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    West Virginia Settles with Arizona Telemarketer

    Company claimed overpriced goods would help handicapped veterans

    Beverly Burdette was suspicious when her 82 year old father, Fred Burdette, purchased overpriced household items that he did not need, such as trash bags and light bulbs, as well as items he did not like, from a telemarketer. The telemarketer told him that the money would go to help "handicapped veterans."

    Because he was a disabled World War II veteran and felt the money was going to a good cause, Fred agreed to purchase several items.

    Beverly's initial suspicions were confirmed when the company, I Glo Workshop, Inc. of Phoenix, Arizona began billing her father for other items that he did not purchase. After receiving a complaint from Fred Burdette, West Virginia Attorney General Darrell McGraw's office began an investigation.

    As a result, I Glo agreed to settle pending charges by the state.

    In the agreement, I Glo agreed to obtain a license and surety bond and to inform consumers of their unconditional right under West Virginia law to cancel telemarketing sales within seven days. I Glo also agreed to refund all payments it collected from West Virginia consumers, which resulted in refunds of $5,828.89 and canceled debts of $4,832.06 for 99 West Virginia consumers.

    "Consumers should always be wary when receiving calls from telemarketers offering deals on goods and services that sound too good to be true," McGraw said. "Consumers should insist that the terms of the sale be disclosed in writing before making a purchase. If the telemarketer refuses to disclose the terms in writing, the consumer should walk away or, in this case, hang up the phone."

    In order to avoid unwanted telemarketing calls, consumers may register their telephone numbers with the Federal Trade Commission's National "Do Not Call" Registry by calling 1-888-382-1222 or by visiting www.donotcall.gov.

    More Scam Alerts ...

    West Virginia Settles with Arizona Telemarketer: Company claimed overpriced goods, such as trash bags and light bulbs, would help handicapped veterans....
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    Menthol Cigarettes May Be More Addictive

    New study finds lower quit rates among minority smokers

    Health officials have long suspected that some cigarettes are more addictive than others. Researchers at the University of Medicine and Dentistry of New Jersey now say there's something to that — menthol cigarettes are harder to quit, particularly among African American and Latino smokers, they say.

    The research team conducted a study that examined the effects of menthol on quit rates among a diverse group of nearly 1,700 smokers attending a Tobacco Dependence Clinic at the UMDNJ-School of Public Health.

    "Lower quit rates among African-American and Latino menthol cigarette smokers at a tobacco treatment clinic" appears in next month's print edition of The International Journal of Clinical Practice.

    "We previously found that menthol cigarette smokers take in more nicotine and carbon monoxide per cigarette. This study shows that menthol smokers also find it harder to quit, despite smoking fewer cigarettes per day," said study author Kunal Gandhi, MBBS, MPH, a researcher in the division of addiction psychiatry at the UMDNJ-Robert Wood Johnson Medical School.

    "These results build on growing evidence suggesting that menthol is not a neutral flavoring in cigarettes," said Jonathan Foulds, director of the Tobacco Dependence Program. "It masks the harshness of the nicotine and toxins, affects the way the cigarette is smoked and makes it more deadly and addictive."

    According to Foulds, more than 80 percent of the African American smokers attending the clinic smoke menthols, and have half the quit rate of African Americans who smoke non-menthol cigarettes.

    The researchers believe the cooling effect of the menthol makes it easier to inhale more nicotine from each cigarette and, therefore, to obtain a stronger and more addictive nicotine dose.

    "That may be part of the reason why African-Americans have much higher rates of lung cancer," Foulds said.

    The researchers also are concerned that more young and Latino smokers are becoming addicted to menthol cigarettes. The tobacco industry may target its marketing of menthol cigarettes to groups with less cash to spend, such as youths, with the aim of getting them hooked even on fewer cigarettes per day, they said.

    Their study findings may have implications for future regulation of cigarettes. Recent legislation in New Jersey and pending federal legislation bans fruit- and candy-flavored cigarettes but allows menthol to be added.

    Menthol Cigarettes May Be More Addictive...
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    2008 Foreclosure Activity Jumps 81 Percent

    One in 54 homes received a foreclosure filing last year

    You could call it "the year of the foreclosure." 2008 shaped up as a bad one for the nation's housing market, with a total of 3,157,806 foreclosure filings — default notices, auction sale notices and bank repossessions — reported on 2,330,483 U.S. properties during the year.

    That's an 81 percent increase in total properties from 2007 and a 225 percent increase in total properties from 2006. The report also shows that 1.84 percent of all U.S. housing units — one in 54 — received at least one foreclosure filing during the year, up from 1.03 percent in 2007.

    The data was supplied in a monthly compilation by RealtyTrac, a real estate firm specializing in marketing foreclosed property.

    Foreclosure filings were reported on 303,410 U.S. properties in December, up 17 percent from the previous month and up nearly 41 percent from December 2007. Despite the spike in December, foreclosure activity for the fourth quarter was down nearly 4 percent from the previous quarter but still up nearly 40 percent from the fourth quarter of 2007.

    "State legislation that slowed down the onset of new foreclosure activity clearly had an effect on fourth quarter numbers overall, but that effect appears to have worn off by December," said James J. Saccacio, chief executive officer of RealtyTrac. "The big jump in December foreclosure activity was somewhat surprising given the moratoria enacted by both Freddie Mac and Fannie Mae, along with programs from some of the major lenders and loan servicers aimed at delaying foreclosure actions against distressed homeowners.

    "Clearly the foreclosure prevention programs implemented to date have not had any real success in slowing down this foreclosure tsunami. And the recent California law, much like its predecessors in Massachusetts and Maryland, appears to have done little more than delay the inevitable foreclosure proceedings for thousands of homeowners."

    The California law, which requires lenders to provide written notice of their intent to initiate foreclosure proceedings 30 days prior to issuing a notice of default (NOD), resulted in a reduction of NODs from 44,278 in August to 21,665 in September. Notice of Default filings then surged by 122 percent, to over 42,000, in December. Similar patterns have occurred in other states, such as Massachusetts and Maryland, where similar types of foreclosure prevention legislation has been enacted.

