Anthony Sykes & Company

In previous posts we have discussed steps to take when making a wise decision when it comes to choosing a tax professional. Our last post discussed why it’s important to look now and a couple of things to consider if that is what you need to do. We will now consider two major red flags that might come up in that search. Look out for “ghost” preparers. A ghost preparer is a paid tax preparer who will not sign the tax return after it is completed. They will insist that the taxpayer sign it and file it themselves. This is against the law. While the taxpayer is responsible for everything in the tax return, if someone is paid to prepare it, they must sign their name. When a person hides their actions in this way it is often a sign that fraud is being committed. If they based their fees on a percentage of the refund or promised to get a bigger refund than anyone else, this is another sign of potential fraud. A valid ID for tax preparers. Every paid preparer needs to have a valid Prepar...

            When it comes to data security threats, the challenges never end. The tactics that criminals use continue to change, but there are some basic things to keep in mind. When it comes to mass email messages or texts, the goal is to get someone to click on a link to steal information or download malware. This is phishing or smishing. An update to this scam is called clone phishing. In this variation, a real email is copied and sent to the recipient again. This time it has an attachment with malicious software or a link to a website designed to steal your personal information.           We can never be too sure how the attack will present itself, but we can be prepared with security measures to protect ourselves. Stop and be aware of warning signs. Unexpected messages with urgent tones telling you to click or download something should be examined closely. Getting a repeated message from a trusted source w...

            Over the past year, the Internal Revenue Service ( IRS ) has used funding from the Inflation Reduction Act on audit activities for those who earn more than $1 million and have more than $250,000 in tax debt. In that time, the IRS collected $1 billion from the group that met these criteria. The increase in funding will allow for other goals to be reached as well.           More staff has been added and technology is being updated to provide better service to all taxpayers in the coming years. The IRS will now expand its enforcement activity to include complex partnerships, large corporations, and high-income high wealth individuals who do not file tax returns. In recent years the IRS was not consistent with enforcing tax rules in this area and had fallen behind in the ways some had gotten around their tax responsibilities. These new initiatives look to bridge that gap. If you are in need of t...

             The Internal Revenue Service ( IRS ) continues to focus on applying the tax laws with accuracy and fairness. With that in mind, they have announced that they are restarting a program that focuses on individuals who did not file returns from 2017 to 2021 and had at least $400,000 in income. They have identified at least 125,000 cases of people who are not in compliance.           The non-filer letters will be going out every week to start the process of filing returns, collecting taxes, interest, and penalties. The basis of these letters comes from information through Forms W2, 1099 and others. Those who receive letters of this nature need to take quick action. The enforcement actions in this program are stronger than usual. That makes it critical that those who receive these letters go to a qualified tax professional . The IRS can be made aware of qualifying deductions and credits that can ch...

              Phishing is a problem that never really goes away, but the intensity increases at certain times of the year. Tax Season is one of those times. Phishing is the practice of sending fraudulent communication pretending to be from a source that is trustworthy. This can take on different forms. Most common are emails and text messages.           The Internal Revenue Service ( IRS ) will never send a message to taxpayers asking for personal or financial information. These types of messages are received frequently and are created to induce panic or fear so that taxpayers will act without thinking. If you get a suspicious message, do not reply. Do not click on any attachments or links. This can install a virus. Delete the message. The IRS will never use social media to ask taxpayers for information.

             Is your QuickBooks Online account safe? Most likely it is. There is a reason why they are the most popular cloud-based accounting software today. However, when something is popular with consumers, it is also popular with criminals looking to take advantage of any opportunity they can. Consider this real-life example of how we helped one of our clients recover from an account hack.           The following details indicate a very sophisticated hack and underscore the need to be vigilant when it comes to criminals trying to steal your money. The Administrator’s account was hacked, and the associated phone number was changed. A Payroll Core subscription plan was added. This allowed the thief to add fake contractor names and associated email addresses. That step is key because this meant W-9’s were emailed to the “contractors”, filled out, and signed via DocuSign and then added to the Administ...

