Did you know that 1.5 million Floridians who are not normally
required to file a tax return may be eligible for a federal economic
stimulus payment? These Floridians – who receive Social Security,
certain Veterans’ or Railroad Retirement benefits, or are low-income
workers – will need to file a special tax return in order to get the
tax rebate they deserve.
Note: Most Floridians will already be filing a 2007 tax return and
will not need to take any additional steps to receive their federal
economic stimulus payments.
This week, CFO Sink announced that the Internal Revenue Service
(IRS) is offering free tax filing services on “Super Saturday”
(March 29, 2008) at more than 30 locations around the state.
LIST OF IRS' FREE TAX FILING
CFO Sink is encouraging all Floridians to help their parents,
grandparents, family, friends and neighbors if they are entitled to
a tax rebate this year.
For additional information on “Super Saturday” or other tax
information, please visit www.irs.gov.
CFO SINK DESIGNATES APRIL AS FINANCIAL LITERACY
At a meeting of the Florida Cabinet, Florida Chief Financial Officer
Alex Sink announced her resolution designating April as Financial
Literacy Month. During the month of April, CFO Sink will raise
awareness about the need for increased financial literacy among
Floridians, as well as increased availability to financial
information and assistance.
“Whether it’s purchasing your first home, saving for retirement or
avoiding excessive debt levels, it is truly important for Floridians
to make wise decisions with their financial resources,” said CFO
Sink. “During the month of April, my office will be working to help
educate Floridians about the importance of prudent money management
and the resources available in their communities.”
CFO Sink is a strong proponent of financial literacy. Through
regional outreach coordinators, her Department of Financial Services
(DFS) aggressively educates consumers in their local communities on
topics such as the wise use of credit cards, identity theft,
hurricane preparedness, small business security, life insurance
policies and first-time homebuyer workshops. During 2007, DFS
conducted more than 2,680 outreach events around the state.
CFO Sink’s Financial Literacy Council was created to study the
financial problems that affect consumers, particularly young
persons, seniors, working adults and small business owners, which
arise from a lack of basic knowledge of financial issues. The
council will also develop recommendations to aid DFS in developing
programs and resources aimed at increasing financial literacy among
For more information on financial literacy or the CFO’s Council
STATEMENT BY CFO SINK ON THE SENATE BANKING & INSURANCE
COMMITTEE’S PASSAGE OF CAT FUND PROPOSAL
Florida Chief Financial Officer Alex Sink applauded the Florida
Senate Banking & Insurance Committee for unanimously passing Senate
Bill 2156 by State Senator Bill Posey (R-Rockledge), which reduces
the amount of exposure Florida’s consumers have to hurricanes.
“I thank Senator Posey and his Senate colleagues for their
leadership and support of this bipartisan proposal to reduce the
risk of hurricane assessments on Floridians and businesses,” said
CFO Alex Sink. “With their support, we are eliminating the risk of
$5.5 billion in hurricane assessments if we have a bad storm this
The companion bill is HB 7021, sponsored by State Representative Ron
CFO SINK DELIVERS
FINANCIAL LITERACY ADDRESS TO FINANCIAL LITERACY COUNCIL
The Financial Literacy Council met on Monday afternoon on the 22nd floor of
the Capitol to hear CFO Alex Sink speak about the state of Florida's
With the current state of the economy and many people
faced with difficult financial decisions they don't understand, financial
guidance and assistance are more important than ever.
The upcoming year may be a difficult one. The nation is
bracing for tough economic times and Florida is facing an enormous revenue
shortfall. Money for all kinds of programs will likely be scarce. And
the need for financial literacy education is vital during these times.
The Council is working to realize goals of
increasing awareness of financial literacy and consumer education, building
a single state resource on financial issues and
aggressively increasing financial literacy
In the year ahead, the council is charged with developing a strategic
outreach plan and building an interactive website that will provide
education to Floridians about personal financial matters. That site will
also connect people to resources available in their own communities.
