IRS

How to Recognize a Scam

January 1, 2022 By quadcities Leave a Comment

Scammers are alive and well and seek to help themselves to your hard-earned money.

Let’s say you receive a call like this: “Hello, I am Agent Smith from the IRS. You owe $2,368 plus interest. If you don’t pay immediately, we will issue a warrant for your arrest!”

Then the caller proceeds to tell you to go get prepaid gift cards and send them to some P.O. Box.

Well, if you have gotten a call like this, there is good news! It is not the IRS and you are not in any trouble. The bad news is that it is a scam. I hope you did not fall for it!

Have you ever received a call from the “IRS,” “Social Security” or “Medicare”? I have. Most of the time it is a robocall by a computer.

I actually got a call from “the IRS” and the individual left a badge number and a number to call back. It is always the same message of urgency that you owe money and an organization is going to issue a warrant for your arrest. Well, I have not been arrested. It’s a sure scam.

How about a call from the “Social Security Administration” notifying you that your benefits are being suspended because you owe money or the caller needs to verify some information?

Then there is the call from “Medicare” stating that your coverage may be or is suspended and you need to verify some information.

Maybe you have gotten a call stating that you have won a lottery or there is some grant someone wants to give you.

The bad news is that if you have received such a call and you gave your information or sent money, you have gotten scammed. These are all common scams to be aware of and avoid. If you get any of these calls, do not ever give any information or any money. Nothing bad is going to happen to you like they threaten. If you give them your Social Security number, date of birth and any other information, your identity will likely be stolen. If you send money, you will be out whatever you send.

Basic rule: do not ever give out any personal information to anyone. These scammers may contact you over the phone, via email or perhaps text message. It is generally always the same story. You need to send immediately some amount of money either via a wire transfer or go buy some gift cards and send them to a P.O. Box. Some may request that you send cryptocurrency.

What the Government Won’t Do
The government will never:

Call you and ask for personal information. If a someone is from the government, that caller will have your Medicare and Social Security number.
Contact you via social media, text or email.
Reach out to you to award you a federal grant. You must apply for one and the purpose is generally for a very specific reason.
Ask you for upfront money to issue a refund, grant or some other government benefit.
Take payments in gift cards, wire transfers or cryptocurrency.

What the Government Will Do

Contact you by mail. The letter will contain very specific information and instruct you what the issue is and what information is needed.
Other Don’ts
Never give any personal information via the phone, email, text message or social media.
Do not send any prepaid gift cards.
Wire transfers should never occur.
Cryptocurrency should not be sent in lieu of a cash payment.

Scammers are alive and well and seek to help themselves to your hard-earned money. Follow these simple rules and keep yourself safe. Keep your money away from them.

Here are some other types of scams to be aware of:

texasattorneygeneral.gov/consumer-protection/common-scams

consumerfinance.gov/ask-cfpb/what-are-some-common-types-of-scams-en-2092/

Always say no, never give them any personal information and keep your money away from them. Hopefully you have not been a victim. Armed with this information, you can avoid becoming one. You work hard for your money, make sure it stays your money!

Thanks for reading; hope you found this helpful. QCBN

By Steven Calabrese

Steven Calabrese, CPA, is the CFO of Polara Health. He also is the owner/operator of a website known as thebiweeklyadvisor.com, where topics such as budgeting, investing, paying off debt and goal setting are discussed.

IRS Website Launched Allows Americans To Track Their Coronavirus Stimulus Check

April 17, 2020 By quadcities Leave a Comment

The IRS has recently launched a website that allows Americans to track the status of their stimulus checks.

The IRS “Get My Payment” website informs users as to when they can expect their $1,200 coronavirus stimulus check. In addition, the site also details whether the agency needs more information before they send the check.

The website will provide details if their check has been delivered, and to which bank account it was deposited to.

In order to use the website, users may need their 2019 tax return, if filed, and their 2018 tax return. Users will need to provide their Social Security Number, date of birth, address and ZIP code to access the information on the website.

The federal government has already started sending stimulus funds earlier this week to citizens who have filed direct deposit information with the government. Those who do not have bank information on file with the government will need to wait a few months before a paper check arrives in the mail.

Anyone who has not set up direct deposit banking information with the federal government can click here to do so.

The following details eligibility for citizens to receive stimulus cash from the federal government.