                 October is National Cybersecurity Awareness month. But we don’t want to wait for a particular time to check how secure our systems and our habits are. That gives the criminals more opportunities.           The scams are constantly changing, and that is especially true in our industry. It is very common for a criminal to send a phishing email or a text message to try and trick someone into giving up their personal information. They could send it to a taxpayer pretending to be the Internal Revenue Service ( IRS ), or to a Tax Professional pretending to be a potential client. Don’t click on strange links or download files from people you do not know! It could allow malware to be downloaded and from there passwords are stolen and computer networks are compromised. They might even hold the data for ransom.           There are steps w...

             Taxpayers and Tax Professionals alike must continue to be vigilant against security threats. This is a year-round concern. Criminals involved in identity theft will always be one step ahead and willing to try new tactics, but they usually involve similar methods. Being familiar with these methods goes a long way to keep you and your information safe.           They will attempt to phish the information they want through emails or text messages. The goal is to get you to give up passwords, bank account numbers, credit card numbers, and Social Security numbers. This is accomplished in two ways. The first is making you feel that the message is coming from someone or some entity that you trust. The second is that a false sense of urgency is created to make a person open a link or attachment, or in some other way give up their sensitive information.       ...

                 Criminals are often adjusting their tactics to confuse people about what they are really after. Other times, they will stick to what works. This is the case with scams related to the pandemic. Here are a few of the more common frauds that have been used in the past 2 years and continue to be seen. Your personal information is like cash, don’t just give it away to anyone.           Fake charities. This has always been a problem, but it grows when there is a crisis or tragedy. Criminals play on a person’s desire to help. Keep in mind that a legitimate charity will never pressure you into giving a donation. They will be happy to receive one at any time and will expect you to do your research. A legitimate charity will not ask for payment by gift card or by wire transfer. This is a hallmark of how scammers operate.           Fake ...

             Phone scams are nothing new and we have all experienced a variation of this at some point. The idea is that there is a prerecorded message, or even an actual person calling, who pretends to be someone they are not. Criminals can use apps to fake their Caller ID number to make it seem like they are calling from the actual institution.           In this case they impersonate someone from the Internal Revenue Service ( IRS ). The messages are urgent and threatening in tone. They claim that law enforcement agencies will soon act unless the taxpayer follows their instructions. This is not how the IRS , or its collection agencies operate.           They will never demand immediate payment. Especially with methods like wire transfer, gift cards, or prepaid debit cards. They will never threaten to use law enforcement to arrest you for lack of tax p...

             Criminals never take a break, so we must always be vigilant and stay aware of their changing tactics. Each year the Internal Revenue Service ( IRS ) releases a Dirty Dozen list of the top 12 scams and abusive tax arrangements that taxpayers should be aware of and avoid. This post will look at text message scams.           These are messages sent to phones that claim to be from the IRS . Many of them reference COVID-19 or stimulus payments. They will also contain links to fake websites in the goal of stealing your personal information or loading a virus.           Always remember that the IRS will never send a surprise text to discuss tax matters, and they never send messages on social media. As a rule, it is best to not open attachments or links in suspicious or unexpected text messages. Make sure to independently verify that the source is ...

               Criminals are especially active during this time of year. Their goal is to steal personal information, such as Social Security numbers, and file fraudulent tax returns. The Internal Revenue Service ( IRS ) scans tax returns for fraud, and when they find something, it is set aside for further review. The next steps are critical.           If the IRS determines there is fraud, they will send a letter to the taxpayer. Nothing will be processed until there is a response. The letter will notify them of potential identity theft and give specific instructions that must be followed. They might be online, over the phone, or even need to take place in person. Do not ignore these letters. Your Qualified Tax Professional can help guide you through the process.

                 The Internal Revenue Service ( IRS ) is strongly encouraging all to remain vigilant in the face of ongoing and renewed scams and schemes. This would include having security software on phones, tablets, and computers. This along with understanding the basic trends of scams will protect taxpayers and tax professionals from identity theft.           Protect your personal information . This is more valuable than cash, or cryptocurrency if you’re into that. Never give it away to just anyone. Only share it when it is needed. A Social Security number, credit card number, bank or even utility account numbers can be used to steal money and create new accounts. Avoid phishing scams . The easiest way for criminals to get what they want is to ask for it. Internet ads don’t always come from companies that you can trust. Never download security software from a pop-up ad. It will say tha...