    Nevada, Florida, Arizona post top state foreclosure rates

    More than 7 percent of Nevada housing units (one in 14) received at least one foreclosure notice in 2008, giving it the nation's highest state foreclosure rate for the year. A total of 77,693 Nevada properties received a foreclosure filing during the year, an increase of nearly 126 percent from 2007 and an increase of nearly 530 percent from 2006.

    Florida registered the nation's second highest state foreclosure rate in 2008, with 4.52 percent of its housing units (one in 22) receiving at least one foreclosure filing during the year, and Arizona registered the nation's third highest state foreclosure rate, with 4.49 percent of its housing units (one in 22) receiving at least one foreclosure filing during the year.

    Other states with Top 10 foreclosure rates for 2008 were California, Colorado, Michigan, Ohio, Georgia, Illinois and New Jersey.

    California, Florida, Arizona post highest 2008 foreclosure totals

    A total of 523,624 California properties received a foreclosure filing in 2008, the nation's highest state total. Foreclosure activity in the state increased nearly 110 percent from 2007 and nearly 498 percent from 2006.

    With 385,309 properties receiving a foreclosure filing in 2008, Florida documented the second highest state total. Florida foreclosure activity increased 133 percent from 2007 and nearly 412 percent from 2006.

    Arizona's 2008 total of 116,911 properties receiving a foreclosure filing was third highest among the states. Foreclosure activity in Arizona increased 203 percent from 2007 and 655 percent from 2006.

    Other states with Top 10 totals for 2008 were Ohio, Michigan, Illinois, Texas, Georgia, Nevada and New Jersey.

    Sunbelt cities plus Detroit land on top 10 metro foreclosure rates list

    With 9.46 percent of its housing units (one in 11) receiving a foreclosure filing during the year, Stockton, Calif., registered the highest foreclosure rate among the nation's 100 largest metropolitan areas in 2008. Other California cities in the top 10 were Riverside-San Bernardino at No. 3 (8.02 percent, or one in 12 housing units); Bakersfield and No. 4 (6.17 percent, or one in 16 housing units); and Sacramento at No. 9 (5.20 percent, or one in 19 housing units).

    Las Vegas documented the second highest metro foreclosure rate in 2008, with 8.89 percent of its housing units (one in 11) receiving a foreclosure filing during the year.

    More than 6 percent of Phoenix housing units (one in 17) received a foreclosure filing during the year, giving the city the fifth highest metro foreclosure rate in 2008.

    The foreclosure rate in Fort Lauderdale, Fla., ranked No. 6, with 5.95 percent of the metro area's housing units (one in 17) receiving a foreclosure filing in 2008. Other Florida cities in the top 10 were Orlando at No. 7 (5.48 percent, or one in 18 housing units) and Miami at No. 8 (5.21 percent, or one in 19 housing units).

    With 4.52 percent of its housing units (one in 22) receiving a foreclosure filing during the year, Detroit registered the tenth highest metro foreclosure rate in 2008.

    2008 Foreclosure Activity Jumps 81 Percent...
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      Giant Recalls TCR, SL Bicycles

      January 14, 2009
      Giant Bicycle, Inc. is recalling about 1,000 bicycle. The affected models are 2009 model year TCR Advanced SL and SL (ISP) Bicycles and Frames.

      The density of the steerer tubes can cause the forks to crack and break, posing a fall hazard to the consumer.

      Giant Bicycle has received one report of the fork cracking with no reported injuries.

      This recall involves 2009 TCR Advanced SL Team, SL 0, SL 1, SL 2, and SL (ISP) model bicycles and frames in silver, charcoal, blue and red. The words Giant and TCR Advanced SL are printed on the frame. Steerer tubes with B, N or P at the end of the serial number are not included in this recall. Other TCR model bicycles are not included in the recall.

      The bicycles were sold by authorized Giant Bicycle dealers nationwide from August 2008 through December 2008 for between $3,300 and $7,500. They were made in Taiwan.

      Consumers should stop riding these bicycles immediately and contact an authorized Giant Bicycle dealer for a free inspection and replacement fork.

      For additional information, contact Giant Bicycle toll-free at (866) 458-2555 between 9 a.m. and 5 p.m. PT Monday through Friday, or visit the firms Web site at www.giant-bicycles.com.

      The recall is being conducted in cooperation with the U.S. Consumer Product Safety Commission (CPSC).

      Giant Recalls TCR, SL Bicycles...
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      Video: Tax Tips New Tax Breaks For Your 2008 Return

      Take advantage of every deduction coming your way

      January 13, 2009

      When it comes to filing your tax return, this is not a year to leave money on the table. In fact, the Internal Revenue Service wants you to take advantage of all the tax breaks you have coming to you — and there may be more of them this tax season. Mark Huffman reports on what to look for, and how to expedite your return.

      Tax News

      Video: Tax Tips New Tax Breaks For Your 2008 Return...
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      BBB's New Rating System Draws Fire

      Critic says BBB's "Pay for OK" scheme should get a failing grade

      Richard Berman

      The Better Business Bureau's (BBB) stamp of approval has historically provided a high comfort level for consumers.

      In the past, the bureau labeled businesses "satisfactory" or "unsatisfactory" for resolving consumer complaints. In 2009, the business watchdog is employing a new rating system.

      Starting this month, businesses will be rated based on 16 weighted categories with a scale from AAA to F. The BBB Reliability Report's algorithm calculating a company's ranking revolves around a set of subjective characteristics including the nature of business, length of time since opening, whether the business is "problematic in the industry," and BBB accreditation, i.e., are they a paying member.

      Certainly the years in business category yields information. But a new high-end restaurant could get a lower grade than a ten-year-old hole in the wall. Using the new grading system for six "cookie cutter" chain Taco Bells we checked, three received B's, one got a CCC, and two received CC's. Yet all reports from these Santa Barbara locations show no consumer complaints.

