Poker tournament winnings must be reported to the IRS

Accounting expert and friend of The Consumer Blog, Bob Martin, sent us this bit of IRS news for you poker players:

WASHINGTON — Starting next year, casinos and other sponsors of poker tournaments will be required to report most winnings to winners and the Internal Revenue Service, according to the IRS.

The new requirement, which goes into effect on March 4, 2008, was contained in guidance released Sept. 4 by the Treasury Department and the IRS. The guidance is designed to clear up confusion about the tax reporting rules that apply to poker tournaments. In recent years, some casinos and players have been confused over whether poker tournament sponsors who hold the money for participants in a poker tournament are required to report the winnings to the IRS and withhold tax on the winnings.

For tournaments completed during 2007 and before March 4, 2008, casinos and other sponsors of poker tournaments will not be required to report the winnings to the IRS or withhold tax on the winnings. But beginning March 4, 2008, the IRS will require all tournament sponsors to report tournament winnings of more than $5,000, usually on an IRS Form W-2G. 

Tournament sponsors who comply with this reporting requirement will not need to withhold federal income tax at the end of a tournament. If any tournament sponsor does not report the tournament winnings, the IRS will enforce the reporting requirement and also require the sponsor to pay any tax that should have been withheld from the winner if the withholding requirement had been asserted. The withholding amount is normally 25 percent of any amounts that should have been reported.

So that tournament sponsors can comply with this requirement, tournament winners must provide their taxpayer identification number, usually a social security number, to the tournament sponsor. If a winner fails to provide this identification number, the tournament sponsor must withhold federal income tax at the rate of 28 percent.

The IRS reminds tournament winners that, by law, they must report all their winnings on their federal income tax returns. This rule applies regardless of the amount and regardless of whether the winner receives a Form W-2G or any other reporting form.  This is true for 2007 and earlier years, and will continue to be the case after the new reporting requirement goes into effect.

Back-to-School Tax Breaks Help Teachers Pay Classroom Costs; Aid Parents, Students With College Tuition

Our main man, Bob Martin aka The Accountant to the Stars, sent us some information that can help us with the tax man:

With the new school year now under way, the Internal Revenue Service today reminded teachers, parents and students that saving receipts and keeping good records can help them take advantage of various education-related deductions and credits on their 2007 federal income tax return.

“The start of the school year is a good time to remind parents, students and teachers to save all receipts related to tax-advantaged education expenses,” said IRS Acting Commissioner Linda Stiff. “Good recordkeeping makes sense because it can help avoid missing a deduction or credit at tax time.”

Deductions reduce the income on which tax is figured. Credits reduce the overall tax. Though both can lower a person’s year-end tax bill or increase their refund, credits normally result in greater tax savings.

The educator expense deduction allows teachers and other educators to deduct the cost of books, supplies, equipment and software used in the classroom. Eligible educators include those who work at least 900 hours during a school year as a teacher, instructor, counselor, principal or aide in a public or private elementary or secondary school.

Worth up to $250, the educator expense deduction is available, whether or not the educator itemizes their deductions on Schedule A. In tax-year 2005, teachers and educators deducted just over $893 million of these out-of-pocket classroom expenses. Under current law, this deduction is scheduled to expire at the end of this year.

Three key tax breaks — the tuition and fees deduction, the Hope credit and the lifetime learning credit — help parents and students pay for the cost of post-secondary education. All three are available, regardless of whether an eligible taxpayer itemizes their deductions. Under current law, the tuition and fees deduction is scheduled to expire at the end of this year, but the two credits remain in effect. In tax-year 2005, taxpayers claimed tuition and fees deductions totaling nearly $11 billion and education credits of almost $6.2 billion.

Normally, a taxpayer can claim tuition and required enrollment fees paid for their own and their dependent’s college education. A taxpayer cannot take both an education credit and the tuition and fees deduction for the same student in the same year. Income limits and other special rules apply to each of these provisions. Education credits are claimed on Form 8863, and the tuition and fees deduction for 2007 will be claimed on new Form 8917.

IRS Publication 970, Tax Benefits for Education, can help eligible parents and students understand the special rules that apply and decide which tax break to claim. The publication also describes other education-related tax benefits, including qualified tuition programs (also known as 529 plans), the student loan interest deduction, Coverdell education savings accounts and the education savings bond program.

Publication 970 can be obtained on this Web site or, without charge, by calling the IRS toll-free at 1-800-TAX-FORM (829-3676).

