Business Banking E-Newsletter - February 2013

How to Detect Counterfeit US Money

The U.S. government estimates that less than 1/100 of 1 percent (that is, 0.01%), of U.S. paper currency in circulation is counterfeit. Considering recent advances in printing technology and the obviously vast incentive to counterfeit bills, that is a small number. In part, that's because the U.S. Secret Service thoroughly investigates all reported counterfeiting cases, and because there are criminal penalties for counterfeiting or passing fake bills. Perhaps more than anything, though, counterfeiting is difficult because of the bills' security features, which are hard to reproduce but easy to use to verify your money's authenticity.

Feel the texture of the bill. People who handle money many times, such as cashiers, can identify a lower-quality fake bill instantly just by touching it. You may not have that much experience, but just about everybody has handled enough money, that they can detect many counterfeits simply by feeling the texture, and paying attention (the paper that bank notes are printed on is not sold commercially; furthermore, the composition of the paper and ink is confidential). Genuine currency has slightly raised ink that is produced in the intaglio printing process. You should be able to feel the texture of this ink, especially if you are holding a new dollar bill.

The paper that money is printed on has slightly changed since the implementation of cotton rag. While money rag now has colored filaments, the traditional feel of money was intentionally left unchanged over the decades, because of its distinctive feel. The feel of a bill made 50 years ago should feel similar to a brand new dollar bill.

Compare the bill with another of the same denomination and series. If the bill feels all right, or if you are a little suspicious but unsure, hold the bill side by side with another bill. Different denominations, obviously, look different, so get a note of the same amount. Also, all denominations, except the $1 and $2, have been redesigned at least once since 1990, so it is best to compare the suspect bill to one in the same series, or date.

Notice the relative flatness and lack of detail on the fake bill. Look carefully at the printing quality. Real U.S. bills are printed using techniques that regular offset printing and digital printing (the most popular tools for all but the most sophisticated counterfeiters) cannot replicate. Look for blurry areas, especially in fine details such as around the borders--real bills have clear, unbroken borders--and on the Federal Reserve and Treasury seals, where the sawtooth points should be sharp and well-defined in genuine bills. Portraits in fake bills may appear dull, blurred, and flat, while in real currency, the portraits are sharp and contain very fine detailing.

Look for colored fibers in the paper. All U.S. bills have tiny red and blue fibers embedded in the paper. Counterfeiters sometimes try to reproduce these by printing or drawing these fibers onto the paper, but close inspection reveals, however, that on the counterfeit note you will see that they are printed on, rather than being part of the paper itself.

Examine the serial numbers. Make sure that the serial numbers on a bill match, and look at them carefully. Fake bills may have serial numbers that are not evenly spaced or that are not perfectly aligned in a row. If you received multiple suspicious bills, see if the serial numbers are the same on both bills. If they are the same, then they are counterfeit notes.

Look for security features in all denominations, except the $1 and $2. The easiest way to spot a fake $5, $10, $20, $50 or $100 bill is to look for the following security features, all of which are very difficult to fake.

  • Look for a security thread (a plastic strip) running from top to bottom. Beginning in 1990, an embedded (not printed) security thread was added to all bills except the $1 and $2 bills. If you hold the bill up to the light, you will see the strip and printing on it. The printing will say "USA" followed by the denomination of the bill, which is spelled out for $5, $10, and $20 bills but presented in numerals on the $50 and $100 bills. These threads are placed in different places on each denomination to prevent lower-denomination bills being bleached and reprinted as higher denominations. Compare a genuine bill of the same denomination, to make sure that the position of the thread is correct. If it is not, the bill is not genuine.
  • The $5 bill has "USA FIVE" written on the thread, the $10 bill has "USA TEN" written on the thread; the $20 bill has "USA TWENTY" written on the security thread; the $50 bill has "USA 50" written on the thread; and the $100 bill has the words "USA 100" written on the security thread. Micro-printing can be found around the portrait as well as on the security threads.
  • Hold the bill up to a black light. If authentic, the security thread in the bills will glow: the $5 bill glows blue, the $10 bill glows orange, the $20 bill glows green, the $50 bill glows yellow and the $100 bill glows pink.
  • Hold the bill up to a light to check for a watermark. A watermark bearing the image of the person whose portrait is on the bill can be found on all $10, $20, $50, and $100 bills series 1996 and later, and on $5 bills series 1999 and later. The watermark is embedded in the paper to the right of the portrait, and it can be seen from both sides of the bill.
  • Tilt the bill to examine the color-shifting ink. Color-shifting ink (ink that appears to change color when the bill is tilted) can be found on 100, 50 and 20 dollar bills series 1996 and later, and on 10 dollar bills series 1999 and later; $5 and lower bills do not yet have this feature. The color originally appeared to change from green to black, but it goes from copper to green in recent redesigns of the bills.
  • Use a magnifying glass to examine micro-printing. Beginning in 1990, very tiny printing was added to certain places (which have periodically been changed since then) on $5 and higher denomination bills. The exact location of the micro-printing is not generally an issue. Rather, counterfeits will often have either no micro-printing or very blurred micro-printing. On a genuine bill, the micro-printing will be crisp and clear.
  • Run your fingernail over the portrait's vest of the bill. You should feel distinctive ridges, printers cannot reproduce this.


