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  Geebo 8:00 am on April 16, 2025 Permalink | Reply
  Tags: income tax, IRS ( 28 ), scam victims ( 5 ), Scams ( 1,468 )   

  IRS Offers New Hope for Scam Victims 

  

  By Greg Collier

  For victims of online financial scams, the damage often goes beyond the initial loss. In many cases, money stolen from taxable retirement accounts can result in unexpected tax bills, adding insult to injury. But recent guidance from the Internal Revenue Service is bringing much-needed clarity and opening new doors for some to reclaim a sense of financial control.

  A memorandum released by the IRS Office of Chief Counsel outlines specific situations where fraud victims may now be eligible for tax relief. This includes individuals who were misled by impersonators posing as bank employees or cybersecurity experts, urging them to move their money for safekeeping. The IRS recognizes that these victims acted with the intent to preserve or grow their funds, a key factor that qualifies them for theft loss deductions.

  The same applies to those who fell prey to deceptive investment schemes, such as fraudulent cryptocurrency platforms. Victims who believed they were engaging in legitimate opportunities to build wealth and made transactions with profit in mind can now find a clearer path to tax relief. The IRS guidance provides practical examples, helping taxpayers understand how their losses may qualify.

  This new direction is a significant step forward. While the law still limits deductions to specific categories, including profit-seeking transactions and federally declared disasters, the IRS’s updated interpretation acknowledges the complexity of modern scams. It marks a shift toward recognizing the good faith efforts of taxpayers who believed they were making financially responsible decisions.

  The guidance does not yet extend to all types of fraud. Situations where money was lost in more personal scenarios, such as romance scams or emotionally driven emergencies, are still excluded. However, the momentum is building for more comprehensive reform. Lawmakers have proposed legislation that would broaden and restore tax deductions for a wider range of scam victims, and some states are already exploring their own solutions to ensure fairness.

  In the meantime, victims can take proactive steps. Documenting communications, filing reports with local law enforcement and federal agencies, and preserving digital evidence all help support claims under the updated guidance. These actions can strengthen the case for those seeking deductions and may offer peace of mind in an otherwise turbulent time.

  Although the 2017 tax overhaul reshaped how deductions are handled, the current IRS memo signals a more compassionate and pragmatic approach to an increasingly common problem. It offers reassurance that, under the right circumstances, victims are not left alone to shoulder the burden of fraud.

  For many, this guidance offers more than just potential savings. It also represents recognition and a measure of justice in a system that has often struggled to keep up with the pace and sophistication of modern financial crime. With continued advocacy and growing awareness, there is reason to hope that the safety net will continue to widen.

   

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  Geebo 8:00 am on April 8, 2025 Permalink | Reply
  Tags: identity theft ( 112 ), income tax, Scams ( 1,468 ), tax ( 4 ), tax return ( 6 )   

  Tax Season’s Hidden Dangers 

  

  By Greg Collier

  As the tax season reaches its peak, state revenue departments across the country are issuing urgent warnings about a surge in scams targeting taxpayers. These schemes are increasingly sophisticated, often mimicking official communications in order to exploit individuals during a period of heightened financial activity and anxiety.

  In Georgia, residents have been targeted by an email campaign falsely claiming to originate from the “GA Taxation Office,” a non-existent entity. The email references coronavirus-related relief programs and asks recipients to provide high-resolution images of their driver’s license and Medicare card. The sender’s address resembles a government domain at first glance, but closer inspection reveals it originates from a fraudulent and unofficial source. The Georgia Department of Revenue has emphasized that it does not request sensitive personal information through unsolicited emails or messages.

  Meanwhile, in Utah, taxpayers have reported receiving letters that closely resemble official notices from the state. These fraudulent letters claim the recipient owes unpaid taxes and threaten legal action, property liens, or asset seizure unless immediate payment is made. These tactics are designed to provoke fear and elicit an immediate response, bypassing any verification steps. The Utah State Tax Commission has urged residents to confirm the legitimacy of any questionable tax notices by contacting their offices directly and to avoid engaging with any information listed in the fraudulent documents.

