US taxpayers must return millions after mistaken refunds

WASHINGTON -- Taxpayers in the US state of Louisiana got an unexpected windfall when a computer error issued their tax refunds a second time, local media reported on Saturday.

The state's Department of Revenue cautioned recipients of the wrongly-paid windfall: "Do not spend it." If they have, they must pay the money back in 30 days.

"An error in an electronic payment system caused 66,780 state individual income tax refunds issued on Tuesday, March 12 to be issued a second time on Wednesday, March 13," the department said on its website.

The duplicate refunds totaled more than $26 million, it said, adding that the state is working with financial institutions to recover the overpayments directly from recipients' bank accounts.

New procedures were put in place to prevent the error from happening again, the department said.

source: news.abs-cbn.com

US taxpayers get one-day reprieve after computer glitch

WASHINGTON - The US Internal Revenue Service said it would give taxpayers an additional day to file their 2017 returns after computer problems prevented some people from filing or paying their taxes ahead of Tuesday's midnight deadline.

"Taxpayers do not need to do anything to receive this extra time," the IRS said in a statement announcing the extension.

The agency said its processing systems were now back online.

Earlier, the agency said several systems were hit with the computer glitch, including one that handles some returns filed electronically and another that accepts online tax payments using a bank account.

The IRS said it believed the problem was a hardware issue and "not other factors."

It was not clear how many taxpayers might were affected, but the agency said it received 5 million tax returns on the final day of filing season last year.

"This is the busiest tax day of the year, and the IRS apologizes for the inconvenience this system issue caused for taxpayers," acting IRS Commissioner David Kautter said in a statement.

The agency said taxpayers should continue to file their taxes as normal on Tuesday evening - whether electronically or on paper.

Taxpayers could also ask for six-month extensions, as President Donald Trump did. The White House said on Tuesday that Trump, because of the complexity of his tax returns, would file his by Oct. 15.

source: news.abs-cbn.com

5 Ways Taxes Can Affect Your Credit

Tax time can be stressful enough without worrying about whether your tax issues will spill over to your credit reports and affect your scores. The good news is that simply filing an extension or finding that you owe the IRS a chunk of money come tax time shouldn't affect your credit reports. It's only when you don't have the money to pay what you owe that it can affect your credit.

Following are five ways that your yearly payment to Uncle Sam can affect your credit.

Going Into Hock to Pay Taxes
Many years ago, in my first year of self-employment, my accountant calculated my estimated taxes but forgot about the "self-employment tax" -- the portion of taxes that cover Medicare and Social Security.
As a result, I learned on April 14 (!) that I owed a much bigger tax bill than I expected. At that time there was no option to pay by credit card, and I didn't want to drain my savings entirely to pay it. I ended up taking out a personal loan from my bank at a low interest rate and paid it off fairly quickly.

It worked out OK. The loan, however, did appear on my credit reports. It didn't create any problems for me, but if you are going to borrow from another source such as credit cards or a personal loan to pay your taxes, keep in mind that debt can affect your credit scores. How much it will hurt (or help) your scores depends on everything else in your credit reports. Keep it in perspective, though. After all, you may find it's better to owe a credit card issuer than to owe the IRS.

Another option is to enter into an installment agreement with the IRS where you pay them monthly until your balance is paid off. In most cases, these payment plans don't appear on your credit. However, if you owe a large amount, you could wind up with a Notice of Federal Tax Lien filed against you, and that will definitely affect your credit. (More on that later.)

Quick Refund Woes

If you need your refund fast, you may be tempted to take advantage of a "refund anticipation loan." Often marketed as "instant" or "rapid" refunds, these short-term loans basically advance you your refund, usually at a very high cost. Whether or not this will show up on your credit reports depends on the lender's policies.

For example, H&R Block (HRB) currently offers a refund anticipation check, and its website says that this is a "bank deposit, not a loan." But it also offers a line of credit called Emerald Advance and that does impact the taxpayer's credit. Their website says, "If you apply and qualify for an Emerald Advance, H&R Block Bank may report information about your account to credit bureaus. Late payments, missed payments, or other defaults on your account may be reflected in your credit report."

Also understand that if your refund takes longer than expected to arrive -- or doesn't come through at all -- you may wind up falling behind on this loan and that can end up on your credit reports. Don't think that won't happen to you. Tax-related identity theft is a large and growing problem I'll discuss in a moment.

