Executive Insurance & Taxes

04/05/2024

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Dirty Dozen: IRS urges taxpayers to not fall prey to untrustworthy tax preparers; ‘ghost preparers’ can disappear with taxpayer cash, information
WASHINGTON – In day seven of the Dirty Dozen tax scam series, the Internal Revenue Service and Security Summit partners today alerted taxpayers to be on the lookout for unscrupulous tax preparers who could encourage people to file false tax returns and steal valuable personal information.
A common problem seen annually during tax season, “ghost preparers” pop up to encourage taxpayers to take advantage of tax credits and benefits for which they don’t qualify. These preparers can charge a large percentage fee of the refund or even steal the entire tax refund. After the tax return is prepared, these “ghost preparers” can simply disappear, leaving well-meaning taxpayers to deal with the consequences.
While most tax professionals offer quality service, these ghost preparers and other unscrupulous preparers try to take advantage of people and should be avoided at all costs. The IRS encourages people to use a trusted tax professional, and IRS.gov has important information to help people choose a reputable, accredited practitioner.
“Ghost preparers and other shady return preparers form a real threat every tax season to well-meaning taxpayers,” said IRS Commissioner Danny Werfel. “By trying to make a fast buck, these scammers prey on seniors and underserved communities, enticing them with bigger refunds by including bogus tax credit claims or making up income or deductions. But after the tax return is filed, these ghost preparers disappear, leaving the taxpayer to deal with consequences ranging from a stolen refund to follow-up action from the IRS. We urge people to choose a trusted tax professional that will be around if questions arise later.”
Unethical tax preparers serve as day seven of the annual IRS Dirty Dozen campaign – a list of 12 scams and schemes to help taxpayers and the tax professional community protect their personal and financial information. Compiled annually since 2002, the Dirty Dozen lists a variety of common scams that taxpayers may encounter anytime, but many of these schemes peak during filing season as people prepare their returns or hire someone to help with their taxes.
Bogus tax preparers have been a recurring theme in the Dirty Dozen for years. Anyone can file a tax return because preparing tax returns is unregulated, which adds risks for vulnerable taxpayers during filing season. To protect taxpayers, the IRS and the Treasury Department have again proposed regulating tax practitioners as part of the proposed Fiscal Year 2025 budget.
Shady tax practitioners can also be involved in stealing taxpayer identities. As a member of the Security Summit, the IRS has worked with state tax agencies and the nation’s tax industry for nine years to cooperatively implement a variety of internal security measures to protect taxpayers. The collaborative effort by the Summit partners also has focused on educating taxpayers about scams and fraudulent schemes throughout the year, which can lead to tax-related identity theft. Through initiatives like the Dirty Dozen and the Security Summit program, the IRS strives to protect taxpayers, businesses and the tax system from cyber criminals and deceptive activities that seek to extract information and money, including ghost preparers.
Tips for taxpayers: Warning signs to look out for
Most tax return preparers provide honest, high-quality service. But some may cause harm through fraud, identity theft and other scams. Paid preparers must sign and include a valid Preparer Tax Identification Number (PTIN) on every tax return. A ghost preparer is someone who doesn't sign tax returns they prepare. These unethical tax return preparers should be avoided, especially if they refuse to sign a complete paper tax return or digital form when filing electronically.
Taxpayers are also encouraged to check the tax preparer’s credentials and qualifications to make sure they are capable of assisting with the taxpayer’s needs. The IRS offers resources for taxpayers to educate themselves on types of preparers, representation rights, as well as a Directory of Federal Tax Return Preparers with Credentials and Select Qualifications to help choose which tax preparer is the best fit.
Some of the warning signs of a bad preparer include:
• Shady fees. Taxpayers should always ask about service fees. Shady tax preparers can ask for a cash-only payment without providing a receipt. They are also known to base their fees on a percentage of the taxpayer’s refund.
• False income. Untrustworthy tax preparers may also invent false income to try to get their clients more tax credits or claim fake deductions to boost the size of the refund.
• Wrong bank account. Taxpayers should also be wary of a tax preparer attempting to convince them to deposit the taxpayer’s refund in their bank account rather than the taxpayer’s account.
Good preparers ask to see all relevant documents like receipts, records and tax forms. They also ask questions to determine the client’s total income, deductions, tax credits and other items. Taxpayers should never hire a preparer who e-files a tax return using a pay stub instead of a Form W-2. This is also against IRS e-file rules.
File accurately and check eligibility for credits and deductions
Taxpayers are ultimately responsible for all the information on their income tax return, regardless of who prepares it. Taxpayers can visit IRS.gov to find answers to tax-related questions and access tools like the Interactive Tax Assistant, which provides answers to several tax law questions specific to individual circumstances.
Filing electronically reduces tax return errors, and people can take advantage of free online and in-person tax preparation options if they qualify through programs like IRS Free File and the Volunteer Income Tax Assistance and Tax Counseling for the Elderly.
Taxpayers should also make sure that they are taking advantage of available credits and deductions, like the Earned Income Tax Credit (EITC), which is refundable and can help low-to-moderate income workers receive up to $7,340 based on their qualifications. People need to make sure they understand which credits and deductions they are eligible to claim and keep records to show their eligibility.
Report fraudulent activity and scams
The IRS highly encourages people to report tax return preparers who deliberately prepare improper returns and any activity that promotes improper and abusive tax schemes.
To report an abusive tax scheme or a tax return preparer, people should use the online Form 14242, Report Suspected Abusive Tax Promotions or Preparers, or mail or fax a completed paper Form 14242, Report Suspected Abusive Tax Promotions or Preparers, and any supporting material to the IRS Lead Development Center in the Office of Promoter Investigations.
Mail:
Internal Revenue Service Lead Development Center
Stop MS5040
24000 Avila Road
Laguna Niguel, CA 92677-3405
Fax: 877-477-9135

