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00:00:01 00:00:03 >> FSN Radio.
00:00:03 00:00:05 It's all about what's next.
00:00:05 00:00:07 Go to FinancialSurvivalNetwork.com
00:00:07 00:00:10 and sign up for your free weekly newsletter.
00:00:10 00:00:12 You'll also get three free reports.
00:00:12 00:00:14 The Financial Survival Network.
00:00:14 00:00:17 It's all about what's next.
00:00:17 00:00:20 (upbeat jazzy music)
00:00:23 00:00:25 >> Welcome, you're listening to
00:00:25 00:00:28 the Financial Survival Network, it's Kerry Lutz
00:00:28 00:00:32 and we're getting close to tax time and the things going on
00:00:32 00:00:34 in the IRS, just amazing.
00:00:34 00:00:39 Hard to believe that refund fraud become in epidemic,
00:00:39 00:00:42 nearly 20 billion dollars a year get scammed
00:00:43 00:00:47 out of the U.S. Government, let alone
00:00:47 00:00:49 we're talking the waste and inefficiency
00:00:49 00:00:52 that the U.S. Government is so famous for.
00:00:52 00:00:56 With us is Mario Costanz, owned almost 100
00:00:56 00:01:00 tax preparation offices in the country a while back
00:01:00 00:01:04 and he's witnessed the abuses every year
00:01:04 00:01:06 and is now speaking out.
00:01:06 00:01:09 Currently, owner of Happy Tax, a service which provides
00:01:09 00:01:12 second income for Americans looking to make money
00:01:12 00:01:14 preparing tax returns for their neighbors.
00:01:14 00:01:16 Mario, welcome to the show.
00:01:16 00:01:17 >> Thank you so much, I appreciate it.
00:01:17 00:01:21 >> So, what's going on now with the IRS?
00:01:21 00:01:23 Anything worth... (chuckles)
00:01:23 00:01:26 Obviously, a lot happening now, isn't there?
00:01:26 00:01:28 >> There sure is, I mean there's plenty going on with the IRS
00:01:28 00:01:30 and one of the biggest things going on with them right now
00:01:30 00:01:32 is their budget cuts.
00:01:32 00:01:34 The congress has repeatedly cut down their budget
00:01:34 00:01:36 and it put them in a position where it's become
00:01:36 00:01:40 more difficult for them to combat and work to eliminate
00:01:40 00:01:41 the fraud that's going on in the country
00:01:41 00:01:45 and in the couple kinds of fraud that's out there,
00:01:45 00:01:48 specifically, one being out and out criminal fraud
00:01:48 00:01:51 is syndicates that go out and they do identity theft
00:01:51 00:01:54 and they get people's identities and they, you know,
00:01:54 00:01:57 fraudulently get refunds in other people's names
00:01:57 00:02:00 and then, when those people go to file, they realize
00:02:00 00:02:01 that their return has already been filed
00:02:01 00:02:03 and they have to go through a nightmare to get
00:02:03 00:02:05 the whole situation rectified but in the meantime,
00:02:05 00:02:06 that money is gone.
00:02:06 00:02:08 There are plenty of other tax fraud as well.
00:02:08 00:02:11 Some of which are earned income fraud,
00:02:11 00:02:15 which has people that don't necessarily deserve
00:02:15 00:02:18 earned income credit filing and getting
00:02:18 00:02:21 that earning credit because it is a pretty large credit.
00:02:21 00:02:23 And sometimes they're doing that on their own.
00:02:23 00:02:25 Sometimes they're doing that with the help of
00:02:25 00:02:28 tax preparers that are of less scrupleless
00:02:28 00:02:31 in terms of their business practices.
00:02:31 00:02:33 >> Right, yeah, I've heard about this.
00:02:33 00:02:37 What about this earned income credit fraud?
00:02:37 00:02:39 Just tell us how that works. >> Sure.
00:02:39 00:02:41 >> So, if someone has a low income,
00:02:41 00:02:44 the earned income credit program is an amazing program
00:02:44 00:02:47 to help those people to help ends meet.
