Recognize Phishing Email Scams

ANNAPOLIS, Md. (November 28, 2017) - The IRS reminds taxpayers to be on the lookout for new, sophisticated email phishing scams that can compromise personal information and affect a taxpayer’s refund. This week is National Tax Security Awareness Week and the IRS is partnering with state tax agencies, including the Maryland Comptroller’s Office and other industry stakeholders to remind people about the importance of data protection.

“One of my top priorities as Comptroller is to stop cyber thieves from tricking Marylanders with bogus emails seeking personal financial information,” said Comptroller Peter Franchot. “Working together with our federal and state partners, we will hold accountable these scammers who take advantage of law-abiding taxpayers.”

Phishing attacks use email or malicious websites to get personal information from the user. Typically, the criminal fools someone into believing the phishing email is from someone they trust. The emails often look and feel like authentic communications, but these targeted messages can trick even the most cautious person into doing something that may compromise data.

Taxpayers should be vigilant and skeptical. Even if the email is from a known source, they should use caution because cyber crooks are very good at mimicking trusted businesses, friends and family.

Here are six examples of email phishing scams:

  • Emails requesting personal information. The thief might ask for bank account numbers, passwords, credit cards and Social Security numbers. This is the most common way thieves steal data.
  • An email urgently warning the recipient to update online financial accounts at a hyperlink provided in the email. The link goes to a fake site.
  • A message with an email address spoofing a familiar address to look like trusted businesses, friends and family. The fake address has a slight change in text, such as name@example.com vs narne@example.com. Merely changing the “m” to an “r” and “n” can trick people.
  • Emails saying the recipient has a tax refund waiting at the IRS or that the IRS needs information about insurance policies. The IRS doesn’t initiate spontaneous contact with taxpayers by email to request personal or financial information.
  • The message has hyperlinks that take someone to a fake site. In one example, the email says: “Following recent calculations, we notice that you are eligible to receive a tax refund. In order to start the refund procedure, please visit this link and follow the steps required.” The link goes to a fake site. The IRS doesn’t send emails asking for refund verification.
  • The message includes a PDF attachment that may download malware or viruses. Never open an attachment from a suspicious email address.

For more information, visit:

National Tax Security Awareness Week: Eight Steps to Keep Online Data Safe

ANNAPOLIS, Md. (November 27, 2017) — During the holiday shopping season, shoppers are looking for the perfect gifts and criminals are looking for sensitive data. This data includes credit card numbers, financial accounts and Social Security numbers. Cybercriminals can use this information to file a fraudulent tax return. During National Tax Security Awareness Week, the IRS is partnering with state tax agencies, the tax industry and groups across the country to remind people about the importance of data protection.

“Online scammers are very active during the holiday season and we want Marylanders to know how to keep their personal information secure,” said Maryland Comptroller Peter Franchot.

Anyone with an online presence can do a few simple things to protect their identity and personal information. Following these eight steps can also help taxpayers protect their tax return and refund in 2018:

• Shop at familiar online retailers. Generally, sites with an “s” in “https” at the start of the URL are secure. Users can also look for the “lock” icon in your browser’s URL bar. That said, some criminals may get a security certificate, so the “s” may not always mean a site is legitimate.

• Avoid unprotected Wi-Fi. Users should not do online financial transactions when using unprotected public Wi-Fi. Unprotected public Wi-Fi hotspots may allow thieves to view transactions.

• Learn to recognize and avoid phishing emails that pose as a trusted source. These emails can come from a source that looks like a legitimate bank or even the IRS. These emails may include a link that takes the user to a fake website. From there, the thieves can steal usernames and passwords.

• Keep a clean machine. This includes computers, phones and tablets. Users should install security software to protect against malware that may steal data. This software also protects against viruses
that may damage files.

• Use passwords that are strong, long and unique. Experts suggest a minimum of 10 characters. Use a combination of letters, numbers and special characters. Use a different password for each account.

• Use multi-factor authentication when available. Some financial institutions, email providers and social media sites allow users to set their accounts for multi-factor authentication. This means users may need a security code, usually sent as a text to their mobile phone, in addition to a username and password.

