Although the April filing deadline has passed, scam artists remain hard at work, and the IRS is warning of a spring surge of phishing emails and telephone scams.
The IRS is seeing signs of two new variations of tax-related scams. One involves Social Security numbers related to tax issues and another threatens people with a tax bill from a fictional government agency. 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.
Both display classic signs of being scams. The IRS and its Security Summit partners – the state tax agencies and the tax industry – remind 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.
Phone Scams. The IRS does not leave pre-recorded, urgent or threatening messages. In many variations of the phone scam, victims are told if they do not call back, a warrant will be issued for their arrest. Other verbal threats include law-enforcement agency intervention, deportation or revocation of licenses.
Criminals can fake or “spoof” caller ID numbers to appear to be anywhere in the country, including from an IRS office. This prevents taxpayers from being able to verify the true call number. Fraudsters also have spoofed local sheriff’s offices, state departments of motor vehicles, federal agencies and others to convince taxpayers the call is legitimate.
Email phishing scams.The IRS does not initiate contact with taxpayers by email to request personal or financial information. The IRS initiates most contacts through regular mail delivered by the United States Postal Service. However, there are special circumstances when the IRS will call or come to a home or business. These visits include times when a taxpayer has an overdue tax bill, a delinquent tax return or a delinquent employment tax payment, or the IRS needs to tour a business as part of a civil investigation (such as an audit or collection case) or during criminal investigation.
If a taxpayer receives an unsolicited email that appears to be from either the IRS or a program closely linked to the IRS that is fraudulent, report it by sending it to email@example.com. The Report Phishing and Online Scams page provides complete details
Telltale signs of a scam
The IRS (and its authorized private collection agencies) will never:
· Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. The IRS does not use these methods for tax payments. Generally, the IRS will first mail a bill to any taxpayer who owes taxes. All tax payments should only be made payable to the U.S. Treasury and checks should never be made payable to third parties.
· Threaten to immediately bring in local police or other law-enforcement groups to have the taxpayer arrested for not paying.
· Demand that taxes be paid without giving the taxpayer the opportunity to question or appeal the amount owed.
· Ask for credit or debit card numbers over the phone.
For anyone who doesn’t owe taxes and has no reason to think they do:
· Do not give out any information. Hang up immediately.
· Contact the Treasury Inspector General for Tax Administration to report the call. Use their IRS Impersonation Scam Reporting web page.
· Report the caller ID and/or callback number to the IRS by sending it to firstname.lastname@example.org (Subject: IRS Phone Scam).
· Report it to the Federal Trade Commission. Use the FTC Complaint Assistant on FTC.gov. Add “IRS Telephone Scam” in the notes.
For anyone who owes tax or thinks they do:
· View tax account information online at IRS.gov to see the actual amount owed. Taxpayers can then also review their payment options.
· Call the number on the billing notice, or
· Call the IRS at 800-829-1040. IRS workers can help.
The IRS does not use text messages or social media to discuss personal tax issues, such as those involving bills or refunds. For more information, visit the Tax Scams and Consumer Alerts page on IRS.gov. Additional information about tax scams is also available on IRS social media sites, including YouTube videos.
For more information or assistance in dealing with the IRS, contact Bj Millitello at 954-240-2635.
The Internal Revenue Service issued a warning Friday to taxpayers who haven’t yet filed their 2018 tax returns that they will face higher tax penalties if they owe taxes and haven’t filed by June 14, 2019.
The failure-to-file penalty is assessed if there is unpaid tax and the taxpayer fails to file a tax return or request an extension by the April due date. This penalty is usually 5% of tax for the year that’s not paid by the original return due date. The penalty is charged for each month or part of a month that a tax return is late. But, if the return is more than 60 days late, there is a minimum penalty, either $210 or 100 percent of the unpaid tax, whichever is less.
