, we think you should be able to meet us and see if you’re comfortable with our knowledge, personalities, way of talking, and our procedures before you engage us. So, we ask that you come in, explain to us what services you’re looking for, and see if you like interacting with us. For free!

Do we understand the problem you’re bringing to us? Do we talk so you understand us? Do you like our ideas?

Partners Charles and Geoffrey
CPA’s Charles Sterck and Geoffrey Kulik

So you can find out the answers to these questions, we offer prospective clients a free introductory meeting with one of our partners. Usually the first meeting lasts between a half hour and a full hour. You and the partner will talk about your overall financial situation and the pressing issue that made you decide to talk to a CPA.

We’ll ask you to bring in copies of your most recently filed Federal tax return, if you’re looking for tax help. Or, copies of the business financial statements you’re getting now, if that’s the work you want us to do. Basically, the partner is looking for information that will let him estimate how many hours it will take us to do what you want. Then by the end of the meeting he will give you an estimate for the engagement.

We want you to know the cost of the work you need before you spend any money.

Oh, yeah. The free meeting is not a free hour of accounting services! It’s an opportunity for you to decide if you want us to be your ongoing CPA. Sometimes I have to disappoint people who tell me that they want their free hour of asking a CPA questions about their taxes and financial life.

Your time is worth a lot, so we understand that by coming to an introductory meeting you’re risking your time. We appreciate that. But, we won’t charge you while you decide if we are the accounting firm for you.

Plus, we will talk to you about your accounting needs before we set up the in-person meeting. In our phone conversation we will confirm that we do the work you’re looking for and think we might be a good fit. If you’re looking for a tax preparer, but your only income is W2 salary income, we will tell you we probably aren’t a good choice, and we’ll suggest some more cost effective alternatives. Or, if you really want to engage a specialist accountant who only handles art supply businesses (or whatever), we’ll tell you up front that we don’t meet your qualifications. We will try not to waste your time, if we aren’t the accountants for you!

So if you are considering establishing a relationship with an accounting professional, give us a chance. We think we give you a low-risk way of seeing if we are the right CPA firm for you.

Perceived Indifference Disease

A neighborhood restaurant we went to nearly every week for several years got a new partner, a long-time bar tender who bought into the business. We’d been spending at least $5,000 a year there, going mostly on their slower nights. We knew all the staff, and had chatty, comfortable conversations with them. We thought we were good customers.

I Don't Care SignSoon after taking over, the new partner changed the music to something I didn’t like. Loud and screechy, in my humble opinion. In a low-key manner I asked if he’d switched the playlist. After he said he did, I said — politely I think — that I thought the new music was not as good as what they had been playing. He responded, “Well other people like it,” and abruptly turned away.

Okay.

He has every right to play whatever music he likes in his restaurant. But his comment and attitude said he didn’t care about me. I paid for the one drink I’d just ordered and left the restaurant without eating.

That conversation was in January and we haven’t been back. We simply disappeared from their list of customers.

I’ve told this story to incredulous friends who know how loyal we were, and they’ve moved birthday parties and dinners away from that restaurant to other spots in the neighborhood. So, the new partner’s interaction with me — and the restaurant’s failure to follow-up — has cost the business at least $7,500 in 2017 revenue.

I am not looking for sympathy or commiseration at being slighted. (Well maybe a little sympathy!) But, mainly I’m telling this story because it illustrates one of the dangers to your business that we explore with you in our business development sessions: Perceived Indifference Disease.

When your customers perceive that you don’t care about them, you’re in danger of losing them. You may never know why they stopped coming.

Our business consulting sessions help you uncover how your interactions with your clients may leave them feeling that you don’t care… even when you care very much!

If you are wondering why you’re not getting the repeat business you deserve, we can help you explore ways of assessing your customer’s feelings toward you and seeing if they feel loyal or repelled by perceived difference.

Indifference word cloud concept with disinterest ignore related tags

Contact us to learn more about the business development options we offer in addition to our traditional accounting services.

Phony Treasury Agents are Calling YOU!

Tax Collection Scam warning posterThey’re back!!!!!

Last week’s message on my cell was an automated voice from the “legal department at the US Treasury” demanding that I call them about my tax fraud that they were investigating.

We’d hoped that the recent bust in India of a guy suspected of running a swindling call center that made similar calls would stop the crooks for a while.  (Story on the alleged crook’s arrest.)

The recorded messages is so poorly made that most people would suspect that it’s a fake.

Give it a listen!