          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...

                 With a new Tax Season set to begin, we need to remember to take steps to protect ourselves from scam artists and criminals. For a certainty, they are adjusting and preparing to attempt to capture your personal information. We need to be aware of their current tactics and remain vigilant. Here are some basic points to keep in mind.           One common trick that they use is to make a phone call and impersonate a Franchise Tax Board ( FTB ) or Internal Revenue Service ( IRS ) employee demanding a tax payment. If these agencies need to confirm details with you, the first step is always a letter mailed through the United States Postal Service. If a call is necessary, the employee will identify themselves, be courteous, and never demand immediate payment. They will never threaten to call the police, ask for gift cards, or try to find out your banking information. These are th...

             This is the busiest shopping season of the year, and most of it is being done online. This means that criminals are actively trying to find opportunities to steal your information. They often use it to try and get a fraudulent tax refund. This is our second post about how we can protect ourselves.           Beware of scammers using fake charities . This is a time of year when many want to give to organizations. Criminals know this and try to use it to their advantage. Never let anyone pressure you into donating without doing research first. Make sure the charity is real by confirming its exact name, website, and mailing address. If the name is similar to, but not the same, as a well-known charity, this is often a sign of fraud. Give donations by credit card or check, do not give gift cards or wire money.           Businesses need to learn b...

             This is the busiest shopping season of the year. As a result, criminals are doing their best to find ways to steal your sensitive personal information. Another time they try to do this is during tax filing season from January to April. However, according to a recent security report from the Internal Revenue Service ( IRS ), even if someone doesn’t file a tax return, their online interactions can reveal that same data and often it is used to try and get a fraudulent tax refund. How can we protect ourselves?           There are some basic steps that we can all take. Make sure that there is security software on all your devices and that it stays updated. Avoid the trap of phishing scams . These are the messages that seem to be from a legitimate source, but they ask for your personal information. They might claim to have information about Economic Impact Payments, Child Tax Credits, or oth...

            The Taxpayer Bill of Rights is a document that highlights the rights that all have when dealing with the Internal Revenue Service ( IRS ). Each taxpayer needs to know them. In our continuing discussion of them, we arrive at Number 6, The Right to Finality . This involves knowing the time available to challenge an IRS position and how long they have to start an audit or collect a debt.           The IRS usually has 3 years from the date a tax return is filed to assess additional taxes. However, that time frame becomes unlimited if the tax return is determined to be fraudulent. There is a 10 year limit to collect taxes, and that can only be extended as part of a payment agreement or a court order. If the IRS sends a notice that additional taxes must be paid, it will tell you the deadline for when you can file a petition in Tax Court to challenge. This is another way you can determine if a cri...

          The Taxpayer Bill of Rights is a fundamental document that details should expect to interact with the Internal Revenue Service ( IRS ). We should all be aware of these rights and the IRS reminds their employees of them as well. The second of these is called The Right to Quality of Service . This refers to prompt, courteous, and professional assistance. All communication with the IRS should be clear and easily understood.           In practical terms, this means that every IRS representative should care about the quality of service that they provide. This applies to the way they listen, how they consider information, and the answer they provide. A supervisor can be requested if you have a problem. The IRS should treat you with courtesy when collecting taxes. This is one reason why aggressive phone calls threatening arrest for not paying taxes are always a scam. In general, the IRS will only conta...

             Taxpayers and Tax Professionals alike have searched for the latest information related to tax compliance this year. That is true of every Tax Season since the law changes each year, sometimes even during the year. However, the need to be informed does not stop after April or May. It is in fact, a right that all Taxpayers have.           At times there are issues with a Taxpayer’s account with the Internal Revenue Service ( IRS ) and adjustments must be made. This cannot be done in secret. The Taxpayer has the right to know what has happened and how they can comply with tax laws. They must be given clear explanations of IRS procedures and decisions. Written notices of why taxes are owed or why certain refund claims are denied will be sent.           Understanding these facts will help to protect all of us from scams and frauds claiming to be ...