Robocalls? Not Much we can do . . . but Maybe a Little.

 I once sued a telemarketer for violating the National Do Not Call Registry. I was awarded $1,500 by the small claims court commissioner. I had fully intended to follow suit by supplementing my income suing every son-of-a-bitch company that showed contempt for both the registry and my inalienable right to a peaceful dinner while watching Jeopardy!

National Do Not Call Registry logo

You can fight against unwanted telemarketing calls by signing up on the Do Not Call Registry

Even though I know that small claims court is a piece of cake and a great way for the little guy to take down the bullies of telecommunication, I find an inexplicable emotional inertia within me when it comes to going to court and filing the suit.

So what alternatives are left?  First, sign up on the registry at are a few tips to wrangle successfully with the robo-rascals.  But  know this: anyone with whom you have an ongoing business relationship—for instance, a credit card company—is exempt from the do-not-call prohibition. Political campaigns and charities, as well as government calls for emergency situations, are also exempt.

First, get a phone with “caller ID” capability. They are relatively cheap. Then, get an answering machine. They’re cheap and easy to use.  If you get a call and you don’t recognize the number, let the machine pick it up. If it’s a call you want to deal with, pick up the phone. Otherwise, let the call die away.

If you do answer the phone and a recording instructs you to press a certain number, DON’T DO IT, not even if it tells you to press a number that will take you off their call list. It tells the calling device that it has reached a legitimate number that’s ripe for receiving telemarketing calls. Just hang up.

Check out the site It works best with VoIP and mobile phone services. VoIP is Internet phone service.  It often comes as part of a package with cable and Internet services. Nomorobo blocks any calls it recognizes as coming from unwanted robocallers. I use AT&T landline service and Nomorobo is not yet supported by AT&T landline service, although it does work with AT&T VoIP service.

You can report any robocalls to the federal government at 888 382-1222 or at I am dubious about the number of people who would bother to take that road. I am also dubious about the effectiveness of such reporting.

And finally, if you are receiving telemarketing calls from a local company, get the person on the line to give you the company phone number and address. Then get in touch with your local small claims court to learn about the procedures to get the evildoers into court in order to sue them for the $500 fine to which you are entitled; even more for multiple violations.

Good luck.

You may Have $ Coming to You!

Unclaimed money site

Unclaimed money site

All types of financial transactions go awry. Perhaps a bank, or retirement fund, or former employer owes you money, but they’ve lost track of you. Such funds end up “on hold” in the treasuries of respective states.

For instance, I just discovered that my late mother-in-law has pension money from a former employer here in California coming to her. It amounts to a whopping 13 cents! Oh well. In a few short moments you can find out if you or one of your relatives has some serious cash coming.

Just go to to find out if your Caribbean vacation awaits you.


The Consumer Gal and I are about to have our book, Enough of Us – which deals with another realm – published in a few weeks. In preparation for the big event we need to concentrate on that project. So for the next eight weeks or so, I will be suspending my semi-monthly Consumer Guy full-length blog posts and, instead, providing  a short consumer tip each week (I hope).

If you would like to learn more about our book that deals with issues of ethics and procreation, please visit our other website, Many thanks for your interest.

Student Loans are Just That . . . Loans. Defaulting is a Risky Proposition – Part II

In part one of this column I described how borrowers of student loans get into trouble and how collection agencies, on behalf of the federal government often make their lives miserable. But just how do the debt collectors go about it?

According to an excellent article by Andrew Martin (“Debt Collectors Cashing in on Student Loan Roundup”) in the September 9, 2012 New York Times, they often start with trolling the Internet for databases that contain information on respective debtors. When they find a suspect, they contact their prey. If a debtor refuses to cooperate, is employed, the agency will try to garnishee their wages. And the government is tenacious. It usually gives a collection agency just six months before transferring the case to another agency.