READ IT

2007 Texas Sales Tax Holiday is around the corner

School is just around the corner and so is the 2007 Texas Sales Tax Holiday (August 17, 18, and 19).  You know, the day you don't have to pay taxes on certain items and the malls are jam packed. 

See what will be tax free and the things that are still taxable.

The law exempts most clothing and footwear priced under $100 from sales and use taxes, which could save shoppers about $8 on every $100 they spend. Backpacks under $100 and used by elementary and secondary students are also exempt.

Remember, there are usually big sales around this weekend too.

How to make the most of a sales tax holiday. 

Below is a selected list of items and their exemption status during the sales tax holiday.
TAX-FREE	TAXED
Baby clothes Backpacks for use by elementary and secondary students Belts with attached buckles Boots - cowboy, hiking Caps/hats - baseball, fishing, golf, knitted Coats and wraps Diapers - adult and baby Dresses Gloves (generally) Gym suits and uniforms Hooded shirts and hooded sweatshirts Hosiery Jackets Jeans Jerseys - baseball and football Jogging apparel Neckwear and ties Pajamas Pants and trousers Raincoats and ponchos Robes Shirts Shoes - sandals, slippers, sneakers, tennis, walking Socks (including athletic) Shorts Suits, slacks, and jackets Sweatshirts Sweat suits Sweaters Swimsuits Underclothes Work clothes and uniforms	Accessories (generally) - barrettes, elastic ponytail holders, wallets, watches Backpacks - unless for use by elementary and secondary students Baseball cleats and pants Belt buckles (without belt) Boots - climbing, fishing, rubber work boots, ski, waders Buttons and zippers Cloth and lace, knitting yarns, and other fabrics Dry cleaning services Football pants Golf gloves Handbags and purses Handkerchiefs Hard hats Helmets - bike, baseball, football, hockey, motorcycle, sports Ice skates Jewelry Laundering services Leather goods - except belts with buckles and wearing apparel Pads - football, hockey, soccer, elbow, knee, shoulder Personal flotation devices Rented clothing (including uniforms, formal wear, and costumes) Roller blades and skates Safety clothing, glasses Shoes - bicycle (cleated), bowlin

Protesting property taxes

How do you do that research? We have step by step process on how to make a successful protest, the idea is to find the properties that like yours and see where those values are.

How to protest your property taxes

<http://www.tax.co.harris.tx.us/propertytax/protest.asp>

<http://www.poconnor.com/texas_property_tax_appeals_steps.asp> 

IRS warns of phishing scam

Jeff Ehling talked about the IRS warning concerning a phishing scam - here is the warning:

WASHINGTON — The Internal Revenue Service today alerted taxpayers to the latest versions of an e-mail scam intended to fool people into believing they are under investigation by the agency’s Criminal Investigation division.
 
The e-mail purporting to be from IRS Criminal Investigation falsely states that the person is under a criminal probe for submitting a false tax return to the California Franchise Tax Board. The e-mail seeks to entice people to click on a link or open an attachment to learn more information about the complaint against them. The IRS warned people that the e-mail link and attachment is a Trojan Horse that can take over the person’s computer hard drive and allow someone to have remote access to the computer.
 
The IRS urged people not to click the link in the e-mail or open the attachment.
Similar e-mail variations suggest a customer has filed a complaint against a company and the IRS can act as an arbitrator. The latest versions appear aimed at business taxpayers as well as individual taxpayers.
 
The IRS does not send out unsolicited e-mails or ask for detailed personal and financial information. Additionally, the IRS never asks people for the PIN numbers, passwords or similar secret access information for their credit card, bank or other financial accounts.
 
“Everyone should beware of these scam artists,” said Kevin M. Brown, Acting IRS Commissioner. “Always exercise caution when you receive unsolicited e-mails or e-mails from senders you don’t know.”
 
Recipients of questionable e-mails claiming to come from the IRS should not open any attachments or click on any links contained in the e-mails. Instead, they should forward the e-mails to phishing@irs.gov (follow the instructions).
 
The IRS also sees other e-mail scams that involve tricking victims into revealing private personal and financial information over the Internet, a practice that is known as “phishing” for information.
 
The IRS and the Treasury Inspector General for Tax Administration work with the U.S. Computer Emergency Readiness Team (US-CERT) and various Internet service providers and international CERT teams to have the phishing sites taken offline as soon as they are reported.
 
Since the establishment of the mail box last year, the IRS has received more than 17,700 e-mails from taxpayers reporting more than 240 separate phishing incidents. To date, investigations by TIGTA have identified host sites in at least 27 different countries, as well as in the United States.
 
