I know that fraud never stops when it comes to the financial world. After all, think of all the reasons one would have to commit fraud and they almost all essentially come back to money. I do end up being surprised at some of the ways this happens, though. The latest jolt came from a recent article concerning fraudulent tax returns using the social security numbers of the incarcerated.

It sounds outlandish when you look at the headline, but then with a little more thought, it starts to make sense. If there is someone out there whose information you could use and have them not immediately notice, is there a better group than prisoners?

This just shows how many different avenues there are for scammers to explore. And they have to keep traveling down those new avenues because if there was just one way for them to achieve success, well, it wouldn’t last long for it would be found and then shut down. They must keep innovating and trying new things to have any success.

This constant push and pull can feel like you have no chance of avoiding scammers, and you know what, that is true, you really can’t. Our ever more interconnected world makes it easier for more people to get more access to more of our information. Even if you are super diligent and keep your most important information private and unknown, I doubt that you are also able to keep all unwanted calls from going to your cell phone.

I think that one can take some positives out of this, however. First off, the more that scams in general rise in prevalence, the more aware people are of them and a little bit of healthy skepticism is all it takes to hold off many of them. Beyond that, financial institutions are aware of the growth in scams, are better equipped to deal with them, making handling a lot of the bad fallout that can come from fraudulent transactions easier to manage.

The biggest thing we can do is remain vigilant. Just as our increasingly technologically connected world has made it easier for the scammers, it has also made it easier for anyone to check what is happening with their financial accounts. It was not all that long ago that it was difficult to get any information beyond a monthly statement, but now almost everyone can pull up a website and get an up-to-the-minute look at an account.

And sure, doing a daily reconciliation is probably overkill. But giving an occasional peek to just make sure you recognize all the transactions, that is probably worth the couple minutes it takes. The worst thing we can do is hide in ignorance and only take action when needed.

The IRS is still going to have quite a bit of work to do until we reach the tax filing deadline of May 17. And things will not stop there as it also has to look beyond that and toward the implementation of the new Child Tax Credit.

I am sure that some of you have no idea what that is. Well, remember when the American Rescue Plan was passed and you heard about getting money every month just because you had a kid? Yeah, it’s that.

First off, those really are the basics of the expanded credit. It sounds fanciful in a way to think the government is just going to be sending people money, but it is true. Beyond that, though, there are some complications that could be involved, which I am afraid could cause some pain for some when it comes time to file taxes next year.

So now that the hubbub following the talk of the latest economic impact payment has passed and you want to know a little more about this other portion of the ARP, I’ll point you toward this article from Forbes. Though be forewarned, although it is entitled “Everything We Know About the New Child Tax Credit So Far,” it is not very long. And therein really lies the problem, for we do not know a lot and there are still a lot of unknowns when it comes to how this will be implemented.

What stands out most to me about the article falls under the heading of “The IRS Is Embracing Technology,” but has nothing to really do with technology. The technology portion is a portal the IRS plans to have set up before the (anticipated) launch of the monthly payments on July 1. That portal is assumed to allow taxpayers to opt out of receiving those monthly payments, which may be good for many.

For example, what if one qualifies for this credit based on their 2020 tax return, when they reported a lower income during a year when many had less than usual. And what if this person then has a return to normalcy based on their 2021 income? They may then find themselves having to repay some of the credit.

Or what about someone who typically has been receiving the smaller amount of the already existing Child Tax Credit and has set up their tax planning during the year to end with their filing largely being a wash, not owing much or not receiving much of a refund. If they have already received some of the credit, so that what the amount of credit remaining to be received on their tax return is smaller, there may be a much larger bill due than expected.

This is not to say that the impulse behind this credit is a bad one. It is trying to help those who need help and it is easy to envision many situations where that is going to be the result. It is also possible, however, to imagine situations where it could cause unforeseen issues. So this is just a gentle reminder that it could be worth putting a little thought into the situation and appreciating how it is going to affect you before the payments begin going out.

Well, here we are, just about at what the original tax deadline was going to be. That came up quick, didn’t it? And I bet that if you have not filed your taxes yet, it came about even quicker for you. After all, that is what happens every time you procrastinate.

Let’s be honest, the things that we file under procrastination are not a slowing down, they are the things we completely are putting off doing. When you make no movement toward an endpoint, you are making zero progress even if you are suddenly allowed more time to get there. If you are worried about something that you only have a week to do, then get a reprieve and are given another month to do it, you are only going to feel the same pressure if you wait until there is again only a week left to finish before starting to work on it.

And trust us, we have seen enough wild April 15^th correspondence to know that no one thrives when that becomes the case. We just expect that on May 17^th this year. The extra month is not going to mean that everyone used the time wisely to avoid that final-moment rush.

Now think about how many things in your life you wished you had got started on sooner. My guess is that everyone can start populating that list rather quickly. In our work, we even hear some bit things get put on that wish list:

-        I wish I had planned throughout the year and avoided this big tax bill.

-        I wish I had saved more.

-        I wish I had put money into retirement funds sooner.

Of course, this is a wild oversimplification. Even in the financial realm, there are actions that are best to wait on, such as making large purchases only after saving enough money to not have to finance them and throw pile interest on top of the purchase price. But even those ‘waiting’ moments are served well – and happen sooner – by not procrastinating the planning process that sets them in motion.

Over the last year, everyone’s sense of time has taken quite a hit to the point where we all had moments when simply recalling what day it was became difficult. Let’s not make it worse by continuing to put off what we can and should do but just do not want to do. Let this used-to-be tax deadline date be a signpost to do something you have been putting off. You will be thankful in the long run.

Sometimes things that are not wholly new come up in a way that strikes us in a new way. That happened this week when the IRS released a notice saying there are more $1.3 billion in tax refunds waiting for people who did not file 2017 returns.

This number comes out every year as the three-year deadline to claim these refunds is reached. And it is not the size of the current number that is staggering -  it always is - but it seems to stand out a little more now after a year when so many battled through difficult financial times.

As part of the IRS’s release on this matter, it states that the midpoint for these refunds is $865. That means about half of the estimated 1.3 million taxpayers who could still get one of these refunds are expected to get more than that amount. That could be a huge benefit for some who need it.

One cannot help but then start thinking about why these returns are unfiled. I suspect a large part of that is not some willful choice by taxpayers. I mean, who is going to choose to not receive money that they are owed by the government? Sure, there may be some people who chose not to file taxes out of a fear they would find they owed money, but I think the overwhelming majority has to be people who did not know what they were supposed to do.

This ignorance can come from many places. I imagine that some start their working life without realizing they must file taxes. I think most people have some concept that they have to pay taxes, but when you see them coming out of your paycheck, you may think that it’s all being taken care of. And even if at some point you find that this is not the case, fear probably keeps many from looking backward, even if it could have resulted in them getting refunds from the past. After all, when people come to us and have to file old tax returns, it is rarely for just one year.

I do not think there is any easy way to fix this. If the tax system were easy, there could be some logline to communicate to everyone what their obligation will be. The American tax system is anything but easy, though, so it should not be too surprising that there are those who do not understand their obligations and end up not filing.

But $1.3 billion??? That is still pretty surprising. And surprising enough that I thought it worth putting into this blog to hopefully do a little bit to increase the education of tax filing.