Archive for November, 2011
The world frequently disappoints us. We all hope people will prove honest and good neighbors. Yet we more often find ourselves on the receiving end of dishonesty and selfishness. When this is just one-to-one, we can attempt to arrange our affairs to minimize future losses or opportunities for conflict. But when the dishonesty is on an industrial scale, it ends up costing us all extra dollars, and there’s little or nothing we can do about it. Over the last two or three years, it’s been impossible to pick up a newspaper without seeing a story about rising auto insurance premiums, often caused by the rapidly increasing levels of fraud. That, as they say, is the tip of the iceberg. The wave of gangs crashing their cars and claiming medical expenses is only worth a few billion a year. Unfortunately, a few billion is peanuts. When it comes to Medicaid and Medicare, the FBI estimates the amount fraudulently claimed to be between $60 and 200 billion a year.
When you recover from the shock, you should ask why the range of the estimate is so wide. The answer is depressing. Although the FBI is on the case, it does not begin to have the resources to investigate the full extent of the problem. All it can do is to base the estimate on samples taken from different sets of files. Think of the top and bottom numbers as being the worst and best case scenarios. Your curiosity is piqued. How can the losses be so great? Does Medicare and Medicaid not have anti-fraud systems in place? Now comes the real killer. The administrations of both the entitlement programs have a “pay and chase” approach. This means they unquestioningly pay all claims and only if evidence later emerges of a possible fraud do they then chase for repayment. Needless to say, most fraudsters are rarely in a position to repay in full (or at all depending on how much time has passed). The result is massive fraud. It begins with health professionals billing for work they did not do and for treatment they did not deliver. Pharmacists invoice for drugs supplied even though there are no prescriptions written. And then, of course, come the actual criminals who set up fake clinics to bill insurers and the entitlement agencies. They last for a few months before disappearing.
To help fight the battle, some of the local FBI agencies are buying billboard ads begging us to act as whistleblowers and turn in the doctors we see billing the health insurance companies for tests and treatment we did not receive. Why should we care? Because when you add up all these false items on legitimate bills, these are billions paid out by insurance companies and the federal government. So those of us who pay health insurance premiums are paying way too much. Those of us who pay taxes are seeing billions of our tax dollars paid out to fraudsters instead of legitimate claimants who are ill. So the federal authorities should immediately withdraw the “pay and chase” policies. No suspicious claim should be paid. If this needs more staff, this creates jobs and is good for the economy. If it saves money, the jobs will be self-funding.
Under Obamacare, there’s a new accent on preventative care. The earlier the diagnosis, the more cost-effective the treatment. If access to reproductive care is also classified as preventative, this will have profound implications for the health insurance debate. This will open up a new war of words between the liberal establishment that favors funding women’s healthcare, and the GOP which campaigns aggressively to withdraw funding from any healthcare service that directly or indirectly supports abortion or fails to emphasize abstinence rather than contraception. So, because these health insurance issues should be resolved during 2012, we can expect men to begin debating how much healthcare women should receive.
Although it’s a slightly different issue, you are probably following the failure of Penn State to deal with the allegations of sexual assaults made against the football team’s former defensive coordinator. With two senior University officials resigning and facing felony charges alongside the alleged molester, the reputation of the football team and the University has taken a major hit. If we translate this into slightly less extreme situations in the workplace, there are always opportunities for employees to “abuse” each other, using the word in its widest form. It can be a boss bullying staff in the hope it will encourage them to work harder, or one employee finding it offensive to work alongside someone thought to be gay. Once there’s a sexual element, the seriousness of the matter grows rapidly. Offering better working conditions or other rewards for sexual favors can quickly become sexual assaults. There are two quite different issues that arise.
The first is the need for all businesses to have a formal workplace policy defining the different forms of harassment and discrimination, backed up by mandatory training programs to raise awareness and produce a better atmosphere. There’s some evidence to suggest many abusers are unaware of the effect they have on others. By alerting them to the problem, some respond constructively. If the others fail to respond, this can trigger the first step along the disciplinary process to terminate their employment. From a legal point of view the aim should be to implement a zero-tolerance policy. While this will not prevent litigation against the business, it will certainly reduce the level of damages awarded against it. The second issue is to avoid any retaliation against the accuser. When a relatively new recruit into the business accuses a senior manager of sexual harassment, there’s a tendency to defend the reputation of the manager. After all, he or she may be a colleague or friend. This can result in pressure being put on the accuser to withdraw the allegations and, if this is refused, penalties being imposed. All forms of retaliation aggravate awards of damages against the business. If this employee makes a formal complaint, liability issues may bankrupt the business.
The Equal Employment Opportunity Commission reported more than 11,000 allegations of sexual harassment in 2010. Remember there’s no limit on the amount of compensation an employee can claim for sexual harassment. Even if you are fortunate and the award is low rather than in the millions, the loss of reputation and the legal costs can be enough to finish the business. So, as you are reviewing your own workplace policies, you should also be talking with your small business insurance advisor about the cover provided by the Employment Practices Liability Insurance Policy. Why should you insure? As a small business owner, you have a multitude of everyday tasks to keep the business on track. You have to delegate the operational side of the business to managers and rely on them to implement your strategies. The first you may know about a sexual harassment claim is when the law suit arrives. Small business insurances can protect you from financial disaster but this does not absolve you from responsibility. You should enforce a zero-tolerance policy in any event.