      Beyond fast food, world famous chef Wolfgang Puck's week-in-advance booked restaurant, Spago, in Beverly Hills only earns a subpar B under the new system.

      Comparing consumer reviews on Tripadvisor.com, Joe's Caf ranks 101st out of 288 Santa Barbara restaurants. Conversely, Spago matched expectations scoring 4th out of 182 Beverly Hills establishments. So how is the BBB's score possible?

      Businesses with Bureau accreditation, such as Joe's Caf receive AAA scores. Just like Spago's, the restaurant has no complaints. The only difference, Joe's Caf is older and a paying member of the BBB. (Without the expensive "Pay for OK" accreditation, there is apparently no way to achieve the AAA ranking.)

      Reaching beyond L.A.'s restaurant industry, many Los Angeles area retailers including Gucci, Ferrari, and Cartier are also now sporting the weak B grade.

      If you are a non-paying BBB member, a single complaint can plummet scores. With just one complaint Ferrari Maserati of Beverly Hills, Porsche of Downtown LA, Dolce & Gabbana, and Prada were downgraded to CC's and D's. At the same time, SavePlus, a wholesale retailer of discount clothes (who also has one complaint on record), enjoys the AAA rating. (Coincidently, SavePlus is a paying BBB member).

      And there is more. If the entire industry product or service is "bad" in the eyes of the BBB, it may be extremely difficult to get above a C. You start at a depressed level and can only go down. The 90-point calculation determining the total grade subtracts as many as 41 points just for "type of business."

      We conducted a survey of several BBB offices around the country to discover who these unfavorable industries were. Adding greater confusion, there was no general consensus from office to office. The BBB claims negatively assessed "types of businesses" are based on levels of complaints. But none of the offices we contacted named construction, banks or car dealers, the largest complaint industries according to the Bureau's own published list.

      Some of the named targets from our calls include movers, credit and loan companies, and psychics (how do you judge their reliability?). Other criticized businesses could soon join the list such as taverns, cigar stores, ice cream shops (think "obesity"), and gun retailers. Even the best of companies in these industries will not rise up to the "B" level or "A" stratosphere once their industry has fallen into the BBB crosshairs.

      What's the solution? Every business stop paying the BBB to support their bogus rating system. At least that will level the playing field.


      Richard Berman is the president of Berman and Co., a Washington, D.C. based public affairs and communications firm

      More Scam Alerts ...

      BBB's New Rating System Draws Fire...
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      More Consumers Delaying New Car Purchases

      Weak economy means more buyers waiting longer to buy vehicles

      Nearly half of Americans reported that they would wait longer before their next vehicle purchase, according to the results of Consumer Reports' 2009 Auto Brand Perception Survey.

      The weak economy is forcing consumers to assess the value of their current vehicle. The number one reason people delayed purchase is that their vehicle is in good shape. The other top reasons are:

      • Vehicles have become too expensive.

      • General concern for the weak economy.

      • Consumers are waiting for fuel-saving technologies, like hybrids to become more affordable.

      • Interest rates for vehicle financing are too high.

      Delaying a car purchase is more apparent in lower-income households, where difficulty in obtaining financing is an issue for nearly a quarter of those respondents.

      "Car owners are considering the real costs and risks in buying a new model, emphasizing needs over wants," said Jeff Bartlett, deputy online automotive editor, Consumer Reports. "The shift in behavior comes at a time when the economy has put jobs and household budgets in peril. And for those looking to buy, the finance crunch has made it more difficult to secure a loan. These factors have pushed consumers to change priorities and have influenced brand perceptions."

      The survey asked which brands consumers thought were the leader in each of seven categories: Design/Style, Performance, Quality, Safety, Technology/Innovation, and Value. In rank order, Toyota, Honda, Ford, Cadillac, and Mercedes-Benz dominated overall scores for brand perception.

      Americans rated Toyota and Honda highest in overall brand perception, at 193 and 149 points, respectively. Those brands also led in quality, value, and environmental friendliness. Overall brand perception is an index calculated as the total number of times that the particular make was mentioned as an exemplar across all seven categories, divided by the total unaided mentions.

      Among the seven factors in the survey, Safety stood out as the most important when shopping for a new vehicle. It was rated number one by 25 percent of respondents. The top ranking was fueled by women, who responded at a 2:1 ratio versus men in support of Safety. For men, quality was the leading factor by a significant margin. Consumers perceive Volvo leads the Safety category. No other brand in any category can boast such a commanding lead over the 2nd ranked brand in a given category.

      Twenty-one percent cited Quality as a most significant factor in choosing a new model. As with last year's survey, Toyota and Honda are perceived to lead in Quality. In perceptions of Quality, Mercedes-Benz and Cadillac also made the top-5 list.

      In tough economic times, getting the most for your money is important. Nearly half of respondents agreed, with 49 percent considering Value as a leading factor. Consumers feel Honda delivers the best value, scoring 29 percent this year and 30 percent last year. Toyota shows a slight increase to 27 percent. Kia also moved up the rankings to 27 percent, from 23 percent last year.

      Porsche, at 29 percent, and BMW, at 28 percent, top the performance category. Toyota has earned its placement in this ranking with increasingly powerful and fuel-efficient powertrains. Chevrolet and Ford round out the group, with each brand offering strong V6 and V8 engines.

      Toyota continues to own the "green car" concept in the public's eyes, propelled by the Prius hybrid. Honda has long nurtured a reputation for good fuel economy and low emissions. Chevrolet, Ford, and GMC round out the top five in a tie at 11 percent each.

      Lexus captured the lead from Mercedes-Benz with its eight-percentage point increase over last year despite a product line that has seen few changes. On the other hand, Mercedes-Benz slid from 24 percent to 19 percent.

      Green and luxury brands lead in Technology/Innovation, with Toyota improving over last year's 30 percent score and taking top honors. Cadillac and Lexus tie for second at 22 percent. Ultimately, Technology/Innovation is the lowest priority for general consumers when shopping for their next new car based on a ranking of the seven factors in this survey.

