This is the second of two tips exploring the IRS Dirty Dozen tax scam list. Tax scams tend to rise during tax season or during times of crisis. Scam artists are using the COVID-19 pandemic to try to steal money and information from taxpayers.

Taxpayers should watch out for these scams.

Scammers targeting individuals with limited English proficiency: IRS impersonators and other scammers are targeting groups with limited English proficiency. These scams are often threatening in nature. Phone scams pose a major threat to people with limited access to information, including individuals not entirely comfortable with the English language.
A common one remains the IRS impersonation scam where a taxpayer receives a telephone call threatening jail time, deportation or revocation of a driver's license from someone claiming to be with the IRS. Recent immigrants often are the most vulnerable to these scams. They should ignore these threats and not engage the scammers.

Dishonest return preparers: Taxpayers should avoid so-called "ghost" preparers who expose their clients to potentially serious filing mistakes as well as possible tax fraud and risk of losing their refunds. Ghost preparers don't sign the tax returns they prepare for taxpayers. They may print the tax return and tell the taxpayer to sign and mail it to the IRS. For e-filed returns, the ghost preparer will prepare but not digitally sign as the paid preparer.
With many tax professionals affected by COVID-19 and their office locations potentially closed, taxpayers should be especially careful to select a credible tax preparer.

Offer in Compromise mills: Taxpayers need to be cautious of misleading tax debt resolution companies that can exaggerate chances to settle tax debts for "pennies on the dollar" through an Offer in Compromise. Dishonest companies oversell the program to unqualified candidates so they can collect a large fee from taxpayers already struggling with debt.
These scams are commonly called OIC "mills," which cast a wide net for taxpayers, charge them pricey fees and churn out applications for a program they're unlikely to qualify for.

Fake payments and repayment demands: A con artist will steal a taxpayer’s identity and bank account information. Then the con artist will file a false tax return and will have the refund deposited into the taxpayer's bank account. Once the direct deposit hits the taxpayer's account, the fraudster places a call to them, posing as an IRS employee. The taxpayer is told that there's been an error and that the IRS needs the money returned immediately or penalties and interest will result. The taxpayer is told to buy specific gift cards for the refund amount.

Payroll and HR scams: Tax professionals, employers and taxpayers need to be on guard against phishing designed to steal Form W-2s and other tax information. These are called Business Email Compromise or Business Email Spoofing. These scams have used a variety of tactics including requests for wire transfers or payment of fake invoices.

Ransomware: This is malicious software that is often downloaded by the user after clicking on a malicious attachment that encrypts their data making their data inaccessible. In some cases, entire computer networks can be affected. The IRS and its Security Summit partners have advised tax professionals and taxpayers to use the free, multi-factor authentication feature being offered on tax preparation software products.

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This article is copied from the Internal Revenue Service godelivery.com service.  All credits go to the Internal Revenue Service for the content of this article.

The Treasury Department and the Internal Revenue Service are providing special payment relief to individuals and businesses in response to the COVID-19 Outbreak. The filing deadline for tax returns remains April 15, 2020. The IRS urges taxpayers who are owed a refund to file as quickly as possible. For those who can’t file by the April 15, 2020 deadline, the IRS reminds individual taxpayers that everyone is eligible to request a six-month extension to file their return.

This payment relief includes:

​Individuals: Income tax payment deadlines for individual returns, with a due date of April 15, 2020, are being automatically extended until July 15, 2020, for up to $1 million of their 2019 tax due. This payment relief applies to all individual returns, including self-employed individuals, and all entities other than C-Corporations, such as trusts or estates. IRS will automatically provide this relief to taxpayers. Taxpayers do not need to file any additional forms or call the IRS to qualify for this relief.

Corporations: For C Corporations, income tax payment deadlines are being automatically extended until July 15, 2020, for up to $10 million of their 2019 tax due.

This relief also includes estimated tax payments for tax year 2020 that are due on April 15, 2020.
Penalties and interest will begin to accrue on any remaining unpaid balances as of July 16, 2020. If you file your tax return or request an extension of time to file by April 15, 2020, you will automatically avoid interest and penalties on the taxes paid by July 15.

The IRS reminds individual taxpayers the easiest and fastest way to request a filing extension is to electronically file Form 4868 through their tax professional, tax software or using the Free File link on IRS.gov. Businesses must file Form 7004.

This relief only applies to federal income tax (including tax on self-employment income) payments otherwise due April 15, 2020, not state tax payments or deposits or payments of any other type of federal tax. Taxpayers also will need to file income tax returns in 42 states plus the District of Columbia. State filing and payment deadlines vary and are not always the same as the federal filing deadline. The IRS urges taxpayers to check with their state tax agencies for those details.