The bad recording is good technique, though. Anyone scared enough or ignorant enough to think the recording is really from the government is a better than average mark for the crooks.

In case you have any doubt about this recording — or about a more professional-sounding call, either live or recorded — the Treasury Department does not call anyone about taxes due. The Internal Revenue Service (IRS), the actual tax collection agency, does not call anyone about taxes due. They also don’t email you threatens about overdue taxes!

The IRS will send you a notice via the United States Postal Service.  That is how you learn that the government is questioning something in your return. And, the conversation never starts out threatening you with jail!

Geesh!

How Much Will it Cost?

We are very happy when people find us on Yelp! Find Us on Yelp We are grateful for the positive comments people have written about us there, and we receive a good number of calls and emails from Yelpers who are looking for accountant.

But recently, without telling us, Yelp added a “Request a Quote” button on the page with our reviews.  Ugh!

We always want clients to know what the cost of our work is going to be before we start doing it.  That’s not the problem.

Yelp's Request a Quote ButtonThe problem is “Request a Quote” results in people following directions and writing in asking, “How much do you charge to prepare taxes?” or, “What’s your price for doing an audit?”

We — like most accounting firms — don’t have a price list for services like this because there is no such thing as a generic tax return or one-size audit.  Billionaire Warren Buffet submits a tax return just as you do… only his is a bit more complicated and costs more to prepare than yours does!

What we do when you are considering our services is to invite you in for a  free introductory meeting in our office.  You’ll talk with one of our partners, see if you like us, and tell us about your situation.

We ask that you  bring in information that will let the partner know the scope of the work you need.  For tax clients, that would a copy of last year’s tax return and the current year’s financial information.  For a bookkeeping client, it might be a copy of the financial reports you are getting now or a list of the reports that you want to see.  The information we ask you to bring varies according to help you’re looking for.

The partner will explain what services our firm offers and how we can help you.  Usually that’s straight-forward: you come looking for tax preparation help, and the partner will tell you we prepare taxes!  Sometimes, with complex financial situations, the partner’s explanation will be more expansive, unexpected, and show a path that you hadn’t anticipated.

Whatever your situation, at the end of the meeting the partner will have a good idea of how much of what type of work we need to do to meet your needs. This will let the partner give you an estimated cost for the engagement.

I wish it could be quicker to get quote.  Unfortunately, for professional services there are three choices:

Reading fine print with a magnifying glass

  1. Have a price list with services set so high that even convoluted examples of the generic service are profitable. This method gives you a fixed, assured price, but it’s a price higher than almost everyone would pay if they were charged for assistance by the hour.
  2. Have a price list with fine print that basically makes the list useless for our target clients, people with complex financial situations.   For a tax return, the fine print would be something like “* good for tax returns using the standard deduction with only a single state W-2 income“.
  3. Learn exactly what the client wants, customize a response, and provide an estimate for the exact work needed by the client.

We use method #3.  It doesn’t let us give quick answers by phone or email. But, we think it’s more straight-forward, transparent, and cost-effective for the client.

If we can provide you with a no-obligation, customized estimate for your accounting engagement, give us a call!  We are at 415-433-4500.

Why the IRS Hack Wasn’t all the IRS’s Fault

Goofy looking man
This taxpayer helped crooks download his tax return

The people that broke into the IRS website last week and downloaded the 100,000 returns had help from their victims.

The IRS had set up questions designed to ensure that only the taxpayer obtained access to the stored tax form. Some of the information the IRS asked for (birth date, street address) can be gathered from other government sites. In addition, the IRS says it asked, “several personal identity verification questions that typically are only known by the taxpayer.” (See the IRS statement)

Posts to social media may have given the hackers some of these answers (such as marital status). Other answers could be guessed or copied from other web sites the bad guys had gotten into.

The IRS has not released the list of additional validation tests it made, but we have two immediate suggestions:

  1. Review the information you’ve posted about yourself on Facebook, Twitter, and other social media sites.  Think like a crook. Have you published enough information for a evil doer to be able to answer the security questions websites typically ask for when you’re asking to reset your password?

    If so, remove some of the information or change who can see all of your information.

  2. When a website asks for your favorite color, food, or first pet’s name, don’t tell the truth!  Make up a nonsense answer like “Swablar”  that you will remember but cannot be guessed or found associated with you anywhere online.

We’ve read articles saying that those validation questions asked by sites are dangerous because so many of the responses (pet’s name, high school, first boy/girlfriend) can be either found on Facebook or on other public sites.

