Finances & economics
Banks
continued from page 1
tabular format - not buried in cumbersome
multi-page brochures.
“Banks will continue to ignore the Truth
In Savings Act and other consumer laws
until the CFPB takes over in July, “ he said.
“But the banks don’t want
consumers to have their own
tough cop. That’s why they’ve
launched
a
relentless
Congressional campaign to
weaken the CFPB, deny it a
strong director and delay its
startup date, because the banks
like it better when there are no
cops on the beat.”
Bartholomew said local
community banks and credit
unions are more likely than national banks
to provide fee schedules.
“For example, while Umpqua Bank and
Banner Bank branches provided fee sched-
ules on request as required by law, we found
that all three branches of Wells Fargo Bank
we visited in Portland failed to provide the
information consumers need to shop for a
checking account,” Bartholomew said.
Surveyors visited 372 bank branches in 20
states to compare fees and determine
whether banks were complying with the
1991 Truth In Savings Act, which requires
disclosure of all account-related fees to
— Only 38 percent of the banks visited
provided researchers with fee schedules as
required by law on their first request. After
two or more requests, eventually a total of
55 percent complied with the law.
— In a finding nearly identi-
cal to the GAO report, nearly
one-quarter of branches (24 per-
cent) never complied and
refused to provide fee informa-
tion, claimed that they didn’t
have it, or told researchers to
“go online.”
— Four out of six of the banks
surveyed in Portland failed to
comply with the law when
asked for a bank fee schedule.
A shopping guide included in the report
compares banking options, directs con-
sumers to free and low-cost checking choic-
es, and provides a list of fees that con-
sumers should look out for when picking a
bank.
The top recommendations for consumers
are:
—Bank at a credit union, or choose a local
Only 38 percent of the banks visited
provided researchers with fee
schedules as required by law on their
first request
prospective customers.
In 2008, the U.S. General Accounting
Office issued a report finding that
researchers “could not obtain” complete fee
schedules at 22 percent of branches.
Three years later that number is virtually
the same, the OSPIRG report found.
Among the findings of Big Banks, Bigger
Fees:
or regional bank, which tend to be more
consumer-oriented and have better rates and
lower fees than national banks.
—Compare fees and rates of different
banks. If they do not provide a schedule of
their fees upon request for you to use in
your comparison shopping, move on to the
next bank.
—Understand how to avoid fees.
Depending on the account, you can avoid
banking fees by using direct deposit of your
paycheck, keeping a minimum balance in
the account or banking online.
“Big banks are blaming regulation for
doing what they always do, which is raise
fees,” said Sasha Rosen, OSPIRG’s organ-
izing director, who conducted many of the
surveys.
“But free checking is still there for con-
sumers who look for it and there are lots of
ways to avoid high bank fees.”
The full report containing 18 detailed tips
for
consumers
is
available
at
http://www.ospirgstudents.org/report/big-
banks-bigger-fees
Scams
continued from page 8
Because scammers often use information from family or
friends in filing false or fraudulent returns, beware of
requests for such data. Don’t fall prey to people who
encourage you to claim deductions or credits you are not
entitled to or willingly allow others to use your information
to file false returns. If you are a party to such schemes, you
could be liable for financial penalties or even face criminal
prosecution.
frivolous arguments
Promoters of frivolous schemes encourage people to
make unreasonable and outlandish claims to avoid paying
the taxes they owe. The IRS has a list of frivolous legal
positions that taxpayers should avoid. These arguments are
false and have been thrown out of court. While taxpayers
have the right to contest their tax liabilities in court, no one
has the right to disobey the law or IRS guidance.
nontaxable Social Security benefits with
exaggerated Withholding Credit
The IRS has identified returns where taxpayers report
nontaxable Social Security Benefits with excessive with-
holding. This tactic results in no income reported to the IRS
on the tax return. Often both the withholding amount and
the reported income are incorrect. Taxpayers should avoid
making these mistakes. Filings of this type of return may
result in a $5,000 penalty.
abuse of Charitable Organizations and
Deductions
The IRS continues to observe the misuse of tax-exempt
organizations. Abuse includes arrangements to improperly
shield income or assets from taxation and attempts by
donors to maintain control over donated assets or income
from donated property. The IRS also continues to investi-
gate various schemes involving the donation of non-cash
assets including situations where several organizations
claim the full value for both the receipt and distribution of
the same non-cash contribution. Often these donations are
highly overvalued or the organization receiving the dona-
tion promises that the donor can repurchase the items later
at a price set by the donor.
abusive retirement Plans
The IRS continues to find abuses in retirement plan
arrangements, including Roth Individual Retirement
Arrangements (IRAs). The IRS is looking for transactions
that taxpayers use to avoid the limits on contributions to
IRAs, as well as transactions that are not properly reported
as early distributions. Taxpayers should be wary of advisers
who encourage them to shift appreciated assets at less than
fair market value into IRAs or companies owned by their
IRAs to circumvent annual contribution limits. Other varia-
tions have included the use of limited liability companies to
engage in activity that is considered prohibited.
Disguised Corporate Ownership
Corporations and other entities are formed and operated
in certain states for the purpose of disguising the ownership
of the business or financial activity by means such as
improperly using a third party to request an employer iden-
tification number.
Such entities can be used to facilitate underreporting of
income, fictitious deductions, non-filing of tax returns, par-
ticipating 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 with the law.
Zero Wages
Filing a phony wage-or-income-related informational
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 may also sub-
mit 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 defini-
tion 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. Filings of
this type of return may result in a $5,000 penalty.
be reported to the IRS using Form 3949-A, Information
Referral. 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 identity of the per-
son filing the report can be kept confidential.
Whistleblowers also may provide allegations of fraud to
the IRS and may be eligible for a reward by filing Form
211, and following the procedures outlined in Notice 2008-
4, Claims Submitted to the IRS Whistleblower Office under
Section 7623.
Caldwell’s, Hennessey, Goetsch
& McGee Funeral Home
Von D. Bailey
Funeral Director
20 NE 14th Avenue
Portland, OR 97232
503-232-4111
Fax 503-231-1586
von.bailey@sci-us.com
.
fuel Tax Credit Scams
The IRS receives claims
for the fuel tax credit that
are excessive. Some taxpay-
ers, such as farmers who use
fuel for off-highway busi-
ness purposes, may be eligi-
ble for the fuel tax credit.
But other individuals are
claiming the tax credit for
nontaxable uses of fuel
when their occupations or
income levels make the
claim unreasonable. Fraud
involving the fuel tax credit
is considered a frivolous tax
claim and can result in a
penalty of $5,000.
How to report
Suspected Tax fraud
activity
Suspected tax fraud can
april 13, 2011 The Portland Skanner Page 9