The New York Department of Consumer Affairs warns:

    A RAL can damage your credit report ... If you're unable to repay the lender (usually a bank), the bank will report the unpaid debt to a credit agency which will negatively affect your credit report.

Tax Liens
If the amount of taxes you owe is large enough, or if you don't resolve your debt quickly with the IRS, you could find yourself with a tax lien on your credit reports. Tax liens fall in the "seriously negative" category with items like collection accounts or bankruptcy.

Fortunately, the IRS has become more lenient in their policies regarding tax liens in recent years. The threshold for automatically filing a lien has risen from $5,000 to $10,000. In addition, the IRS has a relatively new policy that allows taxpayers to request that lien be withdrawn once the debt has been paid in full. (After it has been withdrawn it can be removed from credit reports as well.) And finally, taxpayers who owe $25,000 or less and enter into a direct debit installment agreement may be able to get the tax lien withdrawn after a few monthly payments have been made.

If you do wind up with a tax lien on your credit reports, take the time to find out whether you can get it removed from your credit if you resolve the debt. If you're successful, your credit scores could rise significantly, provided the rest of the information in your reports is positive.

If you think your taxes may have impacted your credit, you can check your credit scores for free with the Credit Report Card.

Going Bankrupt Because of Taxes

If you simply can't pay, tax debt can force you into bankruptcy. You may have to file to get rid of other debts so you can pay your taxes, or you may have to file to discharge some or all of your tax debt. Either way, the bankruptcy will be a serious setback for your credit and will remain on your reports for seven years if you file a Chapter 13 case or ten years if you file under Chapter 7.

The reason you filed -- even if you believe the taxes were improper or unfair -- won't matter as far as your credit is concerned. All bankruptcies are treated the same when credit scores are calculated.

Identity Theft

If you file your tax return expecting a refund, but are told by the IRS that your refund has already been issued, you may discover that you are a victim of tax-related identity theft. It's a problem that's expected to reach $21 billion during the next five years and the IRS is not doing a lot at this point to protect taxpayers.

While the fact that you have been a victim of this type of fraud won't automatically affect your credit reports, you'll probably want to place a fraud alert or credit freeze on your credit reports. And that will make applying for credit or other services such as a cell phone, utilities or insurance, that much more of a hassle. According to Identity Theft 911, it can take you up to a year to get your refund. So if you were counting on that money to pay off holiday debt, think again.

[Note: Remember, we are all entitled to one free credit report -- though not credit scores -- each year from each of the three national credit reporting agencies at the AnnualCreditReport.com website. Second, Credit.com's free Credit Report Card provides access to two of your credit scores, and, because credit reports can be difficult to understand, it breaks down the information in your credit report in an easy-to-understand way, using letter grades.]

source: dailyfinance.com

US exits General Motors in $10-B loss for taxpayers

WASHINGTON - The U.S. government sold its last shares of automaker General Motors Co on Monday, marking an end to a historic bailout of one of America's most storied companies.

The sale leaves taxpayers short about $10 billion of the funds that the Treasury sank into the automaker in 2009.

Washington came to the rescue of the U.S. auto sector during the darkest days of the country's 2007-09 financial crisis, as the nation was sinking further into what would become its deepest recession since the Great Depression.

"This important chapter in our nation's history is now closed," Treasury Secretary Jack Lew said.

The money pumped into the industry came from a $700 billion pool of funds Congress had assembled to shore up the banking system and fight a growing panic on Wall Street.

Taxpayers could still turn a profit from those rescue efforts, despite losses on programs to help housing and autos.

The government took a loss of more than $1 billion on its investments in Detroit automaker Chrysler, while taxpayers remain intertwined with GM's former lending arm, Ally Financial Inc.

But the auto bailout helped Detroit's carmakers return to profitability, and a study released on Monday by the Center for Automotive Research said it saved 1.5 million U.S. jobs and preserved $105.3 billion in personal and social insurance tax collections.

"When things looked darkest for our most iconic industry, we bet on what was true: the ingenuity and resilience of the proud, hardworking men and women who make this country strong," President Barack Obama said.