Other fraudulent e-mail scams try to entice taxpayers to click their way to a fake IRS Web site and ask for bank account numbers. Another widespread e-mail tells taxpayers the IRS is holding a refund (often $63.80) for them and seeks financial account information. Still another email claims the IRS’s ‘anti-fraud commission’ is investigating their tax returns.

IRS Warns Of Virus Email Scam

Watch out for a pesky email that looks like it comes from the tax man, especially if that tax man wants lots of info on you:

The Internal Revenue Service says there’s a new email scam making the rounds, masquerading as a stern warning from the tax collection agency. Those who click on an email attachment with the bogus message will unleash a nasty virus on their computers.

The e-mail purporting to be from IRS Criminal Investigation falsely states that the person is under a criminal probe for submitting a false tax return to the California Franchise Tax Board.

The e-mail seeks to entice people to click on a link or open an attachment to learn more information about the complaint against them. The IRS warned people that the e-mail link and attachment is a Trojan Horse that can take over the person’s computer hard drive and allow someone to have remote access to the computer.

The IRS urged people not to click the link in the e-mail or open the attachment.

READ THE REST

Protest property taxes

Today Action 13 Consumer Reporter Jeff Ehling had advice for recent home buyers who want to protest their property taxes.  The advice actually works for anyone. (READ FULL STORY)

Jeff sends us these links to help you file and win your property tax protest.  He even wrote a Property Tax Protest haiku! Add yours to the comment section.  Remember 5 syllables, 7 syllables, 5 syllables, have fun!

Protest. That's your right.
Follow the links to your fight.
Save without the fright.

How to file for a property tax protest on line
http://www.hcad.org/cgi-bin/News/DisplayNewsRelease.asp?news_id=66

How to protest your property taxes
http://www.tax.co.harris.tx.us/propertytax/protest.asp

http://www.poconnor.com/texas_property_tax_appeals_steps.asp

Jeff says you can protest in any county.

Protest your house's appraisal

Bad news for Harris County home owners, your property appraisals are in the mail and chances are you are facing an increase.  But you don't have to pay more.  Protest your appraisal!  Last year 300,000 protests were filed, and 60% were successful in lowering their tax burden.  You can do it, here's how.

www.tax.co.harris.tx.us/propertytax/protest.asp

www.hcad.org

Missed tax deductions

Today Jeff Ehling talked with the experts about often missed tax deductions and what to do if you can't file in time. 

We have several areas that can help you out:
- Get help with your taxes
- abc13.com Tax Guide

Pasadena woman gets a taxing surprise

Pasadena woman gets a taxing surprise

Why she couldn't get her tax refund

By Jeff Ehling

(4/05/07 - KTRK/PASADENA, TX) - You have probably heard of refund advance loans. That's when you get part of your tax refund now, then pay off the loan when the refund comes in.

For one local woman, getting a refund advance loan turned out to be more than she bargained for. Back in November, Delilah Ramos knew her tax refund would be about $1,900, so she says she went to a Pasadena Jackson Hewitt for a $600 holiday loan.

"What they do, it's kind of like an advance on your tax refund," Ramos told us. "Once you get that and file your taxes with them, they deduct that from your refund."

Then in January, Ramos needed the rest of her refund so she says she went back to Jackson Hewitt to get a loan on the balance of her tax return. "When we went in, they told us we were not approved and it just did not seem right," she said.

Ramos called the bank that denied her refund loan and discovered someone else had already used her information to get the rest of her return. "I told them, 'How is this so when we are just coming in to get this loan,'" she asked.

Ramos then filed a report with the Pasadena Police Department. No one at the Pasadena Jackson Hewitt office would talk to us about Mrs. Ramos' claims, but Pasadena police did confirm there is an investigation into what happened.

The investigation has uncovered a person of interest in the case and that's not all. Police confirm two other Pasadena residents filed similar reports both claiming advance loan applications generated from this Jackson Hewitt office drained them of their tax return money.

Today a Jackson Hewitt official told us three customers of this office all had the same issue with advance tax loans the customers did not know about. Company officials also tell us quote:

"The clients involved have been taken care of, they've all been reimbursed."

"They cut us a check, I guess from their company, and they said they would work on getting their money back," Ramos said.

For Ramos and the other victims, there is little they could have done to prevent someone from filing the loans without their knowledge. "This is information that you have to give, this not something you can

keep personal," she said. Jackson Hewitt officials say they are working with the police to pursue the person of interest in the case.

