Announcer:
It’s time now on KROS for Financial Focus, brought to you by NelsonCorp Wealth Management. The opinions voiced in this show are for general information only, and are not intended to provide specific advice or recommendations for any individual. Any indices mentioned are unmanaged and cannot be invested into directly.
Registered representatives securities offered through Cambridge Investment Research Incorporated, a broker-dealer member, FINRA SIPC, investment advisor, representative Cambridge Investment Research Advisors Incorporated, a registered investment advisor, Cambridge and NelsonCorp Wealth Management are not affiliated. Cambridge does not offer tax advice. For more information, visit our website at www.nelsoncorp.com.
Nate Kreinbrink:
Good morning and welcome to this week’s Financial Focus, brought to you each and every Wednesday morning right here on KROS. This is Nate. I have Andy Fergurson. Usually, you join us the third Wednesday. We are moving you up.
Andy Fergurson:
It’s not the third Wednesday?
Nate Kreinbrink:
It is not the third Wednesday. I looked at my calendar twice today to make sure, but you’re filling in a week early. We always have plenty to talk about when it comes to taxes. I know you and I got together yesterday afternoon starting to see what topics we’re going to do, and we basically filled up a page in two minutes.
Andy Fergurson:
Yeah. Yeah, I remember we said we were not talking about baseball no matter what.
Nate Kreinbrink:
Oh, we are talking about baseball because NL Central has the… Cardinals, they’re not in first. No, they’re…
Andy Fergurson:
They’re not. Are they in second?
Nate Kreinbrink:
No, not second.
Andy Fergurson:
Third?
Nate Kreinbrink:
No, fourth.
Andy Fergurson:
How many teams are there?
Nate Kreinbrink:
Five.
Andy Fergurson:
There’re five?
Nate Kreinbrink:
Yeah.
Andy Fergurson:
Oh, that would mean they’re fifth.
Nate Kreinbrink:
They’re fifth. So, that is awesome for me to say. And I say that jokingly because the Cardinals have been tops for a while. So when you get your chance to get your licks in, you’ve got to do that. And I’m excited because the Reds are playing well. There’s some excitement.
Andy Fergurson:
Got a bunch of young kids up there.
Nate Kreinbrink:
Young kids playing hard, playing free, playing fun.
Andy Fergurson:
Exciting young players.
Nate Kreinbrink:
It’s probably one of the longest kind of stretches into the season that we’re not really mathematically eliminated by now. So it’s fun, exciting. But, no, it’s all good. And it’s exciting to see how those seasons kind of play out. I think you say, they’re kind of hitting those dog days of the baseball season now, where that kind of newness, you’re over the hump. Teams kind of filter themselves to the top or bottom, and kind of they are what they maybe thought they were going to be getting to this time of the year. Are they going to be buyers? Are they going to be sellers? What is their plan hitting into the All-Star break coming up here in about a month.
Andy Fergurson:
Yeah, it’s a fun time. That buyer-sellers decision is, it keeps everybody involved and interested. And we were talking also about the dog days of baseball for our kids.
Nate Kreinbrink:
Oh, yes. We are that way too. The local youth fields, the high school fields, softball, baseball, whatever the case it may be. Those schedules are jam-packed right now.
Andy Fergurson:
Yeah, and if you’re not in a sport, you’re getting ready for your fall sport, right? You’re either running or on the field for football or doing something, you’re getting ready. But, it’s just busy. I feel like summer might be busier for those high school sports than the actual school year.
Nate Kreinbrink:
Than the actual seasons. It is, just because everything’s overlapping and everything. But, good stuff, good stuff, good stuff. Well, let’s talk some taxes before we run out of time.
Andy Fergurson:
Well, you know I love to talk taxes.
Nate Kreinbrink:
So, speaking of season, you call this letter season, and a lot of times people like getting stuff in the mail. You don’t get stuff hard copy in the mail as much other than bills usually. But it is kind of considered letter season for the IRS, meaning that things are starting to hit your mailbox from the IRS.
