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Summertime Is The Season For A New Crop Of Scams

Summertime is a time for fun and relaxation, but beware.

I’ve written in this month’s blog about document safety tips for those of us who live in hurricane territory. (You can read it by clicking here: It's Hurricane Season. Be Prepared). There are plenty of precautions you can take when preparing for Mother Nature. First of all, you can leave the area if a hurricane is on its way. Other disasters like earthquakes and tornadoes are trickier to avoid. But, when it comes to scams you have no warning. The way scammers work is by trying to catch people who are vulnerable and off-guard. So they get pretty creative and very busy during the summer when everyone tends to be a little more relaxed.

New IRS Warning

The IRS has recently published a warning to advise taxpayers of two new variations on tax-related scams. They say that one involves Social Security numbers, while a second scam threatens people with a tax bill from a non-existent government agency. The IRS reminds everyone to stay alert to scams that use the IRS or reference taxes, especially in late spring and early summer as tax bills and refunds arrive. That means now!

Here are some details:

The SSN hustle. The latest twist includes scammers claiming to be able to suspend or cancel the victim’s Social Security number. In this variation, the Social Security cancellation threat scam is similar to and often associated with the IRS impersonation scam. It is yet another attempt by con artists to frighten people into returning ‘robocall’ voicemails. Scammers may mention overdue taxes in addition to threatening to cancel the person’s SSN.

Fake tax agency. This scheme involves the mailing of a letter threatening an IRS lien or levy. The lien or levy is based on bogus delinquent taxes owed to a non-existent agency, “Bureau of Tax Enforcement.” There is no such agency. The lien notification scam also likely references the IRS to confuse potential victims into thinking the letter is from a legitimate organization.

#tax scam #irs help

3 Quick Tips For Dealing With Outstanding Tax Debt

The deadline for filing your 2018 federal tax return has passed.

I know you know that. You’re probably being eaten up inside knowing that you owe money this year that you don’t have or that you haven’t filed in a few years and while you wanted to file this year you think your situation is so desperate that you may as well put it off again. But, my question to you is, why dig yourself in deeper? If not now, when?

You’re Not Alone

You’re going to have to bite the bullet sooner or later. If you take the initiative now, the IRS may go easier on you than if you postpone again. And, if it’s any consolation, you are not alone. According to a recent article at cnbc.com, “Despite one of the longest-running economic expansions on record over the last decade, millions of Americans continue to struggle to pay their taxes.”

Not The End Of The World

The good news is, even though most people in tax debt over their heads don’t realize it, it’s truly not the end of the world. There are usually valid reasons why most people get behind in their taxes. The article I referenced above had some tips that are useful. I’ve extracted the 3 I feel are most useful for anyone who is facing a high tax bill or hasn’t filed in a few years because they can’t pay.

#tax debt #back taxes #2018 taxes

Beware Refund Anticipation Loans

This year, perhaps more than any other, many taxpayers are going to be tempted to apply for a Refund Anticipation Loan (RAL).

With the government shutdown putting IRS workers behind schedule and the new tax law coming into full bloom this tax season, taxpayers cannot be certain of either when they’ll be getting their refund or if they’re getting one at all. This is the kind of environment that makes taxpayers susceptible to falling for the promises made by RAL lenders.

Resist Temptation If You Can

If you really need cash and simply cannot wait for your tax refund, do your homework before applying for an RAL. Be very clear that it is a loan that must be repaid. The loan is calculated based on your ‘anticipated’ tax refund. The RAL lenders are private and are not in any way associated with the IRS. And, you could be denied the loan.

If you apply for and are denied an RAL loan, you could be responsible for a variety of fees. Many lenders charge application fees, credit check fees, and plain old “junk” fees. A strong reason to hold out for your tax refund is that some of the lenders make money mostly from the fees and have no intention of giving the loan. They’re major incentive is getting you to apply for the loan.

Take The High Road

There are other ways of accessing funds if you simply cannot wait for your tax refund. But, you must take the high road. Some taxpayers will file their returns early and lie on their returns. They’ll get a refund, then file an amended return and fix their mistake. Don’t do it. It’s too risky and can raise red flags at the IRS if you file amended returns regularly. In the first place, it’s illegal. You sign your tax return under the penalty of perjury, so if you intentionally file a false return, you could be in big trouble. And, you may even have to pay an additional fee to file an amended return.