​More information is available at https://www.taxadmin.org/state-tax-agencies.
Notice 2020-17 will be in IRB 2020-15, dated April 6, 2020.
​
The IRS established a special webpage on IRS.gov/coronavirus to include all of the available tax-related information. This page will be updated as more information is available.
​
Treasury News Release:  Treasury and IRS Issue Guidance on Deferring Tax Payments Due to COVID-19 Outbreak

​Full credit for this information to Internal Revenue Service dated March 18, 2020

The Setting Every Community Up for Retirement Enhancement Act, better known as the SECURE Act, was signed into law on Friday, December 20. The SECURE Act is one of the most dynamic changes to retirement legislation since the Pension Protection Act of 2006, and addresses a wide variety of retirement planning topics.

​Given that many of these changes became effective on January 1, 2020, there are a few key areas that may immediately affect your retirement plan. Here are four major changes created by the new law:

1.) Required Minimum Distributions (RMDs) Will Start at Age 72, Not Age 70½

Starting January 1, 2020, you will need to start withdrawing money from your traditional IRAs and employer tax deferred accounts such as 401(k)s, 403(b)s, and 457s at age 72, a change from the current withdrawal requirement of age 70½.
If you turned age 70½ in 2019 (born prior to July 1, 1949), you will still need to take your RMD for 2019 no later than April 1, 2020. If you are currently receiving RMDs (or should be) because you are over age 70½, you must continue taking these RMDs. Only those who will turn 70½ (born on or after July 1, 1949) in 2020 or later may wait until age 72 to begin taking required distributions.

2.) You Can Contribute to Your Traditional IRA After Age 70½

Beginning in the 2020 tax year, the new law will allow you to contribute to your traditional IRA in the year you turn 70½ and beyond, provided you have earned income. You still may not make 2019 (prior year) traditional IRA contributions if you are over 70½.

3.) Inherited Retirement Accounts

Upon death of the account owner, distributions to non-spouse individual beneficiaries must be made within 10 years. The current rules that allowed a non-spouse IRA beneficiary to "stretch" required minimum distributions (RMDs) from an inherited account over their own lifetime (and potentially allow the funds to grow tax-free for decades) has been eliminated. The rule applies to inherited funds in a 401(k) account or other defined contribution plan as well.
There are exceptions for spouses, disabled individuals, and individuals not more than 10 years younger than the account owner. Minor children who are beneficiaries of IRA accounts also have a special exception to the 10-year rule, but only until they reach the age of majority.
If you’ve already inherited a stretch IRA, rest easy. The changes from the bill that close loopholes that allowed stretch IRAs applies to beneficiaries of someone who dies after the end of 2019.

4.) Adoption/Birth Expenses

​The new law allows penalty-free withdrawals from retirement plans for birth or adoption expenses, up to $5,000 limit would apply to each parent, including those who have adopted children. So technically, a couple could take out up to $10,000 from their retirement savings, as long as they both have separate accounts in their own names.
Though there are many more aspects and provisions to the new law, we have highlighted some of the most pertinent. As always, it is best to consult with a professional financial planner to ensure you are keeping abreast and adhering to the latest rules as they apply to your overall financial and retirement plan.

All credit for this article goes to David Kudla, CEO and Chief Investment Strategist of Mainstay Capital Management, LLC on behalf of Forbes.com.

Most people don’t usually start thinking about their taxes until January. However, it’s not too early to start now.  In fact, taxpayers can get ready for the upcoming tax filing season by doing a few simple things.

First things first…they can visit the newly updated Get Ready page on IRS.gov. It highlights the steps taxpayers can take before they file their 2019 tax return in 2020.

These steps include:
•             Organizing tax records
•             Checking withholding and making adjustments or tax payments
•             Renewing an expired individual taxpayer identification number

IRS.gov tools and resources help taxpayers understand their tax obligations and filing options. Aside from English, taxpayers will find info in several other languages on IRS.gov. They will find it under the language drop-down menu at the top of each page.

Here are some of the pages taxpayers can visit now to help them get ready for filing:

•             Electronic filing options for individuals: Filing electronically is easy, safe and the most  accurate way to file taxes. There are several free electronic filing options for most taxpayers. Taxpayers can electronically file using IRS Free File or Fillable Forms.
•             Let Us Help You: This page features links to information and resources on a wide range of tax topics.
 •             Free tax return preparation for qualifying taxpayers: Taxpayers can also consider having their tax returns prepared at a Volunteer Income Tax Assistance or Tax Counseling for the Elderly site. The IRS and its community partners are looking for people around the country to become IRS-certified volunteers. Many IRS partners are still accepting new volunteers to join one of these programs for the 2020 filing season.

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Credit to Internal Revenue Service for posting this article.