America's largest automaker, General Motors was seen for generations as a symbol of the country's industrial prowess. The crisis, however, humbled the firm and it briefly entered bankruptcy in 2009.

"We will always be grateful for the second chance extended to us and we are doing our best to make the most of it," GM Chairman and Chief Executive Dan Akerson said in a statement.

The bailout was hugely controversial. During the 2012 presidential campaign, Republican presidential candidate Mitt Romney called it "crony capitalism."

The company is currently benefiting from rising consumer demand in the United States. Across the U.S. auto market last month, Americans bought vehicles at their fastest pace in more than six years.

GM recorded a profit of $4.3 billion for the first nine months of this year. Shareholders have also profited, although gains in the company's shares since its 2010 public offering have trailed far behind a broader stock market rally.

With the government's exit, GM will now be allowed to pay dividends for the first time since the IPO. GM also may be able to offer a more generous and competitive compensation package if its board elects to search for outside candidates to succeed Akerson.

And over the coming years, the closing of the bailout chapter might help the company lose some of the stigma from taking $49.5 billion in government money.

"They can finally put 'Government Motors' in the rear view mirror," said Matthew Stover, an auto analyst at Guggenheim Securities. "That's an important step for consumers and for the company."

source: www.abs-cbnnews.com

Top taxpayer Kim Chiu warns Napoles

MANILA -- Actress Kim Chiu warned Janet Lim-Napoles, the businesswoman implicated in the P10-billion pork barrel scam, that angered taxpayers including herself are out to find her.

"Lahat naman siguro ng mga tao, pag makita nila [si Napoles], papatayin na nila eh," the 23-year-old actress said, laughing, when asked for her thoughts on Napoles and her alleged part in the controversial scam.

On Wednesday, President Benigno Aquino III said the government has put up a P10-million reward leading to the arrest of Napoles, who is wanted for the illegal detention case filed against her and her brother Reynald Lim by former employee and whistleblower Benhur Luy.

Expressing support for the massive anti-pork barrel rally held last Monday, Chiu added, "Kahit wala ako do'n, ramdam ko naman 'yung iba, galit, naiiyak sa galit. Siyempre hindi biro ang pera, pinaghirapan mo 'yon and then mapupunta lang sa mga taong hindi karapat-dapat."

Chiu, who is seen as a prized talent of ABS-CBN, lamented the alleged misuse of the Priority Development Assistance Fund (PDAF), noting the amount of tax celebrities like herself pay the government.

"Ibang klase naman 'yung binabayad naming tax, at hindi namin alam kung saan napupunta," Chiu said shortly after a press conference held Tuesday for her month-long starring stint in the weekend fantasy anthology "Wansapantaym."

In a report released by the Bureau of Internal Revenue in April, Chiu was named as one of the top individual taxpayers in the country, placing 133rd overall with P6.7 million in regular income tax paid in 2011.

"Sana, 'yun nga, clean government. And 'yung 'Million People March,' isa lang 'yung sa mga [paraan] na pinapakita ng mga Pilipino na, 'Hustisya naman para sa amin,'" she said.

No to politics

Asked if she would be willing to enter politics to actively address the problem, Chiu said, "Hindi ko kaya!"

"Wala akong enough knowledge na hawakan 'yung sambayanang Pilipino, hindi. Ang gusto ko lang tumulong, in my own little way. 'Yun lang," said the actress, who actively took part in relief operations for the victims of the recent floods that hit Metro Manila and surrounding provinces.

Addressing criticisms for the supposed publicity she gets from photos showing her engaged in various charity events, Chiu shrugged off her "bashers," saying such posts on social media can help encourage others to join her cause.

"Siguro sa aming mga artista, it's a way of telling the people na, 'Hoy, kayo, tumulong na rin kayo.' Dahil sa social media, sa Instagram, marami kaming mga followers, and 'yung mga followers na 'yon -- 'yung iba do'n basher -- 'yung iba do'n na-inspire mo na tumulong din sila.

"Hindi ko naman gusto na picture-an 'yung sarili ko. Pero merong mga taong nagpo-post, 'Ay ako din, parang gusto ko rin tumulong.' So it's to inspire people, not to publicize yourself," she said.

source: www.abs-cbnnews.com

Kris Aquino is top taxpayer of 2011; PH billionaires not in top 10

MANILA, Philippines - Celebrity Kris Aquino is the number one taxpayer in the country, beating out the country's billionaires, according to data from the Bureau of Internal Revenue (BIR).

