Phone Scams Continue to be a Serious Threat, Remain on IRS “Dirty Dozen” List of Tax Scams for the 2016 Filing Season

WASHINGTON — Aggressive and threatening phone calls by criminals impersonating IRS agents remain a major threat to taxpayers, headlining the annual “Dirty Dozen” list of tax scams for the 2016 filing season, the Internal Revenue Service announced today.

The IRS has seen a surge of these phone scams as scam artists threaten police arrest, deportation, license revocation and other things. The IRS reminds taxpayers to guard against all sorts of con games that arise during any filing season.

“Taxpayers across the nation face a deluge of these aggressive phone scams. Don’t be fooled by callers pretending to be from the IRS in an attempt to steal your money,” said IRS Commissioner John Koskinen. “We continue to say if you are surprised to be hearing from us, then you’re not hearing from us.”

“There are many variations. The caller may threaten you with arrest or court action to trick you into making a payment,” Koskinen added. “Some schemes may say you’re entitled to a huge refund. These all add up to trouble. Some simple tips can help protect you.”

The Dirty Dozen is compiled annually by the IRS and lists a variety of common scams taxpayers may encounter any time during the year. Many of these con games peak during filing season as people prepare their tax returns or hire someone to do so.

This January, the Treasury Inspector General for Tax Administration (TIGTA) announced they have received reports of roughly 896,000 contacts since October 2013 and have become aware of over 5,000 victims who have collectively paid over $26.5 million as a result of the scam.

“The IRS continues working to warn taxpayers about phone scams and other schemes,” Koskinen said. “We especially want to thank the law-enforcement community, tax professionals, consumer advocates, the states, other government agencies and particularly the Treasury Inspector General for Tax Administration for helping us in this battle against these persistent phone scams.”

Protect Yourself

Scammers make unsolicited calls claiming to be IRS officials. They demand that the victim pay a bogus tax bill. They con the victim into sending cash, usually through a prepaid debit card or wire transfer. They may also leave “urgent” callback requests through phone “robo-calls,” or via a phishing email.

Many phone scams use threats to intimidate and bully a victim into paying. They may even threaten to arrest, deport or revoke the license of their victim if they don’t get the money.

Scammers often alter caller ID numbers to make it look like the IRS or another agency is calling. The callers use IRS titles and fake badge numbers to appear legitimate. They may use the victim’s name, address and other personal information to make the call sound official.

Here are five things the scammers often do but the IRS will not do. Any one of these five things is a tell-tale sign of a scam.

The IRS will never:

  • Call to demand immediate payment, nor will the agency call about taxes owed without first having mailed you a bill.
  • Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.
  • Require you to use a specific payment method for your taxes, such as a prepaid debit card.
  • Ask for credit or debit card numbers over the phone.
  • Threaten to bring in local police or other law-enforcement groups to have you arrested for not paying.

If you get a phone call from someone claiming to be from the IRS and asking for money, here’s what you should do:

If you don’t owe taxes, or have no reason to think that you do:

If you know you owe, or think you may owe tax:

  • Call the IRS at 800-829-1040. IRS workers can help you.

Stay alert to scams that use the IRS as a lure. Tax scams can happen any time of year, not just at tax time. For more, visit “Tax Scams and Consumer Alerts” on IRS.gov.

For more information, please contact our office for your free guide entitled “Taking Charge – What To Do If Your Identity is Stolen”.
 

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Insure Your Love

We insure a lot of things in our lives: our cars, our homes, our valuable. But what about something less tangible, such as your love for family? Can you insure that?

Insure Your Love Today. Contact our office to review your plan today. Happy Valentine’s Day from NFS.


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Choosing the Correct Filing Status

It’s important to use the right filing status when you file your tax return. The status you choose can affect the amount of tax you owe for the year. It may even determine if you must file a tax return. Keep in mind that your marital status on Dec. 31 is your status for the whole year. Sometimes more than one filing status may apply to you. If that happens, choose the one that allows you to pay the least amount of tax.

Here’s a list of the five filing statuses:

  1. Single. This status normally applies if you aren’t married. It applies if you are divorced or legally separated under state law.
  2. Married Filing Jointly. If you’re married, you and your spouse can file a joint tax return. If your spouse died in 2015, you can often file a joint return for that year.
  3. Married Filing Separately. A married couple can choose to file two separate tax returns. This may benefit you if it results in less tax owed than if you file a joint tax return. You may want to prepare your taxes both ways before you choose. You can also use it if you want to be responsible only for your own tax.
  4. Head of Household. In most cases, this status applies if you are not married, but there are some special rules. For example, you must have paid more than half the cost of keeping up a home for yourself and a qualifying person. Don’t choose this status by mistake. Be sure to check all the rules.
  5. Qualifying Widow(er) with Dependent Child. This status may apply to you if your spouse died during 2013 or 2014 and you have a dependent child. Other conditions also apply.

