If you like me, can't wait until tax Day.
You are going to love our next guests.
And you should have been able to hear the sarcasm dripping down both sides of my face as I said I love tax Day. A guy who may or may not love tax Day will find out in just a second, but he certainly works at it. His name is Mark Steber, chief tax officer of Jackson Hewitt Tax Surfaces.
Mark. Welcome to the show. First of all, welcome.
To the show, and I love tax Day. One hundred million people getting three hundred billion dollars.
What's not the love?
Well, not everybody gets money back, you know, we'll talk about that a little bit later. How did you end up in the tax field? I mean not when you when you ask a lot of five year olds what do you want to be when you grow up? I've never met one that said I'd like to work in taxes.
How did that happen? Well, it's even more bizarre than that.
I've done taxes and only taxes for this will be my fortieth year.
I didn't have other jobs. I wasn't one of those guys that found my calling.
It's a long, you know, complicated path to how I've become just a personal tax return specialist. But I got out of college back in eighty five and you may not remember that, or maybe you were born after that, but that was when Ronald Reagan passed the tax reformat.
So I got out of college with the county.
Degree, and for the first time in one hundred years, taxes was a much needed profession. I had some people who said, hey, Adjustable, would you like to learn taxes.
I'm not a nerd. I'm not going to be a tax guy, but.
I've had job security, a never changing of evolving world technology.
You know, law changes.
It's an exciting field, but mostly, as I said, to begin with, two out of three people get a refund every year.
That's three hundred billion dollars.
It's a pretty happy thing for the majority of tax payers who get money. And if you help people even more people get money, and if you help them not self inflict a mistake by skipping something, it's even more fun. So on my side, it's like Christmas in spring giving people money.
It's a pretty good gig. I recommend it to anybody.
Well, I will say, and I've been pretty open about this on the air. I am a big believer in getting tax help because to your point, the tax code feels like it's changing all the time. And in the forty years that you've been doing this, do you feel like now is more complicated or less complicated than it was when you got into this field forty years ago.
Oh, it's very simple.
It's not only more complicated for those that hear the news and think the tax code's going away or we're going to a postcard. Technology and the evolution of technology is what's made tax is so complicated. It used to be a form you could fill out with a pencil. Now it's more of a construct for social media management, whether it be get to buy you know, alternative fuel cars or buy houses, or we need stimulus because we've got the pandemic. The tax system is a great system.
So what's going to change in the future. Well, tax have evolved from just a pencil and paper with computers and now you have artificial intelligence that's just going to let loose the people who say, you know, we need each individual's situation to be considered.
To be fair and there's no stopping that. So taxes are going to be here.
They're going to be here for another one hundred years, they're going to get more complicated. But that's the price of fairness, to be quite honest, people complain about how complicated taxes are, but your situation is different than mine than the next listener, and the.
Tax code should reflect that.
People who make more money should pay more taxes, people who make lass should pay less.
And our system does.
That despite some of the commentary, and it's going to continue that way. It's a good system. It's the best system in the world. It is very fair.
Anything else you hear besides that probably just posturing.
Well, let's talk about let's talk specifically to those last minute filers. And I am the proud filer of an extension every single year. This is I'm one of those because I'm just not going to do it more than i have to or faster than I have to. But what if people do want to file before the fifteenth, because that is tax day, it has to be postmarked or filed by the end of that day. What are some of the tip store tricks that you give people who've waited till the last minute.
Well, they're not as smart as those really smart, financially prudent people who filed early. When you file early, as I mentioned, to get some of that three hundred billion dollars, and that's the number.
Then you get your money early.
You don't have to be a financial wizard to know I'm not waiting six months to get my money.
So file early, get your money early. File early.
You lock up your data on the IRS system, state system. So some peskey schemer who bought it on the web or stole it or found your copy last year on the printers just waiting to harm you.
You file early, you lock up your data. Well, those that are going to owe. If you file early, you lock up your data, which is good. And you also don't have to pay till April fifteenth. Filing separate from paying. So earlier is better. Early February is better than now.
But now it's better than on next Tuesday. And that's better than wait until the summer and doing all of those conversated extensions. So to the people who waited til the last minute, get a plan, pull that band aid off.
Find your documents, find last year's return, find a.
Pro unless you want to go learn it yourself here in the last few hours and just get it done and start thinking about twenty twenty five, which were a quarter of the way through.
But get your taxes done.
It's the smart thing to do, not only because it's your biggest financial transaction. Now, employers, banks, lenders, people who are looking to partner with you, they're going to ask you, have you done your taxes? Are you compliant? And if you file an extension you can kind of say yes. But if you've done them even better, you look like you're somebody disciplined about your own house.
They won't mind you partnering up with them in their house. So taxes are a big deal.
They're not going away. Most people are going to file thirty, forty, fifty or sixty years. Get some best practices, and that includes filing early, being a little bit organized, and using a professional.
That's just the best practice.
But it prevents me from feeling like I am having something pulling something over on the government mark, which is precisely why you do it. So let me ask you this. What happens if people don't file their taxes on time?
Well, a lot of things none good.
Yeah, you know, if you don't file at least an extension on time, you can be subject to the failure to file penalty.
Properly named, and that's.
A penalty of up to twenty five percent compounded daily with interest for any tax is that you owe.
Separate from that is the failure to pay penalty.
If you didn't pay your taxes like you're supposed to do, you can be subject to a second twenty five percent penalty, a failure for penalty to pay your taxes plus interest compounded daily. Thirdly, if you're supposed to pay throughout the year because you got a side hustle or a side gig, or your crypto's hitting you know gold and you're making good money, or your stock portfolio and you're selling stocks
making money, you owe your money throughout the year. If you didn't pay that like everybody should, then you got an underpayment penalty and interest. Then you've got to pay a pro to clean it up. And so the penalties and interest can get bigger than even the tax liability for doing it right. But there's a new dark element. Many employers, many lenders, many people who are giving you your certifications, they're going to ask you, are you contemporary?
