Tax

The tax credit available for purchasers of new General Motors plug-in electric vehicles begins phasing out on April 1, 2019. The phaseout was triggered because General Motors, LLC has sold more than 200,000 vehicles eligible for the plug-in electric drive motor vehicle credit during the fourth quarter of 2018.

Qualifying vehicles by the manufacturer, which include Chevrolet Spark EV (2014-2016), Chevrolet Volt (2011-2019), Chevrolet Bolt (2017-2019), Cadillac CT6 Plug-In (2017-2018), and Cadillac ELR (2014, 2016) are eligible for a $7,500 credit if acquired before April 1, 2019. Beginning April 1, 2019, however, the credit is reduced to $3,750 for General Motors’ eligible vehicles. For the next two quarters beginning on October 1, 2019, the credit will be reduced even further to $1,875. After March 31, 2020, no credit will be available.

The plug-in electric drive motor vehicle credit was enacted in the Energy Improvement and Extension Act of 2008 and subsequently modified. The law enables owners of eligible passenger vehicles and light trucks to take the credit. By law, five quarters after reaching the sales threshold, the credit ends for the manufacturer. General Motors vehicles are eligible for some portion of the credit until April 1, 2020.

Please call if you’d like more information about the Plug-In Electric Drive Motor Vehicle Credit.

• By Leon Clinton
• May 15, 2019

Tax-related identity theft occurs when someone uses your stolen Social Security number to file a tax return claiming a fraudulent refund. It presents challenges to individuals, businesses, organizations and government agencies, including the IRS.

Learning that you are a victim of identity theft can be a stressful event. In many cases, you may not be aware that someone has stolen your identity and the IRS may be the first to let you know you’re a victim of ID theft after you try to file your taxes.

Between 2015 and 2018, the number of taxpayers reporting they were identity theft victims fell 71 percent. However, despite the steep drop in tax-related identity theft in recent years, taxpayers should remember that identity thieves constantly strive to find new schemes that work. Once their ruse begins to fail as taxpayers become aware of their ploys, they change tactics. Taxpayers and tax professionals must remain vigilant to the various scams and schemes used for data thefts.

Here’s what you should know about identity theft:

1. Protect your Records. Do not carry your Social Security card or other documents with your SSN (Social Security Number) on them. Only provide your SSN if it’s necessary and you know the person requesting it. Treat your personal information, including tax returns, as if they were cash. Don’t leave it in plain sight for people to steal. Protect your computers with anti-spam and anti-virus software and routinely change passwords for all of your Internet accounts.

2. Don’t Fall for Scams. Criminals often try to impersonate your bank, credit card company, and even the IRS in order to steal your personal data. Learn to recognize and avoid those fake emails and texts. Always err on the side of caution and delete anything that seems suspicious or unfamiliar.

3. Beware of Threatening Phone Calls. Correspondence from the IRS is always in the form of a letter in the mail. The IRS will not call you threatening a lawsuit, arrest, or to demand an immediate tax payment using a prepaid debit card, gift card, or wire transfer. If you receive a threatening phone call, hang up immediately.

4. Report ID Theft to Law Enforcement. If you discover that a tax return was already filed using your SSN and cannot e-file your return because, consider taking the following steps:

• File your taxes by paper and pay any taxes owed.
• File an IRS Form 14039, Identity Theft Affidavit (see below). Print the form and mail or fax it according to the instructions.
• Contact one of the three credit bureaus (Equifax, Transunion, and Experian) to place a fraud alert and/or a credit freeze on your account.

5. Complete an IRS Form 14039, Identity Theft Affidavit. Once you’ve filed a police report, file an IRS Form 14039, Identity Theft Affidavit. Print the form and mail or fax it according to the instructions. You may include it with your paper tax return as well.

6. IRS Notices and Letters. If the IRS identifies a suspicious tax return with your SSN, it may send you a letter asking you to verify your identity by calling a special number or visiting a Taxpayer Assistance Center. This is to protect you from tax-related identity theft.

7. IP PINs. If a taxpayer reports that they are a victim of ID theft or the IRS identifies a taxpayer as being a victim, he or she will be issued an IP PIN (Identity Protection Personal Identification Number). The IP PIN is a unique six-digit number that a victim of ID theft uses to file a tax return. Each year, you will receive an IRS letter with a new IP PIN.

8. Data Breaches. Not every identity theft case involves taxes. If you learn about a data breach that may have compromised your personal information, keep in mind that not every data breach results in identity theft. Make sure you know what kind of information has been stolen so you can take the appropriate steps before contacting the IRS.

9. Report Suspicious Activity. If you suspect or know of an individual or business that is committing tax fraud, you can report it on the IRS.gov website.

10. IRS Assistance. Information about tax-related identity theft is available online at IRS.gov. The IRS has a special section on IRS.gov devoted to identity theft and a phone number available for victims to obtain assistance.

If you have any questions about identity theft and your taxes, don’t hesitate to call.

• By Leon Clinton
• May 10, 2019

Have you found that collecting on your accounts receivables has become more challenging? If so, strengthening your collection procedures may allow you to improve collection rates and shorten the aging days of your accounts receivables. While some tips discussed here may not be suitable for every business, most can serve as general guidelines to give your company more financial stability.

Define Your Policy. Define and stick to concrete credit guidelines. Your sales force should not sell to customers who are not creditworthy or who have become delinquent. You should also delineate what leeway salespeople have to vary from these guidelines in attempting to attract customers.

Tip: Have a system of controls for checking out a potential customer’s credit in place before shipping an order. Furthermore, there should be clear communication between the accounting department and the sales department as to current customers who become delinquent.

Explain Your Payment Policy. Invoices should contain clear written information about how much time customers have to pay and what will happen if they exceed those limits.

Tip: Make sure invoices include a telephone number and website address so customers can contact you with billing questions. Also include a pre-addressed envelope.

Tip: The faster invoices are sent, the faster you receive payment. For most businesses, it’s best to send an invoice with a shipment, rather than afterward in a separate mailing.

Follow Through on Your Stated Terms. If your policy stipulates that late payers will go into collection after 60 days, then you must stick to that policy. A member of your staff (but not a salesperson) should call all late payers and politely request payment. Accounts of those who exceed your payment deadlines should be penalized and/or sent into collection, if that is your stated policy.

Train Staff Appropriately. Apprise the person designated to make calls to delinquent customers of the seriousness and professionalism required for the task. Here is a suggested routine for calls to delinquent payers:

• Become familiar with the account’s history and any past and present invoices.
• Call the customer and ask to speak with whoever has the authority to make the payment.
• Demand payment in plain, non-apologetic terms.
• If the customer offers payment, ask for specific dates and terms. If the customer does not offer payment, tell the customer what the consequences will be.
• Take notes on the conversation.
• Make a follow-up call if you still haven’t received a payment and refer to the notes taken as to any promised payments.

Need help tightening up your credit and collection policies? Help is just a phone call away!

• By Leon Clinton
• May 6, 2019