Tax Guru – Ker$tetter Letter

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Archive for the ‘scams’ Category

Can A.I. Handle Accounting?

Posted by taxguru on July 29, 2020

Over the past few years, as robots and artificial intelligence (AI) have made huge inroads into several industries, I have seen many CPAs and bookkeepers fret over the possibility of having no work to do.  DIY tax return programs and AI were supposedly going to make them obsolete and they sincerely worried about their futures.

Whenever possible, I have assured these doomsayers that as long as they are not just “form-fillers” they will never run out of work.  Tax and accounting rules and regulations will continue to grow more and more complicated until the end of time.  There will thus always be a need for people to apply their knowledge and experience to solving and complying with those rules and regs. 

Having been in this business for almost 45 years, I have seen and been a part of the evolution from doing books manually in big heavy ledgers, to in-house computers,  to working in the cloud.  These have all been means of recording transactions for businesses, much like going from a pencil to a typewriter.  There has always been a need for humans with proper accounting expertise to determine where and when transactions should be recorded in a company’s books.  While it may be possible for a computer to be programmed to play games such as Chess, being able to analyze and properly book accounting entries is too much science fiction for me to accept.

However, that doesn’t mean that other people who are less grounded in the realities of making accounting decisions don’t think it’s possible.  This article in Forbes about a company called ScaleFactor, that was able to con investors out of $100 million dollars for its promised AI accounting system, is very interesting.  I have to admit that I had never heard of this company before seeing this Forbes article.  Surprisingly, their website is still active; so the Forbes expose hasn’t shut them down yet.

Reading the Forbes article, describing how the company used actual human accountants in the Philippines to perform the shoddy accounting tasks while claiming that their magical AI software was actually doing it, reminded me of the extremely interesting documentary I saw not too long ago about Theranos, called The Inventor: Out for Blood in Silicon Valley.  That company claimed to have invented a one drop blood testing machine that could quickly test for a huge number of things, including cancer.  It turned out that the machine didn’t work, but they pretended it did and had human lab workers run tests, often erroneously, in their “fake it ‘til you make it” scheme to con over $700 million from gullible investors.  Paying powerful celebrities for their endorsements also helped convince people that it was worth sinking their money into.  They literally bought credibility because they couldn’t earn it properly.

As always, we should try to learn from these kinds of mistakes that other people make so that we don’t need to suffer the same kinds of losses that they had.  The “fake it ‘til you make it” approach to start-up companies isn’t new by any means.  Sometimes they actually work.  I remember attending meetings in Silicon Valley where some successful entrepreneurs actually bragged about using that tactic.  I have no statistics on how many of the fakers actually made it to their goals and produced real products and services.  I would hazard a guess that for every one that did make it, there are dozens of fakers who didn’t make it, often crashing in flames.  Investors, which include employees of companies promising “magical” things, should be extra cautious.

Posted in Accounting, scams | Comments Off on Can A.I. Handle Accounting?

Phony IRS Scammers Busted

Posted by taxguru on November 2, 2018

With all of the scam phone calls from phony IRS agents, threatening arrest over bogus tax debts unless money is sent to them via gift cards and other crazy methods, it’s great to see that some of them have been caught and will be residing in the Gray Bar Hotel for a while. 

IRS Impersonator Scam Leader Sentenced to 135 Months in Prison After Stealing Millions of Dollars; Co-Conspirators Also Imprisoned

While they are also supposed to pay back the $10.7 million dollars they stole from their 6,282 gullible victims, that’s not very likely to happen.

Posted in scams | Comments Off on Phony IRS Scammers Busted

Toying With IRS Phone Scammers…

Posted by taxguru on June 2, 2018

Funny and educational story arc in this week’s Sally Forth comics, illustrating how widespread these scam calls have become. 

Click on pic to get full size version.

SallyForth-IRSScamCall(5-28-18)

SallyForth-IRSScamCall(5-29-18)

SallyForth-IRSScamCall(5-30-18)

SallyForth-IRSScamCall(5-31-18)

SallyForth-IRSScamCall(6-1-18)

SallyForth-IRSScamCall(6-2-18)

Hopefully, this will help prevent more people from falling victim to the scumbags. Not everyone has gotten the message from conventional sources, such as these recent IRS news releases.

IRS continues warning on impersonation scams; Reminds people to remain alert to other scams, schemes this summer

Taxpayers should stay alert because scammers don’t take a summer vacation

Posted in scams | Comments Off on Toying With IRS Phone Scammers…

Tax Scammers Are Multi-National

Posted by taxguru on February 8, 2018

Tax Season is also Scammers Season.  A number of clients have told us about receiving phone calls from people claiming that the police were coming for them due to tax evasion charges.  A few days ago, we received a couple of those calls, with a robotic voice and each with different Caller ID info, making the same claim. We didn’t waste time calling them back, but I did block their numbers.  I’m sure, just as with many similarly reported scams, they would have demanded payment of the fictitious taxes via some kind of gift cards, which should be a dead tip-off to everyone that this is a huge con job.

