IRS warns of recent tax scam

Congress did approve a $290 million budget hike for the IRS, but that money is going to be used to improve customer-service issues – not tax compliance and enforcement, reports USA Today. The best way to check the status of a refund is online through the “Where’s my Refund?”

The Foreign Account Tax Compliance Act (FATCA) “requires certain US taxpayers who hold foreign financial assets with an aggregate value of more than the reporting threshold – at least $50,000 – to report information about those assets on Form 8938, which must be attached to the taxpayer’s annual income tax return”, states the IRS.

Many taxpayers are eager to know precisely when their money will be arriving, but checking “Where’s My Refund” a few times a day will not produce new information.

The IRS encourages taxpayers to be vigilant against phone and email scams that use the IRS as a lure.

The most common way that income tax identity theft occurs is when the identity thief files an income tax return using his or her victim’s Social Security number along with a counterfeit W-2 that indicates a large refund is due.

TIGTA also recommended that IRS reissue refund checks after finding 113 cases where checks were returned from undeliverable addresses, but were not re-sent after recipients contacted the agency with the correct address.

But tax season also means scam season. The app is free for Android devices from the Google Play Store or from the Apple App Store for Apple devices.

Users of both the tool and the app must have information from their current, pending tax return to access their refund information. “While this approach helps IRS get refunds to taxpayers quickly”, GAO added, “It creates a window during which fraudsters can make off with your refund”.

Increasingly, criminals have been posing as taxpayers and filing phony returns early in hopes of getting the refund themselves.

Another benefit of preparing your taxes early: You may be able to get a better deal on college financial aid. Filing your tax return early has been a great way to thwart that scam.

As the filing season nears, Revenue Commissioner Cynthia Bauerly wants to remind taxpayers that filing electronically helps improve the accuracy of your return and choosing direct deposit is the safest and fastest way to receive your refund.

Remember, the IRS will never call you and threaten immediate arrest. Seventy percent of the nation’s taxpayers are eligible for IRS Free File.

“Their intent is to steal information such as your passwords for IRS accounts or sensitive taxpayer data stored on your computers”, the IRS reported in a news release.

source:http://www.jewocity.com/blog/irs-warns-of-recent-tax-scam/256546

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