Special filing deadline rules
Special deadlines affect penalty and interest calculations for those who qualify, such as members of the military serving in combat zones, taxpayers living outside the U.S., and those living in declared disaster areas.
Taxpayers in a combat zone may be able to further extend the filing deadline and can find details in Publication 3, Armed Forces’ Tax Guide (PDF). For taxpayers living and working outside the U.S. and Puerto Rico, or on military duty, the deadline to file is June 17. They also have until June 17 to file Form 4868 for an extension until October 15. An extension of time to file is not an extension of time to pay any tax due.
When the president declares a major disaster, the IRS can postpone certain deadlines for taxpayers who reside or have a business in the impacted area. If an affected taxpayer receives a late filing or late payment penalty notice from the IRS, and they filed or paid by the deadline stated in the IRS news release of postponement of the deadlines for filing and/or paying, they should call the telephone number on the notice to see if IRS can abate the penalty due to the disaster.
Penalty relief may be available
Taxpayers who have filed and paid on time and have not been assessed any penalties for the past three years often qualify to have the penalty abated. See the First-Time Penalty Abatement page on IRS.gov. A taxpayer who does not qualify for the first-time penalty relief may still qualify for penalty relief if their failure to file or pay on time was due to reasonable cause and not due to willful neglect. Taxpayers should read the penalty notice and follow its instructions to request this relief.
The IRS also expanded the penalty waiver for those whose 2018 tax withholding and estimated tax payments fell short of their total tax liability for the year. The penalty will generally be waived for any taxpayer who paid at least 80 percent of their total tax liability during the year through federal income tax withholding, quarterly estimated tax payments or a combination of the two. The usual percentage threshold is 90 percent to avoid a penalty.
In addition to penalties, interest will be charged on any tax not paid by the regular April due date. For individual taxpayers it is the federal short-term interest rate plus 3 percentage points, currently 6 percent per year, compounded daily. Interest stops accruing as soon as the tax is paid in full. Interest cannot be abated.
Many taxpayers delay filing because they are unable to pay what they owe. Often, these taxpayers qualify for one of the payment options available from the IRS. Taxpayers can use their online account to view the amount they owe, make payments and apply for an online payment agreement. These include:
Installment Agreement — Individuals who owe $50,000 or less in combined tax, penalties and interest can request a payment plan using the IRS’s Online Payment Agreement application. Those who have a balance under $100,000 may also qualify for a short-term agreement. An installment agreement, or payment plan can usually be set up in minutes. Requesters receive immediate notification of approval. Visit Payment Plans, Installment Agreements at IRS.gov for more information.
Offer in Compromise — Struggling taxpayers may qualify to settle their tax bill for less than the full amount owed by submitting an offer in compromise. To help determine eligibility, use the Offer in Compromise Pre-Qualifier tool.
Taxpayers who owe tax for 2018 can avoid having the same problem for 2019 by increasing the amount of tax withheld from their paychecks. For help determining the right amount to withhold, use the Withholding Calculator on IRS.gov
Need Assistance with Your Taxes?
BJ Militello can help! Call 1-954-240-2635 to learn more.
1. Double check your withholding and estimated taxes. The individual tax changes cut both ways. You may be familiar with the major deductions you’re losing, but less familiar with the impact of some of the more favorable changes like the expanded tax brackets. It’s not easy or intuitive to figure out what it all means to your bottom line. There’s no substitute for actually running the numbers. Read More
The Red Flags You Should Know About!
No one likes to receive the “Dear Taxpayer” letter so, here are some tips for avoiding that letter and having to go through a tax return examination or full-blown audit. Remember, if your return is selected for an unusual item or, item of interest, that allows the IRS a 2nd look and it usually snowballs from there.
The Tax Act and Jobs Act (TAJA) went into effect on January 1, 2018, but did NOT affect your 2017 tax return which was due in April of 2018. In almost every case, your 2017 return is covered by the old rules. One of the most complex areas of the TAJA is the 20% business income deduction.