The article tells the story of Arthur Chaskin of Michigan, who borrowed $3,500 in the 1970s. By last January the debt, along with interest and penalties, had grown to 19 grand. When a government-contracted lawyer tracked him down, he garnisheed Chaskin’s brokerage account. A judge reduced the debt to $8,200, 25 percent of which went to the lawyer. The object lesson here is that student loan defaulters never know who is looking for them, when the hunters will strike, and how deep in doo-doo the debtors may find themselves. And, as a reminder, repayment may even come in the form of deductions from Social Security payments – not a pleasant prospect for those on fixed incomes.

Martin reports, “Government officials estimate that they still collect 76-82 cents on every dollar of loans made in fiscal 2013 that end up in default. That does not include collection costs that are billed to the borrowers and paid to the collection agencies.” A 2007 MIT study, however, estimates that Uncle Sam collects something closer to 50 percent of debt. The bad news for student debtors – but good news for taxpayers – is that the government, year to year, is growing ever more efficient at getting its money back – an 18 percent one-year improvement last fiscal year, totaling $12 billion.

Student debt demonstration, Washington, DC, April 4, 2012 – Photo –

Many defaulters are in dire straits. They received schooling and then got caught in the quagmire known as the Great Recession, unable to find work. Some are ill. Some are in over their heads with all types of accumulated debt. But with little chance of shedding their government debt through bankruptcy, they find themselves between a rock and hard place.

And even in cases where a person is broke and either ill, disabled, or unemployed, it’s not easy to incentivize collection agencies to help those debtors get into a program that either allows gradual payment – say through gradual income-based repayment – or to forebear on collecting until the debtors are back on their feet. That’s because the collectors make more money by collecting than by merely preventing default.

The creditors and debt collectors frequently don’t tell the borrowers about programs to ease the repayment burden, or the requirements for qualifying are so daunting that they give up in frustration.

Even President Obama acknowledged, “Too few borrowers are aware of the options available to them to help manage their student loan debt,” in a June memo.

Good news for borrowers may be on the horizon. Congress and the Department of Education are considering regulations that would require debt collectors to offer student loan delinquents an affordable income repayment plan. And the department has promised to do a better job of publicizing such plans, starting with those who are still in school. As part of the proposals, monthly payments would be limited to 10 percent of discretionary income.

But, according to Andrew Martin, “Efforts to change the incentive [reimbursement] structure for guarantee agencies have stalled. And the Obama administration’s efforts to impose new regulations on profit-making colleges were initially watered down and then significantly weakened by a federal judge.”

So while some folks are so deeply in debt that foreclosure and/or bankruptcy are the only ways out from under crushing debt, it will be almost impossible for them to shake off their student loan obligations.

Unless Congress (you know, the government branch with a 9 percent voter approval rating), gets head out of it’s a_ _ _ _ _ e, many of those students who made some big mistakes a long time ago will suffer for a long time to come. Congratulations to those collection agencies that care more about money than humaneness.


Student Loans are Just that . . . Loans. Defaulting is a Risky Proposition – Part I

Millions of Americans are up to their wallets in debt for money they borrowed way back when and thought they’d get around to paying off . . . well . . . eventually. Good luck with that.

Almost 6 million people are at least a year behind in paying off their student loans for post-secondary education. And with new-graduate unemployment as high as it is, the prospects are getting worse. A September 9, 2012 article in the New York Times paints a pretty bleak picture. Sixteen percent of all those with outstanding balances—representing a whopping $76 billion—are in default. So what’s the upshot?

Many of the defaulters are being hunted down, not by the FBI or the local sheriff, but by collection agencies. This is ironic because in my last blog post I discussed the need to regulate collection agencies. Who should regulate them? The federal government (as well as the states). Who is hiring them? The federal government. So while the Consumer Financial Protection Bureau (CFPB) is taking steps to protect debtors from unsavory collection practices, the U.S. Department of Education (DOE) is hiring some of those same agencies the CFPB is trying to get in line. In the last fiscal year, the DOE paid $1.4 billion to collection agencies and other “bounty hunters” in order to recoup its losses.