$2,400 – Couples earning less than $150,000 a year (couples earning $150,000 – $198,000 will receive a prorated check).

$1,200 – Individuals earning less than $75,000 a year (individuals earning $75,000 – $99,000 will receive a prorated check).

$500 – Each dependent child age 16 or under as of Dec. 31, 2019 (for qualifying individuals and couples).

Treasury, IRS Launch New Tool to Help Non-Filers Receive One-Time Coronavirus Relief Check

April 17, 2020 By quadcities 4 Comments

U.S. Senator Martha McSally (R-AZ) shared the following information regarding a new web tool launched Friday by the Treasury Department and Internal Revenue Service (IRS) to help the millions of people who don’t normally file a tax return quickly register for their one-time relief check as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

The CARES Act established Economic Impact Payments for individuals who make less than $99,000 a year or married couples that make less than $198,000 a year.

“People who don’t have a return filing obligation can use this tool to give us basic information so they can receive their Economic Impact Payments as soon as possible,” said IRS Commissioner Chuck Rettig. “The IRS and Free File Alliance have been working around the clock to deliver this new tool to help people.”

The non-filer tool, developed in between the IRS and the Free File Alliance, provides a free and easy option designed for people who don’t have a return filing obligation, including those with too little income to file. The feature is available only on IRS.gov, and users should look for Non-filers: Enter Payment Info Here to take them directly to the tool.

The IRS reminds taxpayers that Economic Impact Payments will be distributed automatically to most people starting next week. Eligible taxpayers who filed tax returns for 2019 or 2018 will receive the payments automatically. Automatic payments will also go in the near future to those receiving Social Security retirement or disability benefits and Railroad Retirement benefits.

How do I use the Non-Filers: Enter Payment Info tool?

For those who don’t normally file a tax return, the process is simple and only takes a few minutes to complete. First, visit IRS.gov, and look for “Non-Filers: Enter Payment Info Here.” Then provide basic information including Social Security number, name, address, and dependents. The IRS will use this information to confirm eligibility and calculate and send an Economic Impact Payment. Using the tool to get your payment will not result in any taxes being owed. Entering bank or financial account information will allow the IRS to deposit your payment directly in your account. Otherwise, your payment will be mailed to you.

“Non-Filers: Enter Payment Info” is secure, and the information entered will be safe. The tool is based on Free File Fillable Forms, part of the Free File Alliance’s offerings of free products on IRS.gov.

Who should use the Non-Filers tool?

This new tool is designed for people who did not file a tax return for 2018 or 2019 and who don’t receive Social Security retirement or disability benefits or Railroad Retirement benefits. Others who should consider the Non-Filers tool as an option, include:

Lower income: Among those who could use Non-Filers: Enter Payment Info tool are those who haven’t filed a 2018 or 2019 return because they are under the normal income limits for filing a tax return. This may include single filers who made under $12,200 and married couples making less than $24,400 in 2019.

Veterans beneficiaries and Supplemental Security Income (SSI) recipients: The IRS continues to explore ways to see if Economic Impact Payments can be made automatically to SSI recipients and those who receive veterans disability compensation, pension or survivor benefits from the Department of Veterans Affairs and who did not file a tax return for the 2018 or 2019 tax years. People in these groups can either use Non-Filers: Enter Payment Info option now or wait as the IRS continues to review automatic payment options to simplify delivery for these groups.

Social Security, SSDI and Railroad Retirement beneficiaries with qualifying dependents: These groups will automatically receive $1,200 Economic Impact Payments. People in this group who have qualifying children under age 17 may use Non-Filers: Enter Payment Info to claim the $500 payment per child.

Students and others: If someone else claimed you on their tax return, you will not be eligible for the Economic Impact Payment or using the Non-Filer tool.

Coming next week: Automatic payments begin
Eligible taxpayers who filed tax returns for either 2019 or 2018 and chose direct deposit of their refund will automatically receive an Economic Impact Payment of up to $1,200 for individuals or $2,400 for married couples and $500 for each qualifying child. Individuals who receive Social Security retirement or disability benefits, SSDI or who receive Railroad Retirement benefits but did not file a return for 2019 or 2018 will automatically receive a payment in the near future.

Coming next week: Get My Payment shows Economic Impact Payment date, helps with direct deposit
To help everyone check on the status of their payments, the IRS is building a second new tool expected to be available for use by April 17. Get My Payment will provide people with the status of their payment, including the date their payment is scheduled to be deposited into their bank account or mailed to them.

