by Daniel Kittell | Accounting News, Fraud, IRS, News, Newsletter
In recent years, IRS imposters have become increasingly adept at deceiving taxpayers, resulting in nearly $5 million in losses, according to the Federal Trade Commission (FTC). These scammers are honing their tactics and targeting vulnerable people, making it crucial for everyone to stay vigilant. Here’s what you need to know to protect yourself from becoming a victim.
The Latest Scam: IRS Impostor Calls
One of the latest and most concerning IRS scams involves callers who claim to be from the IRS and insist that the victim owes back taxes. These fraudsters often use advanced tactics to sound convincing. They might have access to personal information, making their threats seem more credible. Here’s how this scam typically works:
- The Call: The scammer will call, claiming to be from the IRS, and assert that the victim owes back taxes. The scammer’s name and credentials will be fake.
- The Threat: They pressure the victim to pay immediately, often using threats of arrest or legal action if payment is not made.
- The Payment Request: Payment is demanded through untraceable methods such as wire transfers or gift cards, which are difficult to recover once sent.
Who Are the Scammers Targeting?
Scam artists often prey on specific groups who may be less aware of IRS procedures or more susceptible to high-pressure tactics. Typical targets include:
- Elderly Individuals: Seniors are frequently targeted due to potential isolation and lack of familiarity with modern technology.
- Hearing or Vision Impaired: Those with sensory impairments may struggle to verify the legitimacy of communications.
- People with Cognitive Issues: Cognitive impairments can make it difficult to discern legitimate communications from fraudulent ones.
- Individuals Not Fluent in English: Individuals who speak English as a second language might find it more difficult to understand IRS protocols and detect scam indicators.
How to Protect Yourself
To safeguard against IRS impostor scams, follow these tips:
- Understand IRS Procedures: The IRS will never demand payment via phone call or require payment through gift cards or wire transfers. When issues arise, their first contact with taxpayers is typically through official correspondence via mail.
- Verify Caller Identity: If you receive a call claiming to be from the IRS, hang up and contact the IRS directly using their official phone number, which you can find on their website. This will help you confirm whether the call was legitimate.
- Do Not Share Personal Information: Be cautious about providing any personal or financial information over the phone. Legitimate IRS representatives will never ask for sensitive details through unsolicited calls.
- Report Suspicious Activity: If you believe you’ve been targeted by a scammer, report it to the Federal Trade Commission (FTC) and the IRS. The FTC’s website offers a place to report such incidents and can help authorities track down fraudsters.
- Educate Vulnerable Individuals: If you know someone who fits the typical profile of scam victims, such as an elderly family member, make sure they are aware of these scams and know how to verify any communication they receive.
The Best Way to Address Back Taxes
If you genuinely owe back taxes, it’s crucial to handle the situation properly:
- Do Not Use Untraceable Methods: Avoid paying with gift cards or wire transfers. The IRS accepts payments through their secure online payment portal or by check.
- Seek Professional Advice: Consult a tax professional if you’re unsure about your tax situation. They can provide guidance on resolving tax debts and navigating the complexities of tax law.
- Set Up Payment Plans: The IRS offers payment plans for those who cannot pay their taxes in full. Contact them directly to discuss your options and set up a manageable payment plan.
Staying informed and cautious is your best defense against IRS impostor scams. Understanding how these scammers operate and knowing the proper channels for addressing tax issues can protect you and others from falling victim to these sophisticated frauds.
by Jean Miller | Accounting News, COVID-19, CPA, IRS, News, Resources, Tax, Tax Planning - Individual, Technology
The U.S. Government has already started sending stimulus payments to Americans from the $2 trillion coronavirus stimulus bill known as the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was signed into law on March 27, 2020. But there is still some confusion surrounding the details. Here are some things to know about the stimulus payments.
Income Requirements
The stimulus plan outlines that individuals will receive the following: $1,200 for individual tax payers with an adjusted gross income of up to $75,000; $2,400 for married couples filing jointly with an adjusted gross income of up to $150,000, and $112,500 for heads of household. Additionally, families will receive $500 per qualifying child under the age of 17. Dependents over the age of 17 who are claimed under someone else’s tax return will not receive their own payment, which means that most college students won’t qualify to receive a check. If your adjusted gross income (AGI) is more than what’s outlined above, you’ll fall into the “phase out” category—the more your AGI increases, the more the stimulus amount granted decreases, specifically by $5 less for every $100 over the limits noted above. The total phase out amounts based on AGI are: $99,000 for single filers, $198,000 for married couples filing jointly, and $136,500 for heads of household. The AGI will be based on your 2019 tax return, or your 2018 tax return if you haven’t filed 2019 yet.