      While some brands earn a deserved reputation over time, others may influence their perception through design and marketing. Perception is not reality, and it pays for consumers to review available research rather than risk a false assumption.

      More Consumers Delaying New Car Purchases...
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      IRS Offers Help to Financially Stressed Taxpayers

      Agency makes policy changes to help those in trouble

      January 8, 2009
      The federal government's efforts to cushion the blow of the economic meltdown extend all the way to the Internal Revenue Service. The tax collection agency is showing a kindler and gentler face to those hit hardest by the economy.

      The IRS has kicked off the 2009 tax filing season by announcing a number of new steps to help financially distressed taxpayers maximize their refunds and speed payments while providing additional help to people struggling to meet their tax obligations.

      IRS Commissioner Doug Shulman encouraged taxpayers to take advantage of several new tax credits and deductions this filing season and announced a major enhancement to the Free File program that will allow nearly all taxpayers to e-file for free and accelerate their refunds.

      "With so many people facing financial difficulties, we want taxpayers to get all the tax credits they're entitled to as quickly as they can," Shulman said. "In addition, we are creating new protections to help people trying to meet their tax obligations. The IRS will do everything it can to help during these tough times."

      Help for people who owe taxes

      With many people facing additional financial difficulties, the IRS is taking several additional steps to help people who owe back taxes.

      "We need to ensure that we balance our responsibility to enforce the law with the economic realities facing many American citizens today," Shulman said. "We want to go the extra mile to help taxpayers, especially those who've done the right thing in the past and are facing unusual hardships."

      On a wide range of situations, IRS employees have flexibility to work with struggling taxpayers to assist them with their situation. Depending on the circumstances, taxpayers in hardship situations may be able to adjust payments for back taxes, avoid defaulting on payment agreements or possibly defer collection action.

      The IRS reminds taxpayers who are behind on tax payments and need assistance to contact the phone numbers listed on their IRS correspondence. There could be additional help available for these taxpayers facing unusual hardship situations. Among the areas where the IRS can provide assistance:

      Postponement of Collection Actions: IRS employees will have greater authority to suspend collection actions in certain hardship cases where taxpayers are unable to pay. This includes instances when the taxpayer has recently lost a job, is relying solely on Social Security or welfare income or is facing devastating illness or significant medical bills. If an individual has recently encountered this type of financial problem, IRS assistors may be able to suspend collection without documentation to minimize burden on the taxpayer.

      Added Flexibility for Missed Payments: The IRS is allowing more flexibility for previously compliant individuals in existing Installment Agreements who have difficulty making payments because of a job loss or other financial hardship. The IRS may allow a skipped payment or a reduced monthly payment amount without automatically suspending the Installment Agreement. Taxpayers in a difficult financial situation should contact the IRS.

      Additional Review for Offers in Compromise on Home Values: An Offer in Compromise (OIC), an agreement between a taxpayer and the IRS that settles the taxpayer's tax debt for less than the full amount owed, may be a viable option for taxpayers experiencing economic difficulties. However, the equity taxpayers have in real property can be a barrier to an OIC being accepted. With the uncertainty in the housing market, the IRS recognizes that the real-estate valuations used to assess ability to pay may not be accurate. So in instances where the accuracy of local real-estate valuations is in question or other unusual hardships exist, the IRS is creating a new second review of the information to determine if accepting an offer is appropriate.

      Prevention of Offer in Compromise Defaults: Taxpayers who are unable to meet the periodic payment terms of an accepted OIC will be able to contact the IRS office handling the offer for available options to help them avoid default.

      Expedited Levy Releases: The IRS will speed the delivery of levy releases by easing requirements on taxpayers who request expedited levy releases for hardship reasons. Taxpayers seeking expedited releases for levies to an employer or bank should contact the IRS number shown on the notice of levy to discuss available options. When calling, taxpayers requesting a levy release due to hardship should be prepared to provide the IRS with the fax number of the bank or employer processing the levy.

      Taxpayers with financial problems who discover they can't pay when they file their 2008 tax returns also have options available. IRS.gov has a list of "What If?" scenarios that deal with payment and other financial problems. These scenarios, in question-and-answer format, provide information on specific actions taxpayers can take. Taxpayers unable to pay in full can likewise contact the IRS to discuss additional options to pay.

      Maximizing refunds and speeding refund delivery

      This filing season, there are several steps taxpayers can take to maximize their refunds and speed the delivery of money from the IRS.

      Taxpayers should look into the numerous tax breaks available and take every credit, deduction and exclusion for which they qualify. People who had less income in 2008 could find they qualify for credits for which they previously did not qualify. And there are several new benefits this year:

      First-Time Homebuyer Credit: Those who bought a principal residence recently or are considering buying one should take note. This unique credit of up to $7,500 works much like a 15-year interest-free loan. IRS.gov has more details and answers to common questions.

      The Recovery Rebate Credit: This credit is figured like last year's Economic Stimulus Payment except that Recovery Rebate Credit amounts are based on tax year 2008 instead of 2007. Most people already received their full benefit in the form of the Economic Stimulus Payment. However, a taxpayer may qualify for the Recovery Rebate Credit, if, for example, he or she did not get an Economic Stimulus Payment, had a child in 2008 or had a change in income level. If you receive this credit, it will be included in your refund and will not be issued as a separate payment. See the Form 1040 Instructions, Fact Sheet 2009-3 or the information center on IRS.gov for details.

      Standard Deduction for Real Estate Taxes: Taxpayers can claim an additional standard deduction, based on the state or local real estate taxes paid in 2008. The maximum deduction is $500, or $1,000 for joint filers.

      Mortgage Workouts and Foreclosures: For most homeowners, these are now tax-free. Eligible homeowners can exclude debt forgiven on their principal residence if the balance of the loan was less than $2 million. The limit is $1 million for a married person filing a separate return. See Form 982 and its instructions for details.