Many years ago, there was a TV commercial for Chiffon margarine that ended with the catch phrase, “It’s not nice to fool Mother Nature.” Learning she had been fooled into thinking Chiffon was butter, Mom would summon up a thunderbolt. Substitute the U.S. government for Mother Nature and collection agencies for the thunderbolt, and you get a picture of what defaulters are up against. Unlike pitiful little banks and lame mortgage lenders, the fed can muster up some pretty loud thunderbolts of its own. The Times article tells the story of 29-year-old single mother Amanda Cordeiro of Florida, who is in the red on a student loan to the tune of 55 grand. She has had two tax refunds seized (private companies can’t do that) and has changed her phone number several times in the last year to avoid the harassing phone calls the CFPB is trying to put a stop to.

Other defaulters have had Social Security payments garnisheed. This makes life miserable for a lot of former students, especially those who have taken pricey courses at private for-profit schools, like University of Phoenix, ITT Technical Institute, Kaplan University and DeVry University. Many of these schools specialize in Internet coursework with disappointing completion rates for students and less-than-stellar job placement records. The educational institutes frequently coach students into taking out the loans, which are paid directly to the schools. Often, those who fail to find well-paying employment take it on the lam because they have no way to pay back the loans. Students who attended profit-making schools –about 11 percent of all students – account for nearly half of all defaults. Dropouts were nearly four times as likely to default as those who graduate.

While there are programs available to help desperate students pay off their loans over an extended period, with outstanding balance forgiveness at the end of that term, the companies that administer the loans for the government frequently fail to inform the borrowers of those programs. Mounting penalties and accumulating interest rates can lead to huge debt and ruined credit ratings, making life even more difficult when defaulters tries to take out a loan on a car or home, or when they apply for credit cards.

It is very difficult to wipe out government loans through bankruptcy, and they have no statute of limitations. The government has been able to recoup a whopping 80 percent of defaulted debt, about four times the rate of nongovernment lenders.

You may know the acronym ARM as standing for “adjustable rate mortgage.” ARM can also mean “accounts receivable management,” as debt collectors call themselves. The ARM industry is booming thanks to defaulted student loans. ARM companies seek government contracts because of their high rate of return.

When borrowers are delinquent paying for a year, the lender (Uncle Sam) declares them in default. If it cannot find the debtors, the government sics collection agencies on them.

 I leave you and those you care about with a checklist:

  •   Be very, very careful about taking courses from Internet post-secondary schools (see my column of July 17, 2012);
  •  Don’t take out a student loan unless you are damned sure you are going to finish your course of study;
  •  If you do apply for a student loan, get all the information up front about programs to help students who are having trouble paying off their loans;
  •  If you are already delinquent, go to the agency through whom you acquired the loan and ask for the information on extended payback programs;
  • And finally, if you are in debt up to your neck, don’t go making babies, or you’ll be asking for a heap of grief.

To be continued. “See” you in part 2.

Professional sports pitching intoxicants to kids? You bet.

In 1991 the late journalist Jeff Zaslow interviewed me for his column in the Chicago Sun-Times about how advertisers sometimes use poor taste – or even hypocritical pitches – in order to hawk their wares.

Allow me to quote from Zaslow’s column: “Consumer advocate Ellis Levinson . . . finds all liquor ads objectionable and says our society is hypocritical. ‘During the World Series, you see baseball players [in public service ads] telling kids to say no to drugs. Then in the next commercial, ballplayers pitch beer. Beer gets you stoned. It’s a drug commercial.’”

Have things changed? You bet. Have you ever heard of Avion Tequila? I never had, until tonight. I was watching the Yankees-Rangers game when a commercial came on for the Mexican elixir (replete with a subtle reference to S & M pain).

What, exactly, are they selling?