  In Michigan, officials are focused on combating tax-related identity theft, particularly schemes involving the unauthorized filing of tax returns to claim refunds. Cybercriminals are employing deceptive emails and messages that pressure recipients into disclosing personal information under the guise of urgency or legal threat. These scams often succeed when individuals let their guard down, especially when messaging appears to come from a trusted source. The Michigan Department of Treasury is reminding taxpayers to connect only through secure internet networks, avoid clicking suspicious links, and never respond to unsolicited messages requesting personal data.

  Each of these examples underscores the importance of vigilance. Scammers rely on confusion, fear, and the appearance of legitimacy to manipulate individuals into compromising their financial security. Taxpayers should be cautious when receiving unexpected communications about taxes, regardless of the format. Verifying the source through official state websites or direct contact with tax agencies is the most effective way to avoid becoming a victim.

  Tax season will always be a busy time for scammers. Staying informed and exercising caution are essential steps toward protecting your personal information and your refund.

   
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  Geebo 8:01 am on March 19, 2025 Permalink | Reply
  Tags: consumer protection, income tax, IRS ( 28 ), tax audit, taxes ( 9 )   

  How to Avoid an IRS Audit and Stay Compliant 

  

  By Greg Collier

  Receiving an IRS audit notice can be a stressful experience, often bringing with it concerns about additional taxes, penalties, and the time-consuming process of providing documentation. While some audits are random, many result from specific patterns or inconsistencies in a tax return. Fortunately, these triggers are well known, and taxpayers can take steps to minimize the risk of being audited.

  One of the most common reasons for an audit is failing to report all sources of income. Employers automatically report wages through W-2 forms, but income from investments, freelance work, rental properties, and other non-traditional sources must be accounted for separately. Discrepancies often arise when taxpayers overlook 1099 forms or fail to track self-employment earnings accurately. Keeping organized records and ensuring that all sources of income are reported can help prevent this issue.

  Another red flag for the IRS is a significant fluctuation in income from one year to the next. While changes in financial circumstances are normal, large swings, especially for self-employed individuals or business owners, may prompt closer scrutiny. If a business experiences a sharp decline in revenue due to losing a major client or other external factors, it can be helpful to include an explanation with the tax return to clarify the reason for the fluctuation.

  Businesses that consistently report losses also tend to attract IRS attention. While it is common for new ventures to take time before turning a profit, a business that continues to operate at a loss year after year may be seen as a hobby rather than a legitimate enterprise. The IRS requires businesses to demonstrate a profit motive, and maintaining detailed records of revenue-generating activities can help establish credibility.

  Deductions are another area where taxpayers need to exercise caution. Certain deductions, such as large charitable contributions, rental property losses, or home office expenses, require careful documentation to ensure compliance with IRS rules. A charitable donation that significantly exceeds the typical amount given by others in a similar income bracket may raise questions. Home office expenses are only eligible for those who are self-employed and use the space exclusively for business purposes. Having thorough records to justify deductions can prevent unnecessary scrutiny.

  Estate tax returns are also frequently audited, especially when assets appear to be undervalued. The IRS employs valuation experts who review these filings, and any discrepancies in the reported value of real estate, art, or closely held businesses can lead to an audit. Obtaining multiple appraisals from qualified professionals can help substantiate asset valuations and avoid potential disputes with the IRS.

  Even with careful preparation, some audits are unavoidable. The IRS conducts audits through three primary methods, correspondence audits handled via mail, office audits that require a visit to an IRS facility, and field audits that involve an in-person review at the taxpayer’s home or business. In all cases, the IRS provides advanced notice and specifies the documents they need to review.

  While hiring a tax professional can be beneficial, taxpayers remain responsible for the accuracy of their returns. Reviewing all information before filing, maintaining organized financial records, and being prepared to provide supporting documentation when necessary can go a long way in preventing audit complications. Understanding the common triggers for an IRS review and taking proactive steps to ensure compliance can help taxpayers navigate tax season with confidence.

   
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  Geebo 9:00 am on January 16, 2025 Permalink | Reply
  Tags: income tax, IRS ( 28 ), Scams ( 1,468 ), tax preparer scam ( 3 ), tax scam ( 12 )   

  Tax Season Scams: What You Need to Know 

  

  By Greg Collier

  As tax season approaches, individuals and families are preparing to organize their financial records and submit their returns. With W-2 forms landing in mailboxes and deadlines on the horizon, it’s essential to remain wary against scams and misleading tax advice that surface during this time of year.

