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Archive for July, 2020

Common Signs of an IRS Scam

Wednesday, July 29th, 2020

There are a variety of different IRS scams that it is difficult to pin point every single one of them and go into the details of each. The best way to avoid any of these scams is arming yourself with the knowledge of what the real IRS will and won’t do. If you know the basics of how the IRS works it will help you better identify a scam.

The IRS will start by mailing a bill to your home if you do owe unpaid taxes. But if you receive a bill do not automatically assume it is real. The scammers recently caught onto this and have been mailing fake bills to people stating they owe back taxes. In any situation, if you have doubts whether something from the IRS is legit or not, you can call the IRS directly to find out. The number for the IRS is 800-829-1040. If you are in doubt, you shouldn’t call the number on the notice because if it is a fake notice then the number will just call the scammers instead of the real IRS.

The IRS will not leave pre-recorded messages on your phone. They will not threaten to immediately bring in the local police, have someone deported, or revoke driver’s licenses. They will also never demand payment using a specific payment method such as a prepaid debit card, gift card, or wire transfer. The IRS will also give taxpayers the opportunity to ask questions or appeal taxes due.

If you received a scam phone call you can report it to and give the IRS the callback number of the scammer, putting “IRS Phone Scam” as the subject line.

Please consult your tax advisor on all the above issues.

How to Check Your Refund Status

Tuesday, July 28th, 2020

We often get calls from clients asking the status of their refunds and the good news is that IRS has a tool on their website that allows you to get up to date information on the status of their tax return filing, it is the “Where’s My Refund” link:

To check the status of your return you will need the following:
• Your social security number
• Your tax filing status
• The exact amount of your refund from your tax return

If you mailed in a paper return (instead of e-filing) the IRS is experiencing delays so the processing of your return may take longer than their normal 4-6 weeks.

Please consult your tax advisor on all the above information.

Did you Miss the 7/15 Tax Filing Deadline?

Wednesday, July 22nd, 2020

Even though the tax deadline has passed, there are people who have not filed their 2019 tax returns yet. If you are due a refund with your 2019 tax return then there is no penalty for filing your return late. But if you owe with your return penalties and interest will begin to accrue on any remaining unpaid tax due.

If you didn’t file your return and you owe taxes you should file as soon as possible and also pay in what you can with your return if you cannot pay the full amount due. Paying in what you can is better than not paying anything in at all. It is also beneficial to file as soon as possible because the late-filing penalty and late-payment penalty on unpaid taxes does add up fast.

If you are charged a penalty you may be able to get the penalty waived if you call the IRS using the number listed on your notice and explain why you filed late. If you have a history of filing and paying on time you may qualify for administrative penalty relief (usually if you filed and paid on time for the past 3 years and meet other requirements). The IRS gives further clarification on the waiving of this penalty:

Please consult your tax advisor on all the above information.

IRS Video to Avoid an Economic Impact Payment Scam

Thursday, July 16th, 2020

The IRS is reminding people not to fall for scams related to the Economic Impact Payment. Many scammers are targeting the vulnerable population who do not know how they are going to receive their payments. If you have any questions about your payment, you should get your answers directly from the IRS:

The IRS has also created a short video which gives a quick overview on what to look for regarding these scams:

Please consult your tax advisor on all the above information.

Keep Your Economic Impact Payment Notice with your Tax Records

Wednesday, July 8th, 2020

If you received an Economic Impact Payment then you would have received Notice 1444, which provides you all the information of the payment you received. The IRS usually mails these within 15 days after your payment goes out. If you think your payment amount is wrong, you may be eligible for additional tax credits when you file your 2020 tax return. You can refer to Notice 1444 when completing your 2020 tax return. If you have your taxes professional prepared you can give this notice to your accountant with all your other 2020 tax documents.

The IRS also wants to remind people that you should keep all your past tax returns for at least three years.

Please consult your tax advisor on all the above information.