Friday the 13th alert: Beware these 13 tax ID theft scams

If Halloween isn’t scary enough for you, this October also has a Friday the 13th, which if you haven’t looked at a calendar yet, is today.

Friday 13th giphy

And making things even more frightening, the Internal Revenue Service has some terrifying tax scam news.

This week alone, the IRS has issued two warnings about tax-related identity theft schemes.

First was the phishing attempt to hook tax pros by using the agency’s e-Services as bait.

Now there’s a fake insurance tax form scam that’s being used to access annuity and life insurance accounts. The IRS says this criminal scheme also targets tax professionals and their clients.

Fake insurance phishing: There may be variations of the insurance scam, says the IRS, but details below show how one scam version works.

The cybercriminal, impersonating a legitimate cloud-based storage provider, entices a tax professional with a phishing email. The tax professional, thinking they are interacting with the legitimate cloud-based storage provider, provides their email credentials including username and password.

With access to the tax professional’s account, the cybercriminal steals client email addresses. The cybercriminal then impersonates the tax professional and sends emails to their clients, attaching a fake IRS insurance form and requesting that the form be completed and returned.

The cybercriminal receives replies by fax and/or by an email very similar to the tax professional’s email, using a different email service provider or a slight variation of the tax pro’s address.

As for the email itself, the IRS says the subject line varies, but it may be “urgent information” or a similar request.

Here’s an example of the awkwardly worded text in the body of the email:

Dear Life Insurance Policy Owner,

Kindly fill the form attached for your Life insurance or Annuity contract details and fax back to us for processing in order to avoid multiple (sic) tax bill (sic).

The cybercriminal, using data from the completed form, impersonates the client and contacts the individual’s insurance company. The crook then attempts to obtain a loan or make a withdrawal from those accounts

13 scary tax scams: With this recent rash of identity theft scams, it seems only fitting on this Friday the 13th to review some of criminal efforts that have recently made the rounds. Of course, it numbers 13.

  1. Fake insurance letter email
  2. e-Services phishing scam
  3. Fake charities in the wake of Hurricane Harvey
  4. Friday the 13th black cat_Little Gothic Horrors via PinterestPhishing scam from crooks impersonating tax software companies
  5. Cons pose as fake IRS agents calling to ‘verify’ filers’ tax return information
  6. Tax telephone scam script rewritten to include mentions of fake IRS certified letters, EFTPS option
  7. Fake CEO phishing tax scam is back
  8. Phishing criminals pose as potential tax clients to infiltrate tax preparers’ systems
  9. Tax pros targeted in ‘mail on hold’ e-services phishing scam
  10. Telephone tax scam targets students with fake ‘federal student tax’ call
  11. Look out for smishing tax identity thieves
  12. Tax phishing scam artists pretend to be members of Taxpayer Advocacy Panel
  13. Fake IRS agent telephone scam continues despite alleged mastermind’s arrest

Fighting off bad tax spirits (and scams): If you get any of these scam or phishing contacts — or new versions that no doubt will soon pop up — the IRS (and I) remind you of three things not to do:

  • Never give out personal or financial information to unknown, unsolicited callers.
  • Don’t reply to questionable emails from unknown, unsolicited message senders.
  • Don’t click on links or open attachments in suspicious emails.

And here are three things to do if you’re ever targeted by a tax identity thief con artist:

  • Contact the Treasury Inspector General for Tax Administration (TIGTA) to report telephone tax scam calls. Use TIGTA’s IRS Impersonation Scam Reporting web page or call toll-free (800) 366-4484.
  • Report scam attempts to the Federal Trade Commission (FTC). Use the online FTC Complaint Assistant on
  • Send a copies of phishing emails to the IRS at

Finally, be skeptical and trust your gut. If something seems off, step back and investigate.

Call the IRS yourself and find out if the message or call you got is correct or a criminal trying to take your info to file a fake return to collect a fraudulent refund.

Remember, tax scams don’t die. Like Halloween (and TV and movie) zombies, they just keep coming back in new forms in search of more identity theft victims.

Remember, too, that tax crooks goblins and ID theft ghouls are out there year-round, not just in Halloween’s host month of October.





IRS Don’t Take the Bait Recap

Have you been following the IRS Don’t Take the Bait series? This 10 part education series was part of the IRS Security Summit effort. Data breaches and scams have been steadily increasing and are getting more and more sophisticated. The purpose of the series is to raise awareness of this and educate tax preparers on security measures and best practices.

As tax preparers, it is our responsibility to do our due diligence and protect taxpayer information. We need to be cautious about everything we do and remain hyper-vigilant when it comes to security.

We’ve been following the “Don’t Take the Bait” series since day one. Here’s a recap of all 10 steps with a handy infographic that summarizes them all.

Step 1: Avoid Spear Fishing Emails

We’ve written about phishing scams and how they work before. The IRS warns that these kind of scams are usually tailored to individual practitioners. If you fall prey to one, it usually results in stolen taxpayer data and fraudulent tax returns filed in the names of individual and business clients.

The email is usually disguised as being from a trusted source. It often attempts to get victims to voluntarily disclose sensitive information such as passwords. Or, it may encourage people to open a link or attachment that actually downloads malware onto the computer. The IRS warns tax preparers to be wary of emails they receive – especially when they are asking for sensitive information.