#taxes #tax refund

Year-End Tax Prep Tips

It’s that time of year again.

Time to start thinking about getting your ducks in order for tax filing. This year it’s important to be reminded of the changes that were put in place late last year. With the passing of the tax reform bill, there are significant changes that could affect your returns or how much you owe.

Check Withholding To Avoid Underpayment Penalties

You may have forgotten that tax brackets were expanded in the reform. There’s a chance you could be penalized for underpaying taxes throughout the year. So, now is the time to double check your withholding. You can bump it up if necessary and avoid penalties. If you have a year-end bonus coming an increased withholding could help you side-step a tax penalty.

Decide Whether To Itemize Or Not

If you are accustomed to itemizing deductions, you may decide to take the standard deduction in 2018. You’ll have the company of millions of other taxpayers who routinely itemized deductions in past years. That’s because the standard deduction is doubled and because dozens of itemized deductions have been repealed. Additionally, the state and local tax deduction is capped at $10,000.

With all these factors in mind, you may want to avoid any year end spending on things that would previously generated an itemized deduction. This includes charitable gifts and elective health care procedures.

If You Do Choose To Itemize

If you don’t take the standard deduction and decide to itemize, and if you plan on making a charitable donation before the end of the year, remember if you’re making a cash contribution to get documentation. If you plan to claim a charitable deduction of $250 or more for a car donation, you’ll need to submit written acknowledgment from the charity that includes a description of the car. Remember also that you cannot deduct donations to individuals, social clubs, political groups or foreign organizations.

#tax season #deductions #2018 taxes

$1.6 Billion MegaMillion Pot Equals Amount Identity Thieves Stole From IRS

Some lucky person won the same amount of money that a slew of cyber criminals stole from the IRS.

So, the question is, who needs to pray for good luck when you can steal from the IRS? That must be how cybercriminals think. They actually tried to get away with $12 billion from the IRS coffers, but, fortunately the Government agency foiled a lot of their attempts. You have to admit though that $1.6B is not a bad payday.

Millions Of Daily Attempts To Steal

Edward Killen, the agency’s chief privacy officer told the Washington Post that, “Our systems currently withstand an average of 2.5 million intrusion attempts daily."

Keeping the thieves out is a tough job no matter how you look at it! I have to applaud the efforts. Killen also reported that, “From 2015 to 2017, the number of taxpayers reporting to the IRS that they were victims of identity theft dropped by 65 percent, and the number of tax returns with confirmed identity theft fell by 57 percent with more than $20 billion in taxpayer refunds being protected.”

While the IRS is proud of their efforts at foiling many thieves’ attempts, the same Washington Post article has, “found that IRS has not prioritized the initiatives supporting its authentication strategy nor identified the resources required to complete them.”

Breaches Made With Info Found Through Social Media And Other Avenues

The criminals are not going to the IRS to get information needed to steal identities. They are getting the info they need from a variety of sources outside of the IRS. We’ve been reading about it for years. There have been warnings issued by the IRS to protect your information and to be careful about what you post on social media. There have been a multitude of corporate breaches including 500 million Yahoo customers whose information was compromised, 145 million Equifax customers and 21.5 million with Office of Personnel Management files whose personally identifiable information, such as birth dates and Social Security numbers, might have been breached in cyberattacks.

#identity theft #cyber crime #tax fraud

When The IRS Threatens To Garnish Or Levy Belongings

The IRS is not a government agency you want to ignore if they contact you officially by mail.

If you have not paid your taxes and owe them money – especially a large amount and over an extended period of time, they will come after you. But they do it respectfully and clearly every step of the way. There will be no confusion about what they are going to do.

Calling a professional and reputable tax attorney is the first and most advisable step. Failing to do that could result in a devastating mess, like the following story I’m sharing.

