Avoid IRS Scams

IRS Gift Card Scam

The IRS is yet again warning about con artists who use threatening tactics to get taxpayers to pay their IRS tax debt with gift cards. They often suggest the taxpayer’s identity has been stolen, instruct the taxpayer to buy gift cards, and provide the card number and PIN to the fake agent in order to pay a penalty.

The IRS does not specify payment methods such as gift cards, prepaid debit cards, or wire transfers to pay a debt, and the IRS doesn’t threaten to suspend drivers’ licenses, business licenses, or immigration status or to bring in law enforcement.

If you owe the IRS for income-related tax liability, know your rights and consider getting professional help so that you don’t pay more than you owe or more than you can afford.

How can Accelerated Tax Solutions Help?

During our free consultation, we can help determine if the apparent IRS contact is real or not. Companies and scammers use public information to make their communication sound legitimate. They often even make their letters or emails look as though they come from the IRS.

We know how the IRS communicates and the letters and notices they use. We can also conduct a full analysis of your case so that you understand exactly what the IRS is working with. Very often tax payers did not receive the official notice because they moved or they simply threw it away with all the junk mail they receive. Once our legal team uncovers the real situation, they will provide you with the best legal resolution that meets your financial situation and life goals.

Heavy Highway Vehicle Use Tax Due Sept. 3

The deadline to file and pay the Heavy Vehicle Use Tax using Form 2290 for this annual federal excise tax on heavy motor vehicles that operate on public highways, is September 3. Because it falls on a Saturday, the usual August 31 deadline is postponed until September 3.

This tax applies to anyone who is required to register or who has registered large buses and trucks with a taxable gross weight of 55,000 pounds or more. Drivers who only use the vehicle for 5,000 miles or less or 7,500 miles for farm vehicles are still required to file even though they don’t owe the tax.

At Accelerated Tax Solutions, we value our truckers and other independent contractors, and we work hard to make sure that these valued, essential members of our nation’s commerce and transportation get the full representation they need. Whether we are fighting for the highest permissible expenses and deductions under the law in order to reduce their tax debt, ensuring that they are protected as they move towards compliance after years of missed filings, or defending them in an audit or under-reporting examination. 

How do I find a reputable tax preparer?

Many tax preparers engage in seasonal work from January through April, and then they may be nowhere to be found. Obviously, given the nature of tax season, we need seasonal tax preparers to handle the volume of work that doesn’t carry on throughout the year. However, the high, but brief demand can attract practitioners who are not very experienced or worse yet, who are not very ethical. Whether their mistakes are unintentional or diabolical, the taxpayer is usually left with the costs.

The Internal Revenue Service annually cautions taxpayers to do their due diligence when selecting a tax preparer. One of their main concerns relates to the sensitive nature of personal and financial information that can be mishandled or intentionally used in scams resulting in identity theft and fraud. Another reason taxpayers should screen their professionals carefully is that taxpayers are legally responsible for all of the information on their tax returns. 

The IRS provides a number of warning signs to be on the lookout for. Some of the most crucial warnings include the following:

  • First, check to see if the preparer has a valid Preparer Tax Identification Number (PTIN). Anyone who is paid to prepare taxes is required by law to have a valid PTIN and include it on the return along with their signature.
  • Tax preparers should sign your tax returns they prepare. The IRS identifies “ghost” preparers as those who print their work and have the client sign and return it. They will also refuse to digitally sign electronically signed returns. If preparers are reluctant to sign their work, you might not want to trust them.
  • Be wary of tax preparers that charge based on the size of your refund. Paying preparers based on the refund incentivizes them to increase your refund beyond what is warranted.
  • Never sign an incomplete or blank return. You are responsible for the information on the return. 

In addition to the above red flags, the IRS offers other criteria to help taxpayers choose a preparer.