Officers tell us the case remains under investigation.

How did the information needed to get a loan fall into the wrong hands?

We asked about that, but that's one of the details still being kept out of the public eye for now, police do not think anyone else has had the same problem.

>>Click here to send Jeff a consumer news tip
>>Read Jeff's Consumer Blog
>>Talk on the Consumer Message Board
(Copyright © 2007, KTRK-TV)

Pay your taxes later this year

Houston CPA, Bob Martin sent us this important reminder about this year's tax deadline:

Taxpayers will have extra time to file and pay because April 15 falls on a Sunday in 2007, and the following day, Monday, April 16, is Emancipation Day, a legal holiday in the District of Columbia.

“This year, taxpayers have additional time to file and pay beyond the traditional April 15 deadline,” said IRS Commissioner Mark W. Everson. “As we always do, we encourage taxpayers to get an early start on their taxes to make sure they have plenty of time to accurately prepare their return.”

This means the entire country has an April 17 deadline. Previously, the April 17 deadline applied just to individuals in the District of Columbia and six eastern states who are served by an IRS processing facility in Massachusetts, where Patriots Day will be observed on April 16.

The April 17, 2007 deadline will apply to any of the following:

• 2006 federal individual income tax returns, whether filed electronically or on paper.
• Requests for an automatic six-month tax-filing extension, whether submitted electronically or on Form 4868.
• Tax year 2006 balance due payments, whether made electronically (direct debit or credit card) or by check.
• Tax-year 2006 contributions to a Roth or traditional IRA.
• Individual estimated tax payments for the first quarter of 2007, whether made electronically or by check.
• Individual refund claims for tax year 2003, where the regular three-year statute of limitations is expiring.

Other tax-filing and payment requirements affected by this change are described in IRS Publication 509, Tax Calendars for 2007, available on this Web site.

READ MORE

Can you deduct pet expenses?

Charlene wrote into the Consumer Blog with this tax question:

Can you claim your family pet. Like your dog or cat or if you have take to veterinarian all the time?

Here is how Houston accountant, Bob Martin, answered this question for us via email:

Sure along with deducting your social security number from your gross income on page 1.  In all seriousness, your costs related to your family pet are generally considered personal and not deductible for income tax purposes.  However, if you itemize your deductions on Schedule A, and you have paid sales tax in connection with your pet care such as boarding, pet food, etc., and you are claiming the total of your actual sales taxes paid instead of the sales tax table amount, then you may get some tax benefit from the family pet after all. [Just to clarify for those of you who sat in the back of the class, you cannot legally deduct your social security number from your gross income on page 1.]

The tax man is watching

The IRS has released it's dirty dozen tax scams for 2007:

1. Telephone Excise Tax Refund Abuses: Early filings show some individual taxpayers have requested large and apparently improper amounts for the special telephone tax refund. In some cases, taxpayers appear to be requesting a refund of the entire amount of their phone bills, rather than just the three-percent tax on long-distance and bundled service to which they are entitled. Some tax preparers are helping their clients file apparently improper requests. The IRS is investigating potential abuses in this area and will take prompt action against taxpayers who claim improper refund amounts and against the return preparers who help them.

2. Abusive Roth IRAs: Taxpayers should be wary of advisers who encourage them to shift under-valued property to Roth Individual Retirement Arrangements (IRAs). In one variation, a promoter has the taxpayer move under-valued common stock into a Roth IRA, circumventing the annual maximum contribution limit and allowing otherwise taxable income to go untaxed.

3. Phishing is a technique used by identity thieves to acquire personal financial data in order to gain access to the financial accounts of unsuspecting consumers, run up charges on their credit cards or apply for loans in their names. These Internet-based criminals pose as representatives of a financial institution –– or sometimes the IRS itself –– and send out fictitious e-mail correspondence in an attempt to trick consumers into disclosing private information. A typical e-mail notifies a taxpayer of an outstanding refund and urges the taxpayer to click on a hyperlink and visit an official-looking Web site. The Web site then solicits a social security and credit card number. It is important to note the IRS does not use e-mail to initiate contact with taxpayers about issues related to their accounts. If a taxpayer has any doubt whether a contact from the IRS is authentic, the taxpayer should call 1-800-829-1040 to confirm it.

4. Disguised Corporate Ownership: Domestic shell corporations and other entities are being formed and operated in certain states for the purpose of disguising the ownership of the business or financial activity. Once formed, these anonymous entities can be, and are being, used to facilitate underreporting of income, non-filing of tax returns, listed transactions, money laundering, financial crimes and possibly terrorist financing. The IRS is working with state authorities to identify these entities and to bring their owners into compliance.