I have also seen ads for Captain Morgan Rum and Skyy (please, spare me the clever spelling; Toys R Us is bad enough with its backward R) Vodka on professional sports broadcasts. Coors Beer promises you not only a silver bullet high-speed train electrifying your life, but lots of sexy women wearing not much in the way of sartorial splendor (i.e., they’re scantily clad).

I don’t know how else to say this, but I am pissed off. There was a day when beer and wine were the only alcohol products that advertised on TV. No more. I truly believe that if our graft-ridden Congress were not beholden to the booze industry, alcohol advertising on television would go the way of the dodo and cigarette ads. It’s already  bad enough that kids can’t wait to get to college so they can board the Coors Silver Bullet.

Let’s just hope that Phillip Morris doesn’t gain enough traction among members of the House of Reprehensibles to entice its members to allow smokes back onto our home screens. In the meantime, if you have kids, lock your liquor cabinet.

Student debt, costly education, and lots of students – California may be creating yet another model for the nation

We recently learned that student debt in the United States has surpassed $1 trillion. What is a trillion anyway? Well, if you don’t know, it’s the same as a million people each owing a million dollars; or a billion people each owing a thousand bucks. In short, the people who owe this enormous sum are folks who attended an institution of “higher learning” (more on the quotes in a moment) and are now stuck with the bill.

How did this happen? In my other blog – which I co-author with the Consumer Gal (Cheryl Levinosn) we have discussed one major reason in our posts as well as in our book Enough of Us. If parents have kids and hope that their kids will one day go to college, they have to start planning for that eventuality. It makes our blood boil when parents of modest means don’t scrimp and save from the moment they become aware of the pregnancy. No smart phones, cable TV, or expensive gadgets. Forget the plans for upscale vacations or cars for the teens. That money belongs to the college-bound.

We live in the Bay Area; San Jose, to be exact. While the state is in terrible financial condition, it’s still a great place to live (ah, the weather!) But many educators, experts, and general Golden State residents worry about the future of California’s two great state university systems.

The education powers-that-be, including the governor and state legislature, are working desperately on higher education problems. The Cal Grant program helps low- and middle-income students pay for college. The state has formulated performance standards by which schools are eligible to receive funds that have been borrowed by students only if a quarter of students they graduate are able to pay off their loans in a reasonable amount of time.  This standard is an indicator that the schools are graduating young adults with usable skills that lead to jobs.

Unfortunately, not all so-called institutions of higher learning are what they purport to be. There is a spate of schools that promise advanced education and good jobs in fields where openings go begging. They advertise heavily on the Internet and TV. The problem is that they frequently draw their potential students from families that can’t afford to pay the tuition. Those students usually have to borrow from a variety of government sponsored sources. According to California Assemblymember Bob Wieckowski, about 90 percent of these schools’ funding come from Stafford Loans, Pell Grants, G.I. Bill Grants, and the state’s Cal Grants.

University of Phoenix Spokane Campus

California Assemblymember Bob Wieckowski

          The companies that run these schools netted $3.5 billion in 2009 and paid executive salaries of $41 million. Wall Street ain’t the only place where the governments get played for suckers. So while the execs rake in the bucks, most of the students gain few useful skills, have trouble – if any luck at all – finding relevant jobs, and are now burdened with heavy debt. As Wieckowski puts it, “We can’t continue to shovel taxpayer money into shareholder pockets, instead of adequately preparing students for their careers.”

          When Assemblyman Wieckowski introduced legislation this year requiring the schools to meet more stringent criteria in order to receive state grants,  the schools stepped up their lobbying efforts and managed to kill the bill in committee. The legislature never even got to vote on it. However, a coalition of reformers was able to make reforms in the budget process by cutting grants for high-priced schools, raised graduation-rate requirements, “and cracked down on schools with high loan default rates.”

In the meantime, both California State University and University of California systems, as well as the state’s community colleges, need more bucks. Perhaps with the reforms, there will be more state and federal financial benefits available.

