IRS Agents Don’t Accept Payment Over The Phone


In recent years, many clients, friends & total strangers have reached out about getting calls ‘From The IRS’, demanding payment or a lawsuit will be filed, IRS (or police) are on their way to arrest you, or something similar unless you give them a credit card to pay the tax bill right now.  I always calm them down, explain how these calls aren’t from the IRS and are from scammers.  I’ve written posts about these scams in the past & how you can report the calls to the IRS – you can find that post here.

Recently IIMG_1277 heard something that should also ease your fears – while holding for an IRS agent and suffering through the hold music, there was an announcement I’d not heard before:  “Please be advised that IRS employees may not accept payments over the phone, only via mail, online through www.irs.gov, or in person”.  Seems the IRS has gotten the hint and are letting people know what methods may be be used for payments are made to the IRS.   Although not everyone will be on hold with the IRS to hear this announcement, kudos to them for finding a way to let the public know,

Seems almost everywhere we turn, there’s some new scam going on – it’s always good to be careful and keep up to date when new scams come to light.  Please feel free to share this post with your friends!

Please let me know if you’ve got any questions – lots of people get nervous (understandably!) when receiving a call from the IRS.  Please write your comments or questions below.

Cheers!

Thomas C. Hodge
President

Hodge Group LLC
3943 N. Austin Avenue
Chicago, IL 60634

773.237.6369

www.thehodgegroup.com

www.taxbillappeals.com – Property Tax Bill Appeals for Cook County IL

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Will My Return Get Audited?

What does the IRS look for an audit of individuals?


Wondering if your personal tax return might get audited?  Do you know what the IRS looks at?

Obviously, the IRS won’t give out a list of items that they look for, but based on audits, here are some known ‘red flags’ (for some items, I have a free brochure – click on the link for the PDF in a new window):

  • Large Hobby Losses – having wage income and a large loss on a Schedule C especially for an activity that sounds like a hobby instead of a business.  See Hobby vs. Business
  • Owning a cash-intensive small business such as hair/nail salons, car washes, taxi/limo service, etc.
  • Claiming 100% business use for a vehicle, especially if it is your only vehicle.  See Business Use of Vehicles
  • Large write-offs of business meals/entertainment or travel on Schedule C or Form 2106  for Unreimbursed Employee Expenses.  Woman Pondering
  • Rental losses for Real Estate Professionals or individuals with large wage (W2) income.  See Rental Income and Expenses
  • Taking larger deductions than your income allows – especially for taxes paid or real estate interest.  Backup documents for these items will probably eliminate any IRS problems.  See Itemized Deductions Homeowners
  • Foreign bank accounts, especially in ‘tax havens’ that don’t disclose account owners. The IRS has made this a high priority for a few years.
  • Operating an S Corp or LLC where you draw a minimal salary.  The IRS has said that owners of these businesses should draw a ‘reasonable’ salary and people have been passing profits through to their individual returns to avoid paying the match on Social Security & Medicare taxes.
  • Using your Home as a Business – people try to write off a lot of items, but only some are allowed.  See Business Use of Home

These are some of the items that have been looked at during audits over the last few years.  As always, keep adequate records to support your deductions.  See Recordkeeping for Tax Purposes.

With the tax season rolling along, you should discuss any issues you many have with your tax preparer.  I’m available if you need help with your taxes, or have any comments or questions.

Cheers!

Thomas C. Hodge, CPA
President

The Hodge Group
3040 N. Menard Avenue
Chicago, IL 60634

773.237.6369

www.thehodgegroup.com

Best Tax Preparers Website

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The IRS does NOT use e-mail!


I can’t believe how many times I get an e-mail personally (or forwarded from a client) that claims to be from the “IRS”. Usually these e-mails state that a “Transaction has been declined’, or ‘Your Tax Payment Didn’t Clear” or some such nonsense…

Remember – the IRS does NOT use e-mail as a rule – no communications via e-mail is allowed due to fears of virus infections, spyware, malware, etc. So, if you get something like this, ignore & delete it, plus tell your friends.

If you have any thoughts or questions, don’t hesitate to contact me.

Cheers!

Thomas Hodge, CPA
President

The Hodge Group

http://www.thehodgegroup.com

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Individual Tax ID numbers will be harder to get


When a person doesn’t have a Social Security Number (SSN) or aren’t eligible for one, they can apply to the IRS to get a ‘Temporary Individual ID Number’ so they can file tax returns, make payments, obtain refunds, etc. These ID numbers are usually issued temporarily for people who have work visas, scholarships, temporary/seasonal jobs, etc. and who are not citizens or naturalized aliens.  However, obtaining these temporary tax ID numbers will be more difficult moving forward.

The IRS is reporting that ‘a significant number’ of fraudulent tax returns claiming refunds have been filed using temporary ID numbers. Starting soon, in order to get a temporary ID number, applicants will now need to send original copies of passports or birth certificates, or copies certified by the agency that issued the document – notarized copies are no longer allowed as had been in the past.  The IRS is hoping this will cut down on fraud.

