COMMON TAX SCAMS 

As we approach year-end, it is important to distinguish between legitimate IRS correspondence and scams. Tax scams often increase during this time of year – personal information has been compromised and millions of dollars have been lost by individuals who fall victim to these scams.

Common scams include emails and phone calls impersonating the IRS. These scams often are phishing for sensitive personal information, either directly or by infecting computers with malware. Scammers have even created websites that resemble that of the IRS in an effort to solicit sensitive information from taxpayers.

Other scammers have turned to threats, warning of serious action if immediate payment is not made. Common threats include tax liens on your property, revoking your driver’s license, or even arrest. Please note that the IRS will rarely threaten these serious consequences on initial contact.

 

IRS “Dirty Dozen”

Each year, the IRS publishes a list of common scams called the “IRS Dirty Dozen” to help raise awareness and warn taxpayers about common scams. For 2021, this list included scams surrounding the COVID-19 pandemic as well as schemes related to personal data theft. The pandemic schemes included economic stimulus payment theft and unemployment fraud. The personal data theft scams involved tax-related phishing tactics through email, social media, and phone calls. Additionally, the 2021 IRS Dirty Dozen list discussed details on scams involving fake charities and ghost tax preparers, and abusive arrangements. In summary, the IRS urges taxpayers to exercise caution and be aware of the common scams.

 

How to Tell the Difference

The primary form of communication from the IRS is through the United States Postal Service. The IRS will never do the following when contacting you:

  1. The IRS will not email you.
  2. The IRS will not text you.
  3. The IRS will not request personal information through social media or other online platforms.

If you receive a suspicious IRS-related email, there are several actions you can take to avoid falling victim to the scam:

  1. Do not reply to the email.
  2. Do not open any attachments in the email or click on any links.
  3. Delete the original email.

If you receive a suspicious IRS-related phone call, there are similar actions you can take:

  1. Ask for the employee’s badge number and name. If they cannot provide this, it is likely a scam.
  2. Do not provide any information and hang up.
  3. Please feel free to call us with any question or concerns regarding suspicious calls or emails you receive.

You can view your tax account information online at IRS.gov to review your tax status, and call an IRS representative using the appropriate phone number if you have questions regarding the legitimacy of the correspondence. A list of official IRS phone numbers can be found here. If you would like to report the scam to the IRS, you can forward the email or details of the call to [email protected].

If you receive correspondence from the IRS and have questions on its validity, we can also help you determine if the notice is legitimate. Please reach out to us with any questions you may have regarding IRS notices and tax scams.

 

Brief Tax Update: Employee Retention Tax Credit & Recent Tax Law Changes

As we have shared in a previous newsletter, the Employee Retention Credit (ERC) has been a benefit to eligible business owners who retained employees through the COVID-19 pandemic.

Eligibility for the ERC has been assessed on a quarterly basis, and many have qualified for this credit in 2020 as well as quarters 1, 2 and 3 of 2021.

Regarding 2021 Quarter 4 ERC eligibility, the Infrastructure Bill signed into law November 15, 2021 has made the ERC unavailable in 2021 Quarter 4 for businesses unless they qualify under the Recovery Startup Business provision (a business who started operations after 2/15/2020). The good news: the Infrastructure Bill only impacts 2021 Quarter 4 ERC eligibility, and does not affect or change eligibility for prior quarters.

Looking ahead at other tax changes before year-end, we wanted to mention the proposed Build Back Better bill which has not yet been signed. This bill is expected to be signed before the end of the year, and does contain a few tax changes. As new tax proposals can cause taxpayers concern, we wanted to be in touch with you on these.

From what we are able to see on the Build Back Better bill, we believe the tax impacts of this bill will not be as drastic as was initially proposed. We will be reaching out to you soon with another newsletter outlining the tax impacts of the Build Back Better bill.

If you have any questions or concerns, please feel free to reach out to us and we will be happy to assist you.

 


Employee Spotlight: Amy Shaw

Amy Shaw

Amy, a Wyoming native, joined the Soukup, Bush & Associates team in September of 2014. She graduated with a Bachelor of Arts degree in Accounting, and a double-major in Business Administration with a concentration in Operations Management from Western Washington University in June of 2014. Amy also pole-vaulted collegiately for Western’s Track & Field team.

Amy obtained her CPA in 2016 and also became a CVA (Certified Valuation Analyst) in 2018. Amy reviews individual and business tax returns, as well as business valuations.

In her spare time Amy enjoys running, photography, and spending time with her husband Thomas, daughter Alysa, and cat Blue.