Hire purchase is one of the most popular options when considering car finance. If you are buying your car from a dealer whether it is a new or used car then this may be an option that they will offer you. Hire purchase is a type of loan and as such you should be aware that the car will not be yours until you have paid back every last penny owed. If you were to fall behind on the repayments then you would also stand the chance of losing the car. You would also not be able to sell the vehicle until you have paid off the loan, with lenders usually offering hire purchase over terms such as 3 years. Just as with any type of borrowing the interest rates would vary on hire purchase and the rates could be very competitive when compared to taking a loan with the high street lender.
Another popular type of loan is the interest free loan. Of course the benefit of this type of loan is that you would have no interest to pay on the borrowing if you repay it within the time specified. This type of loan would usually be offered by the car dealer if you are looking at buying a brand new car. Providing you can afford to clear the borrowing within the time stated then this could be one of the cheapest ways of buying a brand new car.
If you like to swap your car regularly then you could consider looking at personal contract purchase. You would choose the repayment period and small monthly payments would then be taken by direct debit each month. At the end of the term of the loan the amount that would be left owing on the car would be paid in full or you can choose to hand the car back.
You could also consider looking at personal loans. Sometimes you are able to get very competitive rates of interest for the loan. You could also shop around for the cheapest rates and may even find a loan that comes with 0% interest rate. This type of loan might be a good choice which you could consider if you are buying a second hand car.
Shop around online and get as much information regarding the different types of loans as possible to ensure you know your options.
If looking for a personal loan then compare interest rates as they can differ greatly, if buying a cheap second hand car you could take out a 0% interest loan and pay no interest if you pay off the loan within the time specified.
If buying a car from a dealership and taking hire purchase then do not forget to haggle to get something knocked off the price of the car.
The interest rates of personal loans are very competitive so shop around for the best rates along with the best deals and incentives.
Refinancing your mortgage might need a little bit of your attention at any given time. After all it is not really a small decision to make as it definitely affects your life and possibly your future as well. When it comes to mortgage refinancing it is always wise to get all the tips and advice you can get in order to avoid making mistakes and enjoy the benefits of refinancing even more. For some people, refinancing their home loans might be the only option they have to be able to stay on in their homes. Different people take on mortgage refinancing for different reasons. Regardless of the reasons, once you have decided to refinance your mortgage the question you might want to give some serious thought to is what is the best possible way to be able to get the best interest rates?
Getting pre-approvals for your loans may be a smart way to start things off. With so many mortgage refinancing options available, it would not hurt to shop around for good prices so that you will get the best rate available by applying for pre-approval with different home loan refinancing lenders. It may be a good idea to ensure that the lenders are not doing any credit checking behind your back. After all your credit history is considered as private and confidential and no one including potential creditors may access your credit report without your authorization. During the process of pre-approval, it would probably be wise of you to compare mortgage rates among the different lenders. Once you are qualified, you may authorize the company that can give you the best mortgage rates to pull your credit history.
Pre-payment penalties are definitely a pain in the neck. The penalties might seem trivial to you because the amount you have to pay monthly is probably just a tad more than usual but if you add it all up you could probably have saved thousands of dollars if you had opted for a mortgage refinancing that does not have any pre-payment penalty clauses in it. As pre-payment penalties may be considered as additional or extra expenses when it comes to your mortgage payments, it is advisable that you make sure you have more than enough funds to cover them.
Interest rates can normally be one of the major deciding factors when it comes to selecting the best home refinancing deal ever. You may want to find out the current refinancing mortgage rate and compare the figures given to you by several different mortgage refinancing companies. Bear in mind that lower interest rates might not actually give you the best deal. This is because although the interest rate alone is significantly lower, you might also have to pay for other fees or charges such as purchasing points, closing costs and even taxes. These extra charges might even cause you to have to pay more than originally intended. So it may always be a good idea for you to come up with a maximum figure that you can spare every month to make due payments.
As with almost everything else in the world, it may be recommended that you get everything in writing. It is advisable to get your creditors to include the entire mortgage refinancing terms including all the hidden charges such as closing costs, purchasing points or taxes written or typed down on paper. This is to avoid any future disputes. You may do well to remember not to sign anything unless you are totally confident with the deal yourself. But prior to that, it is advisable for you to ask all the questions you feel that need to be asked.
Mortgage refinancing is not necessarily a bad thing but it may always be good for you or anyone else for that matter to gain all the knowledge you can about the matter.
The way that you are going to be able to improve your skills and increase the success you have with your online business opportunity is to keep in mind the following 3 things. Understanding that success is not going to come overnight, realizing that if you want some skills you have to put in the hard work and dedication that is required and finally never forgetting that in order to be successful in your opportunity you have to be consistent with your promotional efforts.
