Between Hurricane Harvey, the fast-approaching Hurricane Irma and the various wildfires ravaging the west, unfortunately natural disasters have been all too common this summer.
The last thing on anyone’s mind living in those areas is taxes, but nonetheless, there are various tax aspects of a disaster that people should be aware of. Fortunately, this is one area that the IRS makes rapid decisions to help those in need. Below is a sampling of the latest relief for victims of Hurricane Harvey from the IRS. Those impacted by disasters should check the IRS’s page frequently as other disasters may get similar relief from the IRS in the near future.
Finally, for those who want to help and support those victims of any natural disaster, be cautious of who you make donations to. In order for donations to be tax deductible, they must be made to recognized charitable organizations under the IRS. For instance, Go Fund Me donations are typically not deductible as they go to a person and not a charitable organization. If you are donating online, make sure you are on the legitimate website for the charity. Unfortunately, it is all too common for charity scams to pop up during disasters with fake websites that are very similar to legitimate ones. You should ensure that the organization clearly has their Employee Identification Number (EIN) posted and you can use that and their name to check their exempt status on the IRS website. If you are donating a significant sum, that little bit of homework on your part is well worth it.
In September of 2016, the IRS announced that it would start using private debt collectors to recover certain overdue federal tax debts in the spring of 2017. To implement this new program, the IRS contracted with four private collection agencies: CBE Group, Conserve, Performant, and Pioneer. In carrying out their collection efforts, these four companies are required to respect taxpayer rights and obey the consumer protection regulations established in the Fair Debt Collection Practices Act.
How does this new program work?
Considering the continual mail and phone scams that keep emerging, the IRS Commissioner warned taxpayers to be alert for new scams related to this program. When a taxpayer’s account is transferred to a private debt collection agency, the IRS will give the taxpayer written notice of the transfer. In addition, the private collection agency will then send a second, separate letter to the taxpayer verifying this transfer. The private collection agency will not ask for payments to be made on a prepaid debit card or for checks to be made out to the collection agency. All checks should be made payable to the U.S. Treasury. The IRS emphasized that even with private debt collection, taxpayers should not be receiving phone calls from the IRS insisting on immediate payment. The IRS always mails multiple collection notices before making phone calls.
There are several types of accounts that the IRS will not transfer to private collection agencies. Some of these accounts include taxpayers who are deceased, in designated combat zones, victims of identity theft, or in presidentially declared disaster areas and requesting relief from collection. If a taxpayer does not want to work with a private collection agency appointed to his or her account, he or she must notify the private collection agency in writing. Also, the IRS urges taxpayers who are unsure if they have unpaid taxes due from a previous year to check their account balances on www.irs.gov/balancedue.
For more information on private debt collection visit the Private Debt Collection page on the IRS website.
The IRS is warning that con artists are using video relay services (VRS) as a way of potentially scamming deaf and hard of hearing individuals. It appears these bad actors are using VRS just like many of the other phone and email scams that are constantly being reported. These people will call claiming to be from the IRS and demand payment of a tax debt or say that the taxpayer is due a refund. Simply, these scammers are looking for personal information. As always, do not give out personal and financial information to anyone you do not know and confirm that the person requesting information really is who they claim to be. The IRS adds that people should not assume they can trust VRS calls as VRS interpreters do not screen calls for validity.
As listed on IRS.gov, the IRS will never:
If a deaf or hard of hearing individual suspects they received one of these calls, they should call the Treasury Inspector General for Tax Administration (TIGTA) at 800-366-4484. The IRS now accepts calls from all type of relay services whether they are federal, state or private relay providers. The IRS also has YouTube videos in American Sign Language (ASL) with a listing that can be found here. A YouTube video in ASL about this VRS scam is also available.
It’s that time of year again, that time when you have to file your tax returns. It is also the time of year where the scammers come out of the woodwork to try to steal your money and/or identity. Scammers will try many different things to get information from you, with the list below a selection of the some of the most common ones for 2017 (so far).
These are just a few scams of the many that are out there. Educate yourself by going to IRS.gov and report any phishing emails to
For many years now, the IRS has been continually warning the public about the ever-changing tax scams used by individuals to take advantage of unsuspecting taxpayers. These schemes can take place by mail, email, or over the phone and most often involve tricking the taxpayer into giving up personal financial information or intimidating the taxpayer into making fake tax payments directly to the scammer. On August 6, 2015, the IRS released yet another warning to taxpayers alerting them to new variations of these scams.
One of the most common schemes is deception over the phone by impersonating an agent of the IRS or another governmental agency. The new variation of this scheme involves the use of technology. Nowadays, scammers have the ability to change what shows up on a taxpayer’s caller ID to make it appear as if it is a legitimate call from the IRS or another agency, such as the DMV. In addition, to make the call seem genuine, they will gather as much of the taxpayer’s online personal information as possible. Finally, they will use false names, titles, and badge numbers to try to establish their fraudulent identities.
Another way to deceive taxpayers is by mail. In some circumstances, scammers will duplicate official IRS letterhead and direct taxpayers to the nearest bank or business at which they can make payments. Some fraudsters will even provide an actual IRS address to which the victim can send his or her proof of payment.
The IRS stresses that the underlying factor of these scams is fear. Scammers will often use threats of arrest, deportation, or license revocation. In addition, they will emphasize that the matter is urgent and requires immediate attention. The IRS also highlights that while scammers used to only target vulnerable individuals, such as elderly taxpayers or taxpayers whose first language is not English, this is no longer the case. Today, any taxpayer is at risk. In fact, according to the IRS, the Treasury Inspector General for Tax Administration has received approximately 600,000 complaints since October 2013. In addition, there have been over 4,000 victims with a combined total of $20 million in financial losses due to these scams.
In order to protect yourself, here are a few of the tips that the IRS has listed on its website. The IRS will never:
For more information on how to protect yourself or what to do if you find yourself a target, go to the IRS website.
At the beginning of the year, the IRS released its annual list of “Dirty Dozen” tax scams. The list covers a variety of scams, ranging from schemes perpetrated by taxpayers themselves (such as hiding income offshore or implementing abusive tax structures) to scams that are committed against taxpayers without their knowledge (such as phishing or stealing individuals’ identities to claim their tax refunds). While the IRS noted that there is an increase of these scams during tax season, taxpayers must be vigilant throughout the year, especially when it comes to fake charity schemes.
Impersonating charitable organizations has been around for quite some time and often occurs after major natural disasters. Scam artists will pose as legitimate charities to get money or private information from taxpayers by using various methods. One approach is to contact individuals via phone or email asking for donations or personal financial information. Another way is to create websites for fake charities where individuals can “donate.” Not only do these people lose their money, but they are also making themselves vulnerable to further theft by giving up their personal financial information. Other scam artists will contact victims of natural disasters directly and claim to help them file casualty loss claims and get tax refunds.
There are several things people can do to protect themselves against these types of scams.