As a notary, I’ve never been asked to ‘certify this birth certificate is real’ or anything like that and not even sure how I would know so I’m glad this is being taken out of our hands.  As a tax return preparer, I’ve run into situations where people are trying to claim all sorts of things and it is my job to put them on the right track & make sure they file an accurate return.  Knowing that the IRS will only issue temporary ID numbers after receiving original paperwork or certified copies should cut down on tax fraud and make tax return preparation a bit easier…

I welcome your comments & questions.

Cheers!

Tom Hodge, President

The Hodge Group

Think your federal tax refund is slow in coming this year? You’re not alone


Reports continue to come in from around the country about federal tax refunds being slow in arriving. Personally, I’ve had a few taxpayers wonder why they are waiting longer than normal for their refunds, although (fortunately) not too many.

The primary reason is the IRS instituted several safeguards in their processing system to prevent tax fraud. These safeguards have slowed things down and caused more returns to be reviewed before a refund is issued.

How long are we talking? I’ve told people that refunds normally arrive in about 10 – 15 days, but this year it may be as long as 3 weeks (one client had to wait this long). All of these returns were e-filed and I can’t figure out why certain clients are taking longer for their refunds and the IRS (of course) won’t tell what they are looking for with their new safeguards.

Best advice – hang in there and check on www.irs.gov and click on ‘Where’s my Refund’ for updates.  You will need the lead SSN (if you’re filing a return with 2 SSNs), your filing status, and the whole dollar amount of your refund.  Earlier this year there were a few problems with this feature on their site but those seem to have been taken care of as I’ve had only a few issues over the last few weeks (opposed to quite a few in January & early February).

Through the 16th of February, the IRS reported it had processed approximately 34.8 million tax returns (down from the 36.1 million in mid-February 2011).  That is a staggering number of returns when you think about it.

Also, a reminder – the IRS never, never, never tries to get in touch with you via e-mail.  They always communicate via phone, mail or in person.  Any attempt by the ‘IRS” to get info from you via email is fraudulent and you should delete it right away!  Don’t be a victim of tax fraud or identity theft this way.

If you have any thoughts or questions, or need help with your 2011 tax returns, please let me know.

Cheers!

 

Thomas C. Hodge

President

The Hodge Group

Church members being targeted by IRS Scam


The IRS is warning church groups, civic groups and their members about a scam where individuals appear at churches and/or civil groups and get unsuspecting people to file for bogus refunds.  Mostly, the scam zeros in on refunds of Social Security taxes paid in over time, trying to transfer those taxes to the IRS and then filing for a credit. People then pay the scammers for their ‘services’.  The paperwork that is filled out is given back to the taxpayer, who sends it to the IRS and then it is rejected.  By now, the scammers have disappeared.

Identity theft could be another issue, although not widely reported yet.  If the scammers keep a copy of the paperwork (as a paid preparer is supposed to do), then identity theft could be a concern.

IRS Spokesman David Stell said, “The unique aspect of this scam is that they’re going to churches and civic groups to offer ‘something for nothing.’ Unfortunately they are very good at what they do and they’re very good at making people believe that there are credits or refunds available when there are not.”

The IRS urges taxpayers to look out for the following:

  • Claims for rebates or refunds based on excess Social Security benefits. These are almost always fictitious.
  • A claim that the IRS can be a conduit for Social Security Benefits – it cannot!
  • Churches or civic groups being asked to team up with unfamiliar tax advice groups or tax preparation services.
  • Homemade flyers or promotional products that talk about tax refunds or credits being available without proof of eligibility.
  • Groups offering tax preparation with no documentation required.  This could be “No Document Tax Returns” or promises of refunds without presenting any documentation.
  • Tax Preparers pushing you to take advantage as they will ‘only be available today’.

In addition, the scammers might discuss two recently expired tax credits called the Economic Recovery Credit Program and the Recovery Rebate Credit.  Watch out for these words!  Anyone promoting these credits is suspect.

My advice is to alert your church or civic group and to keep your eyes open.  If your church or civic group has a day like this, have it video taped so people’s faces can be sent to the IRS and/or FBI.  Also, always ask the ‘tax preparer’ about their background, how long they’ve been doing taxes, where they passed the CPA exam (it is given on a state basis so the person should respond “Ohio’ instead of ‘Cleveland’).

When in doubt, take a business card (assuming they have any) and say you’ll get back to them.

If you have any thoughts or questions, please don’t hesitate to contact me.

Hope you all enjoyed your Labor Day!

Cheers!

Tom Hodge

Delays in processing some 2010 tax returns


If you file a Schedule A (Itemized Deductions) with your tax return, you will have to wait a bit before filing for 2010 – that includes both electronic and paper filing.

Remember that Congress passed tax revisions late in 2010? Part of that bill included changes to the Schedule A and the IRS is still working to get their computer systems modified. The current target date is February 14, 2011. According to what I have read, if you file electronically, the return will be rejected until their systems are updated – paper filing means the return will probably go into a stack of papers to be processed later and that has ‘disaster’ written all over it…

Best advice I can give is to hold on and wait – you can go to http://www.irs.gov for further updates and I’ll post an update here as well.

If you have comments or questions, don’t hesitate to contact me.

Cheers!

Tom