• Sign up for account alerts. Some financial institutions will send email or text alerts to an account holder when there is a withdrawal or change to their accounts. Generally, people can check their account profile to see what added protections may be available.

• Encrypt sensitive data and protect it with a password. People who keep financial records, tax returns or any personal information on their computer should protect this data. Users should also back up important data to an external source. When disposing of a computer, mobile phone or tablet, people should make sure they wipe the hard drive of all information before trashing.

For more information, please click:

Taxes. Security. Together
Protect Your Clients; Protect Yourself
Don’t Take the Bait

Taxpayers Can Use IRS Select Check Tool Before Donating on Giving Tuesday

ANNAPOLIS, Md. (November 27, 2017) – Giving Tuesday is an annual event celebrated the week after Thanksgiving to kick off the season of charitable giving. Taxpayers making donations may be able to deduct them on their tax return. As they decide where to make their donations, the IRS has a tool that may help.

Exempt Organizations Select Check on IRS.gov is a tool that allows users to search for charities. It provides information about an organization’s federal tax status and filings. Here are four facts about EO Select Check:

• Donors can use it to confirm an organization is tax exempt and eligible to receive tax-deductible charitable contributions.

• Users can find out if an organization had its tax-exempt status revoked. A common reason for this is that the organization did not file its Form 990 or notices annually as required.

• EO Select Check does not list certain organizations that may be eligible to receive tax-deductible donations. This includes churches, organizations in a group ruling, and governmental entities.

• An organization’s “doing business as” name is not searchable. Search using an organization’s legal name instead.

Taxpayers can also use the Interactive Tax Assistant, Can I Deduct my Charitable Contributions? to help determine if a charitable contribution is deductible.
For more information, please click:
Exempt Organizations Select Check – Search Tips
Exempt Organizations Select Check Frequently Asked Questions

 

IRS National Tax Security Awareness Week Runs Nov. 27 to Dec. 1

ANNAPOLIS, Md. (November 21, 2017) ― For the second year, the Internal Revenue Service, state tax agencies – including the Maryland Comptroller’s Office – and the tax industry will host National Tax Security Awareness Week to encourage individual and business taxpayers to take steps to protect their tax data and identities in advance of the 2018 filing season.

Starting Monday, November 27, the focus will be on issues posing a threat to individuals and businesses and steps to protect taxpayers from cybercriminals. In recent years, the IRS, state tax agencies and the tax industry – partners in the Security Summit – have enacted a series of defenses to combat tax-related identity theft.

“We are resolute in our commitment to protecting Marylanders’ financial information and the integrity of our tax system,” Maryland Comptroller Peter Franchot said. “Throughout the year, my employees work tirelessly to identify fraudulent returns from thieves trying to drain the state coffers and from cheating Maryland citizens.”

Throughout the country, Summit partners and other consumer, business and community groups will host more than 25 events to raise tax data awareness during the week. In Maryland, the Internal Revenue Service’s Stakeholder Liaison – including the Maryland Comptroller’s Office – and the Maryland Society of Accounting and Tax Professionals will take part in a forum from 9:30 to 11:30 a.m. Tuesday, November 28, at the University of Phoenix, 8830 Stanford Boulevard, Room 128, in Columbia. Panelists will discuss ways to combat cyber thieves looking to trick people into disclosing sensitive information so they can file fraudulent tax returns.

The holiday season is an especially vulnerable time for online thievery as Marylanders do their holiday shopping and provide credit card and other personal information. Throughout the country, 145 million American have had their names, addresses and Social Security numbers stolen from a variety of locations.

The IRS and states have put many new defenses in place to help protect taxpayers from identity theft. The new IRS protections have worked well and some key indicators of identity theft on tax returns have dropped by around two-thirds since 2015. These protections are especially helpful if criminals only have names, addresses and Social Security numbers. However, the cybercriminals may try to obtain more specific financial details from taxpayers and tax professionals.

During the awareness week, taxpayers and tax professionals will learn:

  • Basic steps to protect themselves and their tax data online, such as using security software, strong passwords and data encryption.
  • What to do if they are a data breach victim, such as placing a freeze on their credit accounts and the signs of tax-related identity theft.
  • How cybercriminals use phishing emails to bait them into disclosing information.
  •  The dangers W-2 Scam that has made identity theft victims of thousands of employees.
  • Those small businesses also are subject to identity theft and should take steps to protect themselves.

