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IRS alerts taxpayers: Scammers scheming around Oct. 15 deadline; Here’s what to do

IR-2018-193, Sept. 27, 2018

WASHINGTON — The Internal Revenue Service is reminding taxpayers to beware of criminals who continue using devious tactics to steal money and personal information from unsuspecting victims, especially as the fall season approaches.

The agency warns that scammers continue to pose as the IRS, making threatening phone calls and using email phishing schemes to lure taxpayers. The scams may be particularly prevalent ahead of the Oct. 15 tax-filing extension deadline. Another tax scam, where criminals pose as charity organizations, tends to peak during hurricane season or following a natural disaster. Taxpayers should learn about these ongoing tax scams and know what to do if they’re targeted.

The IRS urges taxpayers to look out for suspicious calls, emails and donation requests and take appropriate action if they experience any of the following:

Telephone scams

How the scam works: Criminals pose as IRS employees and call victims, demanding immediate payment of a so-called tax debt. Payments are often requested via prepaid debit cards and/or money wires. The caller will ask to stay on the line or otherwise call repeatedly while the victim completes the transaction. The caller may use a condescending tone and will often threaten to file a lawsuit, call the police or involve federal law enforcement agencies if the victim doesn’t comply. The call may appear to come from emergency services and/or a local/federal law enforcement agency but the fraudsters are faking, or “spoofing” the caller ID to only appear to come from a legitimate agency.

What taxpayers should do: Hang up the phone. Know that the IRS would never call to threaten or demand immediate tax payment. The agency offers taxpayers a chance to appeal any amount in question and offers numerous ways of resolving a tax liability.

Anyone wishing to check their account after receiving this type of call can visit the IRS website and register to view your account information online. The tool allows taxpayers to view up to 24 months of payment history and balance due for any given tax year. Taxpayers who want to report scam calls can visit the Treasury Inspector General for Tax Administration’s website, TIGTA.gov, and also email phishing@irs.gov (Subject: IRS Phone Scam). Visit Report Phishing for more information.

Phishing emails

How the scam works: Criminals send an email to your personal or business account(s) appearing to be from the IRS. The email usually features the IRS logo, uses agency language and asks taxpayers to provide sensitive information. It may also ask recipients to open an attachment or click on a link embedded within the email to supposedly give the taxpayer account access. In a more recent variation called “spear phishing,” the criminal, having done research on the victim ahead of time, will send an email posing as a trusted source. The email will make an urgent plea to click on a link and update an account immediately. The link will then direct the victim to what seems to be a trusted website but is in reality a phishing website controlled by the thief who can install malicious software.

What taxpayers should do: Do not provide personal information, click on links or open attachments from emails pretending to be from the IRS. Know that the IRS does not initiate contact by email or social media channels. The agency gets in touch with taxpayers through paper letters mailed by the U.S. Postal Service. IRS letters and notices are mailed to the taxpayer’s most recent address on file. Forward the email as-is, preferably with the full email headers to phishing@irs.gov. Delete the original email.

Fake charity donation requests

How the scam works: Criminals set up fake charities to attract donations from unsuspecting contributors. The scammers prey on well-intentioned taxpayers, especially during times of distress, such as following a natural disaster. They solicit money either by phone, email or even in person. The scammers may even contact disaster victims and claim to be working on behalf of the IRS with the goal of gaining access to personal information under the pretext of filing a casualty loss claim.

What taxpayers should do: Don’t give out personal or financial information such as Social Security numbers. Be wary of charities with names that resemble nationally-known charity organizations. The IRS has an online search tool called the Tax Exempt Organization Search which allows people to find legitimate, qualified charities to whom a donation may be tax deductible. For security and tax record purposes, contribute by check or another way that provides documentation of the gift. Taxpayers who want to report suspected tax fraud activity can do so by completing Form 3949-A, Information Referral.

For more information about tax scams, visit the IRS website at www.irs.gov and search for “scams and schemes,” including the agency’s 2018 Dirty Dozen list.

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Annual Filing Season Program

The Annual Filing Season Program aims to recognize the efforts of non-credentialed return preparers who aspire to a higher level of professionalism. Those who choose to participate can meet the requirements by obtaining 18 hours of continuing education, including a six hour federal tax law refresher course with test. The return preparer must also renew their preparer tax identification number (PTIN) for the upcoming year and consent to adhere to the obligations in Circular 230, Subpart B and section 10.51.

Upon completion of these requirements, the return preparer receives an Annual Filing Season Program – Record of Completion from the IRS.

Annual Filing Season Program participants are included in a public database of return preparers on the IRS website. The Directory of Federal Tax Return Preparers with Credentials and Select Qualifications includes the name, city, state, ZIP Code, and credentials of all attorneys, CPAs, enrolled agents, enrolled retirement plan agents and enrolled actuaries with a valid PTIN, as well as all Annual Filing Season Program – Record of Completion holders.

Review the general requirements for the Annual Filing Season Program

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Clarification for business taxpayers: Payments under state or local tax credit programs may be deductible as business expenses

IR-2018-178, Sept. 5, 2018

WASHINGTON — Business taxpayers who make business-related payments to charities or government entities for which the taxpayers receive state or local tax credits can generally deduct the payments as business expenses, the Internal Revenue Service said today.

Responding to taxpayer inquiries, the IRS clarified that this general deductibility rule is unaffected by the recent notice of proposed rulemaking concerning the availability of a charitable contribution deduction for contributions pursuant to such programs. The business expense deduction is available to any business taxpayer, regardless of whether it is doing business as a sole proprietor, partnership or corporation, as long as the payment qualifies as an ordinary and necessary business expense. Therefore, businesses generally can still deduct business-related payments in full as a business expense on their federal income tax return.

Updates on the implementation of the Tax Cuts and Jobs Act (TCJA) can be found on the Tax Reform page of IRS.gov.

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