      IRS.gov, the official IRS Web site, has more information on these and other popular credits, such as the child tax credit, the Earned Income Tax Credit and alternative fuel vehicle credit.

      E-File, E-Pay and Direct Deposit

      This year, electronic filing options will speed the payment of refunds to millions of taxpayers. Taxpayers who e-file and choose direct deposit for their refunds, for example, will get their refunds in as few as 10 days. That compares to approximately six weeks for people who file a paper return and get a traditional paper check.

      This year, taxpayers can begin filing electronically on Jan. 16.

      The IRS in 2009 is again offering free tax preparation and filing through the Free File program. Anyone with an adjusted gross income up to $56,000 can use the standard Free File options this year — that is approximately 98 million Americans. The program also has usability improvements, including a standardized set of electronic forms that are most frequently used by Free File-eligible taxpayers.

      This year the IRS and its partners are offering a new option, Free File Fillable Tax Forms, that opens up Free File to virtually everyone, even those whose incomes exceed $56,000.

      Free File Fillable Tax Forms allows taxpayers to fill out and file their tax forms electronically, just as they would on paper. This option does not include an "interview" process like the other Free File offerings, but it does allow taxpayers to enter their tax data, perform basic math calculations, sign electronically, print their returns for record keeping and e-file their returns. It may be just right for those who are comfortable with the tax law or those who use electronic software to prepare their returns but file using paper forms.

      Both the fillable-forms option and the previously available Free File offerings are available only through the IRS.gov Web site. More information will be available in mid-January.

      1040 Central and taxpayer-friendly features

      When they visit the IRS.gov Web site this filing season, taxpayers may notice the new "rotating spotlight" feature on the homepage. The spotlights, which change every few seconds, give the taxpaying public direct access to more of the IRS Web site's vast amount of content.

      Also on the homepage, taxpayers can click on 1040 Central to find help preparing and filing their tax returns. Like last year, this popular section of IRS.gov has a wide range of offerings that address taxpayer needs.

      Finally, the IRS is producing a number of podcasts this filing season that will be available on IRS.gov. In addition to Tax Tips, Fact Sheets and News Releases, these short audio interviews cover a wide range of topics and are a way for the IRS to reach out to a new generation of taxpayers.

      IRS Offers Help to Financially Stressed Taxpayers...
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      Countrywide Accused of Gouging Active-Duty Military

      Suit charges lender ignored federal law requiring lowered interest for active-duty servicemembers

      Bank of America's Countrywide Home Loans Inc. faces a lawsuit charging that it failed to grant members of the armed forces the discounted interest rates that they are entitled to by law.

      The suit, which seeks class action status, was filed in New Jersey U.S. District Court on behalf of U.S. Navy reservist Michael Fourte, who had a $680,000 mortgage with Countrywide when he was called to active duty in September 2006.

      The Soldiers and Sailors Credit Relief Act (SCRA) provides that when a servicemember is called to active duty, his or her lenders are required by law to immediately reduce the interest rate on mortgages, car loans, credit card and other debts to 6 percent when the servicemember provides written notification and a copy of the mobilization orders.

      But Fourte said Countrywide ignored his pleas for a reduction in the interest rate on his mortgage and on a home-equity line of credit when he notified them that he had received orders calling him to active duty, as required by the SCRA. Instead, Countrywide allegedly said its policy was to wait until the servicemember had actually entered active duty.

      Fourte, a recent law school graduate, said he advised Countrywide that its policies were in violation of the law but was ignored.

      The suit charges that in December 2006, while Fourte was deployed overseas, Countrywide sent him a letter contesting his claim that he was on active duty. Fourte said he provided the documentation but in February 2007, Countrywide increased the interest rate on his mortgage to 8.25 percent.

      Fourte's lawyer, Barry Gainey, said Countrywide holds mortgages on the homes of more than 17,000 servicemembers who have been called to active duty.

      Gainey said his investigation has found that Fourte's case is not unusual. He charged that Countrywide routinely delays action for "a month or two" after a servicemember is called to duty. When it finally reduces the interest rate, it does not always reduce the actual payment, simply adjusting the percentage of the payment applied to the principal of the loan.

      Gainey noted that Countrywide recently settled other claims made the the attorneys general of 11 states for more than $3.5 billion but refuses to give servicemembers the relief they are entitled to by law.

      "If Countrywide agreed to give each servicemember $1,000 to settle the lawsuit ... the settlement would be approximately $17 million, which is less than one-half of one percent of the $3.5 billion settlement they agreed to earlier this month for the regular citizens of 11 states," Gainey said.

      "Now that Bank of America owns Countrywide, perhaps they will re-evaluate their treatment of U.S. servicemembers and their families," Gainey said.

      Servicemembers who believe they are in a similar situation to Fourte can contact Gainey at 201 225-9001, he said.

      Countrywide Accused of Gouging Active-Duty Military...
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      2008 Data Breach Total Soars

      47 percent increase in incidents from 2007

      January 7, 2009
      It seems 2008 was a year of ups and downs, with home values and stock prices going down, but reports of data breaches increasing dramatically during the year.

      The Identity Theft Resource Center's (ITRC) 2008 breach report reached 656 reported breaches at the end of 2008, reflecting an increase of 47 percent over last year's total of 446.

      In terms of sub-divisions by type of entity, the rankings have not changed between 2007 and 2008 within the five groups that ITRC monitors. The financial, banking and credit industries have remained the most proactive groups in terms of data protection over all three years.

      The Government/Military category has dropped nearly 50 percent since 2006, moving from the highest number of breaches to the third highest.

      According to ITRC reports, only 2.4 percent of all breaches had encryption or other strong protection methods in use. Only 8.5 percent of reported breaches had password protection. It is obvious that the bulk of breached data was unprotected by either encryption or even passwords.

      The ITRC tracks five categories of data loss methods: data on the move, accidental exposure, insider theft, subcontractors, and hacking. Subcontractor breaches, while counted as one breach each, in some cases affected dozens of companies. It is important to note that the number of breaches reported does not reflect the number of companies affected.

