Security Awareness for Taxpayers

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As tax season will be underway the tax scams are picking up.

Here are a few things you can do in order to protect yourself from these scams according to the IRS.

 

Note that the IRS will never:

 

1) Call to demand immediate payment, nor will the agency call about taxes owed without first having mailed you a bill.

2) Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.

3) Require you to use a specific payment method for your taxes, such as a prepaid debit card.

4) Ask for credit or debit card numbers over the phone.

5) Threaten to bring in local police or other law-enforcement groups to have you arrested for not paying.

 

If you don’t owe taxes, or have no reason to think that you do:

 

1) Do not give out any information. Hang up immediately.

2) Contact TIGTA to report the call. Use their “IRS Impersonation Scam Reporting” web page. You can also call 800-366-4484.

3) Report it to the Federal Trade Commission. Use the “FTC Complaint Assistant” on FTC.gov. Please add “IRS Telephone Scam” in the notes.

 

 

 

More information:

Security Summit Identity Theft Tips Overview
Tax Scams

 

IRS websites:

https://www.irs.gov/uac/Tax-Scams-Consumer-Alerts
https://www.irs.gov/uac/IRS-Urges-Public-to-Stay-Alert-for-Scam-Phone-Calls

 

 

Your Appeal Rights

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Rights

On publication 5; published by the Internal Revenue Service shows the process for taxpayers to follow if the taxpayer disagree with an IRS decision.

According to the IRS If you don’t agree with any or all of the IRS findings given you, you may request a meeting or a telephone conference with the supervisor of the person who issued the findings. If you still don’t agree, you may appeal your case to the Appeals Office of IRS.

You may represent yourself at your appeals conference, or you may have an attorney, certified public accountant, or an individual enrolled to practice before the IRS represent you.

If the meeting did not resolve the disagreement, the taxpayer can appeal the case. Appealing the case may require a written letter of protest outlining why the taxpayer doesn’t agree with the IRS findings. Conferences with Appeals Office personnel are held on an informal manner by correspondence, by telephone or at a personal conference.

”However, if you are a nonresident alien, you cannot take your case to a United States District Court.”

 

 

If you would like to learn more about your appeal rights please visit

http://www.irs.gov/pub/irs-pdf/p5.pdf

Foreign Banks Agree to Share Tax Info

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In response to a 2010 law known as FATCA (Foreign Account Tax Compliance Act) the U.S has encouraged foreign institutions to supply the IRS with names, account numbers and balances for accounts controlled by U.S. Taxpayers. All this in an effort to target Americans hiding assets overseas.

Nearly 70 countries have agreed to share this information with the IRS due to a new penalty they will incur under the FATCA that withholds 30% of a foreign banks transactions if they refuse to share information with the IRS. This is a steep penalty that most countries are trying to avoid.

Additionally U.S. banks that fail to withhold the 30% tax would be liable for it themselves and could face steep charges.

More than 77-thousand foreign banks, investment funds and other financial institutions have already agreed to share this information. The Treasury will keep an updated list of all complying banks so American Financial Institutions will know it is OK to send them payments without withholding tax information. As a side note to those with investments in Russia; 515 Russian institutions were forced to apply directly with the IRS because the U.S. halted negotiations with the Russian Government due to the crisis in the Ukraine.

 

     Robert Stack, deputy assistant treasury secretary for international tax affairs, said “The strong international support for FATCA is clear, and this success will help us in our goal of stopping tax evasion and narrowing the tax gap.”

 

The law is so strong, foreign banks are using loopholes in their own laws to provide personal information to the U.S. They circumvent their countries privacy laws by providing the information to their local government and having them release it to the U.S. As the provisions of this law affect more financial institutions, the U.S. is slowly making tax havens a thing of the past.

Officials are still debating a “tax holiday” which would allow corporations and individuals to transfer funds from their foreign accounts to the U.S. at little or no tax at all. The reason why it’s still being disputed is in 2004, when the policy was being tested, it did little for the economy as most companies just transferred some income in order to make their financial statement look better to investors.

As long as companies and investors keep receiving preferred tax rates in other countries, they will keep their income overseas and maximize their tax savings and investment opportunities.