Page 7 - VTax Brand Manager Opportunity Presentation

A CHANGING MARKETPLACE

DIY SOFTWARE PERILS

Identity Theft and Cyber Security Threats continue to rise. The FBI is investigating cases of fraudulent tax returns filed

using TurboTax software. The probe comes after a number of states, including Minnesota, Utah, Alabama, and Georgia,

reported a spike in potentially fraudulent tax returns being filed by scam artists attempting to steal tax refunds. Another

major issue is due to human error and Improper tax liability calculations when taxpayers use the self-prepare software. A

company called PC Novis conducted a study a few years ago and found that individuals who used software programs paid

more for their Tax return preparation due to hidden fees. They paid more than what it would cost to go to a licensed tax

professional.

REGULATORY CHANGES

Another critical development in the tax industry is when the IRS will finally begin requiring all paid tax preparers who were

not already CPAs, enrolled agents or tax attorneys to pass an annual competency test and complete 15 hours of continuing

education. Currently, only 41% of tax professionals have the recommended training requirements or certifications.

The Protecting Americans from Tax Hikes, or PATH Act, is a federal law that was enacted in late 2015. Taxpayers filing early

and claiming these credits typically are expecting refunds. Under the new law, the IRS is required to hold refunds claimed by

these taxpayers until Feb. 15. And the IRS must hold the entire refund, not just a portion of the refund attributed to the

credits. The new tax law helps detect and prevent tax fraud. It focuses on preventing those who improperly claim the EITC

and ACTC from receiving payment. The extended refund release date also gives the IRS more time to ensure taxpayers

properly claiming the credits get the refund they are owed.