An additional feature on Get My Payment will allow eligible people a chance to provide their bank account information so they can receive their payment more quickly rather than waiting for a paper check. This feature will be unavailable if the Economic Impact Payment has already been scheduled for delivery.

Understanding the IRS Free File Alliance

December 17, 2018 By quadcities Leave a Comment

The IRS Free File Alliance has existed for the last 16 years. This is a program to allow taxpayers who qualify to be able to do their tax returns themselves, and file it for free, using the portal at irs.gov/free file.

There are about 12 free file alliance software vendor partners that work with the IRS to provide their software for use through the IRS web portal, for free. There are some restrictions as to who can use free file. A taxpayer who earns less than $66,000 per year can access one of the free file commercial software vendors by going to the irs.gov portal. Some of the software providers offer the federal and state returns, some only allow the federal for free and might charge for the state. There might be other charges involved depending on options and forms, with the different vendors.

Care should be exercised in choosing the right software provider. In the past, some of the software vendors have tried to steer taxpayers visiting the IRS free file portal to options for their paid products that resulted in a charge.

The IRS just recently revised the agreements it had with these software providers to require them to provide more clear options and instructions about the free filing tools, and to lessen the efforts of these companies to steer people toward some of their products that incurred a charge. In the past, the software companies participating in the free file alliance program would have things like a “value-added” button or link somewhere that would try to get people to click on it where it would take them to products for which the company could charge.

The new IRS standards now require that these participating companies remove this type of link or button and not try to steer people so aggressively into their chargeable products. Also, previously if a taxpayer did not qualify for free file, the provider would steer him or her toward products that incurred a charge. Now, the software provider must take the taxpayer who does not qualify for free file back to the irs.gov/free file portal.

Also, in the past, the software provider company would send out reminder emails in the current year to taxpayers who used their free file program the previous year with links to their products for which they charged, without reminding the person that he or she may still qualify for or even mention free file. Now, if emails are sent out to previous free file users, the IRS requires the email to remind the recipient that he or she may still qualify for a free file and that the first option presented to the taxpayer in the email must be Free File, and not a paid product offering.

These changes mean that the 12 companies participating in the Free File Alliance program should be offering a better and more clearly understood process when offering their software product to the alliance. The new IRS Commissioner Charles Rettig apparently played a big part in bringing about these changes. These changes to the Free File Alliance program really should make it a more consumer-friendly offering going forward.

Still, it is good to keep in mind that a great deal of the tax returns that are done wrong and eventually end up with the IRS placing them into collection, were self-prepared returns. So, care should be exercised and professional help sought when necessary. Sometimes it is just best to seek help or just pay someone qualified to do it for you. It can pay in the long run. QCBN

By Ernie Gallardo, EA

Ernie L Gallardo, EA can be reached at 928-899-2434.

Understanding Recent IRS Guidance on Meals, Entertainment Expenses

November 21, 2018 By quadcities Leave a Comment

Just a couple of weeks ago, the IRS released new guidance concerning business deductions for meals and entertainment expenses, which takes into account the new Tax Cuts and Jobs Act (TCJA) tax reform law passed by Congress and signed by President Trump last December.

The bill eliminated the deductions for all the entertainment expenses: things like concert tickets, cruises, golf passes or any other sporting event. As a result, there has been some confusion out there about the matter. Some people thought the whole deduction was lost. In truth, only part of the deduction has been lost. The purely entertainment part seems to be gone. However, the meals and beverages part remains, but only with attention to detail as to the proper records.

The IRS said that taxpayers can still deduct 50 percent of the costs of meals if they are not considered to be “lavish or extravagant” while entertaining current or potential business clients or customer contacts. What is considered to be lavish or extravagant will probably have to be worked out more as time goes by. However, the costs of food and beverages provided before, during or after an entertainment event must be accounted for separately and reflected on a separate receipt.

Prior to the new tax reform law, a taxpayer could deduct 50 percent of the cost of entertainment, meals and beverages as a business expenses. The issue of them not being too “lavish or extravagant” to qualify applied then, too.

Section 274 of the tax code changed all that and now disallows a business deduction for expenses for entertainment, recreational events and other amusement costs incurred while entertaining existing or potential clients or customers. But, does still allow a 50 percent deduction for meals and beverages when incurred while “wining and dining” clients. As the IRS said in a statement, “food and beverages that are provided during entertainment events will not be considered entertainment if purchased separately from the event.”