5. Zero Wages: In this scam, which first appeared in the Dirty Dozen in 2006, a Form 4852 (Substitute Form W-2) or a “corrected” Form 1099 showing zero or little income is submitted with a federal tax return. The taxpayer may include a statement rebutting wages and taxes reported by the payer to the IRS. An explanation on the Form 4852 may cite statutory language behind Internal Revenue Code sections 3401 and 3121 or may include some reference to the paying company refusing to issue a corrected Form W-2 for fear of IRS retaliation.

6. Return Preparer Fraud: Dishonest return preparers can cause many headaches for taxpayers who fall victim to their schemes. Such preparers make their money by skimming a portion of their clients’ refunds and charging inflated fees for return preparation services. They attract new clients by promising large refunds. Some preparers promote filing fraudulent claims for refunds on items such as fuel tax credits to recover taxes paid in prior years. Taxpayers should choose carefully when hiring a tax preparer. As the old saying goes, “If it sounds too good to be true, it probably is.” Remember that no matter who prepares the return, the taxpayer is ultimately responsible for its accuracy. Since 2002, the courts have issued injunctions ordering dozens of individuals to cease preparing returns, and the Department of Justice has filed complaints against dozens of others. During fiscal year 2006, 109 tax return preparers were convicted of tax crimes and sentenced to an average of 18 months in prison.

7. American Indian Employment Credit: Taxpayers submit returns and claims reducing taxable income by substantial amounts citing an American Indian employment or treaty credit. Although there is an Indian Employment Credit available for businesses that employ Native Americans or their spouses, there is no provision for its use by employees. In a somewhat similar scam, unscrupulous promoters have informed Native Americans that they are not subject to federal income taxation. The promoters solicit individual Indians to file Form W-8 BEN seeking relief from all withholding of federal taxation. A recent “phishing” variation has promoters using false IRS letterheads to solicit personal financial information that they claim the IRS needs in order to process their "non-tax" status.

8. Trust Misuse: For years unscrupulous promoters have urged taxpayers to transfer assets into trusts. They promise reduction of income subject to tax, deductions for personal expenses and reduced estate or gift taxes. However, some trusts do not deliver the promised tax benefits. There are currently more than 150 active abusive trust investigations underway and 49 injunctions have been obtained against promoters since 2001. As with other arrangements, taxpayers should seek the advice of a trusted professional before entering into a trust.

9. Structured Entity Credits: Promoters of this newly identified scheme are setting up partnerships to own and sell state conservation easement credits, federal rehabilitation credits and other credits. The purported credits are the only assets owned by the partnership and once the credits are fully used, an investor receives a K-1 indicating the initial investment is a total loss, which is then deducted on the investor’s individual tax return. Forming such an entity is not a viable business purpose. In other words, the investments are not valid, and the losses are not deductible.

10. Abuse of Charitable Organizations and Deductions: The IRS continues to observe the use of tax-exempt organizations to improperly shield income or assets from taxation. This can occur when a taxpayer moves assets or income to a tax-exempt supporting organization or donor-advised fund but maintains control over the assets or income. Contributions of non-cash assets continue to be an area of abuse, especially with regard to overvaluation of contributed property. In addition, the IRS is noticing the return of private tuition payments being disguised as charitable contributions to religious organizations.

11. Form 843 Tax Abatement: This scam rests on faulty interpretation of the Internal Revenue Code. It involves the filer requesting abatement of previously assessed tax using Form 843. Many using this scam have not previously filed tax returns and the tax they are trying to have abated has been assessed by the IRS through the Substitute for Return Program. The filer uses the Form 843 to list reasons for the request. Often, one of the reasons is: "Failed to properly compute and/or calculate IRC Sec 83-Property Transferred in Connection with Performance of Service."

12. Frivolous Arguments: Promoters have been known to make the following outlandish claims: the Sixteenth Amendment concerning congressional power to lay and collect income taxes was never ratified; wages are not income; filing a return and paying taxes are merely voluntary; and being required to file Form 1040 violates the Fifth Amendment right against self-incrimination or the Fourth Amendment right to privacy. Don’t believe these or other similar claims. These arguments are false and have been thrown out of court. While taxpayers have the right to contest their tax liabilities in court, no one has the right to disobey the law.

