WARNING! FAKE IRS Calls!

WARNING! Tax time also means FAKE IRS calls. Don’t be fooled by these crooks!

The safest way to check if it is the REAL IRS is hang up and go to www.IRS.gov and call the number on that website. The IRS goes through a very formal process of gathering information and would not ask for payment information over the phone or through e-mail. If you get threatened by the callers, the IRS does not do that either. 

 

Again, the safest thing to do is hang up and if you have real concern then call the IRS from the number on their website.

Employers Beware! IRS warns of W-2 Scam

Business owners beware! Every year there are people that claim to be part of the IRS to scare you into giving them information. This year, there is a payroll scam where they are sending out e-mails where they are asking for W-2 information. 

Remember, on these W-2’s there is a lot of sensitive information that could hurt your employees and your company. 

Although the e-mails seem legitimate, do not send any information. Some examples of these scam e-mails are:

• Kindly send me the individual 2016 W-2 (PDF) and earnings summary of all W-2 of our company staff for a quick review.
• Can you send me the updated list of employees with full details (Name, Social Security Number, Date of Birth, Home Address, Salary).
• I want you to send me the list of W-2 copy of employees wage and tax statement for 2016, i need them in PDF file format, you can send it as an attachment. Kindly prepare the lists and email them to me asap.

The IRS goes through a very formal process and does not request documents with such short notice. If you are still unsure if it is a scam or not, give them a call directly to verify if it was actually them.

Visit the site below to see what the IRS stated about this scam and for more information.

https://www.irs.gov/uac/newsroom/irs-states-and-tax-industry-renew-alert-about-form-w2-scam-targeting-payroll-human-resource-departments

How to Avoid Tax Fraud, Advice from Scammers Themselves

As a company who follows the three basic principles of Honesty, Integrity, and Innovation, we do not condone Tax Fraud, and we certainly will never perform such acts for anyone who requests such atrocity. So what is Tax Fraud? According to tax whistleblower, it is a general term, which can trigger many different laws found in Title 26 and Title 18 of the United States Code. It is basically a taxpayer’s intent to defraud the government by not paying taxes that they know are lawfully due.

Krebsonsecurity.com has talked about one of the successful scammers who explained how he was able to file a tax fraud by using prepaid debit cards. This kind of method has been used for several years because it has been a indispensible tool of tax fraudsters. The scammer named Peleus reported that he was able to bypass the IRS Fraud Filters, and was able to find great success at the state level. The important thing was, according to Peleus was having a bogus refund sent to a unique prepaid debit card account for each filing. In March 12, 2015, Utah State Tax Commission Chairman John Valentine has reported to the U.S Senate Finance Committee that suspicions returns has been about the direct deposit information changed from the previous year’s ban account to prepaid debit cards.

The problem with transferring funds to prepaid debit cards is that they cannot be traced or recovered, which is a perfect way to commit tax fraud. It seems that prepaid debit cards are most preferable to fraudsters because the identity thief doesn’t have to interact with banks, credit unions or checking cashing stores that may become suspicious when one person starts bringing in multiple tax refund checks to be cashed or deposited.

HOW TO AVOID THIS

–          Try to file your taxes as early as possible. However, if the state taxes have been “filed” already, then immediately report this issue with the state revenue agency.

–          Have a CPA or Accountant do it for you. Accountants are born to study all of the complications of the tax law, and they have to make sure their clients are safe. This is a good opportunity as there are many fraudsters out there who want to file a fake tax return. Accountants usually charge a fair price for their services, especially in Orange County.

–          Consider placing a fraud alert freeze on your file at the major credit companies. If fraudsters have enough personal information to file a fraudulent tax return under your name, then they can use that data to commit other crimes. Placing a fraud alert on your credit file every 90 days is the cheapest way since it is free.

Be sure to make sure your personal information is safe from crooks, and also use this information as a way to help you understand how fraudsters operate so you can use this information to help your sound more legitimate when you report a tax fraud claim.