  The IRS emphasizes that if an offer or promise seems too good to be true, it probably is. Social media is a growing hub for questionable tax advice, with posts encouraging users to falsify information or misrepresent credits to maximize refunds. Falling for such guidance could lead to severe legal consequences and audits, making it crucial to verify the legitimacy of any advice you follow.

  Scammers often pose as representatives of the IRS, employing tactics such as threats, demands for immediate payment, or promises to resolve tax issues instantly. The IRS never initiates contact via text messages, emails, or phone calls. Official communication comes exclusively through mail. Any message urging immediate action or threatening penalties should be met with skepticism. Filing your taxes promptly can help minimize risks of identity theft, as it reduces the chance for fraudsters to file in your name and claim your refund.

  Organizations like the Better Business Bureau (BBB) play a key role in educating consumers about tax scams. Reports to scam trackers often involve individuals receiving fraudulent calls, emails, or texts from impostors claiming to be with the IRS. These messages may include links to fake payment portals or demand sensitive information. Verifying the legitimacy of any contact with the IRS is critical, and trusted resources like the BBB can provide insight into whether a tax preparer or advertisement is reputable.

  Ultimately, staying proactive and informed is the best defense during tax season. By filing early, verifying information, and avoiding unsolicited messages claiming to resolve tax issues, you can protect your finances and identity from potential scams. Tax season can be stressful, but with the right precautions, it doesn’t have to be.

   
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  Geebo 8:00 am on June 13, 2024 Permalink | Reply
  Tags: income tax, IRS ( 28 ), Scams ( 1,468 ), tax debt relief, tax scam ( 12 )   

  Tax debt relief scams return 

  

  By Greg Collier

  Tax debt relief scams are on the rise, targeting vulnerable individuals with promises of settling tax obligations for mere pennies on the dollar. These scammers are exploiting the reputation of legitimate businesses to deceive people into handing over their money.

  One potential victim from Tennessee, for instance, was sitting on her front porch when she received an unsolicited call. Despite her poor vision, she quickly recognized the call for what it was, a scam. The caller claimed to be from the IRS Tax Relief Program. She knew better than to fall for the ploy and promptly hung up.

  Thanks to information from trustworthy sources, she knew that the IRS and Social Security never make unsolicited calls. They communicate through letters. This knowledge protected her from becoming a victim.

  It’s crucial to understand that the IRS will never call you out of the blue. There is no IRS Tax Relief Program that will contact you by phone. Scammers are simply dialing random numbers, hoping to find someone with a tax issue.

  To avoid tax debt relief scams, remember these key points. The IRS will never call you unsolicited. They only send letters. If you receive a letter from the IRS, attempt to resolve the issue directly with the agency. The IRS may offer a monthly payment plan or a way to pay less than you owe, but you must engage with them directly. Do not trust any company that claims you have ‘qualified’ or are ‘eligible’ for an IRS program. Only the IRS can make such determinations.

  By staying informed and cautious, you can protect yourself and your savings from these fraudulent schemes.

   
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  Geebo 8:00 am on April 3, 2024 Permalink | Reply
  Tags: income tax, IRS ( 28 ), IRS Online Accounts, Scams ( 1,468 )   

  IRS warns of latest income tax scam 

  

  By Greg Collier

  As Tax Day looms closer, the Internal Revenue Service (IRS) is ramping up its efforts to caution taxpayers against falling victim to common scams that could jeopardize their financial security. In its latest warning, the IRS is highlighting the dangers of scammers posing as helpful third parties offering assistance with IRS online accounts.

  With the convenience and efficiency of IRS Online Accounts for managing federal tax information, it’s no surprise that they have become a prime target for cybercriminals seeking to exploit unsuspecting taxpayers. These scammers employ deceptive tactics, often masquerading as friendly helpers offering to set up online accounts on behalf of taxpayers. However, their true intent is far from benevolent, as they aim to pilfer sensitive personal information to carry out fraudulent activities such as filing false tax returns and accessing financial accounts.

