Anthony Sykes & Company

             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 ...

     With so many businesses and employees working remotely, security have become a much greater concern. There are a variety of phishing tactics designed to steal the tax information from employers and tax professionals. This is why Payroll and HR Scams has earned a spot on the Internal Revenue Service ( IRS ) Dirty Dozen list of 2020.        The goals of these scams are accomplished by Business Email Compromise ( BEC ) or Business Email Spoofing ( BES ). There are two well-known scams that are currently being used. A compromised email account is used to send requests for gift cards in different amounts. The other uses the victims email account to change their direct deposit information to an account that the criminal controls. Often fake IRS documents are used.      The specific methods may change over time, but the goals are always the same. If you feel that a request is suspicious, look into it further. There are often little detai...

     A tax professional is entrusted with the most sensitive personal data of the Taxpayer, so it is critical to select the right preparer. Most are honest and provide high-quality service. However, there are some who are intent on committing fraud, harming others, and talking Taxpayers into making choices that they will regret later. These activities have earned a place on the Internal Revenue Service ( IRS ) Dirty Dozen list of 2020.      This year Taxpayers should be especially vigilant because of the COVID-19 pandemic possibly making it more difficult to get in contact with their tax professional. This can leave them vulnerable to “ghost” preparers. They make serious mistakes, expose their clients to tax fraud, and then disappear. They never sign the tax returns they work on. By law they must sign and use their Preparer Tax Identification Number ( PTIN).      They may make promises of large refunds, often by using tax credits that do ...

     Criminals are always finding new ways to get people to believe their scams. This now includes putting money into the bank accounts of Taxpayers. Fake payments with repayment demands is the next entry on the Internal Revenue Service ( IRS ) Dirty Dozen list of 2020.      After stealing a Taxpayers Social Security number or their Individual Taxpayer Identification Number ( ITIN ) and bank account information, a con artist will file a fake tax return and have the refund deposited into their account. Later they will call pretending to be the IRS and claiming there was a mistake and demanding the refund be returned immediately. They will always be told to use gift cards.      Taxpayers have the right to many payment options and the IRS will never demand a specific one. Taxpayers always have the right to question how much in tax responsibility they owe. If you ever receive a surprise phone call about a refund repayment, reach out to your Q...

     For many years the Internal Revenue Service ( IRS ) has placed impersonating phone calls on the Dirty Dozen list of scams for Taxpayers to watch out for. These calls come in many forms, the most common is one where the criminal claims to be with the IRS and demand immediate payment. The goal is to create fear and a sense of urgency in the victim. The IRS will never surprise anyone with a payment demand.      These kinds of tactics are also called vishing (voice phishing). Calls that threaten arrest or deportation for not paying a surprise tax bill are fake. Often they are recorded messages that give instructions about how to return the call. You will not receive a “robocall” from the IRS . They will also never ask for your financial information over the phone or call to ask you about your Economic Impact Payment. If you have a tax problem, talk to the IRS , or your Qualified Tax Professional .

     Those who try to impersonate the Internal Revenue Service ( IRS ) often target groups at higher risk than others. Some who are particularly vulnerable are those who have a limited knowledge of English. These scams are used year round which has earned them a place on the Dirty Dozen list.      These scams are often threatening and create a sense of urgency to force the victim to pay a surprise amount of taxes owed. Often the criminals have some real information like an address or part of their Social Security number making the call seem legitimate. The threats of deportation or arrest increase the anxiety for those with limited access to information that would help them to understand how the IRS really communicates. They never use “robocalls” to tell people how to call back. They will never call and ask for personal financial information. Simply hang up on someone asking for these things, you will not go to jail.

      As senior citizens become more familiar and comfortable using technology, this group becomes a prime target for criminals. The Internal Revenue Service ( IRS ) strongly cautions seniors and those who care for them to be careful. Senior fraud has earned a place on the Dirty Dozen list for 2020 because this group is the most likely to be targeted for fraud.      This year phishing scams related to COVID-19 are being used to a great extent. There is an endless surge of emails, texts, fake websites, and social media messages all being used in an attempt to gain personal information. The tactics of these criminals change, but their basic goal remains the same. However, evidence shows that when there is someone who takes an active role in caring for the professional needs of an elderly friend or relative, the risk of fraud goes down. Let’s take time to watch out and care for each other especially during these challenging times. 

       People want to help each other. This is the fundamental feeling that criminals want to exploit whenever there is a disaster. The COVID-19 pandemic is no different. Scam artists will set up fake charities, often with names very similar to legitimate ones, to accept money from unwitting Taxpayers telling them it will be a tax write off. The rise of these schemes this year has led Fake Charities to earn a place on the Internal Revenue Service ( IRS ) Dirty Dozen list.      One sign that you might be dealing with a fake charity is if you receive an unexpected text, phone call, or social media message. These links will lead Taxpayers to fake websites designed to trick visitors into giving up their personal information. Some might even claim that they are working with the IRS . If the name of this organization is similar to, but not the same, as one that is nationally known, you should be wary. This is often a clue that they are fake. A true orga...

     The Dirty Dozen is a list that the Internal Revenue Service ( IRS ) publishes every year of the most common tax schemes and crimes that Taxpayers should be on the watch for. They peak during Tax Season, but are seen throughout the entire year. One entry on this year’s list has to do with debt resolution companies that heavily promote the Offer in Compromise ( OIC ) program. The fact that they advertise this program with very strict standards as something that can help anyone with tax problems is deceptive and therefore earns a place on the Dirty Dozen list.      These companies will send OIC applications to the IRS . The advertisements will play to hearts of distressed who owe large debts, telling them that they will pay “pennies on the dollar”. The OIC program does allow those who are accepted to pay a compromised amount to the IRS . However, the IRS has many other payment programs that have a much higher likelihood of getting approval for. In...