 

***ARTICLE BASED ON TAX FRAUD ADVICE, STRAIGHT FROM THE SCAMMERS from krebsonsecurity.com ***

 

IRS Scam Update: U.S charges 61 over India-based Impersonation Scam

In one of our earlier posts, we posted up a blog about how we can identify a fraudulent scam from a fake IRS representative.

Just recently, The US Justice Department charged 61 people and entities on Thursday on October 27, 2016 with taking part in a scam involving India-based call centers where agents impersonated Internal Revenue Service (IRS) where immigration and other federal officials and demanded payments for nonexistent debts.

The scam, which had operated since 2013, targeted at least 15,000 people who lost more than $300 million. Twenty people were arrested in the United States on Thursday while 32 individuals and five call centers in India have been charged, the department said in statement.

The defendants, including 24 people across nine U.S states, were indicted by a grand jury in the United States District Court for the Southern District of Texas.

United States Assistant Attorney General Leslie Caldwell said at a news conference that the United States will be seeking extradition of those based in India and warned others engaged in similar schemes.

“It’s really important for the scammers in India to know that the United States is looking at this, is watching them and they could, if they engage in that activity, be extradited to the United Sates and could sit in jail … for several years,” she said.

According to the indictment, the operators of the call centers in Ahmedabad, in the Indian state of Gujarat, “threatened potential victims with arrest, imprisonment, fines or deportation if they did not pay taxes or penalties to the government.”

Payments by victims were laundered by a U.S. network of co-conspirators using prepaid debit cards or wire transfers, often using stolen or fake identities, the statement said.

The call centers also ran scams in which victims were offered short-term loans or grants on condition of providing good-faith deposits or payment of a processing fee, it said.

The Investigation involved immigration and Customs Enforcement, Treasury, Homeland Security, U.S Secret Service and police officials, the Justice Department said.

***ARTICLE BASED ON REUTERS.COM***

 

Hurricane Matthew Victims Suffered Enough. IRS Gives Some Help with Tax Relief

Hurricane Matthew has devastated families and businesses in North Carolina as well as South Carolina, Georgia, and Florida. For those affected, life becomes more difficult as their homes, businesses, and possessions were damaged or lost. Unfortunately, life still goes as many tax deadlines arrive which adds more to worry about for extension tax filers.

Therefore, in light of these events, the IRS has decided to give tax relief to those affected by the hurricane. Instead of worrying about trying to file taxes in 2016, extension tax filers will now have until March 17^th 2017 to file their taxes. These tax payers that suffered an uninsured or unreimbursed disaster losses will be allowed to claim for the year of 2016 or for their 2015 extension.

The IRS will also waive late-deposit fees for payroll and excise taxes that are usually due at the beginning of October if they are paid by October 19^th.

This relief applies to those that live within the recorded disaster area. No action is necessary from the affected tax payer if they live in the disaster area, but if they are affected and out of the area, they must contact the IRS to receive the relief.

For help with information and eligibility call the IRS at 866-562-5227 or visit disasterassistance.gov

https://www.irs.gov/uac/newsroom/irs-gives-expanded-tax-relief-to-victims-of-hurricane-matthew-parts-of-four-states-eligible-extension-filers-have-until-march-15-to-file

IRS eyes payroll tax avoidance tactics via S corporations

Payroll tax collection continues to vex the Internal Revenue Service despite several court cases that have resulted in rulings favorable for the IRS regarding unreasonably low compensation. A recent high profile case was David E. Watson, P.C. v. United States on which the Eighth Circuit ruled in 2012. Watson was an indirect partner in a CPA firm, practicing through an S corporation that paid him $24,000 of salary per year and between $175,000 and $203,000 in profit distributions. The court adjusted his compensation to $93,000.

It isn’t hard to see why shareholders of S corporations attempt to justify wage levels below what the IRS considers “reasonable compensation” (assuming the understated compensation is below the FICA wage base). Both the S corporation and employee save the 7.65% FICA and Medicare taxes on the wages not reported.