The Tax Cuts and Jobs Act (TCJA) passed in December did not specifically address the deductibility of expenses for business meals. Because of efforts in part by professional organizations and others to get more clarification, and the confusion in general surrounding the law, the IRS issued “Notice 2018-76,” which for now can be relied on for general guidance while they work on the proposed regulations that will clarify exactly when business meal expenses are deductible and what is considered entertainment.

As an example, a meal purchased before or after an event can still be deductible if relevant to business, and it is accounted for in a separate receipt. If a sporting or other event where tickets are purchased and this ticket price includes the meals and beverages with it, then the costs of those meals is not deductible. If after the sporting event is over, and you take a business client to a meal and drink, that would be deductible.

So again, as before, as it is with all things concerning your taxes, just remember to keep good and accurate records. Keeping detailed records is still very much the order of the day. Well documented receipts where they spell out who was there, what was discussed, the date and time, and that it was for business purposes, will still – and probably always will be – very important. QCBN

By Ernie Gallardo, EA

Ernie L Gallardo, EA is an Enrolled Agent with 15 years of tax experience in the Prescott area.

A member of the American Society of Tax Problem Solvers (ASTPS), and the National Association of Tax Professionals (NATP). Gallardo is the owner of Tycho Tax Services. He can be reached by phone/text 24/7 at 928-899-2434, email at info@TychoTaxServices.com, or at TychoTaxServices.com, and at PO BOX 112, Kirkland, AZ 86332.

Do Not Ignore Letters from the IRS

May 28, 2018 By quadcities Leave a Comment

Every year, around one million new tax collection cases are put in motion by the IRS on people who owe money to the IRS. If you are one of these targets, you should not ignore the letters and attempts to contact by the IRS or any other taxing authority. Most people who go into collection status by the IRS have already ignored previous attempts by them to collect the tax debt they say you owe. On the first letter the IRS sends to a taxpayer, they should either respond to it by phone call or letter themselves immediately, or get professional guidance in doing so. A lot of tax debt problems or other issues can be handled by the taxpayer themselves by simply calling and responding to the IRS in a good faith effort to resolve your

tax issue. This does not mean “rolling over for them.”

In recent years, the IRS.gov website has been improved a great deal in how user-friendly it is to find information about tax laws and help in preparing your taxes. It is also very useful in finding out about your own tax situation. It is a great resource, and is a really good place to start in researching all matters concerning taxes. You can learn what your options are when dealing with the IRS. Last month, I told of the “Tax Payers Bill of Rights.” The website also has a lot of really useful tools like “Get Transcript,” “Where’s my Refund,” “View Your Account,” “Online Payment System,” “Offer in Compromise Pre-Qualifier Tool” and many more. There is also the “Interactive Tax Assistant Tool,” which will help you find answers to your tax law questions. This is a good place to start to get help in dealing with your tax debt problems – if you have one.

In cases where a person’s efforts alone do not resolve the tax debt issue or other problems

with the IRS, or you are just too busy to do so, it would be of great benefit to seek help from a local tax resolution professional to resolve your issue. Even though a person may owe taxes and penalties, they are not required to pay more than they really owe. Sometimes, only a tax resolution professional can figure that out in an accurate way. You can always do what you can, but should be prepared to seek help when necessary. The IRS will not do an amended return for you. Sometimes an accurate amended return is the first step in lowering your tax debt.

Recently, I read about the rapper Earl Simmons, otherwise known as DMK, who was charged last year by federal prosecutors with evading income taxes and trying to obstruct the IRS. He was charged with owing $1.7 million in unpaid taxes and penalties from income he earned between 2002 and 2005. He also failed to file income tax returns for 2010 through 2015 while earning $2.3 million during that time. They charged him with evading taxes by living a “cash lifestyle.”

He used other people’s bank accounts during this time. He also listed his gross income incorrectly during bankruptcy proceedings. In November, he pleaded guilty to one count of tax fraud and the judge sentenced him to one year in prison, three years of supervised release, and was ordered to pay $2.29 million in restitution to the government.

The IRS really does wants to get these tax debt issues resolved, and will work with people

to do so, particularly if you are dealing with them in good faith. QCBN

By Ernie Gallardo

IRS