The Summit partners will urge taxpayers to protect their tax and financial information by:

  • Learning to recognize and avoid phishing emails, threatening phone calls and texts from thieves posing as legitimate organizations such as bank, credit card company and government organizations (including the IRS), and to not click on links or download attachments from unknown or suspicious emails.
  • Always using security software with firewall and anti-virus protections. Making sure the security software is always turned on and can automatically update. Encrypting sensitive files such as tax records you store on your computer. Using strong passwords.
  • Protecting personal data. Using strong unique passwords for each online account. Don’t routinely carry a Social Security card, and making sure tax records are secure. Treat personal information like you do your cash; don’t leave it lying around.

For more information, visit irs.gov.

Gifts to Charity: Six Facts About Written Acknowledgements

ANNAPOLIS, Md. (October 19, 2018) — Throughout the year, many taxpayers contribute money or gifts to qualified organizations eligible to receive tax-deductible charitable contributions. Taxpayers who plan to claim a charitable deduction on their tax return must do two things:

• Have a bank record or written communication from a charity for any monetary contributions.
• Get a written acknowledgment from the charity for any single donation of $250 or more.

Here are six things for taxpayers to remember about these donations and written acknowledgements:
Taxpayers who make single donations of $250 or more to a charity must have one of the following:
o A separate acknowledgment from the organization for each donation of $250 or more.
o One acknowledgment from the organization listing the amount and date of each contribution of $250 or more.
The $250 threshold doesn’t mean a taxpayer adds up separate contributions of less than $250 throughout the year.
o For example, if someone gave a $25 offering to their church each week, they don’t need an acknowledgement from the church, even though their contributions for the year are more than $250.
Contributions made by payroll deduction are treated as separate contributions for each pay period.
If a taxpayer makes a payment that is partly for goods and services, their deductible contribution is the amount of the payment that is more than the value of those goods and services.
A taxpayer must get the acknowledgement on or before the earlier of these two dates:
o The date they file their return for the year in which they make the contribution.
o The due date, including extensions, for filing the return.
If the acknowledgment doesn’t show the date of the contribution, the taxpayers must also have a bank record or receipt that does show the date.

More Information:
Can I Deduct My Charitable Contributions?
Publication 526, Charitable Contributions
Tax Topic 506, Charitable Contributions
Publication 1771, Charitable Contributions Substantiation and Disclosure Requirements

Extension Filers: Deadline is Monday, Oct. 16

ANNAPOLIS, Md. (October 3, 2017) – Maryland Comptroller Peter Franchot and the Internal Revenue Service reminds taxpayers who filed for an extension and face an Oct. 16 filing deadline: The adjusted gross income (AGI) amount from their 2015 return may be needed to electronically file their 2016 tax return.

For those taxpayers who have a valid extension and are in or affected by a federally declared disaster area may be allowed more time to file. Currently, taxpayers impacted by Hurricanes Harvey, Irma and Maria as well as people in parts of Michigan and West Virginia qualify for this relief. See the disaster relief page on IRS.gov for details.

Taxpayers should keep a copy of their tax returns and supporting documents for a minimum of three years. Prior year tax returns are even more important as the IRS makes changes to protect taxpayers and authenticate their identity.

Extension filers should plan ahead if they are using a software product for the first time. They should have kept a copy of their 2015 tax return or if not, will need to order a tax transcript, a process that may take five to 10 calendar days. The AGI is clearly labeled on both the tax return and the transcript.

Taxpayers who prepare their own electronic tax returns are required to electronically sign and validate their return. Using an electronic filing PIN is no longer an option. To authenticate their identities, taxpayers also will need to enter either of two items: Their prior-year AGI or their prior-year self-select PIN and their date of birth. If married filing jointly, both taxpayers must authenticate their identities with this information.

Generally, tax-preparation software automatically generates the prior-year AGI and/or self-select PIN for returning customers. However, taxpayers who are new to a software product must enter the prior-year AGI or prior-year self-select PIN themselves.