The IRS posted this Scam Alert through their IRS Newswire service on February 13, 2018.  All credit for this article goes to the Internal Revenue Service.​

WASHINGTON – The Internal Revenue Service today warned taxpayers of a quickly growing scam involving erroneous tax refunds being deposited into their bank accounts. The IRS also offered a step-by-step explanation for how to return the funds and avoid being scammed.
Following up on a Security Summit alert issued Feb. 2, the IRS issued this additional warning about the new scheme after discovering more tax practitioners’ computer files have been breached. In addition, the number of potential taxpayer victims jumped from a few hundred to several thousand in just days. The IRS Criminal Investigation division continues its investigation into the scope and breadth of this scheme.
These criminals have a new twist on an old scam. After stealing client data from tax professionals and filing fraudulent tax returns, these criminals use the taxpayers' real bank accounts for the deposit.
Thieves are then using various tactics to reclaim the refund from the taxpayers, and their versions of the scam may continue to evolve.
Different Versions of the Scam
In one version of the scam, criminals posing as debt collection agency officials acting on behalf of the IRS contacted the taxpayers to say a refund was deposited in error, and they asked the taxpayers to forward the money to their collection agency.
In another version, the taxpayer who received the erroneous refund gets an automated call with a recorded voice saying he is from the IRS and threatens the taxpayer with criminal fraud charges, an arrest warrant and a “blacklisting” of their Social Security Number. The recorded voice gives the taxpayer a case number and a telephone number to call to return the refund.
As it did last week, the IRS repeated its call for tax professionals to step up security of sensitive client tax and financial files files.
The IRS urged taxpayers to follow established procedures for returning an erroneous refund to the agency. The IRS also encouraged taxpayers to discuss the issue with their financial institutions because there may be a need to close bank accounts. Taxpayers receiving erroneous refunds also should contact their tax preparers immediately.
Because this is a peak season for filing tax returns, taxpayers who file electronically may find that their tax return will reject because a return bearing their Social Security number is already on file. If that’s the case, taxpayers should follow the steps outlined in the Taxpayer Guide to Identity Theft. Taxpayers unable to file electronically should mail a paper tax return along with Form 14039, Identity Theft Affidavit, stating they were victims of a tax preparer data breach.
Here are the official ways to return an erroneous refund to the IRS.
Taxpayers who receive the refunds should follow the steps outlined by Tax Topic Number 161 - Returning an Erroneous Refund. The tax topic contains full details, including mailing addresses should there be a need to return paper checks. By law, interest may accrue on erroneous refunds.
If the erroneous refund was a direct deposit:

1. Contact the Automated Clearing House (ACH) department of the bank/financial institution where the direct deposit was received and have them return the refund to the IRS.
2. Call the IRS toll-free at 800-829-1040 (individual) or 800-829-4933 (business) to explain why the direct deposit is being returned.

If the erroneous refund was a paper check and hasn't been cashed:

1. Write "Void" in the endorsement section on the back of the check.
2. Submit the check immediately to the appropriate IRS location listed below. The location is based on the city (possibly abbreviated) on the bottom text line in front of the words TAX REFUND on your refund check.
3. Don't staple, bend, or paper clip the check.
4. Include a note stating, "Return of erroneous refund check because (and give a brief explanation of the reason for returning the refund check)."

The erroneous refund was a paper check and you have cashed it:

• Submit a personal check, money order, etc., immediately to the appropriate IRS location listed below.
• If you no longer have access to a copy of the check, call the IRS toll-free at 800-829-1040 (individual) or 800-829-4933 (business) (see telephone and local assistance for hours of operation) and explain to the IRS assistor that you need information to repay a cashed refund check.
• Write on the check/money order: Payment of Erroneous Refund, the tax period for which the refund was issued, and your taxpayer identification number (social security number, employer identification number, or individual taxpayer identification number).
• Include a brief explanation of the reason for returning the refund.
• Repaying an erroneous refund in this manner may result in interest due the IRS.

IRS mailing addresses for returning paper checks
For your paper refund check, here are the IRS mailing addresses to use based on the city (possibly abbreviated). These cities are located on the check’s bottom text line in front of the words TAX REFUND:  

• ANDOVER – Internal Revenue Service, 310 Lowell Street, Andover MA 01810
• ATLANTA – Internal Revenue Service, 4800 Buford Highway, Chamblee GA 30341
• AUSTIN – Internal Revenue Service, 3651 South Interregional Highway 35, Austin TX 78741
• BRKHAVN – Internal Revenue Service, 5000 Corporate Ct., Holtsville NY 11742
• CNCNATI – Internal Revenue Service, 201 West Rivercenter Blvd., Covington KY 41011
• FRESNO – Internal Revenue Service, 5045 East Butler Avenue, Fresno CA 93727
• KANS CY – Internal Revenue Service, 333 W. Pershing Road, Kansas City MO 64108-4302
• MEMPHIS – Internal Revenue Service, 5333 Getwell Road, Memphis TN 38118
• OGDEN – Internal Revenue Service, 1973 Rulon White Blvd., Ogden UT 84201
• PHILA – Internal Revenue Service, 2970 Market St., Philadelphia PA 19104