      These trends continue to plague companies and government alike, despite education on safer information handling, new laws and regulations. Mal-attacks, hacking and insider theft, account for 29.6 percent of those breaches that reported the causal factor. Insider theft, now at 15.7 percent, has more than doubled between 2007 and 2008.

      On the other hand, data on the move and accidental exposure, both human error categories, showed noteworthy improvement, but still account for 35.2 percent of those breaches that indicate cause.

      Electronic breaches continue to outnumber paper breaches. While there were 35.7 million records potentially breaches according to the notification letters and information provided by breached entities, 41.9 percent went unreported or undisclosed making the total number of affected records an unreliable number to use for any accurate reporting.

      Based on the breach reports from the past 3 years, the ITRC strongly advises all agencies and companies to:

      • Minimize personal with access to personal identifying information.

      • Require all mobile data storage devices that contain identifying information encrypt sensitive data.

      • Limit the number of people who may take information out of the workplace, and set into policy safe procedures for storage and transport.

      • When sending data or back-up records from one location to another, encrypt all data before it leaves the sender and create secure methods for storage of the information, whether electronic or paper.

      • Properly destroy all paper documents prior to disposal. If they are in a storage unit that is relinquished, ensure that all documents are removed.

      • Verify that your server and/or any PC with sensitive information is secure at all times. In addition to physical security, you must update anti-virus, spyware and malware software at least once a week and allow your software to update as necessary in between regular maintenance dates.

      • Train employees on safe information handling until it becomes second nature.

      It seems 2008 was a year of ups and downs, with home values and stock prices going down, but reports of data breaches increasing dramatically during the ye...
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      Staying Healthy in a Sick Economy

      How to find good health care in tough times

      Looking at last year's 401(k) statement may make you feel a bit queasy, but what happens if you actually do get sick? Will you still have access to health care?

      Visits to doctors are down 10 percent to 15 percent and many individuals are not taking their medicines as prescribed, according to officials at the University of Michigan Medical School. However, there are certain measures that can be taken to lessen the burden while facing tough economic times.

      While many individuals are dealing with cutbacks, it is important that health care remain a top priority, says A. Mark Fendrick, M.D., professor of internal medicine at the U-M Medical School and professor of health management and policy at the U-M School of Public Health.

      Approximately one in nine individuals is cutting pills, taking them every other day or doing something the doctor did not recommend, Fenrick says.

      "Cutting back on health care without consulting your clinician is a very risky decision," Fendrick said. "It may not only have an impact on your health, but also have a worsening economic consequence that will lead to greater costs down the road when minor health concerns become major health issues."

      Fendrick suggests that people continue to follow up with their recommended screenings and immunizations and consult their clinicians before cutting back on health care. Although these preventative measures may cost you now, they are among the most important investments you can make to protect your health and may save you money in the long run.

      While some people may find themselves without health insurance, Fendrick says there are affordable programs available to help individuals facing economic difficulties. He says you should ask your doctor's office or search online for information about decreasing or eliminating the costs of health insurance and prescription medications.

      He also discourages people without insurance coverage from seeking routine medical care at hospital emergency rooms.

      "You should really think about going to your primary care physician who knows your medical history, coordinates your follow up care and interacts with other doctors to make sure you're getting the highest quality care possible at the lowest cost," said Fendrick.

      While the economy is forcing individuals to make difficult choices Fendrick puts it in perspective: "Remember your health is your most important asset, not your money."

      Tips for healthy health care spending include:

      • Continue to adopt healthy lifestyles: diet and exercise can help stave off many diseases.

      • Ask your doctor if prescription medications are available in generic forms.

      • Keep up-to-date with recommended screening tests, such as mammograms, colonoscopies or immunizations.

      Staying Healthy in a Sick Economy...
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      Groups Claim Bank Uses Bailout Funds for Predatory Loans

      California bank accused of using TARP money for tax refund loans

      January 6, 2009
      Consumer groups say Santa Barbara Bank & Trust's refund anticipation loan (RAL) program is a predatory lending practice. To make matters worse, the groups claim the bank is using taxpayer money, from the U.S. Treasury's Troubled Assets Relief Program (TARP), to help make the high-priced loans.

      On November 21, 2008, Treasury approved Santa Barbara as a recipient of $180 million from the TARP program.

      "Santa Barbara is feeding off of taxpayer money twice in making RALs this upcoming tax season," said Peter Skillern, Executive Director of the Community Reinvestment Association of North Carolina. "First, Santa Barbara is skimming off hundreds of millions in refund dollars in making RALs to working families. Second, it is funding its RAL loans using tax dollars from the bailout."

      Santa Barbara is one in the handful of banks that makes RALs and partners with tax preparer Jackson Hewitt. RALs are loans secured by a taxpayer's federal refund, lasting only one to two weeks. They cost between $32 to $130 in loan fees, plus the ancillary fees, and can translate into high Annual Percentage Rates (APRs) of 50 percent to 500 percent. Nearly 9 million taxpayers received RALs in 2006, costing them nearly $1 billion in loan fees.

      RALs target low-income taxpayers, especially recipients of the Earned Income Tax Credit (EITC), a special tax benefit for working families. Nearly two thirds of RAL borrowers are EITC recipients, yet they make up only about 17 percent of taxpayers.

      Santa Barbara made 1.83 million RALs in 2007, earning $118 million in fees. It is one of the higher-priced RAL lenders, charging about 40 percent more than some of its competitors. The bank relies heavily on revenue from RALs and a related product, refund anticipation checks, and these products at one point constituted 56 percent of its after-tax income.

      "Californians are disappointed to see a supposed community bank in wealthy Santa Barbara take federal money while continuing to offer predatory tax refund loans to Earned Income Tax Credit recipients and other Californians in financial need," said Alan Fisher, Executive Director of the California Reinvestment Coalition.

      In order to make these RALs, Santa Barbara must have adequate sources of funding while they maintain certain capital levels required by banking regulators. According to Santa Barbara's own statements, TARP funds will help the bank maintain capital levels while it makes triple digit APR loans to working poor families.

