Accounting Resources for Your Business
Insights from Cornerstone Accounting Solutions
Summertime is winding down, and who wants to be thinking about taxes? This is actually a very good time to be thinking about your tax returns. If you are on extension, get your tax information into your tax preparer sooner rather than later. The extension deadline is the last date in which you can file a timely return. There are no additional extensions of time to file. Getting that information to your tax preparer now gives them time to review your information, ask questions if they have any, and prepare your returns without the rush closer to the deadline. For S-corps & partnerships, the extended due date is September 15. For C Corporations and Individuals, the extended due date is October 15. Let us know if you have filed a timely extension and need tax services to get your returns filed by this deadline.
It is also a good time to be thinking about tax planning for your 2022 tax return. It is a good time to be talking to your financial advisors regarding any tax savings you can get through selling items in your portfolio. If you started a new business and haven’t engaged an accountant, now is a good time to do so. Don’t wait until you are scrambling to get your tax information to a tax professional to realize that you need to get your business information together. If you have purchased a rental property or other investment property, or have started an Air BnB, be sure to contact a tax professional.
Another item that can be addressed during the summer months to avoid the rush at year-end, is making sure you have tax information from anyone who you paid more than $600 in total for the year for services. A W-9 can be downloaded from the IRS website – www.irs.gov - use this form to give to any vendor that you may need to report payments to on a 1099-NEC. See the filing requirements below, as issued from the IRS website.
Lastly, we should all stay vigilant in recognizing scams from anyone posing as an IRS agent. See the notice directly from the IRS below to understand how the IRS will notify you of any tax issues that may arise. Most importantly, for the seniors in your life, make sure they know this information as well. Seniors are the most likely to fall for the scams and we want to protect them. If you or a loved one receives any messages, please contact a tax professional if you have questions about the validity of the inquiry.
Enjoy your summer!
Your accounting and tax professional at Cornerstone Accounting Solutions!
Understanding how the IRS contacts taxpayers and avoiding scams
With continuing phone and in-person scams taking place across the country, the IRS wants to help taxpayers understand how and why agency representatives may contact taxpayers.
In most instances, the IRS sends a letter or written notice to a taxpayer in advance, but not always. Depending on the situation, IRS employees may first call or visit with a taxpayer.
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Here’s how taxpayers can know if a person calling or visiting their home or place of business is a legitimate IRS employee or an imposter. There are special instances where an IRS revenue officer or revenue agent may visit a home or business related to an unpaid tax bill or an audit; the IRS urges people with tax issues to understand the circumstances around these visits and also help protect themselves against imposters.
Frequent Scams
Text Message
The IRS does not send text messages including shortened links, asking the taxpayer to verify some bit of personal information. These fraudulent messages often contain bogus links claiming to be IRS websites or other online tools.
Other than IRS Secure Access, the IRS does not use text messages to discuss personal tax issues, such as those involving bills or refunds.
If a taxpayer receives an unsolicited SMS/text that appears to be from either the IRS or a program closely linked to the IRS, the taxpayer should take a screenshot of the text message and include the screenshot in an email to phishing@irs.gov with the following information:
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Date, time and time zone they received the text message.
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Phone number that received the text message.
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The IRS reminds everyone NOT to click links or open attachments in unsolicited, suspicious or unexpected text messages whether from the IRS, state tax agencies or others in the tax community.
The IRS does not initiate contact with taxpayers by email to request personal or financial information. The IRS initiates most contacts through regular mail. If a taxpayer receives an unsolicited fraudulent email that appears to be from either the IRS or a program closely linked to the IRS, report it by sending the email as an attachment to phishing@irs.gov. The Report Phishing and Online Scams page at IRS.gov provides complete details.
Mail and phone contacts are first steps with a tax issue Taxpayers will generally first receive several letters from the IRS in the mail before receiving a phone call. However, there are circumstances when the IRS will call, including when a taxpayer has an overdue tax bill, a delinquent or unfiled tax return or has not made an employment tax deposit.
In Person Visits
What to know
IRS revenue officers generally make unannounced visits to a taxpayer’s home or place of business to discuss taxes owed or tax returns due. Keep in mind this important point: Taxpayers would have first been notified by mail of their balance due or missing return. A limited exception involves revenue officer contacts while working a small number of “alert” cases, designed to help businesses from falling behind on withheld employment taxes before a balance due notice is created or mailed. Revenue officers are IRS civil enforcement employees whose role involves education, investigation and when necessary, appropriate enforcement steps to collect a tax debt. A revenue officer will help a taxpayer understand their tax obligations as well as the consequences for not meeting the obligations.
IRS revenue agents will at times visit an individual, business or non-profit who is being audited. That taxpayer would have first been notified by mail about the audit and set an agreed-upon appointment time with the revenue agent. Also, after mailing an initial appointment letter to a taxpayer, an auditor may call to confirm and discuss items pertaining to the scheduled audit appointment.
When visited by someone from the IRS, the taxpayer should always ask for credentials or identification. IRS representatives can always provide two forms of official credentials: IRS-issued credentials (also called a pocket commission) and a HSPD-12 card. The HSPD-12 card is a governmentwide standard form of identification for federal employees.
For more information, visit How to know it’s really the IRS calling or knocking on your door on IRS.gov, and the IRS Taxpayer Bill of Rights.
Helpful information on resolving tax issues
The IRS reminds individuals, businesses and non-profits with outstanding tax issues that there are a number of easy ways to get assistance and help them meet their tax obligations. The IRS encourages people to visit a special section on IRS.gov focused on payment options. These include paying taxes through an Online Account with IRS Direct Pay or paying by debit card, credit card or digital wallet. The IRS has options for people who can't pay their taxes, including applying for a payment plan on IRS.gov. Recently the IRS announced expanded voice bot options to help eligible taxpayers easily verify their identity to set up or modify a payment plan while avoiding long wait times.
The IRS Will Not:
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The IRS does not leave pre-recorded, urgent or threatening voice messages. Additionally, the IRS (and its authorized private collection agencies) will never:
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Call to demand immediate payment using a specific payment method such as a prepaid debit card or gift card. The IRS does not use these methods for tax payments.
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Threaten to immediately bring in local police or other law-enforcement groups to have the taxpayer arrested for not paying.
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Demand that taxes be paid without giving the taxpayer the opportunity to question or appeal the amount owed.
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Ask for credit or debit card numbers over the phone.
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All tax payments should only be made payable to the U.S. Treasury and checks should never be made payable to third parties. For anyone who doesn't owe taxes and has no reason to think they do: Do not give out any information. Hang up immediately. For more information, see IRS warning: Scammers work year-round; stay vigilant.
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