How You Don’t Want To End Up

I read the saddest email sent to a person who claims to give advice tax advice on a website. I’m not going to put the site here because the advice is not even legal and it’s just plain bad. But the letter from this fellow is a perfect example of what not to do:

“I’m being garnished. I was the perfect tenant been at the same apartment for 7yrs. I haven’t paid rent for the past 6 months, I don’t have any money. I put on 40lbs because I can’t afford to eat healthy food. I filled up my gas tank, so I could go to work $60 and had $88 left for 2 weeks until I get paid again. I make $20hr. I’m thinking of selling everything I own on craigslist and disappearing. I spoke to the IRS on the phone and told them I couldn’t live like this and her reply was “why not?”

I wanted to do the offer in compromise, but depression has such a tight grip on me I’m not even able to function. That bum you see on the park bench is probably me, just ignore me it’s my own doing and I’m sorry if my being there upsets your cheery day. What are my options? Fake ID and start a new life? Move out of country? Quit my job and shack up with a fat section 8 lady? I fear I’m at my end.”

#tax levy #IRS trouble #wage garnishment

Criminals Are Counting On Your Compassion To Steal From You For A Worthy Cause

Boy, do I miss the good ole days before cyberscammery began!

(I know I made up that word, and you’re welcome to use it!) I miss the olden days when we had a land line and the phone didn’t ring so much. If it rang at dinner time you just knew it was a telemarketer! But, that’s just pure sentimentality and it doesn’t fix a darn thing. The fact of the matter is that every human being has to deal with an onslaught of disreputable criminals who are constantly trying to bilk us out of our money or our identities through emails, social media and phone calls. There seems to be no end to it. We each have to find ways to deal with it.

Most Galling Scam Of All

The type of scam that galls me most is when criminals take advantage of the goodness of regular folks after a tragic event has occurred. This happens frequently in hurricane territory. We are in the middle of hurricane season now and fortunately we’ve not had any storms make landfall. But, just because storms don’t make landfall here, they may cause damage in other parts of the world and the criminals have no qualms about tapping the compassionate thousands of miles away from the actual disaster zone.

Hurricane Season Blows In More Disaster Scams

According to the National Oceanic and Atmospheric Administration (NOAA), the U.S. averages one to two hurricane landfalls each season. And we are just halfway through hurricane season, which runs from June 1 to November 30.

#cyber scam #hurricane Season #charity

Brace Yourself – Hurricanes Stir Up A Storm Of Disastrous Scams

We’ve just entered the hurricane season.

In this part of the country, everyone stays on high alert listening for news of storms forming in the Gulf and the Atlantic and pray for an uneventful season. One thing many people forget, particularly those not in the storm’s path, is that scam artists and con artists extraordinaire can do as much damage as the storms they follow preying on people’s compassion.

Scammers Prey On Compassion

While those in the storm’s path lose their belongings, homes and sometimes even their lives, the scam artists take money from those in distant parts of the country. They go to great lengths to make folks think the money they are donating is going to storm victims, while pocketing every penny.

For instance, check out this story in which, “Investigators found 5,000 questionable Katrina-related websites after that storm, and not just from the area of the disaster, but nationwide. While Katrina was still slamming into Louisiana, a man in Florida launched “AirKatrina.com” claiming he was a private pilot performing rescues and needed money for fuel. He wrote that he saw people huddled on roofs and that “I will hear these screams for the rest of my life.” He was nowhere near Louisiana, but he raised $40,000 in two days, authorities said.

Bogus Concerts Bogus Charities

So be forewarned as we move deeper into hurricane season. Learn to identify scam charities, phishing emails and other forms of communications soliciting funds for hurricane victims.

The scammers get real creative, so do your due diligence before giving. This foxnews.com report captures it well. “From bogus benefit concerts and counterfeit charities to phishing scams, crooks looking to make a quick buck have more and more frequently taken advantage of people’s charity in times of need. And the 2017 hurricane season – the fifth most active since records began in 1851 – has been a particularly ripe time for scam artists.”

#hurricane season #fake charities

Know Your Taxpayer Rights

Every American taxpayer has rights. Do you know what those rights are?

More than half of U.S. taxpayers don’t believe they have any rights when dealing with the IRS. The 2012 taxpayer survey that revealed this alarming statistic caused concern for Nina Olson, the National Taxpayer Advocate. She worked to create the Taxpayer Bill of Rights and to state these clearly and simply and make sure they are prominently displayed.