IRS Still Watches Scams That Fall Off the List

Five of last year’s Dirty Dozen tax scams rotated off the list for 2007. While the IRS has seen a decline in the occurrence of some of these scams –– abusive credit counseling agencies, for example –– other problems, such as offshore abusive transactions continue to be an area of particular concern for the agency. The absence of a particular scheme from the Dirty Dozen should not be taken as an indication that the IRS is unaware of it or not taking steps to counter it.

How to Report Suspected Tax Fraud Activity

Suspected tax fraud can be reported to the IRS using IRS Form 3949-A, Information Referral. Form 3949-A is available for download from the IRS Web site at IRS.gov, or by mail by calling 1-800-829-3676. The completed form or a letter detailing the alleged fraudulent activity should be addressed to the Internal Revenue Service, Fresno, CA 93888. The mailing should include specific information about who is being reported, the activity being reported, how the activity became known, when the alleged violation took place, the amount of money involved and any other information that might be helpful in an investigation. The person filing the report is not required to self-identify, although it is helpful to do so. The identity of the person filing the report can be kept confidential. The person may also be entitled to a reward.

The IRS is begging you to take this deduction

Jeff Ehling has told you about the telephone tax refund before.  Still, there are people across the country not taking advantage and the IRS is wanting to get the word out. 

Here are some links that could get you more money back through this refund:

- Questions and answers
- Request for refund

Sales tax deduction

Today at 4:55, Jeff Ehling showed us some hidden sales tax deductions!  Here are the links you need:

Educator expense

Tuition and fees

State and local sales tax deduction

Missing your W-2 Form?

Oh the horror, what to do if you never receive your W-2 Form from your employer!!! Don't want the IRS tax man knocking at your door in April!

Jeff Ehling talked directly to the IRS and found these helpful links:

- Missing your Form W-2?
- Substitute to Form W-2

2006 tax returns have some twists

Today at 4:55 pm, Jeff Ehling showed us how our 2006 tax returns have some interesting twists.  Interesting because we have some chances to make even more money back than usual.  READ FULL STORY

Jeff mentioned the sales tax exemption, the following link shows you were you can figure out that deduction.  There will also be a form you need to fill out. Here's the trick, you won't find the form on the standard 1040 or 1040 A because the exemption was granted after the forms were printed.

http://www.irs.gov/pub/irs-pdf/p600.pdf

The tax man is coming!

The tax man is coming, the tax man is coming...well at least in a bill form:

Harris County Tax Assessor-Collector Paul Bettencourt announces that his office has begun mailing 1,350,000 property tax bills for 2006, which will begin arriving this week. Earlier this year, the Harris County Tax Office assumed property tax collections for taxpayers in the Houston Independent School District (HISD), the City of Pasadena and Piney Point Village.

[snip]

The 2006 Harris County property tax statements are available online at www.hctax.net and feature a link that allows property owners to view a graph displaying the increases in their property values and taxes from 1990-2006 and five years of account history is included in the bill.

[snip]

For more information, taxpayers may call 713-368-2000 or visit the Tax Office Web site at www.hctax.net.

Sales Tax Holiday strategy

Today Jeff Ehling showed us how to tackle the sales tax holiday.  Get your strategy now by going through the tax-free list to see what's on it and what's not.

Sales tax free weekend

Today at 4:55 and 6 pm, Jeff Ehling talked about the annual Texas sales tax holiday this weekend, beginning Friday, August 4 and lasting through Sunday, August 6. Confused about which items are on the list and which aren't?

See what's on the list yourself.

Sales Tax Holiday 2006

Get ready to save some money.  Here is a reminder of the upcoming Texas Sales Tax Holiday:

Texas shoppers get a break from state and local sales taxes on August 4, 5, and 6 - the state's annual tax holiday. Lay-away plans can be used again this year to take advantage of the sales tax holiday.

The law exempts most clothing and footwear priced under $100 from sales and use taxes, which could save shoppers about $8 on every $100 they spend.

A word of caution: If you sell items that do not qualify for the exemption, you may not advertise or promise that you will pay your customers' sales tax. Additionally, you are prohibited from advertising that you will not collect sales tax on items that do not qualify. You may advertise that tax is included in the sales price of the taxable items that you sell, however.

For information on how to report tax on these sales, please visit Reporting Sales Tax on Tax-Free Items or call us toll free at 1-800-252-5555.

Jeff on the Job links

You saw Jeff on the Job 2 on abc13, now get the online version. Click here for the links to many of the stories you saw on the TV special.

Storage unit auctions bring hidden treasure
If you've ever rented a storage unit, you know some pretty strange stuff ends up stored. What you may not know is that when someone stops paying rent, the contents go to the highest bidder.

