Unsplash+ in collaboration with Getty Images The Internal Revenue Service and its Security Summit partners today wrapped up the eighth annual National Tax Security Awareness Week with a warning for everyone, individual taxpayers and tax pros, to stay alert to emerging tax scams. It's a message the group issues regularly throughout the year because con artists work year-round to steal our money and, in many cases, our identities. Once they get that personal data, they can file fake tax returns to try to collect fraudulent refunds. By now, most of us are well aware of the warning signs of scams... Read more →
Scams
Photo by Anne Nygård on Unsplash Most taxpayers get federal tax refunds. Internal Revenue Service data complete through Oct. 27 shows that the agency received 160.5 million returns and issued nearly 105 million refunds that totaled more than $319 billion. Not surprisingly, taxpayers who are getting cash back from Uncle Sam are among the first to file every tax season. That's also a good security move. By getting their 1040 forms to the IRS early, they beat the criminals who might try to file fake returns under their names to claim their or even bigger fraudulent refunds. But some folks... Read more →
Photo via Unsplash+ in collaboration with Andrej Lišakov The official holiday shopping season is officially underway. So is the identity theft season, which could cause lots of problems for shoppers at tax time. I know about the shopping season because my email box is overflowing with "Buy Now!" and "Bargains, Bargains, Bargains" and "Get 40% Off!" messages, mostly for stuff I have no intention of buying at any price. I know about the tax threat because next week, Nov. 27 through Dec. 1, is the eighth annual National Tax Security Awareness week. During these coming five days, just as online... Read more →
People are increasingly falling for a new scam known as pig butchering. The scheme involves cryptocurrency purchases, and the promised outcome is as reliable as flying pigs. (Photo by Daniel Novykov on Unsplash) The Internal Revenue Service Criminal Investigation (CI) unit has some advice as the holiday season nears. Don't be a pig. No, the warning has nothing to do with over-eating, starting with next week's Thanksgiving spreads. Rather, IRS CI says crooks are reaching out on social media, typically seeking those looking for romantic partners, to get the targeted victims' help in cryptocurrency schemes. These targets, whom the fraudsters... Read more →
Photo by Anya Batalova on Unsplash We don't get many — OK, not any — kids dressed as ghosts on Halloween night. Our neighborhood's youngsters seem to prefer dressing as comic book icons turned movie characters. Heck, last week I even saw an adult, or a very tall teen, dressed as Spiderman, full-face mask included, during my last grocery store visit. But that's for another blog post. Or a call to the local authorities. Getting back to ghosts, notably those with tax connections. As I mentioned in an earlier post, ghost employees and ghost employers can wreak havoc when it... Read more →
Things can get even more complicated if you're donating to international relief efforts and plan to claim your gift as a tax deduction. World Central Kitchen (WCK) workers are among the first in areas in need of relief, like here delivering meals with the help of nonprofit partners in Beit Shemesh, Israel. WCK staff also are already on their way to Acapulco, Mexico, where Hurricane Otis made landfall as a powerful Category 5 early today. (Photo credit: World Central Kitchen/WCK.org) Sometimes, like today, it seems as if the whole world is totally out of control. In the past few weeks,... Read more →
Small businesses' many challenges were multiplied during the COVID-19 pandemic. The Employee Retention Credit (ERC) helped many companies and their workers make it through that lean time. But recently, unscrupulous promoters have pushed some owners to improperly claim the ERC, creating new problems. Now the IRS is offering a way to correct those bad filings. (Image via Unsplash+ in collaboration with Getty Images) The Employee Retention Credit (ERC) helped lots of small businesses and their staff make it through the COVID-19 pandemic. When properly claimed, the ERC is a refundable tax credit designed for businesses that continued paying employees while... Read more →
Photo by Tim Mossholder on Unsplash Businesses who applied for the Employee Retention Credit (ERC) aren’t the only ones upset with the Internal Revenue Service’s handling of claims. So are the Republican leaders of the House Ways and Means Committee. Rep. Jason Smith (R-Missouri), chairman of the tax-writing panel, and Rep. David Schweikert (R-Arizona), chair of the W&M Oversight Subcommittee, this week wrote to IRS Commissioner Daniel Werfel demanding an update on the ERC processing backlog. The ERC, also sometimes referred to as the Employee Retention Tax Credit or ERTC, was created during the COVID-19 pandemic to help businesses and... Read more →
This summer, the Internal Revenue Service warned us of a surge of tax scams. Identity thieves were sending a barrage of email and text messages promising tax refunds or offers to help fix tax problems. Apparently, the scammers are continuing into the fall. Fake IRS text: I got the fake IRS text at left this week. This crook apparently was trying to convince me to click on the StatementClaim.pdf document. I was curious, but not that curious. However, I did like how the crook tried to pique my interest by annotating the fake text as an internal tax agency message.... Read more →
Photo by Max Burchill on Unsplash To paraphrase a gazillion social media posts, exploitative people are why we can't have needed tax breaks. OK, Congress plays a big part. And the Internal Revenue Service too often steps on its own tax toes. But in many cases, unscrupulous people mess things up for the rest of us who are just trying to comply with tax laws and get a little bit of legitimate tax relief along the way. That's what happened with the Employee Retention Credit (ERC). This refundable tax credit was created by lawmakers to help businesses that were struggling... Read more →
