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By Bill
Telephone Scam Now Making the Rounds
The IRS warns consumers about a sophisticated phone scam targeting taxpayers, including recent immigrants, throughout the country. Victims are told they owe money to the IRS and it must be paid promptly through a pre-loaded debit card or wire transfer. If the victim refuses to cooperate, they are then threatened with arrest, deportation or suspension of a business or driver’s license. Characteristics of this scam include:
- Scammers use fake names and IRS badge numbers. They generally use common names and surnames to identify themselves.
- Scammers may be able to recite the last four digits of a victim’s Social Security Number.
- Scammers spoof the IRS toll-free number on caller ID to make it appear that it’s the IRS calling.
- Scammers sometimes send bogus IRS emails to some victims to support their bogus calls.
- Victims hear background noise of other calls being conducted to mimic a call site.
- After threatening victims with jail time or driver’s license revocation, scammers hang up and others soon call back pretending to be from the local police or DMV, and the caller ID supports their claim.
If you know you owe taxes or you think you might owe taxes, call the IRS at 1-800-829-1040. If you know you don’t owe taxes or have no reason to think that you owe any taxes (for example, you’ve never received a bill or the caller made some bogus threats as described above), call and report the incident to the Treasury Inspector General for Tax Administration at 1-800-366-4484.
By Bill
Report Changes in Circumstances that could Affect Your 2015 Premium Tax Credit
If you have enrolled for health coverage through the Health Insurance Marketplace and receive advance payments of the premium tax credit in 2015, it is important that you report changes in circumstances, such as changes in your income or family size, to your Marketplace.
Advance payments of the premium tax credit provide financial assistance to help you pay for the insurance you buy through the Marketplace. Having at least some of your credit paid in advance directly to your insurance company will reduce the out-of-pocket cost of the health insurance premiums you’ll pay each month.
However, it is important to notify the Marketplace about changes in circumstances to allow the Marketplace to adjust your advance payment amount. This adjustment will decrease the likelihood of a significant difference between your advance credit payments and your actual premium tax credit. Changes in circumstances that you should report to the Marketplace include, but are not limited to:
- An increase or decrease in your income
- Marriage or divorce
- The birth or adoption of a child
- Starting a job with health insurance
- Gaining or losing your eligibility for other health care coverage
- Changing your residence
For the full list of changes you should report, visit HealthCare.gov/how-do-i-report-life-changes-to-the-marketplace.
If you report changes in your income or family size to the Marketplace when they happen in 2015, the advance payments will more closely match the credit amount on your 2015 federal tax return. This will help you avoid getting a smaller refund than you expected, or even owing money that you did not expect to owe.
By Bill
Taxpayer Advocate Service
How Does the Taxpayer Advocate Service Work for You?
The Taxpayer Advocate Service is an independent organization within the Internal Revenue Service. We protect taxpayers’ rights by ensuring that all taxpayers receive fair treatment. We can also help you to know and understand your rights under the Taxpayer Bill of Rights.
What is the Taxpayer Bill of Rights?
The Taxpayer Bill of Rights describes ten basic rights that all taxpayers have when dealing with the IRS. Our taxpayer rights webpage can help you understand what these rights mean to you and how they apply. These are your rights. Know them. Use them.
Our site at taxpayeradvocate.irs.gov also can help you with common tax issues and situations: what to do if you made a mistake on your tax return, if you got a notice from the IRS or you’re thinking about hiring a tax preparer.
What can a Taxpayer Advocate do for you?
We can help you resolve problems that you can’t resolve with the IRS. And our service is free. Always try to resolve your problem with the IRS first, but if you can’t, then come to the Taxpayer Advocate Service. The best thing you can do is act now!
- We help individuals, businesses, and exempt organizations. If you qualify for our help, your advocate will be with you at every turn and do everything possible.
- You may be eligible for our help if your IRS problem is causing financial difficulty or you believe an IRS procedure just isn’t working as it should.
- We have offices in every state, the District of Columbia, and Puerto Rico. Your local advocate’s number is in your local directory and at taxpayeradvocate.irs.gov. You can also call us at 1-877-777-4778.
We also handle large-scale problems that affect many taxpayers. If you know of one of these broad issues, please report it to us at irs.gov/sams.
The Taxpayer Advocate Service is your voice at the IRS. For more information, visit us at taxpayeradvocate.irs.gov.
By Bill
Late? What are the Penalties?
April 15 was the tax day deadline for most people. If you are due a refund there is no penalty if you file a late tax return. But if you owe tax, and you failed to file and pay on time, you will usually owe interest and penalties on the tax you pay late. You should file your tax return and pay the tax as soon as possible to stop them. Here are eight facts that you should know about these penalties.
1. Two penalties may apply. If you file your federal tax return late and owe tax with the return, two penalties may apply. The first is a failure-to-file penalty for late filing. The second is a failure-to-pay penalty for paying late.
2. Penalty for late filing. The failure-to-file penalty is normally 5 percent of the unpaid taxes for each month or part of a month that a tax return is late. It will not exceed 25 percent of your unpaid taxes.