SINK COMMENDS STUDENTS, TEACHERS FOR INNOVATIVE “GREEN” VEHICLE
CFO Alex Sink recognized some special “green”
guests at the Cabinet meeting this week. A "FryBrid" conversion vehicle was
created by the K-12 Science Team Division of Curriculum & Learning Support
and the School District of Palm Beach County.
Students Mike Haber and Richard Blair, and their teachers Thomas Knott,
Deborah Bower, Thomas Metcalf, and science administrator Fred Barch, came to
Tallahassee to promote their vehicle that runs on free, waste vegetable oil from
cafeterias and restaurants. Representative Shelley Vana joined her
constituents from Palm Beach County at the Cabinet meeting.
The team attempted to drive the “FryBrid” Mercedes from Palm Beach to
Tallahassee, without purchasing any additional fuel for the trip.
Unfortunately, the vehicle broke down in Gainesville, but the participants
made the trip to Tallahassee anyway. The FryBrid is now on its way to Boston
to attend and participate in the National Science Teachers Association
This is the type
of innovation we need in Florida. More importantly, when talking about a
first-rate education and teachers dedicated to the students of Florida, this
is what the standard should be.
Thank you to the students, Mike and Richard,
and their teachers for bringing such a great example of the potential of students and technology to the attention of Floridians.
GOVERNOR, CABINET CELEBRATE APRIL AS WATER CONSERVATION MONTH
Governor Charlie Crist and the Florida Cabinet today
recognized April as Water Conservation Month. The Florida Department
of Environmental Protection (DEP), together with the Florida Section
of the American Water Works Association, endorsed the proclamation,
reaffirming the state's commitment to increasing water use
"Recognizing April as Water Conservation Month helps promote the
importance of water conservation, encouraging Floridians to become
environmental stewards at home and in their communities," said DEP
Secretary Michael W. Sole. "By using water efficiently, we reduce
the unnecessary waste of a precious resource, we extend supplies of
water for our growing population, and we protect the state's natural
Conservation is not about "doing without." Floridians can conserve
water just by adopting efficient habits that reduce water waste:
- Watering lawns
can account for more than 50 percent of water use at many
Florida homes or businesses. Irrigate your landscaping only when
it actually needs it. Many homes with irrigation systems apply
far more water than is necessary.
landscaping suited to your location to reduce the need for
irrigation. Learn about beautiful Florida Friendly plants at
www.floridayards.org. There you can view and select the right
plants for your home or business.
- Replace old
toilets that use up to five gallons of water per flush with high
performance water-efficient toilets certified by the
Environmental Protection Agency's WaterSense program (http://www.epa.gov/WaterSense/).
- Showering is one
of the top uses of residential water in the United States,
representing approximately 17 percent of indoor water use.
Replace old showerheads with new low-flow models that work just
as well, but use less water.
- Faucets account
for more than 15 percent of indoor household water use. Replace
old faucets with WaterSense approved faucets or aerators.
- Fix water leaks.
Homeowners lose an average of 25 gallons of water a day through
leaky water devices.
- Run your washing
machine and dishwasher only when full and you could save 1,000
gallons a month. Consider buying a clothes washer that has a
water factor of 6.0 or less by going to
- If washing
dishes by hand, don't leave the water running. You can save 200
to 500 gallons a month.
- Repair dripping
faucets. If your faucet is dripping at a rate of one drop per
second, you can waste 2,700 gallons per year.
For information about Florida's water, visit
For more green tips, visit
Idea of the Week
Idea: Take advantage
of tax-advantaged retirement plans
The sooner you begin saving, the more time
your money has to grow. Gains each year build on the prior year's gains --
that's the power of compounding -- and the best way to accumulate wealth.
Qualified plans such as the Individual Retirement Account (IRA) and 401(k)
have tax advantages to encourage saving for retirement.
Contributing money to a 401(k) gives you an
immediate tax deduction, tax-deferred growth on your savings,
and - usually - a matching contribution from your company.
