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Estate Planning, Charitable Giving
And The Northern California Conference

The Planned Giving Department provides information to individuals that will assist them in using gift planning documents such as Wills, Trusts, Gift Annuities, Power of Attorney and Health Care Directives; that will provide for and protect family members and support God's work in Northern California and beyond.

Our department has received the highest possible accreditation by the North American Division of the General Conference of Seventh-day Adventists and certification for all of our planned giving professional staff. We are committed to assisting you with helpful information regarding the best way for you to benefit through a planned gift and to assist you with planning for the distribution of your estate. Please give us a call at 916-886-5699 and we will be happy to assist you.

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Saturday May 25, 2024

Washington News

Washington Hotline

IRS Cautions Taxpayers About Tax Credits

On May 14, 2024, the Internal Revenue Service (IRS) published a consumer alert. The IRS warned taxpayers that there are thousands of returns that include false claims for the Fuel Tax Credit, the Sick and Family Leave Credit and household employment taxes. These "thousands of dubious claims" may lead to audits. Taxpayers who made these claims will need to show documentation to qualify for the deductions or credits.

The IRS urges taxpayers who potentially have claimed an incorrect credit to have their return reviewed by a trusted tax preparer. IRS Commissioner Danny Werfel stated, "Scam artists and social media posts have perpetuated a number of false and misleading claims that have tricked well-meaning taxpayers into believing they are entitled to big, windfall tax refunds. These bad claims have been caught during our fraud review process. Taxpayers who filed these claims should realize they have been tricked, and they face an extensive review process and a long potential wait if they are owed a refund for other things."

The three primary errors on returns relate to the Fuel Tax Credit, the Sick and Family Leave Credit and household employment taxes.

  1. Fuel Tax Credit — There is a fuel tax credit for contractors, farmers and ranchers who use fuel-powered equipment in fields and construction sites. Because these businesses do not use public roads, they qualify for this credit. There are very few taxpayers who will qualify for this credit.
  2. Sick Leave and Family Leave Credit — In 2020 and 2021, there was a sick and family leave credit for self-employed individuals. This was part of the legislation designed to reduce unemployment during the pandemic. This credit does not apply to 2023 tax returns. The credit is also being incorrectly claimed on IRS Form 7202, Credits for Sick Leave and Family Leave for Certain Self-Employed Individuals, for employee income.
  3. Household Employment — Some taxpayers invent fictional household employees. They then claim to qualify for a refund on Schedule H, Household Employment Taxes. However, they have never paid these amounts and therefore are not qualified.

Commissioner Werfel continued, "Scam artists constantly prey on people’s hopes and try to use the complexity of the tax system to convince people there are secret ways to get a big refund. These three credits illustrate that it is important to carefully review the tax return for accuracy before filing and rely on the advice of a trusted tax professional, not some fly-by-night preparer or a questionable source they hear on social media."

Because of the level of fraud in these three areas, the IRS has frozen refunds for thousands of taxpayers. Many taxpayers receive a letter requesting a verification of their identity. Once you verify your identity through a Taxpayer Assistance Center visit, there may be additional documentation required in a second IRS letter. The letters may include IRS Notice 3176 and could subject taxpayers to a frivolous return penalty. The potential penalty is up to $5,000 for filing a frivolous return.

The IRS urges individuals who receive a letter requesting verification of identity or additional documentation to contact a qualified tax preparer. It may be appropriate to go to IRS.gov and review the "Should I file an amended return?" tool.


Published May 17, 2024
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Power of Attorney

If you want to be sure that a person you trust will be able to make decisions for you when you are unable to do so, you can create a power of attorney agreement for healthcare or finances. A power of attorney for healthcare allows a person (known as your agent) to make decisions about the medical care you will or will not receive. A power of attorney for finances allows your agent to manage your financial affairs. Your agent must make decisions consistent with what they know your wishes are, even if they personally disagree. If they do not know your wishes on a particular matter, they must act in your best interest. You can give your agent broad authority to make decisions related to your financial or health care needs, or you can limit their authority to certain types of decisions. Depending on your needs, we can help you create a power of attorney agreement that will be active immediately, will go into effect if you become incapacitated, or will only be in effect for a limited time or under specific circumstances.

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