  • Look for differences, not similarities. Counterfeit bills, if they're any good at all, will be similar to real ones in many ways, but if a bill differs in just one way, it's probably fake.
  • As the steps above explain, the $1 and $2 bills have fewer security features than other denominations. This is seldom a problem because counterfeiters rarely try to make these bills.
  • "Raised bills" are a very simple type of counterfeit in which numerals are glued onto a low denomination bill to make it look like it is a higher denomination. You can easily spot these fakes by comparing the numbers in the corners to the denomination printed in letters at the bottom of the bill. If you are still not sure, compare the bill to another bill of the same denomination.
  • The ink used in U.S. currency is actually magnetic, but this is not a method for detecting counterfeits. The strength is extremely low and is useful only for automated currency counters. If you have a small but strong magnet, such as a neodymium magnet, you can lift a genuine bill. Although you cannot lift the bill off of a table, you can certainly tell that it is magnetic.
  • It's a common misconception that if the ink smears when you rub the bill on something, the bill is not genuine. This is not necessarily true, but ink that does not smear does not mean that the bill is genuine.
  • The Secret Service and U.S. Treasury do not recommend relying solely on a counterfeit-detection pen of the kind that you often see clerks use in stores. These pens can only indicate whether the note is printed on the wrong kind of paper (they simply react to the presence of starch). As such, they will catch some counterfeits, but they won't detect more sophisticated fakes and will give false-negatives on real money that is been through the wash.

Beginning with Series 2004, $10, $20 and $50 bills received a redesign with several changes to their overall look, notably the addition of more colors. Probably the most important new security feature is the addition of EURion Constellations, a distinct arrangement of symbols (in this case, numbers) which triggers many color photocopiers to refuse to copy the bill.

10 Questions to Ask Before Hiring a Tax Accountant

When it's time to look for a tax accountant, you want one who not only can help save you money and avoid potential trouble with the IRS, but also can provide useful information for your business. "We tend to think of accountants as numbers people, but a good accountant does more than just figure the numbers," says Ed Lyon, co-founder of the American Institute for Certified Tax Coaches. "A good accountant will communicate what the numbers mean to us."

So shop around, interview accountants and figure out which one is the best fit for you and your business. Here are 10 key questions to help you make the decision:

1. What kinds of clients do you work with?
You want to make sure your accountant understands your type of business. A restaurant will have certain rules to follow for wages and tips, for instance, just as a construction business must deal with issues related to contract workers and a real estate development firm will have certain criteria about how income is reported. You need an accountant who has worked with other businesses like yours and knows the ins and outs of the industry.

2. Are you available year round?
Some accounting firms shut their doors after April 15 and only reopen for the following tax season. But when you're running a small business, you're going to need help all year, says Melissa Labant, director of taxation at the American Institute of CPAs in New York. "If something comes up, you don't want to wait until tax season in order to get your issue addressed."

3. What's your experience with the IRS?
Often people will tell you it's important to hire a certified public accountant rather than an EA, or enrolled agent, because CPAs have more comprehensive certification requirements. While CPAs are state-certified and have training in such areas as financial planning and bookkeeping, EAs are certified by the federal government specifically to handle taxes and are often former IRS agents with extensive experience dealing with audits. "They've been in the belly of the beast. They may have more inside knowledge of how the IRS really works," Lyon says. On the other hand, a CPA will likely have more experience with broader financial planning issues. Rather than focusing on certification, Lyon says, focus on how your accountant's experience is relevant to your business.

4. Who will be doing the work?
Accountants will often outsource work to a third party. This doesn't mean their services are bad, but you want to be sure they are forthright about who is doing the work, says Kerry Kerstetter, a Harrison, Ark., CPA. If you want to talk with someone familiar with your bookkeeping and that's a third party, it likely will be difficult to speak with him or her directly, Kerstetter says.