Earlier today, I was watching the latest episode of The Checkout, a very funny consumer protection show from Australia.  Illustrating that the phone scammers we have been fighting against here in the USA are pulling the exact same tricks in other countries, it has this segment showing a sweet little old lady purchasing iTunes gift cards in order to pay off a phony tax debt.

Posted in scams | Comments Off on Tax Scammers Are Multi-National

Catching Phony IRS Scammers

Posted by taxguru on December 4, 2017

I doubt there is anybody left in this country who hasn’t received a phony demand for money from scammers posing as IRS agents, whether by phone, email or snail mail.  I have been forwarding at least one such scam email to IRS’s special email address (phising@irs.gov) each week. 

Just as with other such scam emails, I have always been curious as to whether the crooks are ever caught.  This recent story about the arrest of three men in Georgia (USA, not Russia) and one in Illinois, with connections to a bigger organized crime operation in India, is a good sign that at least a few of the bad guys are being caught. 

With fake IDs, three Georgia men collected $666,537, prosecutors say

What is most mind boggling about these scammers is the fact that they allegedly conned 7,314 people to send them a total of almost $3.5 million for fictitious taxes.  Considering that this was just one gang, there have to be several others running the same kind of scam.  With all of the publicity about these scams, it’s a bit amazing that there are so many gullible folks who fall for it.  

IRS has a useful guide to dealing with these scams on their website that has been growing in size as more and more people get into this extremely lucrative criminal activity.

Tax Scams / Consumer Alerts

Posted in Crooks, IRS, scams | Comments Off on Catching Phony IRS Scammers

Beware of Scammers

Posted by taxguru on March 13, 2015

IRS warns of tax scams involving health care law

Fake IRS agents target more than 366,000 in huge tax scam

It’s hard enough dealing with real IRS agents, much less imposters.  The lesson from these scams is that it is crucial to always work with a professional tax advisor who knows the proper procedures for dealing with IRS issues and isn’t afraid to stand up to overly aggressive IRS employees, real or fake.  This is also vital when actual IRS agents are the ones hassling you.

Posted in IRS, scams | Comments Off on Beware of Scammers

Be careful of fake IRS contacts…

Posted by taxguru on October 20, 2014

Fake IRS agents scare many consumers into paying up

Even if you’re not sure whether somebody is really with the IRS or not, the safest way to approach it is to have your professional tax advisor handle all interfaces with IRS on your behalf.  S/he should be able to quickly spot a scam, as well as protect you from the improper tactics used by some actual IRS employees.

 

Posted in IRS, scams | Comments Off on Be careful of fake IRS contacts…

Frivolous Tax Arguments

Posted by taxguru on April 11, 2014

It used to be official IRS policy to ignore people who made ridiculous claims about taxes being voluntary.  However, they finally realized that their silence on the subject just fed into the hands of the promoters of such tax scams who used that as a sign that what they were saying must have been true. 

As announced in this press release, IRS has just updated their guide to many of these tax scams, The Truth About Frivolous Tax Arguments, which can be seen on their website and downloaded as a 62 page pdf.

I had an interesting email conversation with a tax protestor a few months who was spouting some of these idiotic reasons why nobody has to file a tax return.  After I finish the rest of our April 15 extensions, I will post it here on my blog.

 

 

Posted in IRS, scams | Comments Off on Frivolous Tax Arguments

Corporate Minutes Scam in the mail

Posted by taxguru on November 3, 2013

While I know that this scam has been aimed at Arkansas corporations, I am guessing that the scammers will also be doing the same phishing for suckers in other states.  In true scammer fashion, their website is as bland and nondescript as one can be, with no trace of the identities of the crooks behind it.  

 

From a Client:

Subject:  Annual Minutes Requirement Statement

Kerry ,

 
We received this letter yesterday and not quite sure if it needs to be addressed by us or not since we closed out the Corp. thought I let you look at it first . Please let me know what you think if this is something new for the Corp .
 
Thank You

 

My Reply:

That’s a complete scam that you can ignore.

Actually, I received two of those in the snail mail yesterday; one addressed to each of our corporations.

It looks like those scammers calling themselves Compliance Services got the list of all Arkansas corporations and sent them all those letters for their bogus “service.”  At $125 a pop, if they can get a few hundred suckers to fall for it, they will make some good money.

 

 

Posted in corp, scams | Comments Off on Corporate Minutes Scam in the mail

Helping the poor…

Posted by taxguru on August 22, 2012

Rush’s Morning Update today is about this article, describing how people on public assistance have been able to qame the tax system to also obtain huge illegal refunds from IRS. 

Back in the good old days, when a Billion dollars was considered to be a huge number, our rulers may have been concerned about this blatant theft of taxpayer funds.  Now that everything is stated in Trillions, it’s considered a mere drop in the bucket and not worth their effort to even try fixing.

Don’t stories like this make you swell up with patriotic pride when you send your money in to the IRS? 

 

Posted in Rush, scams, video | Comments Off on Helping the poor…