Other answers are so common that thieves can get authenticated by simply typing in the most popular responses. We’ve seen articles that said “pizza” is the favorite food of a majority of Americans, so even if pizza is your favorite food, answer “Swablar”.  I don’t even know if a “Swablar” is edible, but it’s not likely to be guessed by a crook!

In addition, when you participate in a meme on Facebook or another site that says it’s going to tell you what city you should live in, what religion you should be, or what celebrity you are like, be careful!  Are you typing answers to any of your security questions on another site?  Who is running the meme anyway?

Finally, although this week’s IRS hack doesn’t seem to involve weak passwords, please consider switching to a password vault application like Lastpass.  These apps remember your passwords and will generate difficult-to-crack gibberish passwords which will keep you safe(r).  (For more on Lastpass, read a posting made after the 2014 Kickstarter hack.)

How to Be Smart When You Help Nepal

Nepal Earthquake graphicThe earthquake in Nepal devastated one of world’s poorest nations. The annual per capita income was US$730 in 2013, according to the World Bank.

The people in the country need help surviving the aftermath of the earthquake. The best thing we can do, 7600 miles away from the epicenter, is to donate money for relief efforts.

There are many international aid groups rushing help to Nepal.  It’s easy to land on a web page or click on an email, give your credit card number, and specify how much your want to give to the relief effort.

We think you should give generously! 

However, avoid these two pitfalls:

  1. Fraudsters who set up websites or send email saying that they charities but they are either outright lying or they are legal charities but most of the money collected goes to salaries or payments of the people who run the organization.  Before you give, check out the recipient organization on Charity Navigator.  That impartial site lets you type in the name of the organization you’re thinking of giving money to and find out how it rates in delivering service, transparency of its governance, financial controls, and other indicators of trustworthiness.Three- and four-star charities are good places to give your money, we think.  Avoid “charities” that are not listed or those with lower star ratings.
  2. Gifts to Non-US charities are NOT tax-deductible.  The Federal tax rules require that if you list a charitable deduction, the recipient organization must be a US group recognized by the IRS.  Many international aid groups have a US affiliate that meets the IRS requirement.You can check whether a group you’re considering donating to is tax deductible on the IRS website.

Give Now!

If you have a favorite charity that’s doing work in Nepal, please give them a gift today.  If you are unsure where to give, here’s a suggestion.

Doctors Without Borders LogoPayPal is waiving it’s processing fees when you donate to one of the relief charities they are spotlighting.  You give your money to the PayPal Giving Fund — a 501 (c)3 organization recognized by the IRS — and that fund forwards your money to the international relief organization you’ve selected.  We picked Doctors Without Borders, a group that gets a top-tier four-star rating from Charity Navigator.

If you you want to give as we did, visit PayPal now and click on the Doctors Without Borders icon  as it scrolls by.

(Note to Facebookers… Facebook is making it easy to donate to the International Medical Corps.  That charity is three-star rated by Charity Navigator which makes them a good choice, too.)

The people of Nepal need help, Please give what you can.

Give Wisely!  Give Today!

Disturbingly Good Phony Email!

It’s tax season, and you expect to receive messages from your accountant about your finances. But, beware!

Scammers trying to get you to click on a link to download evil programs that run on your computer are ready to take advantage of your anxiety over taxes!  Be especially careful of emails that are supposedly from us or other tax preparers.

This weekend we received the first message in a very, very frightening string of emails designed to get us to click on a link to a website where a damaging program awaited us. We did not go to the website. But, if we had, our computer, our online activity, and our contact lists would all have been at the mercy of some sophisticated bad guys.

Here’s what happened to us.

Saturday we received an email from another local CPA.  The message looked like this, except I’ve substituted a pseudonym for the real CPA and used our firm’s email address and contact information instead of hers.

From: Sally Smith [mailto:[email protected]]
Sent: Saturday, March 21, 2015 5:27 PM
Subject: Important document

Please see the attached file for your review.

Thank you,
Sally
Document8229tax.PDF

What we didn’t notice in the email was that the return email address was [email protected]cap.com and not [email protected]cpa.com.  But, doesn’t the message look like something your accountant might send you talking about your taxes?

We are suspicious people, so although we knew the CPA who sent us the email, we hadn’t talked to her recently and wondered why she had sent us a link for a document.  We replied to her email and asked her.

Hi Sally,
I wasn’t expecting an email from you. Please let me know if you intended me to get this and what it is.

Thanks,
Galen Workman
Sterck Kulik O’Neill accounting group, inc.