      Groups Claim Bank Uses Bailout Funds for Predatory Loans...
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      Fiber-Optic Providers Are Leading Choices for Broadband

      Verizon FiOS, AT&T U-verse lead latestConsumer Reportssurvey

      Consumers looking to cut costs without sacrificing satisfaction for Internet, television, and telephone service should consider bundling with Verizon FiOS or AT&T U-verse, according to Consumer Reports latest survey of major telecom providers and bundled services.

      In the survey, featured in the magazine's February issue, Verizon FiOS and AT&T U-verse, whose networks are fiber-optic based, were the most consistently satisfying providers for their Internet, television, and telephone services.

      Because Verizon FiOS and AT&T U-verse are not available everywhere, many consumers must consider other options for Internet, phone and TV services. The article also includes ratings of these three services, which are typically bundled, from various providers.

      In areas where telco-delivered service is not available, a highly-rated cable company is the next-best choice for many households. Consumers may not have an option when choosing a cable provider because a majority of homes only have one cable company available in their area.

      According to Consumer Reports survey, better cable companies include Cox, Cablevision and the smaller Bright House and Wow, which are fine alternatives to fiber-optic service providers for all three services in areas that they are available and also offer Internet and telephone services.

      If television service is a priority and fiber-optic service isnt available, satellite service may be a fine option. Consumer Reports suggests opting for a bundle that includes DirecTV. It scored higher than all the major cable companies and Dish Network, the other major provider of satellite service, for TV picture, sound and channel selection. It is also offered in hybrid bundles along with DSL Internet and landline phone service from some telephone providers.

      Bundling prices decline

      Intense competition for cable and satellite customers between AT&T U-verse and Verizon FiOS high-speed fiber providers has driven down rates for Internet, phone and TV service and is likely the reason that companies allow these savings to continue past the promotional period. In the past year, bundles of the three services have dropped in price by up to 20 percent, to as low as $80 a month.

      Bundling makes sense for many households, especially for those consumers who are served by one of the fiber carriers or one of the better cable companies. Consumer Reports latest survey found that subscribers were very satisfied with Internet, phone and TV from the best telecomm providers.

      However, bundling doesnt come without some problems. The survey revealed a high incidence of complaints about billing, and fees with some providers triple-play packages. Despite its high marks overall, Verizon FiOS was below average for customer service to its triple-play customers. Cable companies that bundle services had fewer customer-service problems overall.

      How to choose

      Check alternatives. Only a small percentage of homes have two cable companies to choose from; most only have one. Satellite is more widely available, provided a home has an unobstructed view of the horizon to the southwest. DSL is widely available in urban and suburban neighborhoods. While fiber-optic service, such as Verizon FiOS and U-Verse from AT&T, is spreading fast, it is still only available in about 8.5 million homes in about one-third of the states.

      Weigh the case for bundling. With most providers, signing up for more services equals more savings. Bundles allow for integrated services, such as display of callers phone numbers on the TV screen, which is offered with some phone/cable packages. Triple-play offers often come sweetened with more extras, such as free installation. Consumers may also be guaranteed low rates for a longer period of time with triple-play than when subscribing to services one at a time.

      Dont rule out a la carte. Taking fewer than three services from any one provider allows flexibility. Spreading service among a few carriers also eliminates the possibility that a network or equipment failure will knock out all telecomm services. Although bundles usually ensure maximum savings, Consumer Reports found at least one instance where the cost of the service taken individually was actually lower than when it was part of a package.

      Consider phone safety. Cable, VoIP and fiber phone service require a battery back-up to use during power outages. These battery backups may be provided or have to be purchased for an additional fee. Additionally, if an outage lasts longer than the battery backup, consumers may be left without a phone for the remainder of the outage. Emergency 911 service varies among technologies. Consumer Reports recommends supplementing VoIP service with basic landline service for use in 911 calls.

      Fine-tune by other attributes. Consumer Reports ratings reveal that providers differ in more than their customers overall satisfaction. Consumers should determine which TV providers carry programming they desire. Keep in mind that fiber and satellite usually have a termination fee but cable does not. How to get the best price

      Check rates, then check again. Consumers should scour the providers Web site for the best deals, and ask a customer rep if the price quoted is the companys absolute best offer. Consider checking again. Consumer Reports found that rates could change, seemingly by the representative who took the call.

      Negotiate. It can pay off, particularly in areas where theres competition between a cable provider and a traditional telephone company, and when a promotional rate is expiring. Ask for a reduced price or free extras, such as installation or a premium channel at no cost.

      Ask for sample bills. Before finalizing a deal, ask for a summary of all charges for the first and subsequent months. Confirm that the figures include all taxes and fees, and one-time expenses such as a charge to keep an existing phone number. Try to get all the information in writing. Check the figures later against the actual bills.

      Fine-tune extras.As a rule, consumers shouldnt pay more for higher-speed Internet service unless they are doing a lot of downloading or sharing of lengthy videos or other very large files. Most VoIP and fiber-based phone plans include caller ID, answering service, and unlimited local and long-distance calling in the U.S., Canada and Puerto Rico, and sometimes other countries. Check that these features dont disappear or that the bill doesnt increase once the promotional period ends.

      The complete report and Ratings are available in the February 2009 issue of Consumer Reports, wherever magazines are sold. Portions of the story are available for free online at www.ConsumerReports.org.

      Fiber-Optic Providers Are Leading Choices for Broadband...
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      Don't Let Just Anyone Do Your Taxes

      Poor choices in preparers could lead to trouble

      January 5, 2009
      It's tax time again, and considering the complexity of the tax code, a growing number of taxpayers seek help in filing their returns. Here's some advice from the Internal Revenue Service — may sure you pick someone who knows what they're doing. Otherwise, it's you who could end up in hot water.

      In fact, the IRS says you should choose your tax preparer as carefully as you would a doctor or lawyer. Even when someone else prepares your tax return, you, the taxpayer, are ultimately responsible for all the information on the return.