You can always find them online at https://www.irs.gov/taxpayer-bill-of-rights. I’ve also reprinted them here for your convenience.

1. The Right to Be Informed:

Taxpayers have the right to know what they need to do to comply with the tax laws. They are entitled to clear explanations of the laws and IRS procedures in all tax forms, instructions, publications, notices, and correspondence. They have the right to be informed of IRS decisions about their tax accounts and to receive clear explanations of the outcomes.

2. The Right to Quality Service:

Taxpayers have the right to receive prompt, courteous, and professional assistance in their dealings with the IRS, to be spoken to in a way they can easily understand, to receive clear and easily understandable communications from the IRS, and to speak to a supervisor about inadequate service.

3. The Right to Pay No More than the Correct Amount of Tax:

Taxpayers have the right to pay only the amount of tax legally due, including interest and penalties, and to have the IRS apply all tax payments properly.

4. The Right to Challenge the IRS’s Position and Be Heard:

Taxpayers have the right to raise objections and provide additional documentation in response to formal IRS actions or proposed actions, to expect that the IRS will consider their timely objections and documentation promptly and fairly, and to receive a response if the IRS does not agree with their position.

#taxpayer rights #taxes #irs help

An Unexpected Refund From The IRS Spells S-C-A-M

If you happen to notice an automatic deposit made in your bank account from the IRS or you get a refund check in the mail that you weren’t expecting, you are likely the victim of the latest tax scam.

On February 13th, the IRS released a warning to alert taxpayers to a fast growing new scam that uses stolen taxpayer’s information to fraudulently file taxes then deposit refunds into real bank accounts.

Once Deposit Is Made, The Criminals Make Contact

The IRS makes it clear that the criminals use a variety of tactics to get the fraudulent refund from the taxpayers. And, as the IRS points out the tactics are probably evolving, so you’ll want to stay alert.

In one version of the scam, criminals posing as debt collection agency officials acting on behalf of the IRS contacted the taxpayers to say a refund was deposited in error, and they asked the taxpayers to forward the money to their collection agency.

In another version, the taxpayer who received the erroneous refund gets an automated call with a recorded voice saying he is from the IRS and threatens the taxpayer with criminal fraud charges, an arrest warrant and a “blacklisting” of their Social Security Number. The recorded voice gives the taxpayer a case number and a telephone number to call to return the refund.

Don’t fall for it.

#tax scam #tax refund #IRS help

IRS Warns About Hotmail Scam And Potential Virtual Currency Taxation

As we barrel toward the end of the year and shoot headlong into tax season, the IRS has a couple of warnings for taxpayers and tax professionals alike.

These are just two items as we wait and see if there are going to be any bigger changes if a new tax bill is passed.

Taxing Virtual Currency

First of all, if you decided to explore the investment opportunity presented by Bitcoin and other virtual currencies, the IRS may be hitting you up for taxes this coming tax season. The IRS is stepping up enforcement as they see owners experiencing the thrill of record high values.

According to accountingtoday.com, “Last week, a court ordered Coinbase to disclose information pertaining to more than 14,000 of its customers who have engaged in transactions involving bitcoin, and possibly other virtual currency transactions.”

Coinbase defines itself as “a secure online platform for buying, selling, transferring, and storing digital currency.” Specifically, Coinbase provides users with the ability to create a digital wallet to store digital currency, including bitcoin, Ethereum and litecoin. As is website states, “Coinbase has been used in the exchange of more than $50 billion, supports 32 countries and has served more than 10 million customers.”

Accountingtoday.com reported that, “The court issued its ruling after more than a year of litigation and following the IRS’s decision to significantly narrow the scope of its summons. Originally, the IRS sought information pertaining to any United States person who had conducted a virtual currency transaction at any time during 2013 through 2015. The summons enforced by the court is limited to information regarding accounts “with at least the equivalent of $20,000 in any one transaction (buy, sell, send, or receive) in any one year during the 2013-2015 period.”

#bitcoin #hotmail #scam

How To Find Out If You Were Affected In The Equifax Breach

The recent Equifax breach affects over 143 million American taxpayers.

As you might imagine, this could wreak havoc for those affected and you may not even know you’ve been affected until you go to file your taxes next year.