This brings us back to the opening dilemma. Why aren’t parents providing for their kids’ higher education? If it’s because they can’t afford the costs, how can they afford the kids? This raises questions like:

  • Did they have more children than they could provide for?
  • Did they overspend on indulgences while the kids were growing up?
  • Would it be more realistic for their kids to attend junior colleges and after graduating look for higher education opportunities?
  • Should the kids work part time to help foot the bill while attending school?

And finally, when people who can afford to pay their share of taxes get significant tax deduction and a free K-12 scholarship for each kid, are we encouraging a system that is forever going to have trouble funding higher education. We go into this in some detail in Enough of Us. We need to consider whether or not we can afford to lower taxes for those families that will be asking the most help funding their children’s higher education.

Think about it and weigh in with your opinion.

Why are there so many lights on when the lights are off?

          I recently conducted an inventory in my house . . . in the dark. Well, almost dark. Just before going to sleep I went from room to room counting the number of lights that were on. Nightlights, digital clocks, power indicators on electronics, and even an indicator on our emergency standby plug-in flashlight.

         Our microwave oven, toaster oven and gas range each showed me the time . . . within a three-foot span! In all, there were more than 50 lights on in the house. It’s nuts!

          Almost one third of all electricity use in California homes is attributable to electronic devices, especially home entertainment equipment and computers. The rest goes to refrigerators, heaters, air conditioners, lighting, stoves, laundry appliances, pools and the like.

          All this electricity use contributes to higher fuel prices, air pollution, the outflow of cash to foreign nations and dependence on not-so-nice countries for fuel. To the rescue (I’m being optimistic here) comes the California Energy Commission. Never heard of it? Neither have most Californians.

          As appliances become more energy efficient, in step all the gadgets, gizmos and whatnots to take up the slack. And heading them off at the pass, the commission is about to ask the electronics industry to think efficiently. So what’s the problem? Well, it has a name: the Consumer Electronics Association (CEA). Does it have clout? Let me answer listing some of its members: Apple, HP, Intel; you get the idea. And the CEA is behind a bill introduced by California Assemblymember Charles Calderon that would curtail the commission’s authority.

Video gaming makes demands on power supply
Sony PlayStation 3 equipment bundle

          On the other side of the argument is PG&E, Northern California’s mega-utility, which likes the idea of energy efficiency. The CEA, however, makes the case that convergence, where multiple functions are merged into one device as with smart phones, saves on electricity.  By allowing users to avoid employing several different devices to run a variety of functions, they are more efficient than, say, using a cell phone, a computer, and a digital camera, each of which has to be charged or plugged in.

          The state claims that updated efficiency standards would save state residents $7 billion per year, reducing the need for additional power plants and lowering water use by 70 billion gallons. When it comes to water, California is very insecure; so insecure, in fact that if it were a person, no team of psychiatrists could help.

          California is famous (infamous?) for its leadership in environmental regulation. If the state requires greater efficiencies for a variety of gadgets, it’s likely that either manufacturers will sell those more-efficient items nationwide for the sake of financial efficiency, or that other states will adopt similar requirements. “These standards will ensure that new products sold in California contain the latest and smartest technology so that our products sip rather than gulp energy,” said Noah Horowitz of the Natural Resources Defense Council, quoted in the San Jose Mercury News.

          Because the California Energy Commission has not yet defined what a computer is (you read that right), it is not clear whether so-called tablet devices will be included in the new requirements. But several popular implements will be facing efficiency upgrades, including gaming devices like Wii, PlayStation and Xbox, as well as monitors and subscription TV service set-top boxes.

          So what does this mean for you? It’s time for all of us to do our part. Where it’s practical, can’t we live with one fewer nightlight, unplugged cell phone rechargers, and audio systems plugged into power strips that we turn off when not in use? And if you live in a house, how many plugged-in lights do you have shining outside overnight? In an age when so many folks are worried about the national debt we’ll be leaving for our progeny, maybe we should all be thinking about how much of a messed-up environment they’ll be living in.

