9 Ways to Avoid Being a Victim of a Tax Scam

Tax scams have been on the IRS's radar for quite some time now. First we heard that refunds would be delayed due to the fraud mechanisms put in place by the IRS. Now the IRS has identified a new scam going around promising big refunds to low-income, senior and local churches' taxpayers.

The scam promises a big refund (and of course a big fee for the scam artist)a or nonexistent stimulus payment based on the American Opportunity Tax Credit, even if the victim was not enrolled in or paying for college.

What can you do to ensure that you are not a victim? Here are nine steps to ensure you don get caught in one of the scams.



The Tech Accountant

Give to the Right Charity

We are in the season of giving and many taxpayers would like to provide assistance to those less fortunate than they are. While charitable giving is always good, there are however some things taxpayers should know before giving their money, time, and other items to a charity. Here's a short video with the details. Enjoy.



The Tech Accountant

Travel Receipts Got You Sour as a Lemon??? Make Lemonade

I hope everyone had a great holiday this past week. If you were one of the many people traveling this past week, I am sure you have quite a few receipts from your trip that you may want to organize to see how much you spent over the holiday.

Or maybe you are a constant business traveler that is tired of trying to keep up with all of your receipts when you travel for business.

If this describes you, I am sure that the time it takes to organize and tally up what you spent, and where has you as sour as a lemon.

Here's a quick video on a new web-based product with a corresponding smart phone app that can make lemonade out of those receipts. Let me know what you think.



The Tech Accountant

Update: Lifelock has acquired Lemon to expand in the the mobile arena. A new app to play with on Andriod and iOS.

Warren Buffet and Jay-Z preach financial literacy

Here's a coolcartoon video of rapper Jay-Z and Warren Buffet teaching kids good money management. Enjoy.



The Tech Accountant

Fill Your College Coffers

If you are a college student who has had a hard time finding a job this summer, then there may be another way for you to generate the much needed funs to pay for your college tuition and other needs. Surly a college student (and their parents) engages in one of the following activities:

• Go Shopping
• Go Out to Eat
• Go Grocery Shopping
• Hang with Friends

If you do any or all of the previous, then here is a quick video on how you can do those activities and still save for college, pay off current student loans or even pay for other college costs.

So if you were not able to find that perfect summer job to give you the money you were looking for, don't fret, just go out and shop.

The Tech Accountant

IR-2011-69: IRS Increases Mileage Rate to 55.5 Cents per Mile

IR-2011-69: IRS Increases Mileage Rate to 55.5 Cents per Mile

The IRS has increased the standard mileage rate for the rest of the year starting on July 1st to %55.5 cents a mile. The standard rate is used to deduct the costs of operating a vehicle for business or other purposes. The IRS attributes the increase to the rise in gas prices and their effort is to offset taxpayers costs.

The IRS also increased the rate for deducting medical and moving expenses to $23.5 cents per mile. The rate for charitable mileage remains the same.

Taxpayers who use their automobiles for business purposes may also want to track actual mileage to ensure that they are reaping the most tax benefit. There are special rules regarding actual versus standard mileage rates so be sure to speak with your tax professional for additional guidance.

The Tech Accountant

3 Ways to Fight Identity Theft & Tax Fraud

As many taxpayers continue to get over the tax filing season, there are quite a few still waiting to hear from the IRS regarding their tax refunds. Most of the time the refund claim can be tracked by using the IRS’s “Where’s My Refund” system on their site but for those taxpayers that have been the victim of identity theft; locating their refund may be a bit more challenging.


Recently in the Tampa Bay area, there were numerous cases of identity theft where someone had used the taxpayers’ names and social security numbers to file fraudulent tax returns claiming refunds. Typical cases of identity theft and tax return information include complex schemes that either intercept taxpayer information via the mail or online email phishing communication that tries to get the taxpayer to enter their personal information on what appears to be an IRS site. Currently the IRS and the Postal Service investigate any cases of identity theft and tax information.

So what’s a taxpayer to do if they think they are a victim of identity theft and tax return information? Here are 3 Steps one should take:

1. If the IRS contacts you that your identity has been used for tax fraud, respond to the correspondence ASAP. Identity theft and tax issue notices will outline if more than one return has been filed with your information or that you have wages from an employer that you do not know.

2. If you have not been contacted by the IRS, and you think that you have been a victim of identity theft and tax fraud, submit a copy of your identification, a police report detailing the incident, and Form 14039 to the IRS.

3. Contact the IRS Identity Protection Specialized Unit at 1-800-908-4490

Identity theft and tax fraud are on the rise currently and taxpayers must do everything they can to protect their personal information from getting in the hand of unscrupulous persons. By taking a proactive approach, the risk of losing one’s identity can be minimized.

