Anthony Sykes & Company

     The Internal Revenue Service ( IRS ) has decided to suspend the mailing of many notices to taxpayers and tax professionals. Many of these letters are automatically generated. The reason for stopping these letters is that IRS employees have a great backlog of mail to sort through. At this point, many of the letters being sent out do not accurately reflect the current situation.      Some may still be received over the next few weeks. The IRS cannot legally stop sending out all notices. However, there is often no need to respond because they are still working on last year’s tax returns. But if there is a problem for this year, interest and penalties will continue to accrue. So, it is in your best interest to take care of current tax responsibilities as soon as possible.

          The tactics of criminals and scam artists continue to adjust over time. To stay safe, we need to continue to learn about them. We may be familiar with the concept of phishing. This is when a message or email that seems to be from a legitimate source is sent out to hook as many as possible and get them to share confidential information. The activity of spearphishing targets a particular group. With tax season well under way, criminals are turning some of their attention to Tax Professionals and others who use tax software. Many are receiving emails that demand action be taken. They claim that online accounts have been frozen. However, clicking on any of the official icons or links will send you to a page that requires account information to be provided. At that point, the account is compromised.           Instead of clicking on links, go to the actual website. You can also call the support hotline for the governmen...

       The Internal Revenue Service ( IRS ) has finished issuing the third round of Economic Impact Payments ( EIP ). This means that if you qualified, but did not receive the full amount, you must claim the 2021 Recovery Rebate Credit on your tax return. This also applies to those who do not normally file a tax return. Families that added a new dependent in 2021 may be eligible for a greater amount.      The IRS will send a letter confirming what was sent in 2021, so taxpayers must carefully look at the information and determine what amount, if anything, they can claim as a credit. Doing this will help avoid processing delays. Careful review is needed in this matter. Having a Qualified Tax Professional would be helpful.

           With the start of the new filing season, the Internal Revenue Service ( IRS ) is strongly encouraging as many as possible to file taxes electronically and choose direct deposit for any tax refunds. What are some benefits of using direct deposit?           It is fast, especially when filing electronically. Trying to use a paper tax return will only delay the process since there is a considerable IRS mail backlog. There is no need to wait for a check that you hope does not get lost in the mail. It’s easy to set up and it can be split into different accounts if that is what you want. Make sure it goes into a US bank account that you control. 

               Now that tax season has officially started, you need to make sure that you have everything that the Internal Revenue Service ( IRS ) will be looking for. This means that we need to be organized with our documents that are arriving in the early portion of the year. Do not file early without supporting details from a W-2 or 1099. This can lead to mistakes and cause processing delays.           At this point, the necessary material is already available online, or has been mailed. Make sure to review it carefully for any mistakes. Something new this year is a letter called Advanced Child Tax Credit Reconciliation. This is needed to claim the amount of Child Tax Credit that was not advanced last year. Carefully check to make sure the calculations are correct. Most refunds are issued in 21 days, but some can take longer. However, paper tax returns and paper checks will take longer than e...