00:02:47 00:02:49 That what it was designed for and what it's for.
00:02:49 00:02:51 And at its core, it should be working,
00:02:51 00:02:53 however, in many cases,
00:02:53 00:02:57 people that have no income may fraudulently
00:02:57 00:02:59 file tax returns stating that they have income
00:02:59 00:03:02 just to bring them inside that zone
00:03:02 00:03:04 where they can get a large earned income credit
00:03:04 00:03:07 and these people may be completely unemployed,
00:03:07 00:03:10 they may be on public assistance or government programs
00:03:10 00:03:14 but if they have children and they file a certain way,
00:03:14 00:03:16 they'll get an earned income credit
00:03:16 00:03:19 of a couple thousand dollars and also the tax preparer
00:03:19 00:03:21 who prepared that, in many cases will get fees
00:03:21 00:03:23 of a couple hundred dollars, if not more,
00:03:23 00:03:27 and this is not the way the program was designed for.
00:03:27 00:03:29 It was designed to help the working poor
00:03:29 00:03:31 and not necessarily the people that are on
00:03:31 00:03:33 strict government benefits
00:03:33 00:03:36 or just made conscious decisions not to work
00:03:36 00:03:38 because they know that they can go and get this
00:03:38 00:03:40 large tax refund each year.
00:03:40 00:03:42 In many cases, it can be, depending on the state,
00:03:42 00:03:45 five, six, seven thousand dollars
00:03:45 00:03:48 if they have the other tax credits
00:03:48 00:03:50 going on their return as well.
00:03:50 00:03:52 >> And, yeah, it's been controversial
00:03:52 00:03:54 from the beginning, hasn't it?
00:03:54 00:03:56 >> Yes, there's definitely always been some push-back
00:03:56 00:03:58 on that program because, essentially, what it is
00:03:58 00:04:00 it is redistribution of wealth.
00:04:00 00:04:03 I mean, the money comes from the middle and upper class
00:04:03 00:04:05 paying taxes on what they earned
00:04:05 00:04:08 and lower income people, essentially,
00:04:08 00:04:11 aren't paying any taxes and they're receiving these credits
00:04:11 00:04:13 to help them get by. >> Right.
00:04:13 00:04:17 >> So, that's one way, then we've got, obviously,
00:04:17 00:04:19 the refund frauds happening.
00:04:19 00:04:23 And there's a reason why congress has been cutting back
00:04:23 00:04:26 IRS funding though, isn't there?
00:04:26 00:04:28 >> Well, I feel that it has to do with the recent scandals
00:04:28 00:04:30 that the IRS has been involved with and I think
00:04:30 00:04:33 that that is definitely kind of been a little
00:04:33 00:04:34 tap on the hand to them to say, hey, you guys
00:04:34 00:04:38 shouldn't be deleting emails and targeting certain groups
00:04:38 00:04:40 and hence, you know, you've been a bad boy
00:04:40 00:04:42 and we're gonna cut your funding.
00:04:42 00:04:44 I don't know that it's necessarily beneficial
00:04:44 00:04:46 for the country to do that.
00:04:46 00:04:48 My guess is they had some issues there
00:04:48 00:04:51 but, ultimately, the American public and people suffer
00:04:51 00:04:54 if the IRS' resources are cut hoping,
00:04:54 00:04:56 in terms of combating this tax book
00:04:56 00:04:58 as well as just being there.
00:04:58 00:05:00 I mean, the IRS only answers something like
00:05:00 00:05:02 30% of the phone calls that come into them.
00:05:02 00:05:05 So, if you need help, you can't even depend on the IRS
00:05:05 00:05:08 to get the help in terms of getting your taxes done.
00:05:08 00:05:11 And many people do try to prepare their taxes on their own.
00:05:11 00:05:14 In many ways, the tax funding cut is not helpful
00:05:14 00:05:17 to the American people. >> Right.