  • Having a preparer that is available all year helps if any questions or problems arise.
  • You should review the company’s credentials and history. In addition to having a valid PTIN, which you can check here, Attorneys, CPAs, and Enrolled Agents each have their own licensing authorities, which you can check online.
  • Watch out for service fees for larger refunds or for unwarranted services such as having the refund deposited in the preparer’s financial account.
  • Good preparers should ask for documentation of expenses and credits, and they should work with your Form W-2 instead of unofficial paystubs. If they don’t ask for receipts and records, you might be asked to justify your claims in a resulting audit.
  • Review all of the information on the return before you sign it. Double check your financial information to make sure any refund will end up in your account and not somebody else’s.

Although we do not file tax returns as a stand-alone service, Accelerated Tax Solutions does file for all of our clients who need to either file or amend an original tax return in order to reach compliance or challenge a substitute for return by the IRS.

IRS Notice CP2000

What are CP2000 and CP2100 IRS Notifications?

If you receive a CP2000 or CP2100, you most likely have missing or incorrect information. In the case of the CP2100, either your name or taxpayer identification number (TIN) is missing or does not match the IRS records. A payer has made at least one payment to an inaccurate TIN. For missing or obviously incorrect TINs, the taxpayer should begin backup withholding immediately and make up to three requests for the TIN to avoid penalties for not including the correct information.

For CP2000s, the income or payment information reviewed from third parties does not match what you reported. For instance, an employer or financial institution has reported income or payments that you have not included in your tax return. The notice will explain how the reported information that you missed affects your return. If you do not respond by the due date, you will receive a Statutory Notice of Deficiency for a new amount which may include penalties and interest. 
If you receive a CP2000, you should act swiftly to address the issue. The underlying discrepancy might also affect other years. Accelerated Tax Solutions can address this concern for you in a very quick and comprehensive manner, ensuring that our recommendation for future action–which you might choose to do on your own or enlist us to resolve–addresses not only the notice you received but also all years of your required compliance. 

The Rising Costs of Tax Preparation

The cost of tax preparation is on the rise. According to the National Association of Tax Professionals, new clients paid an average of $218 in 2023, up 25% from 2021. Even repeat clients experienced a roughly 23% increase over the same period.

According to a recent online article by Rebecca Chen for Yahoo Finance, much of the increase comes from the decline in CPA candidates, which has led to steeper competition for accountants and thus higher costs. It seems as though the accounting field has lost its appeal to apparently more lucrative or flashier financial fields in finance. In order to compete, accounting firms have had to increase salaries and benefits, allowing more and more staff to work remotely. One response has even been to increase dependence on outsourcing by hiring cheaper international employees.

Although going remote and outsourcing can lower costs, it might affect long term credibility for firms who rely on transitory staffing that threaten relationships and even standards of accounting. At Accelerated Tax Solutions, our clients can rely on relationships, experience, and high ethical standards. Our credibility demands cost effective processes that are trusted, efficient, and sound.

Hire the Best–Experienced and Ethical–Tax Professional

If you think your tax return results are too good to be true, they probably are. An experienced and reputable tax preparer can get the results you deserve based on a thorough accounting of all revenue and expenses that can be properly written off, but some will appear to work magic in order to keep your business or justify higher fees. 

Recently, four tax preparers in the Tampa Bay, Florida area received prison time for conspiring to defraud the United States by increasing their clients’ tax refunds. Among other false claims, the preparers claimed their clients owned businesses or were entitled to education expenses and fuel credits that they weren’t. Now they will be serving between one to three years for tax fraud. According to the IRS, their CI Special Agents will be using every legal method to crack down on fraudulent return preparers. 

At Accelerated Tax Solutions, our case managers and tax preparers know your rights as tax payers and will use all legal means to make sure you pay only the taxes you owe. Although we don’t file stand-alone tax returns, we regularly file for our clients who need to become compliant before entering into an agreement or petitioning for penalty abatement or who want to challenge an audit or substitute for return with an original well-documented tax return.

IRS Raises Interest Penalty

As required by law, the IRS recomputes the interest-rate penalty every quarter at the short-term rate plus three percentage points. Just two years ago, the rate was 3%, but next spring’s filing season will be subject to the recalculated 8% rate. While this rate does not apply to corporations and most W-2 employees have taxes withheld as they go, self-employed workers and independent contractors are especially vulnerable to this increase for under reporting income. The best way to avoid any such penalties is to make estimated payments periodically to cover any potential underpayments.