But, remember, the email address had been doctored from [email protected] to [email protected]  So when we replied, our message went to the bad guys.

And, the bad guys responded!

From: Sally Smith [mailto:[email protected]]
Sent: Monday, March 23, 2015 9:26 AM
To: Galen Workman
Subject: Re: FW: Virus?

Not a virus.

Sincerely,
Sally Smith, CPA EA

Enrolled to Practice and Represent Taxpayers Before the IRS
150 Post Street, Suite 350 San Francisco, CA  94108
Phone: (415) 433-4500
Fax: (415) 433-4765
E-mail: [email protected]
WWW.SKOCPA.COM

This time, not only did the bad guys reassure me that their email was “not a virus” they also included Sally’s signature block to make the email look even more legitimate.

The email still smelt bad, so we really looked at it.  This time we noticed that the messages were coming to/from [email protected]cap.com instead of [email protected]

We called Sally, and she said she knew that her email system had been hacked.  The same message we received went to all of her clients, and she was emailing them about the scam.  When we told her about the reply we got to our emailed question and the slightly different domain name (cap vs. cpa), she was horrified.

The bogus domain name is registered at GoDaddy, just as her legitimate domain name and site. When I looked up the IP address for the bogus domain, the crooks’ website appears to be hosted at GoDaddy, too.  So, the crooks are apparently using a well-known American domain name registrar and hosting service.

Wow!  What guts.

Malware Word CollageProtect Yourself!

  • Don’t open attachments or click on links in emails, unless you’re expecting something from the sender.
  • Verify that email that looks like it’s coming from someone you know, really is coming from someone you know!  Do that by carefully reading the return email address.  And hover your cursor above any links in an email to see where the link is really sending you.

    I can create a link that says www.Google.com, but really sends you somewhere else.  Hover the cursor over the link before clicking to see the real destination.  In an email the real destination appears over the link.  On a webpage like this one, the real destination will appear somewhere discreet, usually at the bottom of your screen.)

When in doubt, don’t click!  Pick up the phone and call the sender!

What Does a Crook Sound Like?

Caller ID of Fraud CallCrooks trying to scare people into paying phony tax bills have been calling my home phone daily this past week.  The calls are robocalls from different phone numbers, all with caller IDs created to make me think the calls are official.

The message is very clipped and threatens arrest on a “no bail” warrant if I don’t call the number.  Today’s caller mentioned a Federal court case against me and something about a grand jury.

Oh, my!

Give a listen to today’s call and a couple more (hit stop to keep the threats from looping)

These calls are designed to scare people into calling the bad guys and paying made-up tax bills with credit card or bank transfers.

The real Internal Revenue Service (IRS) never calls, emails, or posts on social media demands like this.  They also don’t suddenly take you to court or convene grand juries.

The threatening calls I’ve gotten are crass, delivered in heavily accented English,  and easily dismissed as false… especially since I work for a CPA firm and know a bit about the rules.  Plus, I know I am up to date on my taxes!

But, obviously some people fall for these high pressure ruses.

Don’t let it be you.  And, talk to older relatives, newcomers to the country, or other people that may not know the IRS’s processes.  Make sure they know not to give in to these crooks!

For more information tax scams, see what the IRS says. If you get a call yourself, report it to the IRS by email or report the scam via an online form.

And, if you need the help of a real accountant, please contact us at 415.433.4500!

How Much Does It Cost…?

Tax Preparation Tools

Potential clients understandably want to know how much our services will cost them. However, most of the work we — or any accountant — does is charged according to the amount of time it takes to do the work. This means that there is no price list I can share with people considering our services.

Your cost will depend on how complex the work you need done is.  And, on how clear the information you give us is!

Tax Preparation ToolsTax preparation is a good example of how costs can vary, even for people in similar circumstances.

You may record all the income and expense information for the year in the tax organizer we give you. In that case, our professionals can efficiently enter the details into the software, and your preparation costs will be minimized.

Another client may be too busy to tally their expenses, charitable gifts, and various sources of miscellaneous income. Instead of filling out an organizer, this client hands over the proverbial shoe box of receipts for our team members to organize and sum up.

We’re happy to accommodate both types of clients.  But, the categorization and summing of the year’s income and expenses — as mundane as the tallying is — is going to take our team members some time to accomplish. This means the other client will pay more for us to prepare their taxes than you do.

Because of your organization and prep work, as partner Charles Sterck says, your fee for the mundane will go down.

You get to decide though.  Is your time worth paying for the mundane?  Let us know!