The data breach gave hackers access to the Social Security numbers, birth dates, addresses, driver’s license numbers and credit card numbers of people around the world, and as mentioned above 143 million American taxpayers. Criminals can use all of that date to steal identities, so there are sure to be consequences in the short term and long term. One of those long-term ramications could be that a criminal will use your personal information to file a bogus tax return in 2018.

So, the first question to ask is, how do you find out if you and your family members have been affected. Go to the Equifax website at www.equifaxsecurity2017.com to determine if you or anyone in your family has been affected. In addition, women who have recently married need to check their maiden name.

Enroll To Protect Your Credit

Equifax is offering a one-year free credit monitoring service that is available through November 21st. Once you’ve determined whether or not you have been affected in the breach, click on “Enroll” to complete the process for free credit monitoring. Be sure to complete this process on or before Nov. 21.

Next, you’ll want to obtain and review your credit report. You are entitled to one free credit report from each of the three credit reporting agencies per year. Go to www.annualcreditreport.com. Be cautious though because there are many websites that imitate this service.

Also, you may want to consider placing a credit freeze on your credit reports. This is a process that must be done with all three of the credit reporting agencies. Once you do place a freeze on your credit you must be aware that if you need access to your credit for any reason, such as applying for a mortgage, auto loan or home equity loan, you will need to unfreeze your credit and then refreeze it once your credit needs are completed. There is usually a fee charged every time you freeze and unfreeze your account, although Equifax is offering free credit freezes through Nov. 21.

Contact information for the three reporting agencies:

Equifax: www.equifax.com, 800-349-9960 Experian: www.experian.com, 800-397-3742 TransUnion: www.transunion.com, 888-909-8872

#equifax #credit report #identity theft

What To Do When You Get An IRS Audit Letter

Summer is typically when the IRS sends out notices and audit letters, so if you’ve received one, remember, first and foremost, don’t freak out.

Don’t panic.

After all, it’s just a piece of paper sent to you from the IRS. While the IRS can be scary, if you are a law-abiding taxpayer, I assure you even if you end up getting audited it’s not as scary as it seems.

There are several things to know about who gets audited. If your income is between $25,000 and $100,000 per year, your chances of getting audited are pretty slim unless you or your tax preparer made glaring errors on your tax return. However, don’t think that just because your income is less than $25,000 that your odds of getting audited are lower. In fact, they are higher. This is because many taxpayers in this bracket claim the earned income tax credit and the IRS conducts many audits to ensure that the credit is not being claimed fraudulently.

So, here you go, a quick checklist of how to survive your IRS audit letter:

First: Don’t Panic

Take a deep breath. Getting hysterical and angry might seem to be a rational response to upsetting news, but it really isn’t rational at all. As I mentioned in the beginning, an audit doesn’t mean you’ve done anything wrong. It simply means the IRS wants to take a deeper look into your taxable income and assets.

Second: You’re Normal

If you can’t actually make sense of the letter, don’t worry you’re not alone. Not being able to make sense of the letter is normal for anyone but tax attorneys and the people who write the letters. In fact, unclear letters from the IRS are the status quo (there was even a study about this phenomenon).

#IRS audit #tax help #getting audited

With Tax Records, When In Doubt, Keep It

You’ve probably heard the expression, “when in doubt, toss it out.” That applies to just about everything except when you’re clearing out tax records!

So, when you’re inspired to clear out those tax files, don’t be too hasty about getting rid of them.

Many of my clients tend to be confused about what they need to keep and how long. It’s a good idea to do an annual review of the items you need to keep indefinitely and those that have a shorter shelf life.

Digital or Paper Records

In this digital age, the IRS accepts scanned documents. However, the burden of proof for an item of income or expense rests with you, the taxpayer. You will be responsible for scanning documents, receipts and emails after the year ends for easy access. In addition, if you have migrated to digital storage the method of storage and retrieval must be taken into account. When you are confident in your storage and retrieval method, you could probably keep all records indefinitely. And with cloud storage it is fairly safe to say that the sky is the limit.

Electronic records will be expected to be as accurate as paper records and you must be able to index, store, preserve, retrieve and reproduce the records in order to produce a hard copy if needed.