HDTV sets come with plenty of hidden costs
If you're thinking about upgrading your television, buyer beware. There are hidden costs with HDTV that can leave you flat broke. If you're not careful you could end up spending hundreds more for things you don't need or pass on something vital.

Money mistakes could be worth big bucks for you
A 1798 draped bust dollar is worth $50,000! And a 1922 matte proof dollar can fetch a whopping quarter of a million dollars! You'll probably never own one of these in your lifetime, but you could have a smaller treasure in your pocket worth hundreds of dollars and not even realize it.

How to avoid overpaying sales tax when shopping
It sounds easy enough. Some things at the store are taxable and some things are not. If you're leaving it to the stores to figure out sales tax, you might be getting overcharged on a daily basis.

Putting a system to help you win the lottery to the test
Forget about Powerball, how about winning thousands of dollars a week playing the Texas lottery? Lottery help systems are for sale online and they guarantee a 95% win success rate. But do they really work?

Want legitimate work from the comfort of your own home?
Who wouldn't want the chance to work at home? It's a dream that is becoming a reality for many Houstonians. We're always receiving questions about this in the consumer office. How can I work from home? How do I know if a company offering that chance is legit? Well, here is an opportunity that offers the real deal.

Now make sure to catch Jeff on the Job 2 on 13.2 Digital TV.

Houston-area county sees explosive property tax increases

Due to popular demand, here is the story Jeff Ehling reported on last night concerning high appraisal amounts on properties in Wharton County:

(6/6/06 - KTRK/HOUSTON) - You've probably seen the television ads from Governor Rick Perry announcing property tax relief. Well there is one community that is not seeing it.

In some cases those appraisals are up tens of thousands of dollars. It's happening in Wharton County where property tax values are going up, but appraisals have stayed the same for 20 years, until now.

"It's gone nuts, they've gone nuts," said Floyd Fisher of El Campo.

Floyd Fisher's property tax appraisal has him angry. The Wharton County resident says his small piece of land in el campo saw a huge increase this year.

"I had a piece of property that went from $17,000 to $235,000," Fisher said.

And he's not alone, the Wharton County Chief Appraiser says every acre of land and every residential home in the county has been reassessed at the current market value. That is something that had not been done in 20 years.

"I don't believe that property values were at market value," said Wharton County Chief Appraiser Tylene Gamble.

Tylene Gamble has been on the job for just seven months. She found out in October that values in Wharton County were way out of line after a State Comptrollers Office audit. In some cases homes were valued at $25 per square foot, now those homes are assessed at $60 per square foot.

"This was very agonizing and it's not something that we did on a whim, it was a lot of analysis and a lot of detail," Gamble said.

And it's hitting almost everyone.

"As far as my house, sure it went up just like everyone else's did, a lot about 27 percent," said Wharton resident Tom Joines.

Wharton county residents can protest the appraisals and have until June 21st to file a protest.

People who live in Wharton County say they are not taking these increases lightly and they are even appealing to the governor for help.

"Governor Perry, you better care, because I'm going to tell you the voters, they've had it," fisher said.

IRS outsourcing your information?

Linda wrote into the blog with a question that was bothering her:

Is it true that the IRS is outsourcing to foreign countries? If so, I do not like it. I will not knowingly talk to someone in another country about my business. The US Government should NEVER outsource Americans' Information to any country.
p.s. my mortgage company outsources & I won't talk to them either...I sent them a letter & said they could correspond with my by mail or have an American call me....no offense...It's an invasion of privacy I'm not willing to share.

So we went to the IRS with this question, spokesperson Kenneth Vargas responded:

No it is not true.

But I believe your viewer is probably referencing stories about U.S. tax firms sending their work overseas to be worked. Most notably, there have been several media stories about Indian accountants working on U.S. tax returns. (NOT for the IRS, but for private companies)

There are no laws currently prohibiting this private outsourcing. All the work done by the IRS is done domestically by federal employees. We do contract some payment processing with U.S. Banks and will soon be contracting private debt collectors, but our contracts require stringent privacy policies those companies must follow and we also require that all the work be done in the U.S.

Will protesting your property taxes hurt you?

Monte from Houston wrote into the Consumer Blog with the following question about property tax protests:

Thank you for sending the link to Jeff's report. I think one thing that's missing from it is "what prevents HCAD from increasing you property values if during the protest they think they've undervalued your property"?  You go in thinking you may hold or decrease your property value for the year and come out the opposite.

