The IRS is after me!

I am getting calls from the IRS on my cell phone. The calls are coming from a number in the 202 area code, which is the area code for Washington DC. I don't answer calls from numbers I don't recognize, so the the callers have left messages. After first hearing the message, I immediately panicked! Did I forget to file something? Did the IRS decide to audit me? But listening to the message, something about it did not ring true. The woman was speaking very slowly and although she identified herself with a very non-foreign sounding name, her accent did not quite match her name. Also, it sounded like she was reading from a script and she used wording which did not sound genuine: "Do return the call before we take any legal allegation against you". What's a legal allegation?

I have gotten additional calls, and the script is the slightly different, but all the callers talk about vague legal threats and action against me. Often there is background noise on the calls which makes it a little hard to hear. Often, the callers have foreign accents (although there is no reason someone with an accent can't really be working for the IRS).

These calls are all SCAMS! This is a known scam which seems to be happening throughout the USA. The Federal Trade Commission has a web page about the scam here: http://www.consumer.ftc.gov/blog/fake-irs-collectors-are-calling.

So what should you do about it when you receive a call from someone purporting to be from the IRS? Hang up! The IRS will not just call you out of the blue. They will send you a notice in the mail which will indicate how much money they think you owe and why they think you owe it. This notice will invite you to call them to discuss the matter. Unless you are already working with an IRS employee who might call you back, the IRS will not be calling you. They will not tell you that you can pay your bill on the phone with a credit card.

If you have any doubt about the call, you should call the IRS at 800-829-1040. Ask them if they are trying to reach you and whether there is any open notice sent to you.

These calls make me sad. It is very likely that people are really being duped by the callers and paying money to these thieves. I tried reporting the calls to my local police department, but they did not seem very interested. The best thing you can do is to hang up. Don't ask any questions. Certainly don't give out any personal information (not even you name) and hang the phone up!

Topics in Financial Planning: What do Financial Planners do for their clients?

When people meet me and I give them my card which has the title "financial advisor" on it and a company name with "wealth management" and "Registered Investment Advisor" on it, I get some interesting reactions. "I'll come and see you when I get some wealth" or "I don't have any money, so I don't need you" are common reactions. Then I also get "I have a broker who I am very happy with he/she made me xxxx% last year" (usually somewhere around S&P 500 gain for the year).

So I thought it would be worthwhile if I explain what a comprehensive financial planner does for clients and that although many planners are very involved with investment management and the wealthy tend to use them, planners can do many things to help those of more modest means. Investment management is something financial planners do to help their clients, but that is part of a larger function of helping clients.

First and foremost, financial planners help clients formulate, identify, prioritize, and quantify their life financial goals and then the planners create a plan for the client to meet their goals. Some planners might stop there, but most will work with the client over time to implement the plan and change it as goals evolve during normal life changes. The successful planner will become a partner with their client, advising them on financial decisions varying from the best way to buy a car or house to paying for student loans or how to save for retirement, educating the kids, or what benefits to take at work. The planner brings to the table his experience and knowledge to help the client make decisions which are best, not just for the sunny day scenario where nothing goes wrong, but will help the client weather the storms of life, which can include family members going through job loss, sickness, divorce, death, or other unforeseen events.

Sections in a comprehensive financial plan might include:

1. Goals
2. Cash Flow Planning and Emergency Fund
3. Education Planning
4. Retirement Planning
5. Risk Management (Life and Disability Insurance)
6. Employee Benefits
7. Health
8. Tax Planning
9. Buying a House
10. Property/Casualty Insurance
11. Investment Management
12. Estate Planning

A broker does not look at many of the items on this list. A broker cares about  item 11 and maybe items 3 and 5. A financial planner is going to look at all 12 of these items and make recommendations so the client can make good decisions in all these areas.

Over time I will write blog posts which cover all these 12 areas. So everyone can understand the benefits of comprehensive financial planning!