TIGTA (The Treasury Inspector General for Tax Administration) has issued a warning for the public to be aware of phone calls from individuals claiming to represent the IRS. “This is the largest scam of its kind that we have ever seen,” said TIGTA Inspector General J. Russell George in a statement. He noted that has received reports of over 20,000 contacts and has become aware of thousands of victims who have collectively paid over $1 million as a result of the scam, in which individuals make unsolicited calls to taxpayers fraudulently claiming to be IRS officials. Intended victims are told they owe past due taxes and must pay with a debit card or wire transfer or they will be arrested, deported, or will lose their business or driver’s license. The IRS usually makes their first contact by mail, not by phone, email or any other social media. The IRS employees are very diligent in their protection of taxpayer rights and confidentiality. They will not initiate a telephone conversation and demand payment or request personal information. “If someone unexpectedly calls claiming to be from the IRS and uses threatening language if you don’t pay immediately, that is a sign that it … Read More
For most people, the Affordable Care Act has no effect on the 2013 income tax return they are filing in 2014. However, some people may need to make important decisions by the March 31, 2014 deadline for open enrollment. Five things about the health care law you may need to consider today: Currently Insured – No Change: If you already insured, you do not need to do anything more than continue your insurance. Uninsured – Enroll by March 31: The open enrollment period to purchase health care coverage through the Health Insurance Marketplace for 2014 runs through March 31, 2014. When you get health insurance through the marketplace, you may be able to get advance payments of the premium tax credit that will immediately help lower your monthly premium. Learn more at HealthCare.gov. Premium Tax Credit To Lower Your Monthly Premium: If you get insurance through the Marketplace, you may be eligible to claim the premium tax credit. You can elect to have advance payments of the tax credit sent directly to your insurer during 2014 so that the monthly premium you pay is lower, or wait to claim the credit when you file your tax return in 2015. If you choose to have … Read More
The IRS has learned of a new phishing scam in which taxpayers receive emails purporting to be from the Taxpayer Advocate Service (and bearing their logo). The email contains a bogus case number and says: “Your reported 2013 income is flagged for review due to a document processing error. Your case has been forwarded to the Taxpayer Advocate Service for resolution assistance. To avoid delays processing your 2013 filing contact the Taxpayer Advocate Service for resolution assistance.” The email contains a link where the recipient can find contact information for the “advocate” assigned to their case that solicits personal information such as the recipient’s legal name and contact information. There’s also a link to review “your reported income” that again solicits this kind of personal information. If you get inquiries from taxpayers about these messages, please tell them NOT to click on the link and to forward the email to the IRS’s designated address for such e-mails: email@example.com. Taxpayers can find instructions for forwarding the messages on IRS.gov.
IRS RELEASES GUIDANCE ON HOW TO REPORT BITCOIN TRANSACTIONS Bitcoin, and other virtual currency, is to be treated like property for tax purposes similar to stock transactions. Notice 2014-21 was released by the IRS this week to clarify the reporting requirements on transactions involving virtual currency. In some environments, virtual currency operates like “real” currency — i.e., the coin and paper money of the United States or of any other country that is designated as legal tender, circulates, and is customarily used and accepted as a medium of exchange in the country of issuance — but it does not have legal tender status in any jurisdiction. The notice provides that virtual currency is treated as property for U.S. federal tax purposes. General tax principles that apply to property transactions apply to transactions using virtual currency. Among other things, this means that: Wages paid to employees using virtual currency are taxable to the employee, must be reported by an employer on a Form W-2, and are subject to federal income tax withholding and payroll taxes. Payments using virtual currency made to independent contractors and other service providers are taxable and self-employment tax rules generally apply. Normally, payers must issue Form 1099. … Read More
Several incidents over the past couple of months have been directed at tax professionals from unhappy clients. In Chicago Heights, Illinois a Liberty Tax preparer pulled a gun on a customer’s boyfriend who police said threatened to beat him up during a dispute over fees. The boyfriend, 34, has reportedly been charged with assault after confronting the preparer over $500 in additional fees that his girlfriend was charged for her return. The preparer did possess a valid gun license. A 53-year-old man is accused of choking an H & R block employee in Kirkwood, Missouri. The client was enraged about his “tax situation.” Police told news outlets that the assailant knocked the Block employee to the ground and is now charged with misdemeanor assault. The Block worker reported minor injuries but did not require hospital treatment. Another incident involved gunfire and beatings in the Detroit office of Tax City Tax Service. A 19-year-old local man became enraged after the woman he was in the office with couldn’t get her refund in cash. Four people were shot in the scuffle.