It’s the start of a new year, which means that tax season is right around the corner. A few things have changed in the last couple of years, so it’s important to make sure you’re up to date on current tax news before you file. Read More
CEO David King highlights the difficulties of dealing with IRS Enforcement; otherwise known as Collections. Optima’s Lead Tax Attorney, Philip Hwang, shares his insight and offers “Tax Pro Tips” ranging from IRS authority, to what you can expect when you’re subjected to IRS collection actions. Watch Video Click here for more from The Tax Show for People Who Owe.
Retirement accounts can help reduce your taxable income and possibly increase your tax refund. Some accounts may have a year-end deadline for your contribution and required distributions, while others allow additional time. Read More
Dependents are usually children or relatives in your household that require your care. These characteristics allow you to be eligible for some tax deductions and credits. Knowing when to claim a dependent and how will be vital to preparing your tax return this season. Read More
Employees are usually reimbursed for work-related expenses. When you file or report these expenses, it’s important to make sure the numbers are as accurate as possible. Over-claiming expenses, turning in receipts for unused items, or even spending more than the allowed amount are common expense fraud offenses. Whether you’re an employer or employee, it’s important to understand what can be determined as reimbursement fraud to avoid mistakes and spot schemes as they occur.
What are examples of expense and reimbursement fraud?
A typo or honest mistake can be fixed, but ongoing fraudulent numbers can significantly hurt a company over time. Actual expense fraud is deliberate and usually a premediated attempt to inflate reimbursements. See some examples below:
Claims for items that weren’t purchased (office supplies, lunches, etc.)
Bills for canceled trips, such as hotel costs and travel tickets.
Bills for non-reimbursable expenses (anything that isn’t work-related or is done in leisure)
Separate mileage bills from employees who travel together
Inflated totals for any of the above expenses. For example, if an employee were to take a trip that costs $415.00, but the employee rounds up to $420.00 on the bill. This would be an act of expense fraud.
Employees often don’t associate these acts with fraud because the word “fraud” sounds so heinous. Poor judgement can easily become a case, so it’s important that companies have a clear expense policy. Expense policies are put into place to dissolve any confusion about protocols and procedures when dealing with company money.
The 4 Types of Expense Fraud
The above examples of expense and reimbursement fraud can be categorized into one of the four types outlined by the Association of Certified Fraud Examiners:
Mischaracterized expenses. This occurs when an employee mixes their personal expenses with business expenses.
Fictitious expenses occurs when the employee submits fake receipts.
Overstated expenses are inflated costs.
Multiple reimbursements occur when an employee submits multiple receipts for the same item.
How to avoid expense fraud in your company
It’s good to start with a clear and concise expense policy. Employees should be able to understand exactly what is expected when turning in reports and receipts.
Provide tools for employees to easily report expenses. Simplify the process with software, or similar resources to make reporting easy and accurate.
Consider your current system’s efficiency. Company cards or virtual transactions are easy to track.
Audit occasionally to encourage honest reporting.
Fair allowance rates can also prevent expense fraud. When your employees travel out of town, consider the rates of where they are and ensure the allowance can cover those expenses. Sometimes, an employee may consider expense fraud as a last resort.
Do you owe back taxes and want to regain compliance with the IRS?
Optima Tax Relief offers free consultations over the phone for tax debt assistance. Give us a call today at 800-536-0734.
The IRS Offer in Compromise is the most sought-after tax debt resolution. It’s a settlement offer that can significantly reduce your tax liability. How do you know if you qualify? The IRS just announced new guidelines for its Fresh Start Program, which means you’re more likely to qualify now than ever before! CEO David King, and Lead Tax Attorney Philip Hwang discuss everything you need to know about the new guidelines.
As we approach 2022, Optima wants to wish you a happy holiday season and remind you to take advantage of this special time of year. The end of the year is the perfect time to organize your tax records and prepare to file! Optima CEO David King prompts thought-provoking topics as Lead Tax Attorney Philip Hwang provides comprehensive tips for year-end tax filing. Ensure your tax return is as accurate as possible and cement a successful tax season with this video guide from Optima Tax Relief!
On today’s episode of The Tax Show for People Who Owe, CEO David King highlights the difficulties of dealing with IRS Enforcement; otherwise known as Collections. Optima’s Lead Tax Attorney, Philip Hwang, shares his insight and offers “Tax Pro Tips” ranging from IRS authority, to what you can expect when you’re subjected to IRS collection actions. Tune in to learn what you should do if you’re facing a levy or awaiting an inevitable call from the IRS.
