IRS continues to publish a daily entry on its list of “Dirty Dozen” tax scams for 2018. While reports of tax-related identity theft “have declined markedly” for several years, the practice “is still widespread” and serious,
IRS said on March 7. (IR 2018-42) The number of identity theft returns has dropped some 65% between 2015 and 2017. “Because of these successes, criminals are devising more creative ways to steal more in-depth personal information to impersonate taxpayers”, the agency said. IRS also reminded business filers to remain alert to the possibility of cybercriminals filing fraudulent Forms 1120, U.S. Corporation Income Tax Return, using stolen business identities.
Consumers of tax preparation services should be on the lookout for “unscrupulous tax preparers looking to make a fast buck from honest people seeking tax assistance”, IRS said on March 8. (IR 2018-45) “There are some dishonest preparers who operate each filing season to perpetrate refund fraud, identity theft and other scams that hurt honest taxpayers”, the agency said. Unscrupulous preparers “who prey on unsuspecting taxpayers with outlandish promises of overly large refunds” is a serious enough problem to earn a place on the Dirty Dozen list, it added. On March 9, IRS warned taxpayers about “scam groups masquerading as charitable organizations, luring people to make donations to groups or causes that don’t actually qualify for a tax deduction”. (IR 2018-47) These phony charities try to secure donations from unsuspecting contributors, “using a charitable reason and a tax deduction as bait for taxpayers”, the agency said. “Perpetrators of illegal scams can face significant penalties and interest and possible criminal prosecution”, IRS said, adding that “to help protect taxpayers, IRS Criminal Investigation works closely with the Department of Justice to shut down scams and prosecute the criminals behind them”. The agency offered a number of basic tips to people making charitable donations.
(In my personal experience I have noticed some individuals who promote tax scams under the guise of tax advice. Their revenue stream comes from the products they sell to make these tax scams work. In my experience these people design and set up the entire mechanism, which involves buying something from the individual, such as insurance policies. Everything’s verbal. They never prepare or sign returns. They refer everyone to a tax-practitioner who prepares and signs the return and probably kicks part of the fee back to the individual. If the IRS discovers the scam, they will go after the taxpayer and the person who signed the return, but the actual villain may go scott free.)
IRS has announced that registration is now open for the 2018 IRS Nationwide Tax Forum which will be held in Atlanta, National Harbor (Washington, D.C.), San Diego, Chicago and Orlando. (e-News for Tax Professionals 2018-9) As described by the agency, seminars will be presented by IRS experts and national association partners including the American Bar Association, the American Institute of Certified Public Accountants, the National Association of Enrolled Agents, the National Association of Tax Professionals, the National Society of Accountants and the National Society of Tax Professionals. Attendees can earn up to 18 continuing professional education (CPE) credits. The forum will once again feature the Case Resolution Program which allows tax professionals “to bring [their] toughest unresolved IRS case” before agency representatives with specialized expertise for a one-on-one scheduled meeting. “If we can’t resolve the case onsite or it needs more research, we’ll assign it to the appropriate IRS unit for follow-up”, IRS said. For more information and to register, go to irstaxforum.com/index
Unclaimed federal income tax refunds totaling $1.1 billion are waiting to be claimed by taxpayers who have not filed 2014 returns, according to IRS. (IR 2018-44) An estimated one million taxpayers have until April 17 to file their 2014 return. These returns must be properly addressed, mailed and carry a postmark by that date. However, those seeking 2014 refunds may have theirs held if these taxpayers have not filed returns for 2015 and 2016, IRS noted. Refunds also will be applied to any amounts owed to IRS or a state tax agency. “Time is running out for people who haven’t filed tax returns to claim their refunds”, said Acting IRS Commissioner David Kautter. “Students, part-time workers and many others may have overlooked filing for 2014. And there’s no penalty for filing a late return if you’re due a refund”, he added.