  The method these scammers use is alarmingly simple yet effective. By preying on individuals’ trust and the perceived complexity of setting up an IRS Online Account, they deceive taxpayers into divulging sensitive details like Social Security numbers, Individual Taxpayer Identification numbers (TINs), and home addresses. Armed with this information, they can wreak havoc on victims’ financial lives, from filing bogus tax returns to obtaining loans and opening fraudulent credit accounts.

  The IRS emphasizes a crucial point that taxpayers should never enlist the help of third parties to set up their IRS Online Accounts. The only legitimate avenue for creating these accounts is through the official IRS.gov website.

  In conclusion, the IRS’s warning serves as a timely reminder for taxpayers to exercise diligence and skepticism when approached by individuals offering assistance with IRS online accounts. By heeding these cautionary advisories and staying informed about prevalent scams, taxpayers can fortify their defenses against fraudulent activities and ensure a secure tax filing experience.

  Related Video: Internal Revenue Service issues scam warning

   
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  Geebo 9:00 am on January 24, 2024 Permalink | Reply
  Tags: income tax, IRS ( 28 ), Scams ( 1,468 ), tax preparer scam ( 3 ), tax return ( 6 ), tax scam ( 12 )   

  Tax season scams have already started 

  

  By Greg Collier

  This coming Monday, January 29th, is the first day you can file your income tax return. Scammers are aware of this, and will spend the next three months trying to steal from you using your tax return as bait. One report even states that scammers have already started sending out emails impersonating the IRS. The unsolicited emails state you can check the status of your return by clicking on a link. The link will more than likely take you to a website where you’ll be asked to enter your personal information in order to steal your identity. But, that isn’t the only tax scam you should be on the lookout for.

  The IRS impersonation scam stands out as the most prevalent fraudulent activity. In this scheme, perpetrators pretend to be representatives of the IRS when contacting their targets. Usually, these fraudulent callers inform their victims that they are delinquent in their taxes and insist on an immediate payment. Alternatively, some scammers falsely claim that the target is owed a refund and request bank account information. It’s important to note that the IRS typically does not communicate with individuals over the phone regarding tax matters. Any issues with a tax return would be addressed through the mail.

  During tax season, there’s an influx of transient tax preparers who may not have a reliable and long-term presence. If you plan to enlist the services of a professional to file your taxes, it’s crucial to thoroughly research the individual or company beforehand. Exercise caution if a tax preparer indicates an intention to close operations immediately after the filing deadline. In the event of an audit, having a tax preparer who can provide assistance is essential.

  Additionally, be cautious of tax preparers who link their fees to your tax refund. Fees should be determined based on the complexity of your tax return, not the refund amount. Ensure that the fee structure aligns with the effort required to complete your tax filing accurately.

  The most devastating tax scam involves scammers attempting to file a tax return using your identity. This underscores the importance of filing your return promptly. If a scammer successfully files a return in your name, you will likely receive a letter from the IRS indicating the receipt of duplicate returns. In the unfortunate event that you fall victim to this scam, it’s crucial to contact the IRS immediately.

  Delaying your response can complicate the process of rectifying the situation and recovering your tax return. Swift action is essential to minimize the impact of identity-related tax scams. Stay vigilant, file your return as early as possible, and promptly address any suspicious activity with the IRS if you suspect fraudulent filings in your name.

   
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  Geebo 8:00 am on March 28, 2023 Permalink | Reply
  Tags: income tax, Scams ( 1,468 ), tax preparer scam ( 3 ), tax return ( 6 ), tax scam ( 12 ), taxes ( 9 )   

  Not all tax preparers are on the level 

  

  By Greg Collier

  With the income tax deadline less than a month away, we’re sure there are still some who haven’t filed their tax return yet. One of the many benefits of filing early is avoiding a scam that was commonplace during the pandemic. Scammers would file returns in their victim’s name, and collect the return payment. When the victim went to file their return themselves, they would get a letter stating someone else had already claimed their return. This resulted in a bureaucratic nightmare for the victims. If you still haven’t filed, there’s another scam that you need to be aware of, especially if you’re having your taxes done professionally.

