Accounting & Tax News

 

Publication 17
Tax-filing information and tips on what income to report and how to report it, figuring capital gains and losses, claiming dependents, choosing the standard deduction versus itemizing deductions and using IRAs to save for retirement


Watch Out For The Latest Tricks And Scams By IRS Impersonators!

Scammers and Fraudsters continue to try and scare and trick taxpayers, especially older Americans, into paying bogus taxes and penalties, and even giving out personal information that can lead to identity theft. We’ve had clients receive calls threatening collection action or potential lawsuits over false claims of taxes owing. These scam opportunists will even use caller ID spoofing tactics to make it look like they are calling from a legitimate phone number. They also use what appears to be official IRS letterhead for written correspondence, or official looking email addresses and content to fool email recipients into believing they are actual IRS representatives. Keep in mind that the IRS will never call to demand immediate payment, and they will not call to take your credit card or banking information over the phone. The IRS will also never make threats of sending the police or other authorities, or threaten a lawsuit if you don’t respond to their requests. Of course, if you have any concerns or any doubt whatsoever about the authenticity of anyone contacting you on behalf of the IRS, make sure you ask for their proof of their identity, and more importantly let them know you will be in contact with our office and/or reporting the incident on the Treasury Inspector General for Tax Administration’s website.

Posted August 17, 2015/wittenbergcpa.com

IRS Warns Taxpayers To Guard Against New Tricks By Scam Artists; Losses Top $20 Million

WASHINGTON — Following the emergence of new variations of widespread tax scams, the Internal Revenue Service today issued another warning to taxpayers to remain on high alert and protect themselves against the ever-evolving array of deceitful tactics scammers use to trick people.

These schemes – which can occur over the phone, in e-mails or through letters with authentic looking letterhead – try to trick taxpayers into providing personal financial information or scare people into making a false tax payment that ends up with the criminal.

The Treasury Inspector General for Tax Administration (TIGTA) has received reports of roughly 600,000 contacts since October 2013. TIGTA is also aware of more than 4,000 victims who have collectively reported over $20 million in financial losses as a result of tax scams.

“We continue to see these aggressive tax scams across the country,” IRS Commissioner John Koskinen said.  “Scam artists specialize in being deceptive and fooling people. The IRS urges taxpayers to be extra cautious and think twice before answering suspicious phone calls, emails or letters.”

Scammers posing as IRS agents first targeted those they viewed as most vulnerable, such as older Americans, newly arrived immigrants and those whose first language is not English. These criminals have expanded their net and are now targeting virtually anyone.

In a new variation, scammers alter what appears on your telephone caller ID to make it seem like they are with the IRS or another agency such as the Department of Motor Vehicles. They use fake names, titles and badge numbers. They use online resources to get your name, address and other details about your life to make the call sound official. They even go as far as copying official IRS letterhead for use in email or regular mail.

Brazen scammers will even provide their victims with directions to the nearest bank or business where the victim can obtain a means of payment such as a debit card. And in another new variation of these scams, con artists may then provide an actual IRS address where the victim can mail a receipt for the payment – all in an attempt to make the scheme look official.

The most common theme with these tricks seems to be fear. Scammers try to scare people into reacting immediately without taking a moment to think through what is actually happening.

These scam artists often angrily threaten police arrest, deportation, license revocation or other similarly unpleasant things. They may also leave “urgent” callback requests, sometimes through “robo-calls,” via phone or email. The emails will often contain a fake IRS document with a telephone number or email address for your reply.

It is important to remember the official IRS website is IRS.gov. Taxpayers are urged not to be confused or misled by sites claiming to be the IRS but ending in .com, .net, .org or other designations instead of .gov.  Taxpayers should never provide personal information, financial or otherwise, to suspicious websites or strangers calling out of the blue.

