Yes you read that right. The IRS plans to go forward with hiring Equifax to verify and validate taxpayer identities in the wake of their massive systems breach. If you missed the news (because apparently the IRS did), hackers were able to obtain confidential financial information—including social security numbers—of 145 million users; which now equates to the largest US data breach in history.
Outraged by the IRS’s decision to hire Equifax, some members of Congress spoke out including Senate Finance Chairman Orrin Hatch (R-Utah). He recently told Politico:
“In the wake of one of the most massive data breaches in a decade, it’s irresponsible for the IRS to turn over millions in taxpayer dollars to a company that has yet to offer a succinct answer on how at least 145 million Americans had personally identifiable information exposed.”
The IRS continues to defends it’s choice, stating that the service Equifax was hired for will not put U.S. taxpayers personal information at risk. They will, however, keep a watchful eye on their new hire.
If you have been affect and/or would like to find out if your were affected by Equifax’s breach you can do so by clicking here. However, we advise caution before using services to ascertain Equifax exposure. According to the terms and conditions, users that access Equifax’s systems to determine if their information was compromised are voluntarily giving up their rights to sue and/or join class action lawsuits against Equifax.
If you would like more information about this breach or would like to to speak to an R&G Brenner professional, contact us toll free at (888) APRIL-15 or via web by clicking here.
October is Cyber Security Awareness month, and the New York State Department of Taxation & Finance has released a list of 10 tips that all taxpayers should know in order to protect their financial information and keep it from falling into the wrong hands:
1. Be wary of aggressive phone scams – Be sure to only give personal information—including social security numbers—to someone you trust. Remember, the NYS Tax Department and the IRS will contact you by mail first and will never threaten you over the phone or demand payment be made through MoneyGram, Western Union, or other wire transfer services; or using iTunes, Greendot, or other cash or gift cards.
2. Avoid phishing scams – Taxpayers may receive emails with authentic-looking government logos that offer assistance in settling fake tax issues. The NYS Tax Department and IRS will never request personal or financial information by email.
3. Protect your computer – Ensure that your computer is secure when accessing your financial accounts online by looking for “https,” with an “s” after the “http,” in the website address.
4. Use strong passwords – Use a combination of upper- and lower-case letters as well as numbers and symbols when creating a new password. Don’t use your name, birthdate, or common words. Use a different password for each of your accounts.
5. Use secure wireless networks – Always encrypt your wireless network with a strong password. Never access your personal accounts on a public Wi-Fi network.
6. Review bank accounts and statements – Check your credit card and banking statements regularly to spot any suspicious activity.
7. Review credit reports annually – Review each of your credit reports annually to spot any new lines of credit that you didn’t apply for or authorize. This can be a sign that a thief has stolen your identity and opened up a credit card, for example, in your name.
8. Think before you post – The more information and photos you share via social media, including current and past addresses, or names of relatives, can provide scammers possible answers to your security questions or otherwise help them access your accounts.
9. Secure tax documents – Store hard copies of your federal and NYS tax returns in a safe place. Digital copies should also be saved. Shred documents that contain personal information before throwing them away.
10. Review and respond to all NYS Tax Department communications– You should review and respond to all notices sent from the Tax Department. Any unexpected correspondence from the Tax Department can be a potential sign that your identity has been stolen. It’s important that you contact the Tax Department immediately to confirm any liabilities.
If you believe that you’ve been contacted by a cyber criminal attempting a scam, have been the victim of fraud or identity theft, or suspect a tax preparer is engaging in illegal activities, visit the Tax Department’s Report fraud, scams, and identity theft webpage to learn how to report it. The Tax Department takes this type of illegal activity seriously, promptly reviews each compliant, and takes corrective action when appropriate.
If you believe you are victim of identity theft and or your financial information has been compromised, please contact an R&G Brenner professional after your report your situation to the authorities. We may be able to help you to minimize any potential damage. Remember, NEVER send W2s, 1099s, tax returns or other private information via email; always use a secure file transfer when sending sensitive documents over the internet. All R&G Brenner professionals offer free secure file transfer solutions to our clients.
With the clock about to strike midnight on the 2013 Tax Year Filing season, the following is a quick list of tax tips for all you last minute filers out there:
April 15th Deadline
Yes, we all know the saying “Death & Taxes…”. And nothing drums up the cold sweats and association with taxes like the April 15th deadline. However, here is something that many taxpayers do not know: This deadline is only if you OWE taxes to the IRS. If you are due a refund from the IRS, you actually have 3 full years from the April 15th deadline to claim and receive your refund before it becomes the property of the U.S. Government. So, as long as you file your 2013 tax return by April 15th, 2017 you will get your refund. There are of course, many reasons to file your 2013 tax return before the deadline. It’s your money! So don’t let the government hold on to it especially when they do not have to pay interest on it. If you owe, and you do not have all of your tax documents ready, you can always file an extension. Extensions must also be filed before the April 15th deadline. REMEMBER: An extension is only an extension to file your final tax return, NOT to pay the taxes you owe. Therefore, expect to send payment for the estimated amount of taxes you owe along with any extension.
Beware of IRS Scams
IRS & Tax related Scams have been steadily increasing over the last few years. The most common scam going around is IRS impersonators contacting unsuspecting taxpayers and getting them to divulge their confidential personal information which can be used to open up credit cards in the victims name and/or to a file a fraudulent tax return in their name in order to steal refunds. NOTE: The IRS will NEVER initiate contact with your via email, phone, fax or text. They will always send you a written notification with instructions. Even if you receive written communication, double check that the contact information on the letter matches the IRS contact information from the IRS website. If you think that you are the target of a tax related scam, report it to firstname.lastname@example.org.
