Watch Out for IRS Tax Scams
Every tax season, there is an increase in schemes that
target innocent taxpayers by email, by phone and on-line. The IRS does not use email, text messages or any social media to discuss your personal tax issue involving bills or refunds. The IRS and Security
Summit partners remind taxpayers and tax professionals to be on the lookout for
these deceptive schemes.
Some of the most prevalent IRS impersonation scams include:
fake tax payments:
has seen automated calls where scammers leave urgent callback requests telling
taxpayers to call back to settle their “tax bill.” These fake calls generally
claim to be the last warning before legal action is taken. Taxpayers may also
receive live calls from IRS impersonators. They may demand payments on prepaid
debit cards, iTunes and other gift cards or wire transfer. The IRS reminds
taxpayers that any request to settle a tax bill using any of these payment
methods is a clear indication of a scam.
students and parents and demanding payment for a fake “Federal Student Tax”:
scammers are targeting students and parents demanding payments for fictitious
taxes, such as the “Federal Student Tax.” If the person does not comply, the
scammer becomes aggressive and threatens to report the student to the police to
a fraudulent IRS bill for tax year 2015 related to the Affordable Care Act:
IRS has received numerous reports around the country of scammers sending a fraudulent
version of CP2000 notices for tax year 2015. Generally, the scam involves an
email or letter that includes the fake CP2000. The fraudulent notice includes a
payment request that taxpayers mail a check made out to “I.R.S.” to the “Austin
Processing Center” at a Post Office Box address.
W-2 information from payroll and human resources professionals:
and human resources professionals should be aware of phishing email schemes
that pretend to be from company executives and request personal information on
employees. The email contains the actual name of the company chief executive
officer. In this scam, the “CEO” sends an email to a company payroll office
employee and requests a list of employees and financial and personal
information including Social Security numbers (SSN).
tax return information over the phone:
Scam artists call saying they have your tax return, and they
just need to verify a few details to process your return. The scam tries to get
you to give up personal information such as a SSN or personal financial
information, including bank numbers or credit cards.
to be from the tax preparation industry:
The emails are designed to trick taxpayers into thinking
these are official communications from the IRS or others in the tax industry,
including tax software companies. The phishing schemes can ask taxpayers about
a wide range of topics. E-mails or text messages can seek information related
to refunds, filing status, confirming personal information, ordering
transcripts and verifying PIN information.
receive an unexpected call, unsolicited email, letter or text message from
someone claiming to be from the IRS, here are some of the tell-tale signs to
help protect yourself.
IRS Will Never:
- Call to demand immediate payment using
a specific payment method such as a prepaid debit card, gift card or wire
transfer or initiate contact by e-mail or text message. Generally, the IRS will
first mail you a bill if you owe any taxes.
- Threaten to immediately bring in local
police or other law-enforcement groups to have you arrested for not paying.
- Demand that you pay taxes without
giving you the opportunity to question or appeal the amount they say you owe.
- Ask for credit or debit card numbers
over the phone.
get a suspicious phone call from someone claiming to be from the IRS and asking
for money, here’s what you should do:
- Do not give out any information. Hang
- Search the web for telephone numbers
scammers leave in your voicemail asking you to call back. Some of the phone
numbers may be published online and linked to criminal activity.
- Contact TIGTA to report the call. Use
their “IRS Impersonation Scam Reporting” web page or call
- Report it to the Federal Trade
Commission. Use the “FTC Complaint Assistant” on FTC.gov. Please
add “IRS Telephone Scam” in the notes.
- If you think you might owe taxes, call your tax professional or the IRS directly at 800-829-1040.
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 (EFTPS), report it by sending it to email@example.com.
Federal Income Tax rates.
Income tax rates vary from 10% to 39.6% The highest tax rate of 39.6% remains unchanged from 2016.
Capital Gains tax rates.
Tax rates vary depending on whether the gains are short-term or long-term. Short-term gains are taxed at ordinary income tax rates. The maximum rate for long-term capital gains is 20%. However, this only applies to taxpayers with incomes exceeding $418,401 ($470,701 for married filing joint). For taxpayers with ordinary income taxed at a rate below 25%, capital gains and dividends will be taxed at a 0% rate. For taxpayers who are subject to a 25% or greater rate on ordinary income, but whose income falls below the max $418,401/$470,701 threshold, income will continue to be subject to a 15% rate on capital gains and dividends.
- 0% if taxable income falls in the 10% or 15% marginal tax brackets
- 15% if taxable income falls in the 25%, 28%, 33%, or 35% marginal tax brackets
- 20% if taxable income falls in the 39.6% marginal tax bracket
Additional Medicare Tax.
Beginning in 2013 and still in effect, a 0.9% Additional Medicare Tax applies to Medicare wages, railroad retirement (RRTA) compensation, and
self-employment income that are more than:
- $125,000 if married filing separately,
- $250,000 if married filing jointly, or
- $200,000 if single, head of household, or qualifying widow(er).
Net Investment Income Tax.
Beginning in 2013 and still in effect, you may be subject to Net Investment Income Tax (NIIT). The NIIT is 3.8% of the smaller of (a) your net investment income or (b) the excess of your modified adjusted gross income over:
- $125,000 if married filing separately,
- $250,000 if married filing jointly or qualifying widow(er), or
- $200,000 if single or head of household.
New withholding tables for 2018.
To reflect changes made by the tax reform legislation passed in December 2017, the IRS has released updated income-tax withholding tables. The new withholding tables are designed to work with the Form W-4 you already filed with your employer.
However, to see if you need to have your withholding increased or decreased, use the IRS Withholding Calculator at IRS.gov/W4App.
The calculator is being revised to take into account these changes and should be available by the end of February.