00:05:17 00:05:20 >> So, you want to cut the funding and things where
00:05:20 00:05:22 they're doing bad things, but don't just cut it
00:05:22 00:05:26 across the board where they're giving all this fraud away
00:05:26 00:05:29 and they've never made any effort to cut the earned
00:05:29 00:05:32 income tax credit fraud either, have they?
00:05:32 00:05:34 >> I mean, they definitely made some changes
00:05:34 00:05:37 to the program in terms of, there are more audits now
00:05:37 00:05:38 than there have been in the past
00:05:38 00:05:39 but there probably should do more.
00:05:39 00:05:42 There's definitely ways they can utilize
00:05:42 00:05:45 better computer programs to look for patterns of fraud
00:05:45 00:05:48 and they just don't have the funding to do it.
00:05:48 00:05:50 >> Um-hm, interesting.
00:05:50 00:05:54 So what else is going on there where the IRS is just
00:05:54 00:05:56 wasting inordinate amounts of money?
00:05:56 00:05:59 >> I don't see, I mean, the IRS definitely has
00:05:59 00:06:01 a very large burden of processing
00:06:01 00:06:05 almost 300 million tax returns of which 150 million or so
00:06:05 00:06:08 are for individuals, the rest are for businesses.
00:06:08 00:06:10 So, they definitely have their hands full in terms of
00:06:10 00:06:13 handling administration of all that.
00:06:13 00:06:16 As well as handling the 700,000 or so
00:06:17 00:06:20 tax preparers across the country.
00:06:20 00:06:22 So they definitely have a lot on their plate
00:06:22 00:06:25 and the IRS had passed something a couple of years ago
00:06:25 00:06:27 to start regulating tax preparers, which I feel
00:06:27 00:06:30 would have been a great benefit to the industry,
00:06:30 00:06:32 as well as to the American public and that decision
00:06:32 00:06:34 was overturned by the courts,
00:06:34 00:06:37 stating the IRS didn't have the authority to regulate
00:06:37 00:06:39 the tax preparation industry preparers.
00:06:39 00:06:42 So, in essence, right now you don't even need,
00:06:42 00:06:44 have any certification, any registration.
00:06:44 00:06:47 You do need a registration loan in order to prepare
00:06:47 00:06:49 a tax return but you don't have to pass
00:06:49 00:06:51 any continued education, any testing.
00:06:51 00:06:54 So the IRS has very little ability
00:06:54 00:06:58 to stop some of this fraud from the tax preparer perspective
00:06:58 00:07:00 as well and the American public,
00:07:00 00:07:03 many people doesn't know that their tax preparers
00:07:03 00:07:05 are not certified and have no designations
00:07:05 00:07:09 or have no requirements for any minimum knowledge level.
00:07:09 00:07:12 So that's one other thing the IRS should definitely
00:07:12 00:07:15 be granted the authority by congress to regulate
00:07:15 00:07:16 and to have...
00:07:19 00:07:22 In many states, you need to have a license to do hair,
00:07:22 00:07:25 to cut hair and, yet, you don't need a license
00:07:25 00:07:27 to prepare tax returns with people's
00:07:27 00:07:29 sensitive financial information.
00:07:29 00:07:31 So, in many cases, this would definitely be a help
00:07:31 00:07:34 to the industry and also help cut down on the fraud
00:07:34 00:07:36 which ultimately save the American public money
00:07:36 00:07:38 and that's what it should be all about.
00:07:38 00:07:39 The IRS' job is to collect the revenue
00:07:39 00:07:42 and make sure they're not giving it out incorrectly.
00:07:42 00:07:43 >> Right. >> So it can be a help.
00:07:43 00:07:46 >> Sure, well yeah, it's interesting what you say.
00:07:46 00:07:50 You could be the best tax attorney in the world, right?
00:07:51 00:07:52 >> Right.
00:07:52 00:07:56 >> Or you could be the schlokiest tax preparer
00:07:58 00:08:00 at H&R Block, right?
00:08:00 00:08:01 I mean, either one.