Like a 401(k), IRAs offer tax
breaks. There are two types: a traditional IRA
offers tax-deferred growth, meaning you pay taxes on
your investment gains only when you make
withdrawals, and, if you qualify, your contributions
may be deductible; a Roth IRA, by contrast, doesn't
allow for deductible contributions but offers
tax-free growth, meaning you owe no tax when you
For more financial savings tips click here
IRS 'DIRTY DOZEN' LISTS TAX SCAMS TO AVOID
In March, the Internal Revenue Service issued its 2008 list of the
12 most egregious tax schemes and scams, highlighted by Internet
phishing scams and several frivolous tax arguments.
Topping this year’s list of scams is phishing, which encompasses
numerous Internet-based ploys to steal financial information from
taxpayers. New to the “Dirty Dozen” this year is a scheme, which IRS
auditors discovered, that relates to unreasonable and/or excessive
fuel tax credit claims.
“Taxpayers should be wary of scams and promises to avoid paying
taxes that seem too good to be true,” Acting IRS Commissioner Linda
Stiff said. “There is no secret formula that can eliminate a
person’s tax obligations. People should be wary of anyone peddling
any of these scams.”
Tax schemes can lead to problems for both scam artists and
taxpayers. Tax return preparers and promoters also risk significant
penalties, interest and possible criminal prosecution.
The IRS urges taxpayers to avoid these common schemes:
Phishing is a tactic used by Internet-based thieves to trick
unsuspecting victims into revealing personal information they can
then use to access the victims’ financial accounts. These criminals
use the information obtained to empty the victims’ bank accounts,
run up credit card charges and apply for loans or credit in the
victims’ names. Phishing scams often take the form of an e-mail that
appears to come from a legitimate source. Some scam e-mails falsely
claim to come from the IRS. To date, taxpayers have forwarded more
than 33,000 of these scam e-mails, reflecting more than 1,500
different schemes, to the IRS. The IRS never uses e-mail to contact
taxpayers about their tax issues. Taxpayers who receive unsolicited
e-mail that claims to be from the IRS can forward the message to a
special electronic mailbox, email@example.com, using instructions
contained in an article titled “How to Protect Yourself from
Suspicious E-Mails or Phishing Schemes.” Remember: the only official
IRS Web site is located at www.irs.gov.
2. Scams Related to the Economic Stimulus Payment
Some scam artists are trying to trick individuals into revealing
personal financial information that can be used to access their
financial accounts by making promises relating to the economic
stimulus payment, often called a “rebate.” To obtain the payment,
eligible individuals in most cases will not have to do anything more
than file a 2007 federal tax return. But some criminals posing as
IRS representatives are trying to trick taxpayers into revealing
their personal financial information by falsely telling them they
must provide information to get a payment. For instance, a potential
victim is told by phone or e-mail that he or she is eligible for a
rebate but must provide a bank account number (or similar
information) to get the payment. If the target is unwilling, the
victim is then told that he cannot receive the rebate unless the
information is provided. Individuals should remember that the only
way to get a stimulus payment is to file a 2007 tax return. The IRS
urges taxpayers to be extra-vigilant. The IRS will not contact
taxpayers by phone or e-mail about their stimulus payment.
3. Frivolous Arguments
Promoters of frivolous schemes encourage people to make unreasonable
and unfounded claims to avoid paying the taxes they owe. Most
recently, the IRS expanded its list of frivolous legal positions
that taxpayers should stay away from. Taxpayers who file a tax
return or make a submission based on one of these positions on the
list are subject to a $5,000 penalty. The most recent update of the
list of frivolous positions includes: misinterpretation of the 9th
Amendment to the U.S. Constitution regarding objections to military
spending, erroneous claims that taxes are owed only by persons with
a fiduciary relationship to the United States, a nonexistent
“Mariner’s Tax Deduction” related to invalid deductions for meals
and the misuse of the fuel tax credit (see below). The complete list
of frivolous arguments is on the IRS Web site at IRS.gov.