Andy Fergurson:
Yeah, people like to receive birthday cards and other acknowledgements and fun things in the mail. Anytime somebody gets something in their mailbox from the IRS or the State Treasury, they’re not nearly as excited. Usually, it’s a reason for some angst or for some fear for them. But it is that season. We’ve crossed that 60-day mark from the time that taxes were due. And so, now all the automated letters are starting to process through. And so, what may be happening is you may start to see some of those letters that come through because they’re automatically generated by the IRS. And one thing I would tell you, this is where having somebody that helps you prepare your taxes is incredibly valuable because the letters are terribly confusing to read. They just don’t flow very well, they don’t make a lot of sense. And so when you read them, it’s really easy to get confused.
So definitely don’t just pay whatever is there. Have somebody look at it and tell you what’s going on. Even if it’s a small amount, don’t just pay it because you may or may not owe it. I’ll give you an example, or a situation is that a lot of the processes at the IRS are still manual, where the letters are automated. And so, if you are sending a check or making a change to your return through a paper filed amendment, or sending some other letter of inquiry or change or something like that, that has to go through a more manual process, anything outside of an e-filed and direct deposited refund is going to have a bit of a manual process involved.
And sometimes, that manual process cannot keep up with the automation. And what that means is the automation may send you a letter before they’ve processed your check, and you get a letter that says you owe money that you may have already paid.
Nate Kreinbrink:
Because I remember, there was a client that we had that kind of, this falls right into that category. They said they sent the check kind of April 10th, before the deadline or whatever, for the amount that they owed.
Andy Fergurson:
Right.
Nate Kreinbrink:
Never been processed, never been processed, never been processed. Just recently gotten a letter that said, “Hey, you owe what you owe still for the taxes,” which was the exact same amount that you said that they had figured out for what they were expecting to owe, what the check was sent for, but the check was never processed. They went online, paid it, and ironically, a couple days later, then they got the check and it was processed at that time.
Andy Fergurson:
That’s the best way to get your check processed at the IRS is pay again, and then all of a sudden, they’ll find it.
Nate Kreinbrink:
Right.
Andy Fergurson:
Yeah, I mean, I’ve seen it before where you take, and you have some, I’ve even had people wait. I’m like, “Hey, they’re going to send you another letter in 60 days, so let’s hold on and see if they don’t find that check and get it processed before the second letter, and then we’ll make the payment.” The only thing it costs you if they don’t find it is a little bit of interest. And depending on what that number would be, we sometimes will wait and see if we can get that other check processed. And sometimes, people get a second letter even before they process the check. And so, yeah, it happens all the time, and it’s because the automation of the system.
The automation of the system is good. It does help things go faster. The problem is sometimes the cart gets a little bit before the horse. I’ve got another client who, they’ve got evidence that a check is cashed out of their bank account. They can see that it’s cashed, but they got a letter in the mail that says that they haven’t paid.
Nate Kreinbrink:
They haven’t paid it.
Andy Fergurson:
And anytime you get a letter from the IRS that says you owe them money, it makes you nervous.
Nate Kreinbrink:
Right.
Andy Fergurson:
Because you hear these horror stories that they’re coming after you. Well, they’re not. They’re not coming after you. Even if they have an extra 87,000 agents, they’re not coming for you right now. You’ve got some time. There’s a process. They’re going to give you a chance to take care of it. Nothing from the IRS is ever going to be, “We’re coming right now. We’re coming to get you.” They’re going to give you a chance to make it right.
Nate Kreinbrink:
Right, and I think playing off of that urgency, that call to action, knowing that this is a time period where letters are calling out, it unfortunately brings into the scope a lot of scams. And you said, creating this urgency, “Hey, pay now or else.” Or, “Pay now, or we’re going to come get you.” Or whatever the case it may be. But again, people that run these scams, scammers and these phishing schemes and all this type of stuff that they do, they prey off that emotion.