How to find AGI; plan ahead if a mailed transcript needed

The adjusted gross income is gross income minus certain adjustments. On 2015 tax returns, the AGI is found on line 37 of Form 1040; line 21 on Form 1040A and line 4 on Form 1040EZ. Taxpayers who e-filed and did not keep a copy of their original 2015 tax return may be able to return to their prior-year software provider or tax preparer to obtain a copy.

Those who lack access to their prior-year tax returns also may go to irs.gov/transcript and use Get Transcript Online or Get Transcript by Mail. A transcript is a summary of the tax return or tax account. There are various types of transcripts, but the Tax Return Transcript works best. Look for the “Adjusted Gross Income” amount on the transcript.

Taxpayers must pass Secure Access authentication in order to access Get Transcript Online and immediately access their transcripts. Those who cannot pass Secure Access authentication should use Get Transcript by Mail or call 1-800-908-9946, and a transcript will be delivered to their home address within five to 10 calendar days.

IRS Reminder for Parents, Students: Check Out College Tax Benefits

ANNAPOLIS, Md. (September 26, 2017) ― With school now in session, the Internal Revenue Service reminds parents and students about tax benefits that can help with the expense of higher education. Two college tax credits apply to students enrolled in an eligible college, university or vocational school. Eligible students include the taxpayer, their spouse and dependents.

American Opportunity Tax Credit

• The American Opportunity Tax Credit, (AOTC) can be worth a maximum annual benefit of $2,500 per eligible student. The credit is only available for the first four years at an eligible college or vocational school for students pursuing a degree or another recognized education credential. Taxpayers can claim the AOTC for a student enrolled in the first three months of 2018 as long as they paid qualified expenses in 2017.

Lifetime Learning Credit

• The Lifetime Learning Credit, (LLC) can have a maximum benefit of up to $2,000 per tax return for both graduate and undergraduate students. Unlike the AOTC, the limit on the LLC applies to each tax return rather than to each student. The course of study must be either part of a post-secondary degree program or taken by the student to maintain or improve job skills. The credit is available for an unlimited number of tax years.

To claim the AOTC or LLC, use Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits). Additionally, if claiming the AOTC, the law requires taxpayers to include the school’s Employer Identification Number on this form.
Form 1098-T, Tuition Statement, is required to be eligible for an education benefit. Students receive this form from the school they attended. There are exceptions for some students.

Other education benefits

Other education-related tax benefits that may help parents and students are:
• Student loan interest deduction of up to $2,500 per year.
• Scholarship and fellowship grants. Generally, these are tax-free if used to pay for tuition, required enrollment fees, books and other course materials, but taxable if used for room, board, research, travel or other expenses.

• Savings bonds used to pay for college. Though income limits apply, interest is usually tax-free if bonds were purchased after 1989 by a taxpayer who, at time of purchase, was at least 24 years of age.

• Qualified tuition programs, also called 529 plans, are used by many families to prepay or save for a child’s college education. Contributions to a 529 plan are not deductible, but earnings are not subject to federal tax when used for the qualified education expenses.

To help determine eligibility for these benefits, taxpayers should use tools on the Education Credits Web page and IRS Interactive Tax Assistant tool on IRS.gov.

Keep A Copy of Tax Returns

Taxpayers should keep a copy of their tax return for at least three years. Copies of tax returns may be needed for many reasons. If applying for college financial aid, a tax transcript may be all that is needed. A tax transcript summarizes return information and includes adjusted gross income. Get one from the IRS for free.

The quickest way to get a copy of a tax transcript is to use the Get Transcript application. After verifying identity, taxpayers can view and print their transcript immediately online. The online application includes a robust identity verification process. Those who can’t pass the verification must request the transcript be mailed. This takes five to 10 days, so plan ahead and request the transcript early.

IRS Begins Issuing Notices to Taxpayers Whose ITINs Expire by End of 2017

ANNAPOLIS, Md. (August 9, 2017) —The Internal Revenue Service is mailing letters this month to more than 1 million taxpayers with expiring Individual Taxpayer ‎Identification Numbers and urges recipients to renew them as quickly as possible to avoid tax refund and processing delays.