Disbursing Payments
Stimulus checks will be direct deposited into the bank account listed on your 2019 tax return (or 2018, if you have yet to file for 2019) beginning mid-April. The IRS will send a physical check to your most recent address on file if a bank account is not listed on either tax return. For those whose banking information has changed since then, the IRS is developing a web-based portal where individuals can provide their banking information to the IRS online to ensure that as many people as possible can take advantage of receiving a direct deposit rather than waiting for a check in the mail. This tool is expected to be available around April 17.
You will receive a notice of payment from the Treasury approximately two to three weeks after your payment has been disbursed, which will be sent to your last known address. The notice will include the method by which payment was delivered (direct deposit or check), the address where payment was sent, and a phone number to contact the IRS if, say, your banking information has changed but hasn’t been updated and therefore you did not receive the payment.
Back Taxes
As long as you meet the income guidelines, you should still receive a stimulus payment if you owe back taxes, even federal, state, and student loans. The one exception is for those who owe child support payments.
Who doesn’t Qualify?
In addition to high wage earners and college students, other individuals may be left out of receiving a stimulus check: senior citizens and disabled people who are claimed as dependents by someone else; non-resident immigrants, temporary workers, and immigrants who are in the country illegally (immigrants with green cards, H-1B, and H-2A work visas qualify to receive payment); unemployed high wage earners: those who earned more than $99,000 last year but are now unemployed will be eligible for a rebate on their 2020 tax returns if they earn below the phase-out limits this year; Too, parents of babies born in 2020 won’t receive their $500 payment for that child until next year.
Low Income Earners
Individuals who make less than $12,000 a year are not required to file taxes. If you fall into this category and haven’t filed taxes in the last two years, you are still eligible to receive a check, but there’s an extra step involved. First, if you receive social security benefits, you will automatically receive a stimulus check. But for the estimated 10 million Americans who fall into the “low income” wage earning bracket, don’t receive social security benefits, and haven’t filed taxes for the last two years, the IRS has set up a web portal that will allow you to register for a stimulus check. Visit IRS.gov and look for “Non-Filers: Enter Payment Info Here”. The IRS has also partnered with TurboTax to set up a web page where individuals can answer a few questions and then choose to receive their payment via paper check or direct deposit.
by Daniel Kittell | Accounting News, Fraud, IRS, News, Resources
For years, taxpayers have been told that the IRS will never call to inquire about their taxes or collect unpaid funds. Rather, the IRS has operated under the communication policy that they will contact taxpayers by written notice only. However, immediately following this year’s tax season, in April 2017, the IRS enacted a change in their policy to begin calling individuals with overdue tax bills, but there are specifics to when or why they will contact you via phone.
Unfortunately, as many of us know, dozens and dozens of scam artists exist in today’s world, who will surely be attempting to capitalize on this new policy to con you out of your own money. With that in mind, we have assembled some information regarding the new policy to help you recognize when you’re actually being contacted by the IRS, and when you’re being scammed.
- The IRS has contracted out 4 private collection agencies: Conserve, Pioneer, Performant, and CBE Group
- These agencies will only call individuals with long overdue taxes, namely those with accounts who have not interacted with the IRS in more than 365 days. Thus, if you were a bit late on your April 2017 taxes, you didn’t receive a call in May, and won’t unless they go unpaid through April 2018.
- The IRS will still send written notices first stating your account is being turned over to a collection agency
- There are many practices or tactics used by scam artists over the phone that the IRS will never follow, even when calling though their contracted collection agencies. The IRS will NOT:
- Threaten to deport you, foreclose your property or withdraw your license
- Threaten to bring in law enforcement or other agencies to arrest you for lack of payment
- Demand payment without allowing you to inquire against or appeal the amount owed
- Request immediate payment over the phone. They will never call without sending a bill or notice via mail first
- Ask for credit or debit card numbers over the phone
- Demand a certain form of payment (i.e. a wire transfer, prepaid debit card or iTunes gift card)
If you think you have been scammed, or have an issue with one of the contracted collection agencies, the IRS suggests contacting the hotline for the Treasury Inspector General for Tax Administration at 800-366-4484, or visit tigta.gov. If you do receive a call from someone claiming to be from the IRS and are concerned with the validity of the call in any way, do not send funds. If you have questions about owing taxes or would like to confirm that a call you received is legitimate, contact the IRS directly at 1-800-829-1040.