00:08:03 00:08:06 And there's nobody there to tell the difference,
00:08:06 00:08:09 basically, right? >> That's correct, yes.
00:08:09 00:08:11 >> Interesting.
00:08:11 00:08:15 So some regulation wouldn't be necessarily a bad thing, huh?
00:08:15 00:08:17 >> Not in this case, no. >> Yeah.
00:08:17 00:08:18 >> So, yeah.
00:08:20 00:08:22 And, actually, what else,
00:08:24 00:08:27 what else do we need the IRS to do
00:08:27 00:08:30 to become more customer friendly, I guess?
00:08:31 00:08:33 >> Well, like I mentioned, only 30% of the phone calls
00:08:33 00:08:36 are being answered and even when they are,
00:08:36 00:08:38 wait times are two and three hours long.
00:08:38 00:08:41 So, in terms of just having the staff in order to
00:08:41 00:08:43 appropriately be there, I mean,
00:08:43 00:08:47 the government is asking us to pay taxes and it's our duty
00:08:47 00:08:51 to do that, however, they're not even there
00:08:51 00:08:54 to give guidance to people that need help
00:08:54 00:08:56 in terms of getting things done.
00:08:56 00:08:59 And sometimes, even if someone is using the tax preparer
00:08:59 00:09:02 or a tax professional, or CPA or attorney,
00:09:02 00:09:04 remember, you still may have reason to contact the IRS
00:09:04 00:09:07 if you need to request copies of forms
00:09:07 00:09:10 or the IRS sent you a letter to request more information
00:09:10 00:09:12 and to have to spend two or three hours that,
00:09:12 00:09:16 loss for activity alone of the American people doing that
00:09:16 00:09:19 is just such a negative and could be easily solved
00:09:19 00:09:23 by just giving some more resources to the IRS.
00:09:23 00:09:25 And I'm sure there's more efficiencies as well
00:09:25 00:09:28 that can be found, as in any government agency
00:09:28 00:09:31 but overall, the IRS does a good job to get through
00:09:31 00:09:33 what they can with the resources that they have.
00:09:33 00:09:36 >> It is pretty remarkable
00:09:37 00:09:40 of the volume of returns that they handle
00:09:40 00:09:45 and a lot of that has to do with technology, right,
00:09:45 00:09:49 that they're able to handle the quantities of returns
00:09:49 00:09:51 and the complexity of these returns.
00:09:51 00:09:52 >> Correct, yeah, the majority of the returns
00:09:52 00:09:54 are electronically filed, these days.
00:09:54 00:09:57 >> Yeah, so that is something that they have managed
00:09:57 00:10:01 to really do well is electronic filing of returns,
00:10:03 00:10:05 in spite of themselves, right?
00:10:05 00:10:06 >> Correct, yes.
00:10:06 00:10:10 >> Yeah, so their mission, they're not gonna be loved,
00:10:10 00:10:14 let's face it, but they've got a tough job to do
00:10:14 00:10:17 and they are the agency that everybody loves to hate.
00:10:17 00:10:19 Right? >> Yes, yep.
00:10:19 00:10:22 >> Most people are afraid of the IRS.
00:10:22 00:10:24 That's what drives people to tax preparers,
00:10:24 00:10:27 something like 60% of all tax returns are prepared
00:10:27 00:10:31 by a tax professional and the remainder is self-prepared.
00:10:31 00:10:35 So, people don't want to mess up and get caught up
00:10:35 00:10:38 with the IRS because they do have the ability and the right
00:10:38 00:10:41 to garnish salaries and freeze bank accounts,
00:10:41 00:10:42 seize up all the money.
00:10:42 00:10:44 Now, they don't jump right on that and go extreme
00:10:44 00:10:47 unless substantial money is owed
00:10:47 00:10:49 and things to get to a certain point,
00:10:49 00:10:52 however, people definitely want to make sure that
00:10:52 00:10:53 they're in compliance with the IRS
00:10:53 00:10:57 and overall, using a tax preparer is very helpful
00:10:57 00:10:59 in terms of that, in many cases.
