Tax season is in full swing and business is great. Thanks to those of you who have referred clients. As a reward for our hard work, the office will be closed from April 16^th through April 18^th. We will reopen on Monday, April 21^st.

For this newsletter I thought I would focus on two areas that have been in the news quite a bit lately - identity theft and charitable contributions.

Recently a friend sent me some tips and I thought I would share them with you. There are several great ideas that I think you will find helpful.

I’m asked a lot about charitable contributions and what type of recordkeeping is needed to get a deduction. I’m including some information that comes from the IRS Newsroom at http://www.irs.gov.

Check out my website at llhcpa.com. We’re making changes each month and hope you will come back and visit often. If you have a favorite website you think would be good to have on the “fun stuff” page, please let me know. The most recent addition is the art of Travis Chatham, a bright new artist, who also happens to be a client.

Identity theft is becoming a huge problem. Theives may use several methods to steal your identity including:

• Stealing your wallet or purse

• Stealing your mail, including bank and credit card statements

• Completing a change of address card and diverting your mail

• Going through your trash

• Using information you share on the internet

Here are some great tips for avoiding or minimizing your chances of having your identity stolen:

The next time you order checks have only your initials (instead of first name) and last name put on them. If someone takes your check book they will not know if you sign your checks with just your initials or your first name but your bank will know how you sign your checks.

When you are writing checks to pay on your credit card accounts, DO NOT put the complete account number on the "For" line. Instead, just put the last four numbers. The credit card company knows the rest of the number and anyone who might be handling your check as it passes through all the check processing channels won't have access to it.

Put your work phone # on your checks instead of your home phone. If you have a PO Box uses that instead of your home address. If you do not have a PO Box uses your work address.

Never have your SS# or auto license number printed on your checks -- you can add it if it is necessary. But if you have it printed, anyone can get it.

Place the contents of your wallet on a photocopy machine, do both sides of each license, credit card, etc. You will know what you had in your wallet and all of the account numbers and phone numbers to call and cancel. Keep the photocopy in a safe place. Carry a photo copy of your passport when travel either here or abroad.

We've all heard horror stories about fraud that's committed on us in stealing a name, address, Social Security number, credit cards, etc. But here's some critical information to limit the damage in case this happens to you or someone you know:

We have been told we should cancel our credit cards immediately. But the key is having the toll free numbers and your card numbers handy so you know whom to call. Keep those where you can find them easily.

File a police report immediately in the jurisdiction where it was stolen, this proves to credit providers you were diligent, and is a first step toward an investigation (if there ever is one).

But here's what is perhaps most important: Call the three national credit reporting organizations immediately to place a fraud alert on your name and Social Security number. The alert means any company that checks your credit knows your information was stolen and they have to contact you by phone to authorize new credit.

Credit bureaus:

Equifax: 1-800-525-6285

Experian (formerly TRW): 1-888-397-3742

Trans Union: 1-800-680-7289

Social Security Administration (fraud line): 1-800-269-0271

To be deductible, contributions must be made to qualified exempt organizations. Organizations can tell you if they are qualified and if donations to them are deductible. To help you determine if an organization is qualified, the IRS publishes Publication 78, Cumulative List of Organizations. The publication lists the organizations that IRS recognizes as exempt organizations under Internal Revenue Code Section 501(c)3 and is available in most public libraries, or you can search through an electronic version online.

Only contributions actually made during the tax year are deductible. Credit card charges and payments by check are deducted in the year they are given to the charity, even though you may not pay the credit card bill or have your bank account debited until the next year.

If your contributions entitle you to merchandise, goods, or services, including admission to a charity ball, banquet, theatrical performance, or sporting event, you can deduct only the amount that exceeds the fair market value of the benefit received.

Donations of stock or other property are usually valued at the fair market value of the property. To assist you with estimating fair market value, check out It's Deductible’s web site. They have both books and software to assist you in valuing property. For stocks and bonds with an active market, the fair market value is the average price between highest and lowest selling price on the valuation date.

Those who donate their cars may also claim only the fair market value of the car. The fair market value takes into account many factors, including the vehicle’s condition. The fair market value may differ substantially from the car’s Blue Book value. For vehicle donations, taxpayers must document the both the car donation and its fair market value.

For a contribution of $250 or more, you can claim a deduction only if you obtain a written acknowledgment from the qualified organization. A person donating property valued at more than $5,000 must obtain a qualified written appraisal.

In a recent tax court case, a tax preparer (not a CPA) was convicted of conspiracy to defraud the government and aid in the preparation of false tax returns. This individual conducted seminars claiming to know about “secret” deductions” in the tax code that would allow taxpayers to turn personal expenses into legitimate business expenses. Among the deductions were claiming a cat as a rodent control device, the cost of a dog as a security device and the cost of a bird as aerial surveillance.

That’s it for this newsletter. Please call or e-mail me if you would like to have any additional information on either of these topics. I’m also interested in topics you would like to see covered in future issues.