Below are five things scammers often do that the real IRS would never do:

The IRS will never:

  • Angrily demand immediate payment over the phone, nor will the agency call about taxes owed without first having mailed you a bill.
  • Threaten to bring in local police or other law-enforcement groups to have you arrested for not paying.
  • Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.
  • Require you to use a specific payment method for your taxes, such as a prepaid debit card.
  • Ask for credit or debit card numbers over the phone.

Here’s what you should do if you think you’re the target of an IRS impersonation scam:

  • If you actually do owe taxes, call the IRS at 1-800-829-1040. IRS workers can help you with a payment issue.
  • If you know you don’t owe taxes or do not immediately believe that you do, you can report the incident to the Treasury Inspector General for Tax Administration (TIGTA) at 1-800-366-4484.
  • If you’ve been targeted by any scam, be sure to contact the Federal Trade Commission and use their FTC Compliant Assistant at FTC.gov. Please add “IRS Telephone Scam” to the comments of your complaint.

For more information on reporting tax scams, go to IRS.gov and type “scam” in the search box.

Why Hire a CPA Firm?

We always appreciate the opportunity to explain why you should engage a CPA firm like ours, as compared with hiring a bookkeeping or a tax preparation only service, especially since our fees can be higher on average, relative to those other types of services. Probably the most significant benefit of engaging a CPA firm like ours is the education and experience levels that we can offer you and your company, inherent in the services we provide. Whereas anyone can put out their “shingle”, advertising bookkeeping, and/or income tax preparation services, CPA firms are held to a much higher standard of education, knowledge and ethics. For example as a CPA, I am required to not only have a college degree in accounting, I’m also required to have a minimum of 40 hours of continuing education on an annual basis, in the fields of accounting, tax law, business finance, personal financial planning, and other related studies. Unfortunately the nationally syndicated companies who advertise their income tax preparation services by “professionals” are prepared by individuals with minimal training and experience, in a mass production type of atmosphere, without requiring these same standards or ethics.  Please contact us if you’d like to discuss how we can assist you, and/or your company with its accounting, business start-up, income or business tax preparation, or any of the other types of services that we provide. Mike and Staff

Posted July 24, 2015/wittenbergcpa.com

If You Get An IRS Notice, Here’s What To Do

Each year the IRS mails millions of notices and letters to taxpayers. If you receive a notice from the IRS, here is what you should do:

  • Don’t Ignore It.  You can respond to most IRS notices quickly and easily. It is important that you reply right away. 
  • Focus on the Issue.  IRS notices usually deal with a specific issue about your tax return or tax account. Understanding the reason for your notice is important before you can comply.
  • Follow Instructions.  Read the notice carefully. It will tell you if you need to take any action to resolve the matter. You should follow the instructions.
  • Correction Notice.  If it says that the IRS corrected your tax return, you should review the information provided and compare it to your tax return.

    If you agree, you don’t need to reply unless a payment is due.

    If you don’t agree, it’s important that you respond to the IRS. Write a letter that explains why you don’t agree. Make sure to include information and any documents you want the IRS to consider. Include the bottom tear-off portion of the notice with your letter. Mail your reply to the IRS at the address shown in the lower left part of the notice. Allow at least 30 days for a response from the IRS.
  • Premium Tax Credit.  The IRS may send you a letter asking you to clarify or verify your premium tax credit information. The letter may ask for a copy of your Form 1095-A, Health Insurance Marketplace Statement.  You should follow the instructions on the letter that you receive. This will help the IRS verify information and issue the appropriate refund.
  • No Need to Visit IRS.  You can handle most notices without calling or visiting the IRS. If you do have questions, call the phone number in the upper right corner of the notice. You should have a copy of your tax return and the notice with you when you call.
  • Keep the Notice.  Keep a copy of the notice you get from the IRS with your tax records.

Watch Out for Scams.  Don’t fall for phone and phishing email scams that use the IRS as a lure. The IRS first contacts people about unpaid taxes by mail – not by phone. The IRS does not initiate contact with taxpayers by email, text or social media.

 July 22, 2015/IRS.gov