  A woman from Virginia is out $3000 after she allowed a company to process her tax return. She found an ad for the company through a social media ad, which we would never recommend doing. The victim went to the company’s website, and they appeared to be legitimate. She even had multiple conversations with the company over the phone and through emails. However, when it came to her tax return, the company allegedly filed her return without her permission and stole the payment. When the victim tried to contact the company, they had already disappeared.

  If you still need your taxes prepared, there are ways to protect yourself from this scam. Make sure to choose a tax preparer who is licensed and registered with the IRS. You can check the credentials of a tax preparer on the IRS website or through the Better Business Bureau.

  If a tax preparer promises you a big refund without even looking at your tax documents, it’s probably too good to be true. Avoid tax preparers who make unrealistic promises.

  Never sign a blank tax return or one that has incomplete information. Review your tax return thoroughly before signing it.

  Review your tax return for accuracy before submitting it to the IRS. If you notice any errors, contact your tax preparer immediately.

   
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  Geebo 9:00 am on February 7, 2023 Permalink | Reply
  Tags: income tax, IRS ( 28 ), mail fraud ( 23 ), Scams ( 1,468 ), tax scam ( 12 )   

  New scam targets taxpayers 

  

  By Greg Collier

  In previous posts about tax season, we’ve warned our readers about the typical scams they might encounter. One of the tips we always give is that the IRS will never call or email you about your income tax return. Instead, the agency sends their notices through postal mail. But what if you got something in the mail that said you owed tax money? That’s what residents of Pennsylvania are having to deal with right now.

  Residents of the Keystone State have already started receiving letters in the mail which claim they owe the state a substantial amount in back taxes. Moreover, the letters residents are receiving threaten them with both wage garnishment and seizure of property if the bill is not paid. The letters are even labeled with “Final Demand for Payment”.

  All of these threats are part of common tactics used in most scams. First, the scammer wants you to have a sense of panic upon seeing the letter. They’re hoping to scare you into sending them a payment without doing any further research. Then the scammers increase the urgency of that fear by using threats of financial loss.

  If you receive a letter like this, don’t panic. Do your research. According to the Pennsylvania Department of Revenue, these letters are supposedly being sent by the ‘Tax Assessment Procedures Domestic Judgment Registry’. There is no such office or department in the state of Pennsylvania, or any other state for that matter. A quick Google search turns up a number of state complaints about this scam.

  Also, never call any phone number that may be included in the contents of the letter. That number will just be manned by scammers looking to intimidate you further into making a payment. Instead, go to your state’s Department of Revenues website to locate their direct contact information. They should be able to provide you with correct information about any possible tax balances.

   
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  Geebo 9:00 am on January 31, 2023 Permalink | Reply
  Tags: income tax, IRS ( 28 ), Scams ( 1,468 ), tax return ( 6 ), tax scam ( 12 )   

  Tax season means time to look out for tax scams 

  

  By Greg Collier

  With most employers releasing W2 forms to their employees, it’s time for most of us to start thinking about our tax returns. This year’s deadline is April 18th which will be here before you know it. However, it’s not just the deadline you may have to worry about. There are con artists out there looking to take advantage of your tax return.

  The most common scam is one that takes place all year round, and it’s the IRS impersonation scam. Currently, the Better Business Bureau is warning consumers about receiving phone calls from people claiming to be from the IRS. Typically, these scammers will tell their victims they’re behind in their taxes and demand an immediate payment. Other scammers will say that you’re owed a refund and will ask for your bank account information. In either case, the IRS generally does not call people over the hone. If there was an issue with your return, you would be contacted through the mail.

  Also, during tax season, a number of fly-by-night tax preparers will appear. If you intend to have a professional file your taxes, research that professional or company first. You should be wary of any tax preparer that intends to close up shop after the filing deadline. In case there is an audit, you’d want your tax preparer to be able to help you. Also, be wary of tax preparers who tie their fee to your tax refund. Fees are supposed to be based on how difficult it is to complete your tax return, not your refund.

  Lastly, and the most devastating of tax scams, is when a scammer tries to file a return in your name. This is the main reason why you should file your return as soon as possible. If a scammer did file a return in your name, you’ll receive a letter from the IRS stating they’ve received duplicate returns. If you do become a victim of this scam, contact the IRS right away. The longer you wait, the more difficult it could be to get your tax return.