Helpful Advice from the IRS

By Ken Weinstock CPA, Leisure World resident.

Happy New Year! I’d like to start the year with some helpful advice from the IRS. The IRS offers many free email subscriptions. One that I subscribe to is called “Tax Tips”. Here are a few edited excerpts from recent editions of “Tax Tips”.

How To Avoid Being Scammed by Someone

Posing

as the IRS

Knowledge is a taxpayer’s first line of defense against scammers who pretend to be from the IRS with the goal of stealing personal information. Here are some facts about how the IRS communicates with taxpayers:

The IRS doesn’t normally initiate contact with taxpayers by phone or email. Do not reply to an email from someone who claims to be from the IRS because the IRS email address could be spoofed or fake.

The IRS does not send text messages or contact people through social media.

When the IRS needs to contact a taxpayer, the first contact is normally by letter delivered by the U.S. Postal Service.

How To Avoid Tax-Related Identity Theft

Stay safe online. Watch out for identity thieves who try to steal personal financial information which also could be used to potentially file fraudulent tax returns. Take extra care while shopping online or viewing emails and texts.

Watch out for fake charities. Taxpayers should be on alert for scammers using fake charities to commit fraud. Scammers often take advantage of people’s generosity by setting up fake charities to trick unsuspecting donors into giving away not only money, but also their sensitive personal information. Being alert to potential scams will not only shield a taxpayer’s money but also help protect personal and financial data that scammers can use in tax-related identity theft. don’t want to overlook is making sure your executor knows where your Will is stored and can access it when needed.

Choosing a unique Identity Protection PIN provides extra safety for taxpayers. The IRS reminds taxpayers they can get extra protection starting in January by joining the agency’s Identity Protection Personal Identification Number or IP PIN program. Anyone who has a Social Security number or Individual Taxpayer Identification Number and can verify their identity is eligible to enroll in the IP PIN program. The fastest and easiest way for taxpayers to receive an IP PIN is by using the “Get an IP PIN” tool on the IRS website.

How To Choose a Tax Preparer Tax filing season will be here soon. As people begin to gather their documents and receipts in preparation of filing a tax return, many are also choosing to use a professional tax return preparer. Anyone with an IRS Preparer Tax Identification Number (PTIN) can be a paid tax return preparer. However, tax return preparers have differing levels of skills, education and expertise.

-Rilus M. Dana, J.D. is the Managing Partner at Dana and Associates, LLC.

Choosing a tax return preparer wisely is important because taxpayers are ultimately responsible for all the information on their return, no matter who prepares it for them.

When looking for a tax professional, taxpayers can search the IRS Directory of Preparers. While it is not a complete listing of tax return preparers, it does include those who are enrolled agents, CPAs and attorneys.

Before hiring a preparer, taxpayers should make sure they know what they’re getting. They can do this by:

• Checking the preparer’s history with the Better Business Bureau. Taxpayers can also verify an enrolled agent’s status on IRS.gov.

• Asking about fees. Taxpayers should avoid tax return preparers who base their fees on a percentage of the refund or who offer to deposit all or part of their refund into their financial accounts. Taxpayers should be suspicious of any preparer claiming they can get larger refunds than other tax preparers.

• Asking if the preparer plans to use e-file. The fastest way to get a tax refund is by e-filing and choosing direct deposit.

• Making sure the preparer will be available if needed People should consider whether the individual or firm will be around for months or years after filing the return. It’s possible they’ll need the preparer to answer questions about the preparation of the tax return later.

• Ensuring the preparer signs and includes their PTIN Paid tax return preparers must have a PTIN to prepare tax returns and must include it on any tax return they prepare.

• Considering the person’s credentials. Only attorneys, CPAs, and enrolled agents can represent taxpayers before the IRS in tax matters.