ITINs with middle digits 70, 71, 72 or 80 are set to expire at the end of 2017. The notice being mailed — CP-48 Notices, You must renew your Individual Taxpayer Identification Number (ITIN) to file your U.S. tax return — explains the steps taxpayers need to take to renew the ITIN if it will be included on a U.S. tax return filed in 2018.

The notices will be issued over a five-week period. Taxpayers who receive the notice but have acted to renew their ITIN do not need to take further steps unless another family member is affected.

Under the Protecting Americans from Tax Hikes (PATH) Act, ITINs that have not been used on a federal tax return at least once in the last three consecutive years will expire Dec. 31, 2017, and as mentioned above, ITINs with middle digits 70, 71, 72 or 80 will also expire at the end of the year.

Affected taxpayers who expect to file a tax return in 2018 must submit a renewal application.

As a reminder, ITINs with middle digits 78 and 79 that expired at the end of last year can be renewed at any time.

To renew an ITIN, a taxpayer must fill out a Form W-7 and submit all required documentation. For more information, visit www.irs.gov.

 

IRS Offers Last-Minute Filing Tips; Use Direct Deposit for Quicker Refunds

ANNAPOLIS (April 12, 2017) — With the April 18 deadline fast approaching, the Internal Revenue Service today offered taxpayers still working on their 2016 taxes a number of tips. These tips are designed to help taxpayers avoid common errors that could delay their refunds or cause other tax problems in the future.

The IRS encourages taxpayers to file electronically. Doing so, whether through e-file or IRS Free File, vastly reduces tax return errors, as the tax software does the calculations, flags common errors and prompts taxpayers for missing information. And best of all, there is a free option for everyone. Whether filing electronically or on paper, be sure to keep a copy of your tax return. In addition, the IRS offers these last-minute tips:

Refunds
The best and fastest way for taxpayers to get their refund is to have it electronically deposited into their bank or other financial account. Taxpayers can use direct deposit to deposit their refund into one, two or even three accounts. See Form 8888, Allocation of Refund, for details.

Make sure the financial institution routing and account numbers entered on the return are accurate. Incorrect numbers can cause a refund to be delayed or deposited into the wrong account. After filing, whether or not direct deposit was chosen, use “Where’s My Refund?” on IRS.gov or download the IRS2Go Mobile App to track the status of a refund.

The IRS issues nine out of 10 refunds in less than 21 days. “Where’s My Refund?” provides the most up-to-date information. The tool is updated once per day, usually overnight, so checking more often will not generate new information. Calling the IRS will not yield different results from those available online, nor will ordering a tax transcript.

Special Instructions for Paper Filers

Math errors and other mistakes are common on paper returns, especially those prepared or filed in haste at the last minute. These tips may help those choosing this option:

• Fill in all requested Taxpayer Identification Numbers, usually Social Security numbers, including all dependents claimed. Check only one filing status and the appropriate exemption boxes.
• When using the tax tables, be sure to use the correct row and column for the filing status claimed and taxable income amount shown.
• Sign and date the return. If filing a joint return, both spouses must sign.
• Attach all required forms and schedules, such as Schedule A for people who itemize their deductions. In addition, attach to the front of the return all Forms W-2 and other forms reflecting withholding.
• Mail the return to the right address. Check Where to File on IRS.gov or the last page of the tax instructions. If mailing on Tuesday, April 18, be sure to do so early enough to meet the scheduled pick-up time and ensure a postmark before the midnight deadline.

Need More Time to File?

Avoid a late-filing penalty by requesting a tax-filing extension. There are several ways to do so, including through the Free File link on IRS.gov or by designating a payment as an extension payment and making it via one of the IRS electronic payment methods, including IRS Direct Pay. Alternatively, taxpayers can file Form 4868, Application for Extension of Time To File U.S. Income Tax Return. While an extension grants additional time to file, it does not extend the time to pay any tax due. April 18 is the deadline for most to pay taxes owed and avoid penalty and interest charges.

Owe Tax?

Taxpayers who owe taxes can use IRS Direct Pay or any of several other electronic payment options. They are secure and easy and taxpayers receive immediate confirmation of their payment. Or, mail a check or money order payable to the “United States Treasury” along with a Form 1040-V payment voucher. Taxpayers who can’t pay by April 18 often qualify to set up a monthly payment agreement with the IRS using the Online Payment Agreement option on IRS.gov.