What a fun Monday. The hubby and I spent much of the morning setting up free credit monitoring accounts related to recent healthcare data breaches. Then we each ordered a free credit report to see if miscreants had been pretending to be either of us. I suspect we are not alone in taking identity theft precautions. The HIPAA Journal reports there was a 261 percent month-over-month increase in breached healthcare records in July. More than 18 million records were exposed in 56 reported incidents. The incredibly high total was due to a major data breach at HCA Healthcare that saw... Read more →
Photo by Volodymyr Kondriianenko on Unsplash Summer is slipping away, but tax crooks are still hard at work. That's why the Internal Revenue Service and its Security Summit partners are spreading the word about signs of data theft. The warning from Uncle Sam and state tax officials, as well as the private sector tax community, is aimed at helping tax professionals. That's understandable, since they collect and manage clients' tax and personal data. If crooks can crack the tax pros' cache, they have what the IRS calls a precious commodity, details on thousands of taxpayers from just a few sources.... Read more →
Summertime, despite what the song says, is not easy if you are the target of a tax scam. And that's increasingly likely this season, says the Internal Revenue Service. The tax agency is urging people to be on the lookout for a summer surge of tax scams. Identity thieves are sending a barrage of email and text messages promising tax refunds or offers to help fix tax problems. Neither the good (possible cash back from Uncle Sam) nor the bad (tax troubles) exist. They are just the latest ploys, targeting individual and business taxpayers, that crooks are using to try... Read more →
Photo by Mediamodifier on Unsplash Guess who's not taking a long July 4th holiday? Tax scammers. The Internal Revenue Service and its Security Summit partners today warned of a new scam mailing in which crooks tell the correspondence recipients that they are owed a tax refund. The fake tax mailing comes in a cardboard envelope from a delivery service. As is often the case with tax scams, the letter includes contact information and a phone number that do not belong to the IRS. The mailing tells recipients that in order to get their refund, they must provide personal information, such... Read more →
Photo by Tima Miroshnichenko Sometimes a tax notice is a good thing. That was the case for a Georgia man who paid his county taxes. Or so he thought. But a follow-up notice prompted him to raise questions about the prior payments. And that led last week to the arrest of a clerk at the Spalding County Tax Commissioner's office on charges of theft and forgery. Paid taxes not paid: The two theft charges come from the taxpayer's payment of his taxes in cash. The alleged forgeries were from receipts for those payments. Before these incidents were reported, the Spalding... Read more →
Many businesses that stayed open during the height of the coronavirus pandemic were able to do so thanks to the Employee Retention Credit (ERC). Some companies, however, subsequently filed for the 2020-2021 tax benefit at the urging of unscrupulous ERC promoters, and now are finding the IRS is looking into their claims. The Internal Revenue Service earlier this summer warned businesses about Employee Retention Credit (ERC) promotions that could land the companies in tax trouble. The ERC was created in 2020 as part of the $2 trillion Coronavirus Aid, Relief and Economic Security (CARES) Act to help businesses and their... Read more →
Photo by Christa Dodoo on Unsplash The National Taxpayer Advocate has some good news for taxpayers and the Internal Revenue Service. But it's not great news. "The taxpayer experience vastly improved during the 2023 filing season," wrote National Taxpayer Advocate Erin M. Collins in her mid-year report to Congress issued today. The main reason for the improvement, she noted, was that the IRS caught up in its processing of paper 1040 forms. The tax agency also did a better job this year in dealing with various business returns, generally issued refunds quickly, and upgraded its phone assistance lines so that... Read more →
Photo by Anastasiia Chepinska on Unsplash Among the many lessons we've learned, or not, from the COVID-19 pandemic is that we'll likely never be rid of it. And as the transition to endemic status progresses, we'll continue to deal with flare-ups like, irony alert, the one that erupted following the Centers for Disease Control (CDC) and Prevention's recent first in-person Epidemic Intelligence Service conference in four years. The same persistence seems to apply to taxes, too. As the severity of COVID-19 became clearer, most of the United States went into lockdown to help slow its spread. While that saved lives,... Read more →
Unscrupulous tax return preparers once again made the Internal Revenue Service's annual Dirty Dozen scam list. That's not a surprise. The IRS and reputable tax community members are constantly battling shady tax pros and the schemes they use to lure taxpayers to use their so-called services. While the tax world is divided in how to best combat these crooks and scams, the IRS has long argued for tighter tax professional regulation. President Joe Biden also has expressed support for more tax pro oversight. And this month, members of Congress introduced the latest bicameral effort to protect taxpayers from dishonest tax... Read more →
Scammers tend to use tried and true techniques to con people out of their identities and money. One of the most popular schemes involves crooks pretending to be real-life officials. And the Internal Revenue Service is near the top of government agencies that con artists impersonate. CloudFlare, a company which provides security for many companies' online operations, says that the IRS ranks sixth in the 50 top brands when it comes to phishing attempts that use fake sites. The example given by CloudFlare included "IRS" along with the words "contact" and "payment." A big tip-off that the URL is fake... Read more →