Here is the answer from Jeff Ehling:

Under a typical protest, The Harris County Appraisal District (HCAD) has set the value of your property based on its research.  If you protest, usually you are not going to bring evidence into the meeting that shows your home is worth more than the HCAD estimate.  It is possible the assessment could go up, however HCAD says they can't remember that ever happening.

A (property) taxing question

HCAD says you never lose your ten percent property tax cap because properties are reassessed every year:

Recent news reports and advertising have incorrectly claimed that the appraised values of capped homesteads in Harris County could increase 20% in 2007 if no value protest is filed in 2006.

Because the Harris County Appraisal District reviews all residential values annually, the maximum appraised value increase on a capped homestead in any year would be 10% over the prior year value, plus value added by any new improvements made before January 1 of the current year.

However, the tax fighting professionals at O’Connor & Associates, ran some numbers for the Action 13 Consumer Department and came up with this statistic:

We took a random sample of our 22,000 clients' accounts and found that 2 out of 4 accounts had been raised by more than 10%...We believe that it happens frequently.

So which is it? We want to hear from you. Email us your property tax tales.

Property tax protest story

Due to popular demand, we have posted the entire 6 pm version of Jeff's property tax story. Here is the link to the Houston-area appraisal districts.

Read the entire article here.

Property tax protest

Today at 4:55 pm, Jeff showed us how you might want to protest your property taxes, even if your appraised value did not go up this year.

- Harris County Appraisal District (HCAD)
- Galveston Central Appraisal District (GCAD)
- Brazoria County Appraisal District (BCAD)
- Fort Bend Central Appraisal District (FBCAD)
- Montgomery Central Appraisal District (MCAD)

Property tax arbitration

Today at 4:55 pm, Jeff showed us how to protest our property taxes.  Then he showed us a new way to continue the fight in case your protest fails.  Now you can head to binding arbitration.

Find out more from the Harris County Appraisal District.

There is more information from the Texas State Comptroller's Office:
Arbitration Information
Frequently Asked Questions
Local Property Tax Information

How to avoid overpaying sales tax when shopping

Today at 4:55, Jeff showed us how to avoid paying sales tax when shopping at convenience stores.  How?  Well, there are many items THAT SHOULD NOT BE TAXED! 

Here is our original story from February:
How to avoid overpaying sales tax when shopping

Other important links:
When is food taxable?
List of what is and isn't taxable
How to get refund on tax error

To complain about a store:
Field Office - Houston North
Taxpayer Services and Collections
16630 Imperial Valley Drive, Suite 227
Houston TX 77060-3411
(281) 820-6055

Field Office - Houston Northwest
Taxpayer Services and Collections
1919 North Loop West, Suite 510
Houston TX 77008-1354
(713) 868-9112

Field Office - Houston Southeast
Taxpayer Services and Collections
650 FM 1959
Houston TX 77034-5420
(281) 484-6533

Field Office - Houston Southwest
Taxpayer Services and Collections
9888 Bissonnet, Suite 510
Houston TX 77036-8247
(713) 777-1881

Audit Office - Houston North
1919 North Loop West, Suite 311
Houston TX 77008-1394
(713) 864-0276

Audit Office - Houston South
2656 South Loop West, Suite 400
Houston TX 77054-2600
(713) 665-1200

IRS seeks PayPal customer information

Just in time for April 15th 17th!  The IRS wants PayPal to hand over customer information.  Seems the government thinks some PayPalers might be not paying their fair share:

The IRS wants PayPal to hand over information about American taxpayers who have bank accounts, credit cards or debit cards issued by financial institutions in some 30 countries known as tax havens.

Now PayPal isn't selling out customers yet.  The company is reviewing it's options.  This all sounds familiar doesn't it?

Tax Prep Software Comparison

Today at 4:55 pm, Jeff showed us a comparison of tax preparation software.  Here is another look at some other tax programs.

These are the programs Jeff looked at:
- TaxACT
- TurboTax
- TaxCut
- IRS e-File

Privacy Tips for Tax Season

The Privacy Rights Clearinghouse has a good warning and helpful tips about your privacy and tax time.

REVIEW: Three tax prep programs, three different outcomes

Here is an article reviewing the various tax prep software packages.  Here is the list of products:

H&R Block's TaxCut, Intuit's TurboTax and the comparatively cheaper TaxAct, from an Iowa company called 2nd Story Software.

I've used Turbo Tax but that is it on the list.

Anyone tried one of these and loved or hated it?