5. Are you a conservative or more aggressive accountant?
Some accountants want to write off everything they possibly can, while others take a more conservative approach. It's important to figure out where you fall on the spectrum and find an accountant who agrees with your philosophy, Lyon says. If accountants tell you they specialize in finding red flags that could trigger audits, they may be hesitant to maximize your deductions. For example, some accountants believe taking a home office deduction might be a red flag to the IRS, Lyon says.

6. How do you bill for your services?
Some accountants charge by the hour; others bill a flat rate. If you want to take a more hands-on approach to your bookkeeping, an hourly rate might be better because you won't have as much continuous work for an accountant, Kerstetter advises. Regardless of the billing approach, be sure to get an estimate of an accountant's likely fees. Provide a copy of your previous year's tax returns so the accountant can familiarize himself with your business before giving a quote, Labant says.

7. How do you handle working with multiple entities?
If you have more than one entity under your name, be sure the person you hire can manage them simultaneously--a skill not all accountants possess. If you own rental property as an LLC and a retail store registered as a C-corporation, for example, you'll need an accountant who can coordinate and track money moving between those entities, Kerstetter says.

8. What can you tell me about the medical expense reimbursement plan?
This question may seem technical, but not all accountants will know about this plan, which allows you to deduct your family's medical expenses on your return, Lyon says. If the accountant you're speaking with is unfamiliar with such plans, you should be wary because that might be a red flag that he or she isn't well versed in deductions that could save your business money.

9. What tax program do you use?
You shouldn't choose accountants based on the tax program they use, but it's a good detail to ask about. QuickBooks is commonly used for small businesses, which means your information would likely be easily transferred between different accountants, Kerstetter says. Hiring an accountant who uses more obscure tax software won't affect the quality of the work, but it might make it tricky to switch accountants.

10. How often will we communicate about tax issues?
Every accountant will be different when it comes to frequency of communication for tax planning purposes. Ask about a prospective accountant's approach and be sure you're satisfied with the degree of communication, Labant says. "You want to feel comfortable calling them with issues relating to your taxes."


6 Ways to Enhance Your Credibility

Your success in business is directly proportional to how quickly (and how well) you can establish credibility with your customers, investors, and colleagues. Randall Murphy, president of the professional development firm Acclivus talks about credibility:

1. Be genuine about who you really are.
The days are long gone when customers were impressed by an illustrious corporate name or a fancy job title. Customers are more likely to respect you if you present yourself as an individual rather than a plug-and-play "representative." The moment you pretend to be more (or other) than you really are, your credibility flies out the window. Be authentic, even if all you bring to the table is your enthusiasm.

2. Know the legitimate value of what you provide.
When you know--truly know--what you're products and services are worth, you're unafraid to communicate both the strengths and the limitations of your offering.  You'll refuse to cave to unreasonable customer demands. You'll stick to your firm's policies and procedures, and explain to the customer why they make sense. You'll be strong and confident about what you can contribute, thereby creating credibility.

3. Have insights based on research and analysis.
Adding insights to a conversation automatically creates credibility. Insight comes from learning about a firm, the role it plays in the industry, and the customers that it serves. Insight is strengthened when you develop multiple contacts (and thus different perspectives) within the customer's firm. Remember: even the smartest CEO doesn't know everything, and as an outsider, you can bring a fresh perspective to old problems.

4. Listen actively, consider carefully, and respond succinctly.
People who have credibility don't feel the need to "prove it" all the time. Nothing says "I'm insecure and insincere" spouting pat answers to questions that haven't been asked. Therefore, when a customer speaks, listen with all your concentration, take a few seconds to consider what was said, and only then make a remark, ask another question, or tell a brief story to move the conversation along.

5. Never talk or write in "sales-speak."
The moment you sound like a salesperson, customers buttonhole you into the "empty suit" category. Whenever you communicate with customers, edit out everything that sounds like a sales pitch (e.g. "money back guarantee"), don't make unsubstantiated claims (e.g. "we have the highest quality"), and avoid marketing biz-blab (e.g. "reach out", "best practices"). Instead, clearly describe how your offering improves your customer's business.

6. Be a catalyst rather than a hero.
In the comics, heroes swoop in to save the day. In real life, would-be sales heroes fall flat on their faces. Credibility comes not from your heroic actions, but from your ability to "crystallize" problems and solutions. Even customers with a detailed list of requirements usually need a clearer understanding of their needs and how best to meet them. Doing so helps the customer to be the hero, which creates masses of credibility...for you.

Source: - Geoffrey James