Every year around this time, the IRS issues a warning about scams that attempt to victimize taxpayers and steal from them. More often than not, the victims of these crimes are senior citizens. The scams have varying levels of sophistication. From simple - such as calling on the phone and posing as an IRS agent - to sophisticated phishing scams that attempt to get taxpayers to reveal information that can be used to hack key user accounts.
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Even though reports of tax-related identity theft have declined markedly in recent years, the Internal Revenue Service warns that this practice is still widespread and remains serious enough to earn a spot on the agency’s annual “Dirty Dozen” list of tax scams.The Dirty Dozen is compiled each year by the IRS and outlines a variety of common scams taxpayers may encounter any time during the year. Many of these cons peak during filing season as people prepare their tax returns.
Tax-related identity theft occurs when someone uses a stolen Social Security number or Individual Taxpayer Identification Number (ITIN) to file a fraudulent tax return claiming a refund.
The IRS recently announced additional requirements for taxpayers and tax professionals to verify their identities when they call as part of security efforts.
Taxpayers and professionals should have the following documents ready when they call:
- Social Security numbers and birth dates for those who were named on the tax return in question
- An Individual Taxpayer Identification Number (ITIN) letter if the taxpayer has one in lieu of a Social Security number (SSN)
- Filing status – Single, Head of Household, Married Filing Joint or Married Filing Separate
- The prior-year tax return. Telephone assistors may need to verify taxpayer identity with information from the return before answering certain questions
- A copy of the tax return in question
- Any IRS letters or notices received by the taxpayer
This data breach was especially egregious because the company reportedly first learned of the breach on July 29 and waited roughly six weeks before making it public (hackers first gained access between mid-May and July) and three senior Equifax executives reportedly sold shares of the company worth nearly $2 million before the breach was announced.
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Moreover, as CNN points out, consumers don't choose to do business or share their data with Equifax; rather, Equifax — along with TransUnion and Experian, the other two major credit reporting agencies — unilaterally monitors the financial health of consumers and supplies that data to potential lenders without a consumer's approval or consent.
For many companies, keeping close tabs on revenue, expenses, and profit is the number one priority. However, companies that carry inventory may not realize its direct effect on profitability. This effect is known as shrinkage. Shrinkage is the excess amount of inventory (in accounting records) that no longer exists in the actual inventory. In other words, it is a loss of inventory. There are several causes of shrinkage, such as:
Q: I’m concerned. I was sure I paid my income tax this year when I filed, but I have just received a call from someone saying they are an authorized IRS collection agent and I need to pay a small balance now due ($350). The agent said I should pay by prepaid debit card. What do you recommend?
- Bailey J., Private Business Owner
gh the tax filing season has ended for most taxpayers. People should remain on alert to new and emerging schemes involving the tax system that continue to claim victims.
“We continue to urge people to watch out for new and evolving schemes this summer,” said IRS Commissioner John Koskinen. “Many of these are variations of a theme, involving fictitious tax bills and demands to pay by purchasing and transferring information involving a gift card or iTunes card. Taxpayers can avoid these and other tricky financial scams by taking a few minutes to review the tell-tale signs of these schemes.”