If you think you are at risk for under reporting income, let us conduct a comprehensive tax analysis to see what the IRS thinks you owe. The sooner you act to avoid these penalties, the better, especially as they increase to 8% next spring.

1040 e-file Deadline, November 18

Act fast if you need to file past taxes from 2020-2022 quickly with efile. The IRS will shut down individual e-filing beginning Saturday, November 18, 2023 at 11:59 p.m. EST in order to prepare for the upcoming 2023 tax filing season. According to the IRS, only “send submissions” for 1040 state and federal filings will be affected by the shutdown. Other services such as “Get Acks” and business (BMF) will remain unaffected.

We all know how slow regular mail can be especially when dealing with the IRS. So if you need to file past returns, hurry! When the system picks back up, you will only be able to e-file 2021-2023, not 2020.

If you need assistance with your past filings, we can help, but make sure you have your documents ready if we are going to meet the e-file deadline.

Here’s the information recommended by the IRS. Not all information applies to all taxpayers.

  • Social Security numbers of everyone listed on the tax return. 
  • Bank account and routing numbers for direct deposit or information to make a tax payment.
  • Forms W-2 from employer(s).
  • Forms 1099 from banks, issuing agencies and other payers including unemployment compensation, dividends, distributions from a pension, annuity or retirement plan.
  • Form 1099-K, 1099-MISC, W-2 or other income statement for workers in the gig economy.
  • Form 1099-INT for interest received.
  • Other income documents and records of virtual currency transactions.
  • Form 1095-A, Health Insurance Marketplace Statement.

Information to support claiming other credits or deductions such as receipts for child or dependent care, college expenses or donations.

Tax Resolution vs Debt Consolidation

It is important to distinguish the work Tax Resolution Firms do from the work done by debt consolidation companies. Many debt consolidation companies have rightfully received numerous complaints and bad ratings because of the, in many cases, false or misleading promises they make to their clients who are often under duress. In most cases, the client’s credit rating has already been adversely affected, and the debt has been sold to collection agencies who have few options other than to nag consumers until they agree to pay something. 

On the other hand, state and federal income tax authorities have much more power to collect back taxes that are owed. In addition to auditing returns and filing substitutes for returns, tax authorities can place liens on taxpayers’ assets and more aggressively seize funds through bank levies and wage garnishments. In these types of situations, our firm can benefit clients immensely through informed action, representation, and resolutions that protect our clients’ assets and financial security. Even in our domain, however, there are companies that make promises they can’t keep. While there are legitimate ways to reduce tax liabilities over time, broad claims to reduce taxes to “pennies on the dollar” are misleading at best. For example, nearly two-thirds of offer in compromise (OICs) applications should never have been filed in the first place according to the IRS.

At Accelerated Tax Solutions, our process begins with getting to know your personal financial challenge and then explores exactly what the tax authorities think they know. Guided by experienced attorneys and veterans in the field of resolution, our team then works to put you in the best position legally possible, keeping you informed throughout the process. As a result, we have served 1000s of individuals, families, and businesses by providing actual and affordable options to address their state and federal tax liabilities.

Expanded IRS Examinations

Call us before the IRS starts expanded examination of high-income compliance, digital assets, FBAR violations, and labor brokers. We specialize in Revenue Officer engagement, audit representation, and 940/941 payroll tax liabilities.

The IRS will intensify work on over 1,600 taxpayers who earn above $1 million and have more than $250,000 in recognized tax debt by focusing dozens of Revenue Officers on these cases in FY 2024. Additionally, the IRS will open examinations of 75 of the largest partnerships including hedge funds, real estate investment partnerships, publicly traded partnerships, large law firms and other industries. By early October, they will also begin contacting around 500 partnerships with balance sheets with over $10 million in assets and begin adding these to their audit stream if necessary. In addition to these high profile cases, the IRS is expanding efforts involving digital assets, FBAR violations related to foreign bank accounts, and labor brokers involving construction contractor payments to shell companies posing as subcontractors. The IRS will scale up both civil audits and criminal investigations with efforts already demonstrated in Texas and Florida.