Aquino, the youngest sister of President Benigno Aquino, paid nearly P50 million in income taxes in 2011.

The BIR on Monday released its list of Top 500 individual taxpayers for 2011. The list includes familiar names from business and entertainment, as well as not-so-familiar names. (For the full list, click here)

Prominent businessman Manuel V. Pangilinan ranked fourth with P25.99 million. Executives from Ayala companies were also top taxpayers, such as Bank of the Philippine Islands president Aurelio Montinola III (P24.47 million) and Manila Water president Gerardo Ablaza (P22.64 million).

Foreign Affairs Secretary Albert del Rosario ranked 118th with P7.1 million in income tax payment in 2011.

Where are the billionaires?

Interestingly, the country's billionaires were not in the Top 10.

Mall tycoon Henry Sy, Sr., who was named the richest man in the Philippines by Forbes magazine, ranked 15th on the BIR list with P16.58 million income tax. His son Hans Sy ranked 22nd with P13.4 million income tax, while daughter Teresita Sy ranked 83rd, paying P8.3 million in income tax in 2011.

Tycoon Lucio Tan, the second richest in the Philippines according to Forbes, only ranked 35th in BIR's list, paying P10.78 million in income tax.

Tan paid less than his lawyer Estelito Mendoza, who ranked 14th with tax payment of P 17.63 million.

David Consunji and family, whose net worth was estimated by Forbes at $2.8 billion, ranked 176th, paying P5.9 million in 2011.

However, other tycoons such as Enrique Razon, Jr. ($4.9 billion), Andrew Tan ($3.95 billion), George Ty and family ($2.6 billion), Lucio and Susan Co ($2 billion), Robert Coyiuto, Jr. ($1.6 billion),Tony Tan Caktiong and family ($1.4 billion), Andrew Gotianun and family ($1.2 billion), and Roberto Ongpin ($1.2 billion) were nowhere on the BIR's list.

Celebrities on the list

Aside from Aquino, several celebrities also made the BIR's list of top individual taxpayers. TV host and actor Marvic "Vic" Sotto paid P14.72 million in taxes, ranking 19th. Actor Derek Ramsey ranked 120th, paying P7 million in taxes.

Willie Revillame ranked 181th (P5.8 million), while Ogie Alcasid ranked 184th (P5.8 million). Sharon Cuneta ranked 191st, paying P5.74 million in taxes in 2011.

John Lloyd Cruz ranked 205th, paying P5.4 million in income tax.

Boxing champ Manny Pacquiao ranked 158th, paying only P6.1 million in income tax in 2011.

Top corporate taxpayers

Smart Communications topped the BIR's list of top non-individual taxpayers in 2011, with P10.23 billion in income tax. Manila Electric Company (Meralco) ranked second with P8.3 billion in taxes, followed by Shell Philippines (P6.36 billion), Chevron Malampaya (P6.3 billion) and Nestle Philippines (P4.8 billion).

San Miguel Brewery ranked 6th (P4.77 billion), followed by Globe Telecom (P4.52 billion), tobacco giant PMFTC (P3.7 billion), Petron Corp. (P2.62 billion) and Philex Mining (P1.87 billion).

source: www.abs-cbnnews.com

Taxpayers beat deadline for filing ITR

MANILA, Philippines - Hundreds of taxpayers lined up at the Bureau of Internal Revenue (BIR) in Quezon City, beating the deadline for filing income tax returns on Monday.

ABS-CBN talked to some taxpayers, who called on the government to do more projects so that people will be more inspired to pay the correct taxes.

BIR Commissioner Kim Henares says income earners have 2 responsibilities - to pay the correct taxes and monitor and check where the taxes go.

According to Henares, it is up to the public to make sure that taxes go to its intended purpose but it cannot be used as a reason not to pay the correct taxes.

The BIR is tasked to collect P1.253-trillion this year to fund various government projects.

Henares believes the weekly filing of tax evasion charges against those who do not pay the correct taxes is improving tax collection efforts. According to Henares, if before only 10 out of 100 pay correct taxes, now 20 are paying correctly for fear of being charged in court.

source: www.abs-cbnnews.com