          Go California Energy Commission!

Want to Bitch About Credit Card Issuers? Have we got a Site for You!

You have probably heard about the Dodd-Frank Act. It aims to regulate speculative and unfair practices on the parts of financial institutions. Most Congressional Republicans are out to kill it. Many Democrats want it strengthened. Part of that act is the creation of the Consumer Financial Protection Bureau (CFPB). How silly! Complaints against lenders? Why on earth would we big, bullying consumers need protection from those sweet little-bitty banks like JP Morgan Chase, Bank of America and Citibank?

When financial consumer advocate and Harvard Law Professor Elizabeth Warren advocated before Congress for the creation of the CFPB she was raked over the coals by the free market boys (and girls?). It soon became clear that if and when the bureau was created, she had a Klondike Bar’s chance in a microwave of being approved for the post of director. That position eventually went to Richard Cordray, the former attorney general of Ohio, a well-known consumer protection guy. President Barack Obama had to appoint Cordray with a recess appointment to avoid the free-market contingent in the House. Warren went back to Massachusetts to run for the U.S. Senate.

It looks like Cordray is taking this job seriously. The CFPB made a formal announcement today that it has set up a web site that allows

CFPB Director Richard Cordray
Richard Cordray

consumers to post grievances against companies that provide credit cards, mortgages and student loans. The grievances are posted in the form of databases.

Since the bureau opened for business last July, it has received 45,000 grievances – 17,000 about credit cards alone – through June 1, 2012.

“By making our data publicly available, initially in the area of credit cards, we hope to improve the transparency and efficiency of this essential consumer market,” Cordray said in a statement. ‘‘Each and every time we hear from American consumers about their troublesome transactions with financial products, it gives us important insight.”

The public database includes complaints made since June1. Working with the credit card issuers, the CFPB created a number of response categories that show how each complaint has been dealt with and how quickly.

For each category, companies can respond to a consumer in one of four ways. Once the complaint is routed to a company, it has 15 days to respond and 60 days to resolve the complaint. Consumers should expect to receive a refund, an explanation, a correction, a change in account terms, or simply have the case closed.

If you have a complaint against a bank, mortgage lender, student loan provider, or credit card issuer, take it to

For the time being, you will also be able to see the recent record concerning credit card complaints. The other categories should come online by the end of the year.



Santa Clara County, California to set Healthful Nutrition Standards

I live in San Jose. It’s a city of almost one million people. If you don’t know it, San Jose accounts for most of the population of Santa Clara County. Most of Silicon Valley resides in this county. You may have heard of some of the corporations that reside here: Apple, Cisco Systems, Intel, HP, eBay, Netflix. The list is almost endless. There is a lot of money in this area. And while there are a lot of vegetarian and vegan eateries in which the more-educated and health-conscious can chow down, people here seem to be getting fatter, just like the rest of America.

County facilities themselves have not been doing a great job of limiting junk –or at least junky – food. Until now, that is. The county board of supervisors is embarking on a policy to reduce the county’s role as an enabler of people’s bad dietary habits. The idea is to set nutritional standards for any edibles or potables that are offered at county facilities.

Can vending machines become a source of good nutrition?

Vending machines at government facilities already have a 50-percent minimum healthful content requirement. In a pilot program, officials had a vending contractor load one machine in the county building with only items meeting the better nutrition standards. Over the course of a year this machine generated the most revenue by far of any machine in the building. While revenues from all other vending devices dropped, the income from the pilot machine more than compensated.

Starting next July, jails, probation facilities, and even the county fair will have to clean up – or at least tidy up – their acts. In an article in February 28, 2012 San Jose Mercury News, reporter Tracy Seipel quotes Supervisor Ken Yeager, who introduced the regulation: “When you think of how any meals are served to people under custodial care, particularly younger people, and in hospitals, why not give them more nutritional foods?”