00:10:59 00:11:01 >> Yeah, I mean, you can't,
00:11:01 00:11:05 if you've got anything the least bit complex
00:11:05 00:11:08 in this day and age, you can't not
00:11:11 00:11:13 use a tax preparer or a CPA
00:11:14 00:11:16 or a tax attorney, right?
00:11:17 00:11:19 >> Yeah, I agree.
00:11:21 00:11:22 I think of it this way:
00:11:22 00:11:26 if someone has a pipe burst in their sink in their kitchen,
00:11:26 00:11:28 they could probably figure out a way to do that themselves
00:11:28 00:11:31 as well, but they aren't a professional.
00:11:31 00:11:33 So why then, when it comes just because
00:11:33 00:11:35 there's some marketing out there that you can
00:11:35 00:11:37 do your tax returns yourself,
00:11:37 00:11:38 why would you try to do that yourself
00:11:38 00:11:40 when you have so much at stake?
00:11:40 00:11:42 Not only negatively but also positively.
00:11:42 00:11:44 There's a lot of missed deductions people miss
00:11:44 00:11:47 and hence, they're not getting the size refund
00:11:47 00:11:49 that they should be getting if they really did have
00:11:49 00:11:50 tax filing knowledge.
00:11:50 00:11:52 People should stick to what they know.
00:11:52 00:11:54 If you're a carpenter, you should do carpentry,
00:11:54 00:11:55 you shouldn't be doing taxes.
00:11:55 00:12:00 Just like same analogy in terms of something that...
00:12:00 00:12:02 You can probably wash your car as well
00:12:02 00:12:04 but nobody washes their car anymore, car washes.
00:12:04 00:12:07 So, same thing applies here in terms of just
00:12:07 00:12:09 using a professional to get the service done right.
00:12:09 00:12:11 >> Yep, couldn't agree more.
00:12:11 00:12:12 Well, obviously, you're gonna want to find out more
00:12:12 00:12:15 and get some more info from Mario.
00:12:15 00:12:19 Mario, how do we find out more about what you're doing?
00:12:19 00:12:21 >> So, you can check on our website,
00:12:21 00:12:23 it's called GetHappyTax.com
00:12:23 00:12:25 Gives you a little bit more information
00:12:25 00:12:26 about the company we're launching.
00:12:26 00:12:28 And we're coming out in May,
00:12:28 00:12:31 there'll be franchise opportunities available
00:12:31 00:12:33 in the future and we're looking to help
00:12:33 00:12:37 your average Joe American to increase their income
00:12:37 00:12:41 by enabling them to get them a tax business
00:12:41 00:12:43 and not necessarily try to learn taxes.
00:12:43 00:12:45 Too many people try to get into the tax business,
00:12:45 00:12:47 like a mentioned, that don't have the tax experience.
00:12:47 00:12:51 So, our model is that we do have all 100%
00:12:51 00:12:53 of our returns signed off on by CPAs.
00:12:53 00:12:55 So, our franchise, you're using our storefronts,
00:12:55 00:12:57 just have awesome, amazing, service people.
00:12:57 00:13:00 And all the returns are prepared in a remote office
00:13:00 00:13:03 by our CPAs that work for us.
00:13:03 00:13:05 So you can find out more at GetHappyTax.com
00:13:05 00:13:07 leave your information and we'll let you know
00:13:07 00:13:07 as we're launching.
00:13:07 00:13:10 >> Alright, excellent, thanks so much for being on, Mario.
00:13:10 00:13:13 >> Thank you so much, have a great day.
00:13:13 00:13:16 >> FSN radio, it's all about what's next.
00:13:16 00:13:19 Go to FinancialSurvivalNetwork.com
00:13:19 00:13:22 and sign up for your free weekly newsletter.
00:13:22 00:13:24 You'll also get three free reports.
00:13:24 00:13:26 The Financial Survival Network,
00:13:26 00:13:28 it's all about what's next.
00:13:28 00:13:31 (upbeat jazzy music)
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