3. Minimum late filing penalty. If you file your return more than 60 days after the due date or extended due date, the minimum penalty for late filing is the smaller of $135 or 100 percent of the unpaid tax.
4. Penalty for late payment. The failure-to-pay penalty is generally 0.5 percent per month of your unpaid taxes. It applies for each month or part of a month your taxes remain unpaid and starts accruing the day after taxes are due. It can build up to as much as 25 percent of your unpaid taxes.
5. Combined penalty per month. If the failure-to-file penalty and the failure-to-pay penalty both apply in any month, the maximum amount charged for those two penalties that month is 5 percent.
6. File even if you can’t pay. In most cases, the failure-to-file penalty is 10 times more than the failure-to-pay penalty. So if you can’t pay in full, you should file your tax return and pay as much as you can. Use IRS Direct Pay to pay your tax directly from your checking or savings account. You should try other options to pay, such as getting a loan or paying by debit or credit card. The IRS will work with you to help you resolve your tax debt. Most people can set up an installment agreement with the IRS using the Online Payment Agreement tool on IRS.gov.
7. Late payment penalty may not apply. If you requested an extension of time to file your income tax return by the tax due date and paid at least 90 percent of the taxes you owe, you may not face a failure-to-pay penalty. However, you must pay the remaining balance by the extended due date. You will owe interest on any taxes you pay after the April 15 due date.
8. No penalty if reasonable cause. You will not have to pay a failure-to-file or failure-to-pay penalty if you can show reasonable cause for not filing or paying on time. There is also penalty relief available for repayment of excess advance payments of the premium tax credit for 2014.
By Bill
Bartering Income
Bartering is the trading of one product or service for another. Often there is no exchange of cash. Some businesses barter to get products or services they need. For example, a gardener might trade landscape work with a plumber for plumbing work.
If you barter, you should know that the value of products or services from bartering is taxable income. This is true even if you are not in business.
Here are a few facts about bartering:
- Bartering income. Both parties must report the fair market value of the product or service they get as income on their tax return.
- Barter exchanges. A barter exchange is an organized marketplace where members barter products or services. Some operate out of an office and others over the Internet. All barter exchanges are required to issue Form 1099-B, Proceeds from Broker and Barter Exchange Transactions. Exchanges must give a copy of the form to its members who barter each year. They must also file a copy with the IRS.
- Trade Dollars. Exchanges trade barter or trade dollars as their unit of exchange in most cases. Barter and trade dollars are the same as U.S. currency for tax purposes. If you earn trade and barter dollars, you must report the amount you earn on your tax return.
- Tax implications. Bartering is taxable in the year it occurs. The tax rules may vary based on the type of bartering that takes place. Barterers may owe income taxes, self-employment taxes, employment taxes or excise taxes on their bartering income.
- Reporting rules. How you report bartering on a tax return varies. If you are in a trade or business, you normally report it on Form 1040, Schedule C, Profit or Loss from Business.
For more information, see the Bartering Tax Center on IRS.gov.
By Bill
What Kind of Health Insurance Qualifies as Minimum Essential Coverage?
The individual shared responsibility provision requires you and each member of your family to have basic health insurance coverage – also known as minimum essential coverage – qualify for an exemption, or make an individual shared responsibility payment when you file your federal income tax return.
Many people already have minimum essential coverage and do not need to do anything more than maintain that coverage and report their coverage when they file their tax returns. Most taxpayers will simply check a box to indicate that each member of their family had qualifying health coverage for the whole year.
Here are some examples of coverage that qualify as minimum essential coverage:
Employer-sponsored coverage
• Group health insurance coverage for employees under
o a governmental plan such as the Federal Employees Health Benefit program
o a plan or coverage offered in the small or large group market within a state
o a grandfathered health plan offered in a group market
• Self-insured group health plan for employees
• COBRA coverage
• Retiree coverage
Individual health coverage:
• Health insurance purchased directly from an insurance company
• Health insurance purchased through the Health Insurance Marketplace
• Health insurance provided through a student health plan
Coverage under government-sponsored programs:
• Medicare Part A coverage
• Medicare Advantage plans
• Most Medicaid coverage
• Children’s Health Insurance Program or CHIP
• Most types of TRICARE coverage
• Comprehensive health care programs offered by the Department of Veterans Affairs
• Department of Defense Nonappropriated Fund Health Benefits Program
• Refugee Medical Assistance
U.S. citizens, who are residents of a foreign country for an entire year, and residents of U.S. territories, are considered to have minimum essential coverage for the year.
For more information on the types of coverage that qualify as minimum essential coverage and those that do not, as well as information on certain coverage that may provide limited benefits, visit the MEC page on IRS.gov/aca.
By Bill
IRS Warns Tax Payers to Watch Out for Phishing Scams
IR-2015-31, Feb. 18, 2015
WASHINGTON — The Internal Revenue Service today warned return preparers and other tax professionals to be on guard against bogus emails making the rounds seeking updated personal or professional information that in reality are phishing schemes.
“I urge taxpayers to be wary of clicking on strange emails and websites,” said IRS Commissioner John Koskinen. “They may be scams to steal your personal information.”