Santa Clara County serves four million jail meals annually. The senior nutrition program serves 1.2 million meals. County probation provides about half a million meals and the medical center sells almost that many in its eateries in addition to the 300,000 it provides patients. In all, the county generates about six million meals.

Even event producers at the fair grounds will have to bring in food concessions that offer selections meeting the more healthful guidelines.

California is famous – and sometimes notorious – for being innovative. In keeping with that tradition, this local reform could set the standard – or at least start the ball rolling – toward better nutrition nationwide.

This isn’t the first time the county has been at the forefront of healthy living. In 2005, it adopted a healthful food and beverage vending policy. In 2008, it adopted a very effective menu-labeling ordinance for chain restaurants. In 2010 the state passed a similar menu labeling law.

Also in 2010, Santa Clara County became the first in the United States to enact an ordinance requiring minimum nutrition standards for food offered as part of restaurant so-called “kids’ meals.”

Funding for the new program is paid for by a 2010 grant from the U.S. Department of Health and Human Services to the County Public Health Department. The new nutritional standards are part of the county’s obesity-prevention efforts that support public health goals of reducing obesity, increasing physical activity and improving nutrition.[*]

According to county public health officer Dr. Marty Fenstersheib, more than half the adults and more than a quarter of the middle and high school students in Santa Clara County are overweight or obese.

The idea behind this new policy is to offer better nutrition options for everyone. That means hamburgers and pizzas offered at county venues will contain more healthful ingredients. Vending machines will contain fewer fried chips, sugary sodas and candy.

Among the nutritional standards are:

  • Increased  fresh fruit and vegetable offerings
  • Milk with one percent or lower fat content
  • Lower fat-content foods
  • No beverages with added sugar
  • Minimal or zero processed foods
  • Low sodium content
  • Reduced amounts of fried foods
  • No trans fats

As a commissioner on the county’s volunteer Advisory Commission on Consumer Affairs (I do not speak for the commission in this article) I applaud this progressive and meaningful effort.

Now perhaps someone can explain this to me: The state does not charge sales tax for potato chips, candy, and 10-percent fruit juice beverages because they are “foods”, but it does charge taxes on vitamins, nutritional supplements and over-the-counter remedies like aspirin, antacids and allergy medicines.

It’s my hope that the county in which I live will set a new standard for California and, subsequently, the country, by being a role model for government sponsored nutrition programs. With wise leadership, such efforts should cost governments virtually nothing and save them money in the long run by reducing healthcare costs.

I can dream can’t I?

[*] For anyone interested in the details of the nutrition standards, here you go:,%202012/203860359/TMPKeyboard203876916.pdf


Here Come the Tax Scams

It’s that time of year again. No, I am not referring to George Washington’s birthday. Nor those of Drew Barrymore, Vijay Singh, Dr. J, Ted Kennedy, or Lord Baden-Powell (dudes . . . he founded the Boy Scouts!). It’s time to prep your bits of paper and checkbook registers for your tax returns. Each year the Internal Revenue Service does us all a favor by offering a dirty duodeciscam (as in a dozen scams) list. “Taxpayers should be careful and avoid falling into a trap with the Dirty Dozen. Scam artists will tempt people in person, on line and by email with misleading promises, about lost and free money. Don’t be fooled by these scams,” Says IRS Commissioner Doug Shulman.

1) Identity theft: If you suspect that your identity has been stolen, notify the IRS Identity Protection Specialized Unit at  If you do so in time you might prevent a rogue from reaping a refund in your name, even if you do not have a refund coming.

2) Phishing. As many of you know, this is not a typo. And it is not related to Price-Pfister, the faucet company. It’s a solicitation that looks exactly like an official email from a government agency or a legitimate company with which you might have done business. The phishing email asks for personal information about you and various account numbers. If you receive an email that appears to be from the IRS and asks you for any personal information, do not respond. Instead, forward it to It’s a good idea to not provide such information to any business that asks for it in an email.