The Tech Accountant

IRS helps you save for retirement

Here’s a great way to save for retirement and the IRS is helping you do it. Typically if you contribute funds to an IRA, a taxpayer can claim an above the line deduction for their contribution. A contribution may also make a taxpayer eligible for the retirement savings contribution credit. Listen below for details on how a contribution to an IRA will save you money on taxes.




So how is the IRS helping the taxpayer with IRA contributions this year?

Due to Emancipation Day (a holiday in the District of Columbia) taxpayers have a few extra days to make contributions to an IRA. The holiday falls on April 15th, and the IRS will be closed that day thus moving the date for making contributions to an IRA (and filing your tax return). Be sure to speak to your tax advisor to see how an IRA contribution can benefit you.

The Tech Accountant

5 Taxpayers the IRS is Targeting

There was a great deal of news that occurred over this past weekend but one of the more important stories was probably the deal between AT&T and T-Mobile to merge pending government approval. This will make AT&T the largest mobile provider and will affect a great deal of customers. There is however a little bit of other news that many tax payers may want to know regarding a new list out from the IRS.


According to the IRS, they are targeting specific groups of taxpayers for audits this year and taxpayers need to ensure that their return will not be flag by the IRS’s “Discriminant Function”. The 5 areas where the IRS is putting more focus is:

1. Schedule A Filers – Those that itemized their deductions

2. Schedule C – Those solo entrepreneurs that are not corporations

3. Schedule E – Those that own rental properties

4. Cash Basis Businesses – Those businesses that only use cash and not credit

5. Sales of Assets and other investments – Those taxpayers that have investments or assets for investments

What’s a taxpayer to do to ensure that their return is not flagged by the IRS? The most important factor is keeping good records that proved your deductions or credits are valid and that you qualify for them. Keeping good records can also help if your tax return is selected for an audit. Audits go a bit more smoothly when your paperwork is organized and typically result is no change or maybe even a little more money back for you.

The Tech Accountant

IRS Videos for All

As the IRS continues toward a more technology focused operation, taxpayers will be glad to know that the IRS recently added videos to their tools to assist taxpayers with a myriad of tax issues. Topics include disaster information, education, filing and paying taxes, IRS Audits, IRS Liens, post filing issues, recordkeeping, retirement plans and scams & fraud. The videos are broken down by individuals, small businesses, tax professionals, and governments. The IRS has also provided a section for those taxpayers that speak Spanish. The videos can be found here and typically run from 3 to 15 minutes.


This is another resource for taxpayers (and tax professionals) to use to understand their tax situations.

The Tech Accountant

Is the IRS "Lien"ing on You?

The IRS recently announced changes to the lien filing process and OIC (Offer in Compromise) changes that are suppose to help taxpayers meet their tax obligations. The changes are the following:



1. The dollar threshold for when liens are generally issued is being increased, to at least $10,000 in back taxes. The previous threshold was $5,000.

2. The IRS will make it easier to withdraw a lien once a person pays off their tax debt. However, the withdrawal is not automatic. Once full payment is made, you will have to request the lien be removed. To speed up the withdrawal process, the IRS will streamline its procedures to allow collection personnel to withdraw liens.

3. The IRS will withdraw liens in most cases where a taxpayer signs up for a direct debit installment agreement, which means the IRS will pull the money directly out of your bank account. If you currently have an installment agreement but switch to a direct debit agreement, you can request that the lien be withdrawn. There is a catch. The IRS says liens will be withdrawn after a probationary period to make sure the direct debit is working.

4. Small businesses with $25,000 or less in unpaid taxes can now get an installment agreement over 24 months. It used to be that only small businesses with under $10,000 in liabilities could participate.

5. The IRS will revise the Offer in Compromise rules to allow participation by taxpayers with annual incomes up to $100,000. In addition, those with a tax liability of up to $50,000 may now submit an offer, double the old limit of $25,000 or less.

The Tech Accountant

Want a Big Tax Refund...Here's How

Thanks to a fellow tax colleague of mine, here is a funny video that will hopefully educate many about how taxes work and why your tax refund is your money to begin with. Enjoy



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2010/2011 Tax Outlook -What happen and what to do in the future

The lame duck session of Congress is behind us and the new Congress is in session. So what happen at the end of 2010 and what can taxpayers expect going forward?

Here's is a brief overview of what the lame duck session did and how you can plan for your future taxes now.



The Tech Accountant

Tax Extenders...The Gift that keeps giving

The lame duck session of Congress finally made a move on the tax issues looming for the rest of the year and going forward. Here is a quick video outlining some of the individual tax updates that will affect your taxes.



The Tech Accountant

You Deserve a Cool Credit

In these cooler weather months it's good to know that the IRS is offering us a cool credit that may warm our wallets and our homes. Check out all the details in this quick video.



