FET Refund Scam Targets Senior Citizens

Tax recovery expert Byron Horner warns taxpayers to be cautious of suspicious calls

Landrum, SC – January 4, 2007 – Senior citizens are being targeted by Federal Excise Tax (FET) refund scams, says Byron Horner, president of Utility Audit Company, Inc. (UAC).  “This new wrinkle in the scams facing our country’s seniors is especially troubling,” Horner comments. 

Many senior citizens are not required to file federal tax returns.  However, Horner explains, since the FET refund is being offered to all taxpayers, the IRS developed Form 1040-EZ-T.  “This form allows non-filing taxpayers to receive an FET refund by completing it and returning it to the IRS,” Horner elaborates.  “Taxpayers using this form don’t have to research and document the actual amount of FET they paid.  Instead, they can claim an ‘opt-out’ amount of between $30 and $60 based on the number of exemptions.” 

“I received a phone call from a taxpayer today, asking for information on the refund and how to get it,” Horner relates.  “Then I learned something that really concerns me.”  According to Horner, the taxpayer was contacted by a company representing itself as helping people get the FET refund.  “The taxpayer was told the company could determine their refund amount by using their social security number.”  “Unfortunately,” Horner continues, “the taxpayer gave the company their social security number.   Within a few minutes, they were told their refund would be $700.”  Fortunately, says Horner, the taxpayer sensed something wasn’t quite right and ended the call.  “The next step by the company was most likely to offer to secure the refund with an advance payment from the taxpayer,” Horner surmises. 

“Getting more than the standard opt-out amount ($30-60) requires you to review the actual phone bills for the 41-month refund period,” says Horner.  “There is simply no way this company could access that information with just a social security number, let alone calculate the actual amount that quickly.”  “And that’s before we even talk about the dangers of giving out your social security number,” Horner adds. 

While the incident has been reported to the state’s attorney general’s office, “the fact that this occurred in one state is a clear warning that it will happen in other states as well—if it hasn’t already,” Horner says.  “Senior citizens, their guardians, and advocates should be to be extremely careful not to give any personal information, including social security numbers, to callers.”  Instead, Horner suggests, “tell the caller you’ll think about it and call them back.  And, says Horner, “ask for the caller’s name, company name, and a number to return their call.”  “If they’re reluctant to give you any of that information, there’s an excellent chance it’s a scam,” Horner warns.  “Get what information you can and report the call.” 

“Any time there is something as large as this refund (an estimated $13 Billion), and with as many individuals and businesses entitled to it, there are bound to be scam artists,” Horner concludes.  

For more information or questions about the FET refund process, visit UAC’s website at http://utilityauditco.com.  Byron Horner can be reached at 866-457-4262.

2006 FET Refund Method Will Leave Taxpayer Money on the Table

Tax Recovery Expert Byron Horner says IRS method will only return a fraction of the amount owed

Landrum, SC – January 2, 2007 –  Byron Horner, president of Utility Audit Company, Inc. (UAC), stated today that the estimation method approved by the IRS for businesses to use in figuring their 2006 Federal Excise Tax (FET) refund will not return all of the money they’re entitled to.  “There are significant problems with this highly-restrictive method,” Horner comments.

Although the IRS is allowing businesses to estimate the amount of FET paid based on a comparison between their April and September 2006 phone bills, “capturing a truly representative usage sample from just two months isn’t very likely,” Horner notes.  “If your long-distance usage was higher than local usage in the past but was not in April or September 2006 (the sample months), it is doubtful that this method will return the full amount of FET you’re owed.”

“The IRS admits that businesses have more varied phone usage patterns than individuals,” Horner relates, “yet their estimation method only offers 2 set months as a basis for calculating your entire 41-month refund—one immediately before the tax ended and one month immediately afterward.  Any large shifts in usage between those two months will tilt the differential equation, which can lower your refund for the entire period.”

Another problem with the method, Horner says, is the cap on the total phone expenses businesses can claim; 1-2%, depending on the number of employees.  “If your differential equation comes out to be more than 2%, the excess percentage will represent lost refund dollars,” Horner explains.  “Larger businesses capped at 1% have little choice but to invest the time and resources to calculate the exact figures and claim the amount of FET they actually paid.”

In order to do so, businesses must be able to back up their claim with accurate records and phone bills for the past 41 months.  “For businesses with multiple phone lines and cellular accounts, this process will be extremely tedious and time-consuming,” Horner notes.  Businesses may not think it’s worth the time, and opt for estimation method.  However, if they do, they may very well be leaving money on the table.”

“The 2006 tax season is upon us,” Horner adds.  “Every business in the country is entitled to an FET refund.  They need to know that there are tax experts who will review and calculate their refunds in a fraction of the time, making sure they get all the money they’re owed.”

For more information or questions about the FET refund process, visit UAC’s website at http://utilityauditco.com.  Byron Horner can be reached at 866-457-4262.