Even though there are many programs out there that promise success overnight and money within minutes this is not reality. The reason they do this is just to have you sign up to their opportunity and that’s it. It takes time to achieve real success and this is something that you must understand and always keep in mind.
Since success takes time to obtain you must be prepared to put in the hard work and dedication to learn the skills necessary for success.
As you continue to do the right things in your business you are going to be successful because you’re going to be learning many lessons along the way. It is simply a process that takes time but it does happen.
If you truly want to achieve success the one thing that is required of you is to be consistent in promoting your business the right way because the more you promote it the more results you are going to get and this means you will be successful. The key in all of this is just to be patient and wait for the results. Those who are not patient and rush into things will reach failure faster than success. So if you are serious about being successful then you must be able to develop the patience required to be successful.
Understanding the tax gap and what its components are allows the legislative and executive branches of government to make better decisions about tax policy and the allocation of resources for tax administration.
Components of the Tax Gap
The tax gap can be divided into three components: non filing, under reporting and underpayment. Non filing occurs when taxpayers who are required to file a return do not do so on time. Under reporting of tax occurs when taxpayers either understate their income or overstate their deductions, exemptions and credits on timely filed returns. Underpayment occurs when taxpayers file their return but fail to remit the amount due by the payment due date.
Of these three components, under reporting of income tax, employment taxes and other taxes represents about 80 percent of the tax gap. The single largest sub-component of under reporting involves individuals understanding their incomes, taking improper deductions, overstating business expenses and erroneously claiming credits. Individual under reporting represents about half of the total tax gap. Individual income tax also accounts for about half of all tax liabilities.
The National Research Program
Previous estimates of the tax gap relied on detailed research that was conducted for tax years 1988 and earlier. To update this research and reflect a changing economy, revisions to the tax code and more subtle shifts in individual behavior, the IRS launched the National Research Program (NRP) in 2001.
The NRP was designed to measure individual taxpayer reporting compliance for tax years 2001. Over the course of the next three years, the IRS randomly selected about 46,000 returns for review and examination. These audits were largely completed by the fall of 2004. To gather statistically valid data, the return selection process for the NRP included an oversampling of high income returns. This enables IRS researchers to draw valid conclusions about important sub-categories of taxpayers.
For instance, slightly more than 6 percent of individual taxpayers filed Schedule C as sole proprietors in 2001. These taxpayers reflect a wide range of economic activity. To draw valid conclusions on Schedule C filers, the NRP examined about 21,000 individuals who filed a Schedule C, slightly less than 46 percent of the total sample.
The current data from the NRP are preliminary, so the results are shown as ranges. As refinements are made to the tax gap analysis, some of these estimates may change. It is unlikely, but possible, that the final estimates of the tax gap will fall outside of the established range.
The tax gap figure does not include taxes that should have been paid on income from the illegal sector of the economy.
Preliminary Findings on the Tax Gap
For Tax Year 2001, all taxpayers paid ,767 trillion on time, a figure that represents from 83.4 percent to 85 percent of the total amount due. The 2001 tax gap, the difference between taxes owed and taxes paid on time is from 2 billion to 3 billion for all types of taxes.
Overall, the noncompliance rate is from 15 percent to 16.6 percent of the true tax liability. The old estimate, derived from compliance data for Tax Year 1988 and earlier, was 14.9 percent.
Late payments and other IRS enforcement and compliance efforts, including taxpayers audits and collection activities (payment arrangements, liens, levies and other legal actions) recover some of the Tax Gap. For Tax Year 2001, the IRS expects eventually to collect an additional billion of the tax gap, reducing the net amount of the tax gap to between 7 billion and 8 billion.
Among the areas where taxpayer compliance appears to have worsened are:
-Reporting of net income from flow-through entities, such as partnerships and S corporations.
-Reporting of proprietor income and expenses, such as gross receipts, bad debts and vehicle expenses
-Reporting of various types of deductions
Among the areas where compliance seems to have improved is the reporting of farm income.
Overall, compliance is highest where there is third-party reporting and/or withholding. For example, most wages, salaries and tip compensation are reported by employers to the IRS through Form W-2. Preliminary findings from the NRP indicate that less than 1.5 percent of this type of income is misreported on individual returns.
IRS researchers anticipate identifying other specific areas of deterioration and improvements in the coming months as they complete the detailed analysis of the study’s data.
Further Benefits of This Research
More than establishing the overall extent of individual under reporting, the NRP study also offers IRS officials specific insight into the types of income reporting that have the greatest compliance problems. For example, the NRP will not only provide the misreporting rates associated with individual lines of the tax return, but will also be the basis for updating the statistical formulas that assist IRS employees in selecting returns for audit.
When these updated formulas become available for use, IRS employees will be better positioned to select returns for examination that have the greatest likelihood of under reporting Using such an approach better ensures that IRS audits are focused on the returns most in need of examination. This not only improves IRS efficiency, but it also assures taxpayers that others are paying their fair share. It also lessens the likelihood that those with accurate tax returns will receive the same degree of scrutiny.