Sign Your Return & Mail To Correct Address
While this may sound trivial, many taxpayers forget to sign their tax returns! Your tax return is technically not considered filed if it is not signed. While the majority of tax returns are filed electronically, there are still many reasons why a return would be filed as paper. Furthermore, if you had your return prepared by a professional, be sure that they signed the return as well. While the taxpayer is ultimately responsible for what is listed on their return, a common scam that many “professionals” use to avoid any liability is to file a tax return as “self-prepared”. In other words, the IRS thinks that the taxpayer prepared and filed the tax return themselves when in reality it was filed by a paid income tax preparer. So be sure to check for all appropriate signatures! Furthermore, be sure you are mailing your tax return to the right IRS processing center. The IRS tends to change their mailing addresses annually and some have separate mailing addresses for refunds and taxes due. Here is a list of all the IRS tax processing centers.
Keep Your Tax Records
So you just sent in your taxes and now you can throw all of your W2s, 1099s, receipts & other tax related documentation into the fireplace, right? WRONG! Depending on your situation, the IRS says to keep all of your tax records between 3 & 6 years. So, just to be on the safe side, keep all of your tax records for at least 6 years. Sometimes it could take years before the IRS notifies you with an issue and/or adjustment on your tax return. If you plan on contesting changes in the IRS’ favor, you’ll need your backup documentation. Recent budget cuts to the IRS will probably delay the notification process even more.
File With A Tax Professional
While millions of taxpayers are electing to forego using a tax professional in favor of filing themselves, the numbers don’t add up. A couple of years ago R&G Brenner investigated The True Cost Of Preparing Your Own Tax Return and found that taxpayers who filed themselves were losing an average of $594 in refunds as opposed to using a Tax Professional. Similarly, H&R Block is running ads this year that found 1 in 5 taxpayers who prepares their own taxes are not claiming all the deductions they are entitled to and are losing $490 in refunds. Now there are many taxpayers who have very simple returns (standard deductions, no house, no kids, etc) and can easily file themselves. However, the moment your tax return gets even a little bit complicated, you should seek professional help. If you are going to Itemize Deductions (Schedule A), claim mortgage interest, have children (Earned Income Tax Credit), deduct business expenses (Schedule C), have rental income (Schedule E), or other complex tax positions, it is almost never a good idea to prepare your own tax return.
If you would like information about R&G Brenner, our services or if you need any tax assistance before or after the April 15th deadline, please feel free to contact us here, or call us toll free at (888) APRIL-15.
Each year, the Internal Revenue Service (IRS) puts out a list of common tax scams—dubbed the “Dirty Dozen”—to warn taxpayers. Ranging from identity theft to return preparer fraud, the list is intended to remind tax payers to use caution preparing, filing and discussing their annual taxes. Personal and other sensitive information can get into the wrong hands if the proper precautions aren’t taken. It’s wise to periodically review the IRS’ Dirty Dozen to keep apprised of scams.
It’s more common than you may think, and it’s on the rise. About 8.6 million households in 2010 were the victims of identity theft, according to the Bureau of Justice Statistics, up from 6.4 million households in 2005. Identity theft involves the unauthorized use of credit cards and checking accounts, as well as the misuse of personal information to open new accounts and loans or commit related crimes. The IRS lists tax fraud as a result of identity theft as a top concern in 2013. This can result when someone uses your personal info, such as social security number and name without obtaining your permission, and uses it to file a fraudulent tax return, thus getting a refund illegally. The IRS attempts to combat this type of identity theft through a comprehensive strategy involving three components: prevention of fraud, early detection and assistance for victims, preventing $20 billion in fraudulent refunds from being issued in 2012.
False 1099 Refunds
The IRS lists False Form 1099 refund claims as another of its top scams. Many people believe that the federal government manages top-secret accounts for citizens of the United States and that taxpayers can tap into those accounts through filing a 1099-OID (Original Issue Discount). This is an illegal scam, and can net perpetrators penalties and jail time.
This scam takes the form of unsolicited email or a fake website claiming to be legitimate but that lures unsuspecting people in and encourages them to give up personal information about their finances. The thieves can then turn around and commit identity theft. One common way this occurs is through emails claiming to come from the IRS. The IRS NEVER contacts taxpayers via email to obtain personal info. Recipients of such emails should be aware it’s a scam and forward the email to email@example.com to protect themselves and alert the authorities.
Offshore Income Fraud
Hiding income in offshore accounts remains one of the top scams reported by the IRS. Many individuals attempt to evade paying U.S. taxes by keeping their money in offshore banks, using wire transfers as well as debit and credit to get at the funds. Of course, there are legitimate needs for many people to have offshore accounts; however, taxpayers in these situations must comply with certain reporting and disclosure laws in order to operate within the law and avoid penalties, fines and jail time.
Return Preparer Scams
According to the IRS, approximately 60 percent of taxpayers will consult with tax professionals and companies in 2013 to assist in preparing their returns. Although most of these professionals are honest, many are not. This often can result in refund fraud or identity theft, so the IRS cautions taxpayers to be especially diligent in researching the firm they hire to do their taxes. Keep in mind that your tax return is your legal responsibility no matter who prepared it. Taxpayers should check that their tax pro enters his IRS Preparer Tax Identification Number (PTIN) and signs the return. A common scam is for a tax preparer to file a tax return they prepare for a taxpayer as “Self-Prepared”. This is illegal and any paid tax preparer who attempts this should not be used, and be reported to the IRS asap.
If you have encountered any other scams in regards to your tax return, please let us know in the comments section below.
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