01/09/2024

Per today's news release:
"The Internal Revenue Service today announced Monday, Jan. 29, 2024, as the official start date of the nation's 2024 tax season when the agency will begin accepting and processing 2023 tax returns.

The IRS expects more than 128.7 million individual tax returns to be filed by the April 15, 2024, tax deadline.

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02/04/2022

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08/02/2021

Advance Child Tax Credit 2021 payments facts:
1. The credit amounts will increase for many taxpayers.
2. You may receive part of their credit in 2021 before filing 2021 tax return.
3. Payments are automatically issued by check or direct deposit.
4. The total of the advance monthly payments are up to 50% of the Child Tax Credit.
5. The credit for qualifying children is fully refundable (customers without earned income).
6. The disbursement is up to $300 per month for each qualifying child under age six. Each qualifying child ages between six to 17 receive up to $250/month, including those who turn 17 this year.
7. The payments will be issued on July 15, August 13, September 15, October15, November 15 and December 15.
8. The child tax credit payments could reduce tax refund amounts next tax season on an average of $2000.
9. If you'd rather receive all you money upon filing of your 2021 return, you can choose to UN-ENROLL to NOT receive the Advance Child Tax Credit. Go to this link https://www.irs.gov/credit.../child-tax-credit-update-portal. Be ready to go through the identification process.
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Child Tax Credit Update Portal | Internal Revenue Service
IRS.GOV
Child Tax Credit Update Portal | Internal Revenue Service
Unenroll if you don’t want to get advance Child Tax Credit payments or check if you’re enrolled.

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08/02/2021

Advance Child Tax Credit 2021 payments facts:
1. The credit amounts will increase for many taxpayers.
2. You may receive part of their credit in 2021 before filing 2021 tax return.
3. Payments are automatically issued by check or direct deposit.
4. The total of the advance monthly payments are up to 50% of the Child Tax Credit.
5. The credit for qualifying children is fully refundable (customers without earned income).
6. The disbursement is up to $300 per month for each qualifying child under age six. Each qualifying child ages between six to 17 receive up to $250/month, including those who turn 17 this year.
7. The payments will be issued on July 15, August 13, September 15, October15, November 15 and December 15.
8. The child tax credit payments could reduce tax refund amounts next tax season on an average of $2000.
9. If you'd rather receive all you money upon filing of your 2021 return, you can choose to UN-ENROLL to NOT receive the Advance Child Tax Credit. Go to this link https://www.irs.gov/credits-deductions/child-tax-credit-update-portal. Be ready to go through the identification process.
STAY SAFE AND CALL OUR OFFICE FOR ANY QUESTIONS (407) 870-7662

Unenroll if you don’t want to get advance Child Tax Credit payments or check if you’re enrolled.

05/20/2021

"The Internal Revenue Service is starting to provide tax refunds to taxpayers who paid taxes on their 2020 unemployment benefits that recent legislation later excluded from taxable income.

In March, after passage of the American Rescue Plan Act, the IRS said it would recalculate the taxes and refund the money starting in May for any taxpayers who filed early and paid taxes on their 2020 unemployment compensation before the law had passed. The IRS asked tax professionals not to file amended tax returns for those clients, but to wait until the IRS refunded the funds this spring and summer.

The announcement came on the final weekend of another prolonged and confusing tax season for taxpayers and preparers due to the ongoing pandemic, recent tax law changes from the various COVID-19 relief packages passed by Congress since last year, and backlogs and staff shortages at the IRS.

A man wearing a protective mask rides a scooter past the Internal Revenue Service headquarters in Washington, D.C.Samuel Corum/Bloomberg
“There have been many changes that our people have had to deal with, just in the last few months,” said Stephen Henley, senior managing director and national tax practice leader at CBIZ MHM. “Last year was a big change with the pandemic shutdowns and everybody moving to remote work, and of course all of the delays with the postponement of the tax deadlines. This year we had the 1040 postponement to May 17, but in addition to that we had the changes in the legislation that occurred at the end of the year that essentially made some retroactive changes to the Employee Retention Tax Credit. That tax credit was pretty much ignored and it really wasn’t a big deal for a lot of companies because they got the PPP loans, and if you got the PPP, you couldn’t get the tax credit. Well, legislation made a retroactive change to that, so all of a sudden it was a big deal. And it happened right there at the beginning of tax season. We’re still working on it for our clients, of course, so that’s an added complexity, which is a good thing for our clients and for us, but it’s just another thing that we had to put the list, along with the PPP 2 loans and then the Restaurant Revitalization grant process, which has just kicked off. It’s been challenging from the different changes.”