3) Illegitimate Tax Preparers. If you use a professional to prepare your taxes, check that person or business out before hiring. As the IRS puts it: “Questionable tax preparers have been known to skim off their clients’ refunds, charge inflated fees, and attract new clients by promising guaranteed or inflated refunds . . . In 2012 every paid preparer needs to have a Preparer Tax Identification Number and enter it  on the returns he or she prepares.” Here are some indications that preparers may not be on the up and up: They don’t sign the return or include their tax preparer number; Failure to give you a copy of your return; Promise of a larger-than-expected refund; Charges you a percentage of your refund as a fee; Asks you to split the refund; Adds forms to the return that you never filed before even though your status has not changed; They encourage you to place false information on your return.

4) Hiding Income Offshore. This usually applies to taxpayers (or cheats) with substantial resources. Many people have evaded taxes by hiding income in foreign banks, brokerage accounts and other schemes including foreign trusts, employee-leasing schemes, annuities or insurance plans. Now we all love the IRS, so we’re happy that they have lots of investigators who pursue taxpayers with undeclared accounts, as well as the enablers who assist them in their nefarious undertakings. If you have such offshore holdings, you are required to report the. If you don’t and you get caught, you will most likely have to pay through the nose or some other orifice.

5) Free Money From the IRS. Come on, what other kind of money can be given away? Money that you have to pay for? Scammer have been circulating flyers at community churches or spreading word among low-income people and the elderly. Here’s how the scam works. They let folks know that the government has a money giveaway program. All you have to do is apply. They charge the dupe a fee, help them fill out a form and then disappear. One of the scams involves having the victim apply for a Social Security refund that doesn’t exist.

6) False Income and Expenses. This is a really good way to be called in for an audit. I went through a small such audit a long time ago. I ended up owing nothing but it was a pain in the neck and several other body parts. And if you owe money as a result you will be very, very unhappy. This scam works thus: You claim more income than you actually made and then make false claims about your expenses in order to maximize refundable credits and then get an increased refund. In addition, says the IRS, some taxpayers are filing excessive claims for the fuel tax credit. Doing so could result in having to repay the refunds plus interest plus penalties. Good luck with that.

7) False Form 1099 Refund .Truthfully, I don’t quite understand this. But if you are thinking of filing a false information return like a 1099 Original Issue Discount (OID) to justify a false refund claim, don’t do it.

8) Frivolous Agreements. “Promoters of frivolous schemes encourage taxpayers to make unreasonable and outlandish claims to avoid paying taxes they owe. The IRS has a list of frivolous tax arguments that taxpayers should avoid.” They have been thrown out of court, so don’t bother.

9) Falsely Claiming Zero Wages. Typically, a filer submits a Form 4852 or a “corrected” Form 1099 that reduces income to zero, sometimes submitting statutory language as an explanation as to why the filer does not consider certain income as wages. Sometimes they blame a paying company for not issuing a corrected 1099. In addition to other penalties there is a $5,000 penalty.

10)  Abuse of Charitable Organizations and Deductions. In a nutshell, here’s what not to do. Don’t claim deductions for contribution to charities over assets that you still control or from which you still make income. Don’t overvalue non-cash assets that you donate. If you donate non-cash assets, make sure you are not claiming the value on one set of donated items that other entities are also claiming.

11) Disguised corporate ownership. In this scheme, third parties request employer identification numbers and form corporations that obscure the true ownership of a business. Then they underreport income, claim fictitious deductions, avoid filing tax returns and pull off all sorts of other scams, like money laundering. The IRS is now working with state authorities to identify such cons.

12)  Misuse of Trusts. Trusts serve all kinds of use purposes, including some that legitimately aid folks in reducing tax burdens. But – and here comes my big but – the IRS has seen an increase in the use of trusts like private annuity trusts and foreign trusts in order to shift income and deduct personal expenses. If you are planning to use a trust, seek the help of a legitimate attorney who specializes in such vehicles and include advice from a financial professional as well.