Are you compliant?
And you can either say yes, I did it or no, I didn't, and look like they're not somebody that want to be a part of your team, or you can lie and they'll find that out sooner or later because they can run the check. And even your credit rating now can be reflective not to mention cross claiming on unpaid taxes and all the rest bad. So nothing good happens to somebody and rarely little even if you extend.
But you certainly don't want to miss the deathline and court disaster with penalties, interest, professional fees and just the bad reputation that can hurt you with that. It's a self inflicted financial wound that you don't need to wait on.
I've got a question from our text line over here for Mark, our guest, he's the chief tax officer of Jackson Hugh Att Tax Services. Someone said, how far back can you file a return? Maybe you didn't file several returns. Maybe I don't know if they were getting a refund those years, and I don't know if the penalties are different. But how far back can you go back to sort of make good after you haven't filed.
Yeah, there's a lot packed into that question.
The first answer is you have three years to amend the tax return and claim some unclaimed credits or benefits that you left off. The IRS also has three years to audit a tax return. Now, if you've never filed, the statute of limitations on both being audited, you know, and getting into trouble never starts.
So it's wide open, so you never want to leave attack. You're open. Now.
The bad news is you can't even go back and get refunds because there's a special rule that says you can go back three years when the taxes are paid, but the IRS can audit you forever if you have not filed a tax return. That's why it's always in your best interest to file, file timely and get all your money.
And I leave your listeners with one sad bad fact.
Each year on April fifteenth, coming up the IRS, and they've been doing this for a couple of months now, has been trying to find one million people one million with an M to give one billion with a B tax refunds that were failed to be claimed. People move, they close their bank account for whatever reason they didn't get them, and after three years, with the deadline expiring on April fifteenth, every third year they keep that billion dollars and unclaim refunds.
Forever. Then you can't go get that money.
So not only are taxes complicated, there's a million people, even a billion dollars sitting there at the IRS that after a while, the while being three years, they just keep that money forever, So a lot baked into the How long and how far back?
Three years is your general rule forever? If you didn't file, is your risk of being audited?
What is this question from our another listener? Please ask how to handle disputes with the IRS? I had a seven year battle which I won, but it took that long for the IRS to correct their error. Is this a common experience that you guys have seen at Jackson Hewitt to have a situation drag.
Out for that long? We have seen it. It doesn't happen with us.
It's usually with people trying to do self representation or they're using some of those JANKI midnight TV advertisements that they know a guy, a competent professional who has an enrolled agent or CPAA is licensed to practice before the IRS can usually get a situation wrapped up in a relatively short time, again depending on the facts and circumstances, but seven years is unheard of with a representative unless you've got some really strange facts and really disputed issues
and some really complicated things just come up. But I'd rarely see anything taking more than a couple of three or four letters. Maybe a phone call issue resolved, maybe the client wins, maybe they owe taxes didn't agree with, maybe they've got penalties for given. But use a trusted representative, somebody trained and experienced, not those late night TV people.
Those are usually more bait and.
Switched, and certainly not some of these other guys that creep into the system. You want to use someone who's good at this, and you can ask ask them what their experience is with advocacy services, how do they charge, how much it's going to cost you, and what their experience is with your issue, because each issue is different.
If you've got valuation of art that's different, the left off a W two, you know, and so it just depends. But no, that's that's too long.
Let's talk about before we go. Let's talk about those scams that are floating around out there. Tax Time is like scam Central, And what are you seeing in terms of what people are being solicited allegedly by the irs.
Yeah, you see stuff creep into the system. I mentioned that three hundred billion dollar number all the time. When you've got that much money in the system, bad people.
Creep around, and we could cover this for an hour.
What we see often are just bold, baseless claims. We guarantee you get a refund, you know, all sorts of other stuff.
You know, ghost preparations epidemic right now.
People who do your taxes, but they won't sign it's only your names on there, because they can get a little more aggressive and put fake stuff on there, but it's only your name and a pro has to sign it under law. So if your tax re turner doesn't have their signature and their P ten, their prepared tax id number, then you've likely been scammed and you should report that. The thing is common this year, and it's
been common the last two years. Are these fake texts, fake emails, fake phone calls that look like they're from the irs, and they just want to confirm some final information, generally your bank account or some other information that's personable.
And you think, well, yeah, I'll confirm my bank account.
And you've just given your bank account, your routing number, and you're checking account number to some scammer so the IRS does not call, they do not email, they do not text. They may return your call, and that's different than sourcing a call. But if you didn't call the IRS and you're not managing them, do not believe a text. Another great reason to have a tax pro on your contact list on your smartphone, ask them, hey, is this
text real? Ninety nine point nine to nine are fake, but they do hurt a lot of people because people try to do right by them and even some of the.
More sophisticated stuff.
It may say IRS on your call ID fake fake fake fake. Now, it's just that way, and it's so easy to scam the vulnerable. Do not fall prey to it. Have a pro on your contact list. You've got a Jackson you at office. Even if we don't do your taxes. We hate these guys worse than you hate these guys. We'll gladly look at your email, your text, your letter, or your phone call, and then we'll turn it over to the authorities and you won't be out money and have to clean up that whole id theft thing.
Mark Saber is the chief tax officer for Jackson Hewett. Thanks so much for making time for us today. Mark I really appreciate it.
It's your money, it's your biggest transaction. Go get your money.
I like it.
Thanks Mark,