 

IRS: Private Collection of Some Overdue Federal Taxes Starts in April; Those Affected Will Hear First From IRS

IRS Will Handle Most Tax Debts; Taxpayers Advised to Watch Out for Scam Calls

ANNAPOLIS, MD (April 5, 2017) – Starting this month, the Internal Revenue Service will begin sending letters to a relatively small group of taxpayers whose overdue federal tax accounts are being assigned to one of four private-sector collection agencies.

The new program, authorized under a federal law enacted by Congress in December 2015, enables these designated contractors to collect, on the government’s behalf, unpaid tax debts. Usually, these are unpaid individual tax obligations that are not currently being worked by IRS collection employees and often were assessed by the tax agency several years ago.

Taxpayers being assigned to a private firm would have had multiple contacts from the IRS in previous years and still have an unpaid tax bill.

“The IRS is taking steps throughout this effort to ensure that the private collection firms work responsibly and respect taxpayer rights,” said IRS Commissioner John Koskinen. “The IRS also urges taxpayers to be on the lookout for scammers who might use this program as a cover to trick people. In reality, those taxpayers whose accounts are assigned as part of the private collection effort know they have a tax debt.”

The program will begin this week with a few hundred taxpayers receiving mailings and subsequent phone calls, with the program growing to thousands a week later in the spring and summer. Taxpayers with overdue taxes will always receive multiple contacts, letters and phone calls, first from the IRS, not private debt collectors.

The IRS will always notify a taxpayer before transferring their account to a private collection agency (PCA). First, the IRS will send a letter to the taxpayer and their tax representative informing them that their account is being assigned to a PCA and giving the name and contact information for the PCA. This mailing will include a copy of Publication 4518, What You Can Expect When the IRS Assigns Your Account to a Private Collection Agency.

Only four private groups are participating in this program: CBE Group of Cedar Falls, Iowa; Conserve of Fairport, N.Y.; Performant of Livermore, Calif.; and Pioneer of Horseheads, N.Y. The taxpayer’s account will only be assigned to one of these agencies, never to all four. No other private group is authorized to represent the IRS.

Once the IRS letter is sent, the designated private firm will send its own letter to the taxpayer and their representative confirming the account transfer. To protect the taxpayer’s privacy and security, both the IRS letter and the collection firm’s letter will contain information that will help taxpayers identify the tax amount owed and assure taxpayers that future collection agency calls they may receive are legitimate.

The private collectors will be able to identify themselves as contractors of the IRS collecting taxes. Employees of these collection agencies must follow the provisions of the Fair Debt Collection Practices Act, and like IRS employees, must be courteous and must respect taxpayer rights.

The private firms are authorized to discuss payment options, including setting up payment agreements with taxpayers. But as with cases assigned to IRS employees, any tax payment must be made, either electronically or by check, to the IRS. A payment should never be sent to the private firm or anyone besides the IRS or the U.S. Treasury. Checks should only be made payable to the United States Treasury. To find out more about available payment options, visit IRS.gov/Payments.

Private firms are not authorized to take enforcement actions against taxpayers. Only IRS employees can take these actions, such as filing a notice of Federal Tax Lien or issuing a levy. To learn more about the new private debt collection program, visit the Private Debt Collection page on IRS.gov.

The IRS reminds taxpayers to be on the lookout for scammers posing as private collection firms. The IRS will be watching for these schemes as the collection program begins, and this effort will include working with partners in the tax community and law enforcement about emerging scams.

People should remember that these private collection firms will only be calling about a tax debt the person has had – and has been aware of – for years and had been contacted about previously in the past by the IRS.

“Here’s a simple rule to keep in mind. You won’t get a call from a private collection firm unless you have unpaid tax debts going back several years and you’ve already heard from the IRS multiple times,” Koskinen said. “The people included in the private collection program typically already know they have a tax issue. If you get a call from someone saying they’re from one of these groups and you’ve paid your taxes, that’s a sure sign of a scam.”

For more information, visit the “Tax Scams and Consumer Alerts” page on IRS.gov.