4. Fuel Tax Credit Scams
The IRS is receiving claims for the fuel tax credit that are
unreasonable. Some taxpayers, such as farmers who use fuel for
off-highway business purposes, may be eligible for the fuel tax
credit. But some individuals are claiming the tax credit for
nontaxable uses of fuel when their occupation or income level makes
the claim unreasonable. Fraud involving the fuel tax credit was
recently added to the list of frivolous tax claims, potentially
subjecting those who improperly claim the credit to a $5,000
5. Hiding Income Offshore
Individuals continue to try to avoid paying U.S. taxes by illegally
hiding income in offshore bank and brokerage accounts or using
offshore debit cards, credit cards, wire transfers, foreign trusts,
employee leasing schemes, private annuities or life insurance plans.
The IRS and the tax agencies of U.S. states and possessions continue
to aggressively pursue taxpayers and promoters involved in such
6. Abusive Retirement Plans
The IRS continues to uncover abuses in retirement plan arrangements,
including Roth Individual Retirement Arrangements (IRAs). The IRS is
looking for transactions that taxpayers are using to avoid the
limitations on contributions to Roth IRAs. Taxpayers should be wary
of advisers who encourage them to shift appreciated assets into Roth
IRAs or companies owned by their Roth IRAs at less than fair market
value. In one variation of the scheme, a promoter has the taxpayer
move a highly appreciated asset into a Roth IRA at cost value, which
is below annual contribution limits even though the fair market
value far exceeds the amount allowed.
7. Zero Wages
Filing a phony wage- or income-related information return to replace
a legitimate information return has been used as an illegal method
to lower the amount of taxes owed. Typically, a Form 4852
(Substitute Form W-2) or a “corrected” Form 1099 is used as a way to
improperly reduce taxable income to zero. The taxpayer also may
submit a statement rebutting wages and taxes reported by a payer to
the IRS. Sometimes fraudsters even include an explanation on their
Form 4852 that cites statutory language on the definition of wages
or may include some reference to a paying company that refuses to
issue a corrected Form W-2 for fear of IRS retaliation. Taxpayers
should resist any temptation to participate in any of the variations
of this scheme.
8. False Claims for Refund and Requests for Abatement
This scam involves a request for abatement of previously assessed
tax using Form 843, “Claim for Refund and Request for Abatement.”
Many individuals who try this have not previously filed tax returns.
The tax they are trying to have abated has been assessed by the IRS
through the Substitute for Return Program. The filer uses Form 843
to list reasons for the request. Often, one of the reasons given is
"Failed to properly compute and/or calculate Section 83-Property
Transferred in Connection with Performance of Service."
9. Return Preparer Fraud
Dishonest tax return preparers can cause many problems for taxpayers
who fall victim to their schemes. These scam artists 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 the
filing of 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, especially one who
promises something that seems too good to be true.
10. Disguised Corporate Ownership
Some people are going as far as forming domestic shell corporations
in certain states for the purpose of disguising the ownership of a
business or financial activity. Once formed, these anonymous
entities can be used to facilitate underreporting of income,
non-filing of tax returns, engaging in listed transactions, money
laundering, financial crimes and even terrorist financing. The IRS
is working with state authorities to identify these entities and to
bring the owners of these entities into compliance.
11. Misuse of Trusts
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. As
with other arrangements, taxpayers should seek the advice of a
trusted professional before entering into a trust.
12. Abuse of Charitable Organizations and Deductions
The IRS continues to observe the misuse of tax-exempt organizations.
Misuse includes arrangements to improperly shield income or assets
from taxation, attempts by donors to maintain control over donated
assets or income from donated property and overvaluation of
contributed property. In addition, IRS examiners are seeing an
upturn in instances where taxpayers try to disguise private tuition
payments as contributions to charitable or religious organizations.
IRS Watches Scams That Fall Off the List
While the IRS has seen a decline in the occurrence of some of these
scams, other problems, such as abuse of the American Indian
Employment Credit and misuse of structured entity credits, continue
to be areas of concern. 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. 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.
Whistleblowers also could provide allegations of fraud to the IRS
and may be eligible for a reward by filing Form 211, Application for
Award for Original Information, and following the procedures
outlined in Notice 2008-4, Claims Submitted to the IRS Whistleblower
Office under Section 7623.