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The American Rescue Plan Act excludes $10,200 in 2020 unemployment compensation from the income used to calculate the amount of taxes owed. The $10,200 per person exclusion applies to taxpayers who are either single or married filing jointly, with modified adjusted gross income of less than $150,000. The $10,200 is the amount of income exclusion, but it’s not the amount of the refund. The refund amounts will vary and not all adjustments will result in a refund. Unemployment compensation remains taxable above that limit.

The IRS said Friday it has identified more than 10 million taxpayers who filed their tax returns prior to enactment of the American Rescue Plan and has been reviewing those returns to determine the correct taxable amount of unemployment compensation and tax. That could result in a refund, a reduced balance due or no change to tax (no refund due nor amount owed).

“These corrections are being made automatically in a phased approach, easing the burden on taxpayers,” said the IRS. “The first phase is underway and includes the simplest returns. The next phase will include the more complex tax returns which the IRS anticipates will take through the end of summer to review and correct.”

The initial phase of adjustments is happening for single taxpayers who had the simplest tax returns, including those filed by taxpayers who did not claim children or any refundable tax credits. The IRS plans to issue refunds by direct deposit for taxpayers who included their bank account information on their 2020 tax return. If valid bank account information isn’t available, though, the refund will be mailed as a paper check to the address of record, which is going to take longer and add to the delays. The IRS said it would continue to send refunds until all identified tax returns have been reviewed and adjusted.

The refunds are going to be subject to the usual offset rules, including overdue federal taxes, state income taxes, state unemployment compensation debts, child support, spousal support or certain federal nontax debts (i.e., student loans). The IRS said it would send a separate notice to the taxpayer if the tax refund is offset to pay off those outstanding debts.

The IRS will also send taxpayers a notice explaining the corrections, and they should receive the notice within 30 days of when the correction is made. The IRS advised taxpayers to keep any notices they receive for their records. They should also review their return after receiving an IRS notice.

The American Rescue Plan Act also included provisions expanding applicability of the Earned Income Tax Credit for single taxpayers. As part of the same process, the IRS is also making corrections to any claims for the Earned Income Tax Credit for people without qualifying children and the Recovery Rebate Credit, which is used to claim funds from any Economic Impact Payments that a taxpayer didn’t receive last year. However, the IRS noted that some taxpayers may be eligible for certain income-based tax credits not claimed on their original return, such as the EITC for their qualifying children. If so, it advised taxpayers to file an amended tax return if the revised adjusted gross income amount makes them eligible for extra benefits.

After the IRS gets finished with this initial phase for simpler tax returns, more complex corrections will begin, such as for married couples filing jointly.

The American Rescue Plan Act also suspends the requirement to repay excess advance payments of the Premium Tax Credit, or APTC. “If a taxpayer paid an excess APTC repayment amount when they filed their 2020 return, the IRS is also refunding this amount automatically,” said the IRS. “If the IRS corrects the taxpayer’s account to reflect the unemployment income exclusion, the excess APTC amount that the taxpayer paid will be included in that adjustment. The IRS is also adjusting accounts for those who repaid excess APTC but did not report unemployment compensation on their 2020 tax return.”

Taxpayers who have not yet filed a tax return should consult the guidance for Forms 1040 and 1040-SR, which explains how to exclude unemployment compensation.

All in all, many tax professionals will be glad to see the end of this long, extended and stressful tax season.

“One of the things that happens when you have an extended deadline like that is it seems like it has a slowing effect on your ability to get the right data for the tax return process,” said Henley. “It seems like every year it’s getting harder and harder to get the client data in quickly. Obviously if you don’t get the client data, it disturbs your workflow. You have things scheduled and you can’t do them, and you have to move things around.”

He’s hoping that the remainder of the year and next tax season will be less difficult. “It’s been challenging when you have these shifting deadlines, and hopefully this is the last year we’ll have to deal with it, but of course we don’t know what will happen in the future,” said Henley. “But I’m hopeful that we’ll get some sense of normalcy after this year.”" Michael Cohen.

01/20/2021

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04/16/2020

If you utilized a bank product when you filed your 2019 income tax return, please go to IRS.GOV and update your bank account info ASAP otherwise your stimulus check will be deposited to that bank

Non-Filers: Enter Payment Info Here Get My Payment Get Coronavirus Tax Relief Get Your Refund Status Do Your Taxes for Free Get Your Tax Record View Your Account Make a Payment Forms and Instructions 1040 and Schedules 1-3 Individual Tax Return Other 1040 Schedules Information About the Other Schedu...

04/16/2020

Please do not pay anyone to help you get your stimulus check. This is an automatic check. Please DO NOT PAY

02/10/2020

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