Are you one of the many people who received a phone call saying that you back taxes? And that if you don’t pay, you could be put in jail?
Hundreds of people are receiving these calls daily. Scammers call the unsuspecting citizen, claim to be a revenue agent, IRS official or tax collector. The scammer then informs the innocent person they owe hundreds or thousands of dollars in back tax debt. “It must be paid immediately”, the scary voice on the phone says, or “you will be arrested and jailed.” The voice then demands payment via a credit card or bank account.
If your lucky, you recognize this call as a scam to get money or steal your identity. Unfortunately, some people panic and give in and provide personal information, such as their social security number, credit card number or bank account data.
What should you do if you receive one of these calls? First, do NOT give them any personal information. You should, however, report the call to law enforcement, including the phone number where the call originated. You should also report the call to the Internal Revenue Service at email@example.com (Subject: ‘IRS Phone Scam’).
If you believe that you might owe back taxes, you should contact a tax professional. CPA’s, enrolled agents and attorneys can determine whether you have legitimate tax debt and then assist you resolving those debts.
Be aware of the dangers of providing any personal data over the phone. Be cautious when receiving calls about debts you have no knowledge. Be prepared and know your rights.
You skim through your mail and you see a letter from the Internal Revenue Service. Your heart beats faster and faster. Your palms sweat. Your head spins. What do you do?
- Open the envelope and read the entire notice. Sometimes the notices are difficult to understand. You may have to read the notice more than once to understand what it means.
- Reply as soon as possible. You should call the number listed on the notice. The IRS has very flexible hours. Some offices are open as early as 7:00am to 7:00pm local time.
- Don’t hang up. You may have to wait on hold. Calls are answered in the ordered received, so if you hang up, your call goes back into the queue.
- Have pen and paper ready. Each agent is required to identify themselves by name (for example, Ms. Brown) and ID number (1001687278).
- Sometimes the letters have specific instructions for replying in writing instead of replying by phone.
- Review the letter for deadlines. The IRS has specific deadlines for responding, submitting documents and contesting findings. It is important that you meet the imposed deadlines.
- Keep a copy of the notice with your tax records. Keep copies of any letters or documents you send to the IRS with your tax records.
- The IRS contacts taxpayers via letter using the US Postal Service.
- Don’t give someone calling from the IRS your personal information (for example, social security number, birth date, credit card number, etc.) unless you have verified that they are from the Internal Revenue Service.
- Don’t respond to e-mail messages allegedly from the IRS. The IRS does not correspond with taxpayers via e-mail.
- Get help if you are confused or have trouble resolving your tax debt. Wisconsin Judicare operates a low-income taxpayer clinic. You can call us at 800-472-1638 or call your local taxpayer advocate. For Wisconsin, the number is 855-833-8231. For other states, see http://www.irs.gov/Advocate/Local-Taxpayer-Advocate.
Starting today, the Internal Revenue Service is accepting 2014 tax returns. If you’re like many people, you might still be focused on paying off holiday bills. However, you should be thinking about this filing season. So, where do you start?
- Find last year’s tax returns and all the attached documents. Look in all the nooks and crannies, in the attic, in the storage unit – wherever those important documents might be hiding.
- Keep a large envelope or folder for all the incoming tax documents. Mark the envelope “Tax Documents 2014”. Noting the year on the outside will make next year’s hunt a little easier.
- Make a list of all the documents that you should receive. Items such as W-2’s and 1099’s from all your 2014 employers. Look at last year’s tax return. It’s a great place to start when making your list. Then go back to January 1, 2014 and give yourself 10-15 minutes to think about the changes to your life. Did you get a new job? Retire? Did you buy a home? Did you have health insurance? Did you get married? Divorced? Did you have a child? Did your child turn 24?
- With this list, as items are received, you can check them off. Once you have received all of your documents, it’s time to prepare your tax return. Don’t forget that some of these items can be obtained online (for example, student loan interest paid).
- If you don’t receive a form that you were expecting or a form you received has incorrect information, you should contact the person or business who issued the form. The IRS can’t help you figure this out. The IRS receives the same information you do.
So why wait for all your forms to come? While you may know exactly what you earned or how much interest you paid on your mortgage in 2014, having the official forms ensures that you have the most accurate and complete information possible. This will help avoid an overpayment or underpayment of your tax bill.
For more information about these topics, visit the IRS website at www.irs.gov; the Judicare website at www.judicare.org.
Happy Tax Filing!