The “Filing” tab on IRS.gov can help with many of your federal income tax filing needs. Use the Interactive Tax Assistant tool to help you choose the right filing status. For more on this topic see Publication 501, Exemptions, Standard Deduction, and Filing Information. Go to IRS.gov/forms
to view, download or print the tax products you need.

For further assistance in deciding which filing status you qualify for, please contact our office.


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It Takes a Genius To Do Your Taxes, Right?

No, it doesn’t take a genius to do your taxes.

A do-it-yourself tax software ad says “it doesn’t take a genius to do your taxes.” That is quite correct. It doesn’t take a genius to do your taxes.

It also doesn’t take a genius to do the wiring in your house nor does it take a genius to install a toilet. It doesn’t take a genius to make a soufflé; and it does not take a genius to change the brakes on your car.

All of these things you can certainly do yourself. If you figure them out without training or experience, you may luck out and not get electrocuted, or flood your house, or serve an embarrassing dessert to your guests, or hit something because your brakes fail.

Yes, you can certainly do your own taxes, but you don’t know what you don’t know. The IRS knows this about do-it-yourselfers, and give those tax returns more scrutiny.

You don’t need us to do your taxes and you also don’t need insurance on your house. But, once your house is in flames and your tax return under scrutiny, you’re going to wish you had spent the money.

What You Think Your Tax Software Costs? 

The initial price of tax software ranges from $29.95 to $104.99. While that doesn’t sound expensive, it’s a small part of the total cost. The true cost of tax software is more than just the price you pay at checkout.

How Much Is Your Time Worth?

You’ve got better things to do than taxes. According to the IRS, tax filers spend 13 hours on average preparing and filing their taxes (per IRS Source). If your average household income is $50,000, that’s $312 of your time. That’s a lot of money! The average time is takes to do taxes using a tax advisor is 2 hours, that’s a great savings.

The Cost of Missed Deductions

Based on a recent survey, the average tax refund of tax software users is $1824. The average tax refund of people using a tax advisor is $2615, or a difference of $791! Get your entire refund by working with a tax advisor.

Your Total Cost for Using Tax Software

$1166 is the total cost you could have for doing your own taxes. This is the Purcahse Cost + Time Cost + Difference in the Refund. And these are just Federal Tax figures. If you have to file a state tax return, these numbers can increase! Save Money. Save Time. Save Frustration. Hire a Trustworthy Tax Advisor to help you file your taxes today. Contact our office today for assistance.


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The Earned Income Tax Credit: Often Missed

The Earned Income Tax Credit has helped workers with low and moderate incomes get a tax break for 40 years. Yet, one out of every five eligible workers fails to claim it. Here are some things you should know about this valuable credit:

  • Review Your Eligibility. If you worked and earned under $53,267, you may qualify for EITC. If your income or family situation has changed, you should review the EITC eligibility rules. You might qualify for EITC this year even if you didn’t in the past. If you qualify for EITC you must file a federal income tax return and claim the credit to get it. This is true even if you are not otherwise required to file a tax return. Don’t guess about your EITC eligibility. Use the EITC Assistant tool on IRS.gov. The tool can help you find out if you qualify for the credit. It can also estimate the amount of your EITC.
  • Know the Rules. You need to understand the rules before you claim the EITC, to be sure you qualify. It’s important that you get this right. Here are some factors you should consider:
  1. If you are married and file a separate return you do not qualify for EITC.
  2. You must have a Social Security number that is valid for employment for yourself, your spouse, if married, and any qualifying child listed on your tax return.
  3. You must have earned income. Earned income includes earnings from working for someone else or working for yourself.
  4. You may be married or single, with or without children to qualify. If you don’t have children, you must also meet age, residency and dependency rules. If you have a child who lived with you for more than six months of 2015, the child must meet age, residency, relationship and the joint return rules to qualify.
  5. If you are a member of the U.S. Armed Forces serving in a combat zone, special rules apply.

  • Lower Your Tax or Get a Refund. If you qualify for EITC, you could pay less federal tax, no tax or even get a refund. EITC could be worth up to $6,242. The average credit was $2,447 last year.

For more on EITC, see IRS Publication 596, Earned Income Credit. It’s available in English and Spanish on IRS.gov or for more help in person, give us a call here at Northeast Financial Strategies Inc.


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