           A growing threat today involves cybercrime. One example of this is Ransomware. This is software designed for an evil purpose. It will target human or technical weaknesses in a computer, network, or server. Most of the time, people are not even aware of downloading it. This relates to our recent Phishing blogpost .           Once inside, the Ransomware will track activity to lock and encrypt critical files. Then a demand message will appear. It will usually have payment details and contain the threat of the losing the data, or making it public. They may even be able to impact the entire computer network. To avoid this situation be careful about the links and attachments you open. There are many fake COVID-19 charities being promoted. This is a particular concern for Tax Professionals because they deal with the personal information of many individuals. The Internal Revenue Service ( IRS ) has guidel...

          Identity Theft continues to be a problem. In previous years, a fraudulent tax return would be filed with the Internal Revenue Service ( IRS ) to steal a tax refund. This type of scam goes on every year. Now there is a new variation related to COVID-19 relief that has been provided.           Criminals are doing their best to steal Economic Impact Payments ( EIP ) being sent to Taxpayers. Remember that there is no fee to receive these funds. Do not pay anyone to find out when you will receive your payment. Never sign over your check to someone. If your identity has been stolen, make sure to let the IRS know and make sure they have your correct address and bank information.           The IRS has recently warned a number of care facilities and nursing homes that these EIP funds belong to the residents and not the business providing their care. These payments ...

     The use of deceptive tactics, including fake emails, text messages, links, and websites, to gain personal information is called phishing. New phishing scams using pandemic related terms is one of the fastest growing scams according to the Internal Revenue Service ( IRS ). Remember that the IRS will never contact Taxpayers using Social Media or text message, and will never initiate contact through email.      Many are anxious and seeking the latest news about how the COVID-19 pandemic will impact them, their business, and other financial matters. These new phishing schemes use terms like “coronavirus” and “stimulus” to draw in Taxpayers looking for answers to their questions. Please remember that the official term is Economic Impact Payment. Do not open strange emails, click on links, or open attachments from people you don’t know or that are unexpected. Criminals feel that everyone is a target and this is one of their tools.

     Taxpayers need to protect themselves at all times, especially when communicating online. The Internet allows anyone to share information with everyone. This is the basic principle that scammers exploit when using Social Media scams. Information becomes their tool of choice when trying to steal personal information.        This is especially true during a crisis like COVID-19 . The Internal Revenue Service ( IRS ) states that the current health crisis has been used extensively by criminals in attempts to steal information from Taxpayers. Often it starts with the victim getting an email or text that has a link to something they are interested in. By clicking on that link, you will be exposing yourself to all sorts of malicious code. Some will seek out your passwords, user names, or banking information. So make sure you know what you are clicking on and who the source is. Make sure you look closely at the message, there may be clear indications tha...

     Every year the Internal Revenue Service ( IRS ) announces a “Dirty Dozen” list of scams and crimes that Taxpayers should be aware of. These are most commonly seen during Tax Season, but can be used at any time. This year, with the COVID-19 pandemic, the focus is on how criminals are using everything related to the Coronavirus to prey on the fear and uncertainty around us.      The goal of these tax scams is to steal your personal information and money. Criminals feel that everyone is a potential target, so please do not engage with these individuals. We all must be on guard against these frauds, and try to watch out for each other. Our next few blog posts will highlight some of the more recent trends in this area of tax crime.

         Every year, the Internal Revenue Service ( IRS ) publishes a list of the 12 most common tax scams. It is called the “Dirty Dozen”. While these scams may peak at the beginning of the year, they can be found at any time so we must always be vigilant to avoid these situations. It seems that a few large organizations with a Tax-Exempt status may be involved in some land investments with inflated values. The details of why this scheme makes the “Dirty Dozen” list can be read here .           In this latest example, land appraisers, tax preparers, and others may be involved in billions of dollars of inflated deductions. These land deals, called syndicated conservation easements, make it possible for more than 1 person to claim a charitable deduction of property. The legitimate reason to donate these properties is to protect them from future development. The concern from the IRS is that this provision is being...

         A general warning has been issued to all Taxpayers by the Internal Revenue Service ( IRS ). There are some who continue to promote what have been deemed frivolous schemes and tax arguments . Considering that this happens every year, it has earned a spot on the 2019 IRS “ Dirty Dozen ” list. These are considered the 12 most common tax scams seen during the year.           Some of the myths that continue to be promoted are that only those who work for the Federal Government are subject to income tax, the First Amendment allows for the refusal to pay taxes on religious or moral grounds, and that only foreign income is taxable. These arguments, and many others like them, have been thrown out of court repeatedly , so do not get talked into going down this path. Taxpayers have the right to contest their Tax liabilities, but they must do so legally . Using any frivolous arguments will bring stiff penalties an...

         The Internal Revenue Service ( IRS ) continues to strenuously warn taxpayers against claiming Business Tax Credits for which their companies do not qualify for . This is a tactic commonly used by Tax Preparers who are not to be trusted. This is a practice seen often, which is why falsely claiming Business Tax Credits has a spot on the IRS 2019 “Dirty Dozen” list.           There are two credits that are often claimed irresponsibly. One is the Research Credit , which is used to support scientific experimentation that improves a product or process used in the business. There are very specific guidelines that must be followed in order to successfully claim this credit and if there is no supporting documentation, failure to do so will lead to the claim being rejected. The Fuel Tax Credit is even more difficult to claim. It’s basically limited to use of farming or other vehicles not used on highways. Wit...