Tag Archives: tax returns

Tax-Related Telephone Scams

Tax-Related Telephone Scams

This week our area has been hit with an increased number of tax-related scam telephone calls. They are starting to sound much more realistic than similar scams in prior years.

Usually the caller will identify themselves as a member of an enforcement division of either the IRS or Maryland State Police. They will inform you that there was a mistake on your income tax return from last year and you owe a sum of money. The caller will do their best to sound official and scare you with significant penalties and jail time. Please do not fall victim to these tactics.

First, the IRS and Comptroller of Maryland will never call you to collect money. They will always use certified mail when they are about to garnish your wages or levy your bank account. They will also never ask you to get a debit card or money order and bring it to their location. These requests are all fake.

If you receive a questionable phone call regarding your tax returns, you can tell if they are legitimate by asking them a few questions. For example, ask them to confirm how many children you claimed. Tell them you think you may have left one off by mistake. If they have your return, they should know how many dependents are on your return. Another question you can ask is who was listed at the bottom as the preparer. You can tell them you had a tax service prepare it and they made a mistake, so you purchased software and prepared it yourself, but possibly sent them the wrong version of the return in error. Again, if they have your return, they should be able to tell you whose name is listed as the preparer of the return. If they can’t, you know they are a phony caller.

Today I received one of those calls. I am not very busy today, so I decided to have some fun. After about twenty to thirty minutes of playing along and asking them questions, they must have gotten the impression I was toying with them and they hung up. It was fun while it lasted…… At least for me.

IRS to Audit More Small Businesses!

IRS to Audit More Small Businesses!

The 2018 IRS Forum was a valuable source of information regarding the upcoming tax filing season. Among the many tidbits I gleaned were issues of IRS concern relating to small businesses. The IRS has announced they are going to scrutinize such things as: personal use of the business assets such as cell phones and laptops,… Continue Reading

Do You Need to File a Form 1099 Misc?

Do You Need to File a Form 1099 Misc?

A Form 1099 Misc should be filed for every unincorporated vendor or contractor who you paid $600 or more during the calendar year 2017. The amounts to be reported are for services only. If you paid someone for products and services, only the labor charges are to be reported in box 7 of Form 1099… Continue Reading

Biggest Audit Risks for Business Owners

Biggest Audit Risks for Business Owners

The Schedule C for an unincorporated business and the Schedule F for farming activities are the forms MOST AUDITED by the IRS! The IRS has published the following list of issues they scrutinize when auditing the Schedule C and the Schedule F: Lack of record keeping for automobile use – no mileage logs. Personal phone… Continue Reading

Would Your CPA Approve of How You Organize Your Files & Receipts?

I recently met with a contractor who had very organized files. You could tell he spent a lot of time assembling his receipts. The problem: they were organized in a manner that was not efficient for preparing a tax return. Instead, the gentleman had organized his records by vendor. The solution: The income tax return… Continue Reading

How Do I Handle My Mother’s Estate?

QUESTION: Dear Taxman – I am the administrator of my Mother’s estate. All she owned at the time of her death was her car, her house and a few investments which were all sold at a loss. Am I required to file an estate income tax return? ANSWER: Dear Reader – An estate tax return, form… Continue Reading

Do I File A Return If My Business Had More Expenses Than Income?

QUESTION: Dear Taxman – This summer I started a lawn mowing business and made about $3,000 mowing grass. However, my expenses were more than my income. Do I need to report it on my tax return? ANSWER: Dear Reader: The IRS requires all business income to be reported when you file your tax return. You… Continue Reading

Claiming Dependents

QUESTION: Dear Taxman – My Daughter graduated from college in May of this year. She started working in September and expects to make about eleven thousand dollars this year. Can we still claim her as a dependent for this year? ANSWER: Dear Reader: To claim her as a dependent in any year, she must have been a… Continue Reading

How Long Do I Keep Tax Records?

QUESTION: Dear Taxman – How long am I required to keep my tax records? ANSWER: Dear Reader – You should save all your income tax records for the current year and six previous years. Certain tax records like your income tax returns should be kept permanently. Property settlement transaction documents should be kept for four… Continue Reading