The Tech Accountant

A Lame Duck still Quacks

All the votes have been tallied and all the precincts have reported…some people are happy with the outcome and some are not. Whether your Congress person won or not is not the issue at this point, the issue lies in what is going to happen in the lame duck session of Congress for the rest of the year and will you as a taxpayer be prepared. Here’s a quick rundown of what is on the table for taxpayers before the year ends:


• Bush Tax Cuts extended?

• Estate Tax?

• AMT?

• Health Care Reform?

I am not a betting man but would have to think that more than likely some taxes are going to go up. What taxpayers do before this year ends is important but you may need to call the psychic hotline or a crystal ball to assist you. When I looked into my crystal ball this is what I have come up with.


Be sure to speak to your tax professional (psychic) to ensure that all of your ducks are in a row for the upcoming tax season.

The Tech Accountant

Uncertain Tax Planning

The fall season typically brings about a change. Whether it is change in the temperatures, the changes in the leaves, or the change in the time (fall back) around this time of year everyone is experiencing a change. One thing that should not change during this time of year is a taxpayers’ ability to properly plan for the upcoming tax season. This year however, is one of the most difficult tax years to plan for due to the uncertainty in the Congress and our economy. The economy is currently filled with uncertainty making many small businesses hold on to their hard earned money and not hire more workers. Congress is adding their uncertainty to the pot by recently adjourning without addressing the expiring Bush tax cuts in addition to other important tax issues (AMT, estate tax, and more).


What is a taxpayer or small business owner to do in a situation of uncertainty? Listen to some of the ideas we have come up with for our clients here.



The Tech Accountant

A look back at the tax season

Now that the tax extension deadline is one day into the rear view mirror, many taxpayers (and us tax professionals too) would like to take a break away from taxes. This gives me the opportunity to sit back and reflect on some of the more memorable comments I heard during the year regarding taxes and filing. There were quite a few areas of tax law where some taxpayers I spoke with were unclear as to the rules but some of the major ones had to do with extensions with balances due, and failing to file a tax return.




Tax Extensions

When a taxpayer does not have all the information to accurately complete their return by the deadline, the IRS will allow for an extension of time to prepare the tax return. To request an extension, taxpayers must file Form 4868 (individuals) or Form 7004 (businesses) on or before the due date of the return. Typically this is where the misunderstanding starts. An extension of time to file your return does not include an extension of time to pay your tax liability. Taxpayers filing extensions should estimate to the best of their knowledge their tax liability and send a payment when filing their extension.



Failure to File

When a taxpayer does not file a tax return by the due date (including extensions) a failure to file penalty may be incurred. This rule has been in existence for quite some time, however many taxpayers are unaware of the penalty. This may also be a good time to notify taxpayers that the failure to file penalty has been increased for income tax returns filed more than 60 days after the due date (including extensions). Returns filed after 2008 qualify for the increased failure to file penalty in which the minimum penalty will be $135 or 100% of the tax not paid.

These are just two of the more frequent misconceptions that I personally heard about during the year, but there are more. With all the recent changes in tax law, there are sure to be more “grey” areas where many taxpayers may fall thru the cracks. One the reasons I always say taxes are a year round strategy that can be proactively done with your tax professional instead of reactively at year end.

The Tech Accountant

IRS Introduces Widgets to Inform Taxpayers

The IRS continues to embrace technology and is quickly moving into the realm of social media with their new widgets. The widgets can be placed on websites, and social media sites to inform taxpayers about new developments with the IRS and tax breaks. Topics for the widgets include EITC (Earned Income Tax Credit), IRS Retirement Plans; HIRE Act tax breaks, due diligence, and non-profits. Be sure to keep a lookout for the new widgets on your tax professional’s website and social media pages. Examples are below:

The Tech Accountant

Fishing with the EFTPS

Back in July, I posted about a new e-mail scam that had been circulating to get taxpayers personal data. Well, the crooks seem to be at it again according to the IRS, and this time the “fish hook” is the EFTPS (Electronic Federal Tax Payment System). Now before everyone jumps to conclusions and says “See another reason to not use technology”, let me outline the details of the scam.


The scam claims to be from the IRS and states that it comes from the Anti-Fraud Commission (and many of the words are misspelled). The e-mail goes on to say that someone has used the taxpayer’s credit card information to pay a tax liability. The e-mail continues and says that taxpayer’s bank accounts have been used for fraud and money has been lost. To help recover the funds, taxpayers must click on a link within the e-mail to start the recovery process.

How to spot scam IRS e-mails

1. Misspelled words

2. E-mail does not end with IRS.gov

3. Link does not end with IRS.gov

4. IRS does not send e-mails to taxpayers

Hope the following tips will keep taxpayers safe when surfing the internet and checking their e-mails

The Tech Accountant