      For that reason, you should thoroughly review the completed return before signing it and ask questions on entries you don't understand. And it should go without saying, never sign a blank tax form.

      Most tax return preparers provide honest service to their clients, the IRS says, but it's always a good idea to be careful. When seeking someone to prepare your tax returns, there are several red flags that should alert you that you could be venturing onto thin ice:

      • Be cautious of tax preparers who claim they can obtain larger refunds than other preparers.

      • Avoid preparers who base their fee on a percentage of the refund.

      • Use a tax professional who signs the completed tax return and provides you a copy.

      • Consider whether the individual or firm will be around to answer questions months, or even years, after the return has been filed.

      • Check credentials. Only attorneys, certified public accountants (CPAs) and enrolled agents can represent taxpayers before the IRS in all matters, including audits, collection and appeals. Other return preparers may only represent taxpayers for audits of returns they actually prepared.

      • Find out if the preparer is affiliated with a professional organization that provides its members with continuing education and holds them to a code of ethics.

      • Ask friends and family whether they know anyone who has used the tax professional and whether they were satisfied with the service they received.

      Reputable preparers will ask to see receipts and other documentation and will ask numerous questions to determine whether expenses, deductions and other items qualify. By doing so they are trying to help you avoid penalties, interest or additional taxes that could result from an IRS audit.

      Don't Let Just Anyone Do Your Taxes...
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      Indiana Puppy Breeder Shut Down

      Some animals put down as state seizes company assets

      January 5, 2009
      The State of Indiana has seized the assets of a dog breeding company, effectively shutting it down. The state acted on a tax issue, but Attorney General Steve Carter says state officials also raised serious questions about the animals' welfare, as well as other consumer issues.

      Late last month the Indiana Attorney General's office, the Owen County Sheriff's office and the Indiana Department of Revenue (IDR) served Tammy Gilchrist, the owner of Kritter Haven, with a search warrant for business and tax records dating back to 1998. Gilchrist was also served a jeopardy assessment authorizing the state to immediately collect tax the Indiana Department of Revenue finds is in danger of being recovered if standard assessment and collection procedures are followed.

      When she was unable to produce payment, Carter said Gilchrist was served with a jeopardy levy, enabling the state to seize her bank accounts and inventory of animals including 74 dogs and four horses.

      Three veterinarians and 15 volunteers from the Humane Society of the United States and local animal care and rescue organizations were on site to assist with safe removal of the animals from Gilchrist's property. Many of the dogs were emaciated and suffered from obvious medical ailments such as open sores and severe skin conditions. One of the dogs had to be euthanized due to its poor condition. The other animals were placed with multiple humane organizations in throughout the state.

      Judge Frank Nardi signed a temporary restraining order today, preventing Gilchrist, and Kritter Haven co-operator Julie Herrick, from continuing operation. A hearing will be held on January 12 to determine if the temporary order will become permanent.

      In addition to the temporary restraining order, Gilchrist will also be served with a five-day notice from the Indiana Department of Revenue stating that her tax debt must be paid to the state by January 7 or her retail merchant license will be revoked.

      "Our previous seizure of the animals effectively put her out of business," said Carter. "Judge Nardi's order puts the court's authority behind that action."

      The Attorney General's office has received complaints about Gilchrist failing to deliver puppies offered for sale, misrepresenting the health or age of puppies, failing to deliver registration papers, failing to refund shipping fees, failing to obtain a kennel license and/or selling puppies with various viruses that died a few days after delivery.

      Since October 2003, Gilchrist offered puppies of various breeds for sale to consumers through advertisements on various websites. She has conducted business as AKA Kennel, TEKS Kennel, Puppysrus and Affordable Pups, with a principal place of business in Owen County, located at 11231 Highway 231, Cloverdale, Indiana.

      Indiana Puppy Breeder Shut Down: The State of Indiana has seized the assets of a dog breeding company, effectively shutting it down....
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      H&R Block to Stop Selling Refund Anticipation Loans in California

      Company settles suit charging it with deceptive practices

      January 2, 2009
      Tax preparation giant H&R Block has agreed to stop selling high-cost refund anticipation loans as "early tax refunds" in California.

      Attorney General Edmund G. Brown Jr. said the settlement, which includes a $4.85 million payment by the company, will protect cash-short consumers from paying exorbitant interest rates that they can little afford.

      Brown filed suit against H&R Block in early 2006 regarding its marketing and sale of income tax refund anticipation loans and a related product called refund anticipation checks. The company denied any wrongdoing.

      A refund anticipation loan is a short-term loan secured by a taxpayer's anticipated income tax refund. The complaint alleged a variety of deceptive practices by H&R Block including:

      • Deceptive advertising designed to disguise refund anticipation loans, which carry fees and other costs, as tax refunds, which the IRS provides without charge; and

      • Unfair debt collection practices by which customers' refund proceeds were garnished to pay off debts they supposedly owed.

      The settlement provides for up to $2.45 million in restitution for consumers who purchased a Refund Anticipation Loan or a Refund Anticipation Check through H&R Block between January 1, 2001 and December 31, 2008. In addition, the company will pay $500,000 in penalties and $1.9 million in fees and costs.

      In addition. H&R Block will be prohibited from marketing these loans and related products in a deceptive or misleading manner and will be required to make clear and conspicuous disclosures to consumers prior to their purchase of these products. Terms of the settlement are limited to three years.

      A settlement administrator will be contacting eligible consumers directly. Eligible consumers may also write to the Attorney Generals Public Inquiry Unit at P.O. Box 944255, Sacramento, CA 94244-2550, or may send an e-mail at ag.ca.gov/contact/.

      Brown previously settled claims against Jackson Hewitt and recently concluded a trial against Liberty Tax Service, the second and third largest tax preparation companies in the country, respectively. All three lawsuits involved refund anticipation loans and related products.

      H&R Block to Stop Selling Refund Anticipation Loans in California...
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