The IRS has posted a list of “dirty dozen” scams for 2020 that you, the taxpayer, need to be wary of. You can search the IRS article by going to www.irs.gov/newsroom/dirty-dozen. The article is listed under IR-2020-160. Below, we have chosen a handful of categories that we see occurring more often than others.
Tax debt resolution companies:
Some companies exaggerate “pennies on the dollar” resolution for your back taxes through an Offer In Compromise (OIC). However, an OIC has strict requirements before the IRS will consider or even accept. Many OICs are oftentimes rejected by the IRS. Be careful of who you hire because it may leave you with more cost than benefit.
Threatening IRS calls:
The IRS will never threaten or ask for immediate payment methods over the phone. It will not call about unexpected refunds or Economic Impact Payment (EIP). You should verify any threats or demands by calling the IRS yourself.
EIP or refund theft:
2020 is a prominent year for criminals to attempt theft of EIPs from the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Stolen information is used to file fraudulent returns in order to obtain the EIP payments. The IRS has a website dedicated to the EIP payment and information, as well as an identity theft guide.
For EIP information, go to: www.irs.gov/coronavirus/economic-impact-payments.
For ID theft information, go to: www.irs.gov/newsroom/taxpayer-guide-to-identity-theft.
By law, paid preparers are required to provide his or her credentials on a prepared return. This includes a signature and Preparer Tax Identification Number (PTIN). A return that is not signed and credentialed by a paid preparer can leave the taxpayer with consequences such as over-inflated numbers that will cause tax issues. In this situation, the taxpayer who has paid for professional services is left holding the bag. Any legitimate preparer will not hesitate to provide his or her credentials.
Remember, the IRS will never call to threaten or ask for immediate payments. It typically sends you mail through the United States Postal Service. Depending on the progress of your case, it will be certified mail. Always verify information with your bank and the IRS by calling them yourself. Do not call numbers provided on suspicious mail.
If you are not sure whether something is legitimate or not, you can try and research for yourself, or you give us a call, and we will be happy to point you in the right direction.