Andy Fergurson:
Absolutely.
Nate Kreinbrink:
And knowing that things are going to be sent out now, now is the time to do it. So again, beware of any letters or calls or whatever. I think it’s said that the IRS will never personally call you.
Andy Fergurson:
The IRS will never call you. You’ll always get a letter first from the IRS. Even if your account goes to collections, the IRS will send you a letter that says it’s gone to the collections, and then the collections’ agency may call you. But that’s a ways down. Your first contact from the IRS will never be a phone call. It’ll always be a letter. Your first contact from the IRS will never be an agent at your door. It’ll always be a letter. And so, just for that matter, even outside of the IRS scams, all these scams, there is no reputable company that is going to call you and demand payment right now.
Nate Kreinbrink:
The first time they talk to you.
Andy Fergurson:
The first time they talk to you. Everything is going to, every reputable company is going to give you an opportunity to make it right. They know that people don’t have the means to pay immediately, and so they’re going to give them an opportunity. Maybe it’s only seven days, but they’re going to give them an opportunity to find that money and to issue that check or whatever. And it’s never going to be something where you have to go get a gift card and read them the numbers over the phone. If you’re ever doing something like that, it is a scam.
So just, and unfortunately, they try it because they’re successful. They’re able to get people, they get people excited, they get people nervous. They play off of things that they know people are afraid of, like the IRS, like the county police, like the Sheriff’s department. They use those things as triggers because people, good people are afraid of those things, right? And so they try to get you all fired up and excited. And then when you’re in that state of anxiety, then they make you do things that when you look back on it, you go, “Oh, I should have known better.” And unfortunately, there’s no restitution for it.
I had a client call me and say, “Hey, I had a relative that got scammed. How do we report this on our taxes? At least we can report it as a theft loss because it’s theft, right?” And I said, “Well, it is theft, but unfortunately, there’s no way to recoup that on your taxes anymore.” Since 2017, there are no casualty and theft losses related to those or to any type of scam. And so, you just have to be careful. You have to train your parents, your grandparents, and just make sure that they are being careful and being cautious because they’re getting the phone calls. Somebody’s calling them and asking them for money, because you call enough people, somebody will say yes.
Nate Kreinbrink:
Well, and I think too, you’ve read about stories like this, you’ve heard people report stories like this, but it has happened locally. And I think that’s where people need to understand is that this is happening to people in our community, in our area or whatever, that they’re getting these calls about a grandchild that is in jail or grandchild that is sick, that needs money. Exactly, again, you hear these nationally, but they are happening here locally and they need to make sure that, again, do not panic when you hear some of this stuff.
Want to mention though, before we run out of time, that every Friday, NelsonCorp Wealth Management is wearing jeans for charity. Money raised in the month of June will be donated to the Shop with a Cop Back to School Supplies Program. Andy, as always, I appreciate you joining me.
Andy Fergurson:
No problem.
Nate Kreinbrink:
Andy Ferguson, NelsonCorp Tax Solutions. Nate Kreinbrink, NelsonCorp wealth Management, bringing you this week’s Financial Focus. Thanks again for tuning in and have a great rest of your week.
Announcer:
Financial Focus is a production of NelsonCorp Wealth Management in Clinton and Davenport. The opinions voiced in this show are for general information only and are not intended to provide specific advice or recommendations for any individual. Any indices mentioned are unmanaged and cannot be invested into directly.
Registered representatives securities offered through Cambridge Investment Research Incorporated, a broker-dealer member, FINRA SIPC, investment advisor, representative Cambridge Investment Research Advisors Incorporated, a registered investment advisor, Cambridge and NelsonCorp Wealth Management are not affiliated. Cambridge does not offer tax advice. For more information, visit our website at www.nelsoncorp.com.