Specifically, the bogus email asks tax professionals to update their IRS e-services portal information and Electronic Filing Identification Numbers (EFINs). The links that are provided in the bogus email to access IRS e-services appear to be a phishing scheme designed to capture your username and password. This email was not generated by the IRS e-services program. Disregard this email and do not click on the links provided.
Phishing made this year’s Dirty Dozen list of IRS tax scams. The full list is available on IRS.gov.
Phishing is a scam typically carried out with the help of unsolicited email or a fake website that poses as a legitimate site to lure in potential victims and prompt them to provide valuable personal and financial information. Armed with this information, a criminal can commit identity theft or financial theft.
If you receive an unsolicited email that appears to be from either the IRS or an organization closely linked to the IRS, such as the Electronic Federal Tax Payment System, report it by sending it to phishing@irs.gov.
In general, the IRS has added and strengthened protections in our processing systems this filing season to protect the nation’s taxpayers. For this tax season, we continue to make important progress in stopping identity theft and other fraudulent refunds.
It is important to keep in mind the IRS generally does not initiate contact with taxpayers by email to request personal or financial information. This includes any type of electronic communication, such as text messages and social media channels. The IRS has information online that can help you protect yourself from email scams.
By Bill
Affordable Care Act – Individuals
New IRS Publication Helps You Find out if You Qualify for a Health Coverage Exemption
Taxpayers who might qualify for an exemption from having qualifying health coverage and making a payment should review a new IRS publication for information about these exemptions. Publication 5172, Health Coverage Exemptions, which includes information about how you get an exemption, is available on IRS.gov/aca.
The Affordable Care Act calls for each individual to have qualifying health insurance coverage for each month of the year, have an exemption, or make an individual shared responsibility payment when filing his or her federal income tax return.
You may be exempt if you:
- Have no affordable coverage options because the minimum amount you must pay for the annual premiums is more than eight percent of your household income,
- Have a gap in coverage for less than three consecutive months, or
- Qualify for an exemption for one of several other reasons, including having a hardship that prevents you from obtaining coverage or belonging to a group explicitly exempt from the requirement.
On IRS.gov/ACA, you can find a comprehensive list of the coverage exemptions.
How you get an exemption depends upon the type of exemption. You can obtain some exemptions only from the Marketplace in the area where you live, others only from the IRS when you file your income tax return, and others from either the Marketplace or the IRS.
Additional information about exemptions is available on the Individual Shared Responsibility Provision web page on IRS.gov. The page includes a link to a chart that shows the types of exemptions available and how to claim them. For additional information about how to get exemptions that may be granted by the Marketplace, visit HealthCare.gov/exemptions.
By Bill
IRS Identifies Five Easy Ways to Spot Suspicious Calls
WASHINGTON — The Internal Revenue Service issued a consumer alert today providing taxpayers with additional tips to protect themselves from telephone scam artists calling and pretending to be with the IRS.
These callers may demand money or may say you have a refund due and try to trick you into sharing private information. These con artists can sound convincing when they call. They may know a lot about you, and they usually alter the caller ID to make it look like the IRS is calling. They use fake names and bogus IRS identification badge numbers. If you don’t answer, they often leave an “urgent” callback request.
“These telephone scams are being seen in every part of the country, and we urge people not to be deceived by these threatening phone calls,” IRS Commissioner John Koskinen said. “We have formal processes in place for people with tax issues. The IRS respects taxpayer rights, and these angry, shake-down calls are not how we do business.”
The IRS reminds people that they can know pretty easily when a supposed IRS caller is a fake. Here are five things the scammers often do but the IRS will not do. Any one of these five things is a tell-tale sign of a scam. The IRS will never:
1. Call you about taxes you owe without first mailing you an official notice.
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 get a phone call from someone claiming to be from the IRS and asking for money, here’s what you should do:
- If you know you owe taxes or think you might owe, call the IRS at 1.800.829.1040. The IRS workers can help you with a payment issue.
- If you know you don’t owe taxes or have no reason to believe that you do, report the incident to the Treasury Inspector General for Tax Administration (TIGTA) at 1.800.366.4484 or at www.tigta.gov.
- If you’ve been targeted by this scam, also contact the Federal Trade Commission and use their “FTC Complaint Assistant” at FTC.gov. Please add “IRS Telephone Scam” to the comments of your complaint.
Remember, too, the IRS does not use email, text messages or any social media to discuss your personal tax issue. For more information on reporting tax scams, go to www.irs.gov and type “scam” in the search box.
Additional information about tax scams are available on IRS social media sites, including YouTube http://youtu.be/UHlxTX4rTRU?list=PL2A3E7A9BD8A8D41D. and Tumblr http://internalrevenueservice.tumblr.com where people can search “scam” to find all the scam-related posts.
By Bill
Atlas Shrugged III, the movie is slated for release on Sept 12, 2014.
If you want to see it at your local theatre you need to get involved…
Click on the link to the official movie web site, www.atlasshruggedmovie.com and click the link to ‘Get Involved.’
