No Check? Tax Return May Be Lost

It’s nearly eight weeks since your tax return was due, time to start wondering where your refund is if you haven’t received it. It’s even more important, says the National Association of Enrolled Agents, an association of tax preparers, to make sure your check cleared if you owed the government money.

The reason: If it didn’t, your return might have been lost. And you could be liable for late-payment penalties if you don’t take decisive action.

If you find that the IRS didn’t get your return, you should write “Possible Duplicate” across the top when you file a new copy, says NAEA President Rick Wilshire. You also can write the IRS to ask that the late penalty be waived.

Keep a detailed record of any conversations you have with IRS representatives, Wilshire says, because the more you can show you tried to remedy the situation, the more likely the IRS will believe that you filed on time in the first place.

SEC prospects for comments

Don’t think prospectuses tell you enough - or tell you clearly enough?

Well, the Securities and Exchange Commission wants investor’s suggestions for improving fund prospectuses. The SEC is especially interested in ways to improve the way they describe risks. For a questionnaire, call 800-SEC-0330

Hold equals sell

If an analyst at a brokerage firm lowers the investment recommendation on a stock to “hold” from “buy,” what’s to keep the firm from selling the stock short and driving the price down?

The short answer is “nothing.” But it’s a timely question. If you follow what happens to a stock after a major brokerage firm issues a “hold” recommendation, you could not be blamed for believing that “hold” means “sell.”

The word “hold” is not in the vocabulary of many professional stock traders. Their job is to execute orders to meet customer demand and, if lucky, pick up some quick capital gains.

Forcing brokerage firms, in effect, to live by their own advice would make it a lot harder for the rest of us to trade.

But last week the National Association of Securities Dealers proposed a rule that addresses one potential abuse - brokerage firms that trade on their analysts’ recommendations before they are made public.

The NASD wants the Securities and Exchange Commission to forbid brokerage firms from “increasing inventory in a stock in advance of a bullish research report or decreasing or liquidating its position because it was about to issue a bearish report.”

Risk information assessed

Bank brokers do a better job than stock brokers and insurance agents when it comes to informing customers about investment risks, according to a study commissioned by the American Bankers Association.

Insurance agents ranked below bankers and brokers in terms of overall customer service, the study, conducted by San Francisco-based Prophet Market Research, showed.

Prophet audited sales practices at 86 large U.S. stock brokerages, banks and insurance firms and compared results to gauge how each stacks up against the other. The analysis was done at the behest of the bank trade group.

Bankers have been under fire from lawmakers and consumer groups following customer complaints that bank brokers don’t fully disclose the risks of investing in mutual funds and take advantage of the trust Americans have in their bankers.

The study showed bank brokers offered clear explanations of products and asked customers about their investment time horizon, the study showed. But they were harder to contact than stock brokers or insurance agents.

Stock brokers offer a broader array of investment products than either bankers or insurance agents, the study showed. Prophet said the results suggest that sophisticated investors are better off using stock brokers, while average investors may be better served by banks.