The Type of Document Determines How Long You Keep It

According to the IRS, how long to keep a document depends on the action, expense or event recorded by the document. Generally, keep records that support an item of income, deduction or credit shown on the tax return until the period of limitations for that tax return runs out.

Whether you are paperless or not, keep in mind that compliance includes federal (IRS) guidelines as well as state guidelines, as there is often a difference in the statute of limitations for both. For example, while the IRS has a three-year statute, the state of California has a four-year statute. Being caught throwing out 2013 tax data this year (even though it was filed in 2014) could be a real issue in the case of a state audit.

The IRS has provided the following guidelines:

#tax records #irs help

You’ve Been Under-Reporting Your Income and The IRS Has Caught You

Are you the target of an audit for allegedly under-reporting income to the IRS?

Professional help by an experienced, Enrolled Agent tax attorney is a must in this type of situation. A little bit of understanding may also come in handy before you get sucked into the unraveling of your tax returns.

Depending on how much of your income you failed to report, the IRS can put you through the wringer for a very long time.

For instance, if you fail to report 25% of your income the IRS has a full six years to audit. Even that time frame almost always gets extended up to an extra full year. However, working with an expert tax attorney may help you be able to shorten the time of the extension.

Things get even more complicated if you knowingly, as opposed to mistakenly, file a false return, under-report income or worse, willfully fail to file. You could even be facing potential criminal charges and prison time. The rules change in an equally dramatic way. Section 6531(2) of the tax code states that the statute is six years commencing once the return is filed, or from the time you willfully failed to file a return.

With complicated tax issues it is often difficult to determine specifically when a tax crime is committed.

And even more difficult to decide when the six-year clock begins to run. Let’s suppose a taxpayer is indicted within six years after willfully attempting to evade taxes. That does not necessarily mean they are out of the woods in terms of further audits or investigation. This happens frequently if the taxpayer is outside the U.S. or becomes a fugitive. The clock just stops running and will start again once the case becomes active again.

#IRS trouble #under reporting income #tax fraud

When the IRS Suspects You of Under-Reporting Income

Have you suddenly become the unhappy target of an audit for allegedly under-reporting income to the IRS?

Maybe you did under-report. Maybe you didn’t. Whether you did or not, your tax returns have waved some red flags at the IRS and you are now in their line of sight.

You may not know it, but if the IRS suspects under-reporting they can go back over previous tax returns and make you prove your income. They’ll ask you to prove income, expenses, bank deposits and more. And the normal three-year IRS statute of limitations does not apply.

Things get even more complicated if you consciously file a false return, under-report income or worse, willfully fail to file. You could even be facing potential criminal charges and prison time. This is tax evasion and when it comes to tax evasion or fraud, the IRS can really speed the process up.

Don’t Go It Alone

If you think you can deal with the IRS in this instance, I’ll ask you to reconsider. Professional help by an experienced tax attorney is a must. Depending on how much of your income you failed to report, the IRS can make your life miserable for a very long time. For instance, if you fail to report 25% of your income the IRS has a full six years to audit. Even that time frame almost always gets extended up to an extra full year. This is when working with an expert tax attorney can be useful. They may help you be able to shorten the time of the extension.

#IRS trouble #tax help

Are You Taking Advantage of the Saver's Credit?

As we get closer to tax season, there’s a benefit that many taxpayers consistently miss out on.

I like to help my clients get every benefit from the government they can. That’s why I’m taking time to help you familiarize yourself with the tax advantages of the Saver’s Credit.

The real question may be: Are you even aware of this credit? Many people are not yet it provides money back into your pocket. Also known as the Retirement Savings Contributions Credit, The Saver's Credit is designed to make it easier for low- to moderate-income taxpayers to save and invest for retirement.

In order to claim the tax credit, you simply need to be 18 years of age or older. Additionally you cannot be a full-time student nor can you be a dependent on someone else’s tax return. The credit is worth 10%, 20%, or 50% of your retirement plan contributions of up to $2,000 per year for singles or $4,000 for couples, depending on your adjusted gross income (AGI). Keep in mind this is an actual tax credit, not a deduction. So you get money back either in your refund or a separate payment that goes right in your pocket.

#Saver's Credit #2016 tax credits #tax tips

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