Here are the steps the IRS suggests taking:

  1. Educate all employees about phishing in general and spear phishing in particular.
  2. Use strong, unique passwords. Better yet, use a phrase instead of a word. Use different passwords for each account. Use a mix of letters, numbers and special characters.
  3. Never take an email from a familiar source at face value; example: an email from “IRS e-Services.” If it asks you to open a link or attachment, or includes a threat to close your account, think twice. Visit the e-Services website for confirmation.
  4. If an email contains a link, hover your cursor over the link to see the web address (URL) destination. If it’s not a URL you recognize or if it’s an abbreviated URL, don’t open it.
  5. Consider a verbal confirmation by phone if you receive an email from a new client sending you tax information or a client requesting last-minute changes to their refund destination.
  6. Use security software to help defend against malware, viruses and known phishing sites and update the software automatically.
  7. Use the security options that come with your tax preparation software.
  8. Send suspicious tax-related phishing emails to

Step 2: Be Alert to Account Takeover Tactics

Account takeovers occur when a thief manages to steal or guess the username and password of a tax professional, enabling access of their computers or their other online accounts. Here’s how they work:
Thieves peruse websites and social media for clues about a tax preparer’s email addresses and business activities. From there, they pose as a familiar organization like IRS e-Services or tax pro software by sending a spear phishing email. The email recipient clicks on a disguised link that takes them to a login page that looks like it’s for the organization the thief is impersonating. That page then loads malware that captures keystrokes, giving the thief access to user credentials.
Common organizations thieves pose as include IRS e-Services, tax pro software, another tax professional, a familiar bank, a cloud-based storage provider, or a “potential client”.

Step 3: Security Summit Safeguards

There are several safeguards the IRS is taking to protect against hackers. For 2018, the IRS will be asking tax pros to gather the following information on their business clients.

  • The name and Social Security number of the company individual authorized to sign the business return. Is the person signing the return authorized to do so?
  • Payment history – were estimated tax payments made? If yes, when were they made, how were they made, and how much was paid?
  • Parent company information – Is there a parent company? If yes who?
  • Additional information based on deductions claimed.
  • Filing history – Has the business filed Form(s) 940, 941 or other business related tax forms?

Step 4: Defend against Ransomware

Ransomware is a type of malware that infects computers, networks and servers and encrypts (locks) data. Once the malware is on your computer, cybercriminals demand a ransom to release the data.  There have only been a handful of tax practitioners who have been victimized by ransomware attacks, but that doesn’t mean there won’t be more. Ransomware attacks are a growing and evolving crime threatening the private and public sectors as well as individuals.

Tips to Prevent Ransomware Attacks

  • Make sure employees are aware of ransomware and of their critical roles in protecting the organization’s data.
  • For digital devices, ensure that security patches are installed on operating systems, software and firmware. This step may be made easier through a centralized patch management system.
  • Ensure that antivirus and anti-malware solutions are set to automatically update and conduct regular scans.
  • Manage the use of privileged accounts — no users should be assigned administrative access unless necessary, and only use administrator accounts when needed.
  • Configure computer access controls, including file, directory and network share permissions, appropriately. If users require read-only information, do not provide them with write-access to those files or directories.
  • Disable macro scripts from office files transmitted over e-mail.
  • Implement software restriction policies or other controls to prevent programs from executing from common ransomware locations, such as temporary folders supporting popular Internet browsers, compression/decompression programs.
  • Back up data regularly and verify the integrity of those backups.
  • Secure backup data. Make sure the backup device isn’t constantly connected to the computers and networks they are backing up. This will ensure the backup data remains unaffected by ransomware attempts.

Step 5: Prevent Remote Access Takeover Attacks

Your entire digital network could be at risk for remote takeover by cybercriminals. Such a takeover could lead to fraudulent tax filings and damage to your clients. A remote attack targets an individual computer or network as the cybercriminal exploits weaknesses in security settings to access the devices. Another line of attack uses malware to download malicious code that gives the criminals access to the network.

The IRS urges tax professionals to take the following steps to help protect themselves from remote takeovers:

  • Educate staff members about the dangers of phishing scams, which can be in the form of emails, texts and calls, as well as the threat posed by remote access attacks;
  • Use strong security software, set it to update automatically and run a periodic security “deep scan” to search for viruses and malware;
  • Identify and assess wireless devices connected to the network, including mobile phones, computers, printers, fax machines, routers, modems and televisions. Replace factory password settings with strong passwords.
  • Strengthen passwords for devices and for software access. Make sure passwords are a minimum of eight digits (more is better) with a mix of numbers, letters and special characters;
  • Be alert for phishing scams: do not click on links or open attachments from unknown, unsolicited or suspicious senders;
  • Review any software that employees use to remotely access the network as well as those used by IT support vendors to remotely troubleshoot technical problems. Remote access software is a potential target for bad actors to gain entry and take control of a machine. Disable remote access software until it is needed.

Step 6: Watch Out for the W-2 Email Scam

The W-2 scam – called a business email compromise or BEC – is one of the most dangerous phishing email schemes trending nationwide. A business email compromise occurs when a cybercriminal is able to “spoof” or impersonate a company or organization executive’s email address and target a payroll, financial or human resources employee with a request.

Tax professionals should be very wary of emails that they receive and should educate clients about these scams. Employers, including tax practitioners, should review their policies for sending sensitive data such as W-2s or making wire transfers based solely on an email request.

Step 7: Protect e-Services Accounts, EFINs

A tax professional’s login credentials are highly sought out by cybercriminals. They use them to access IRS e-Services and obtain the EFIN, which allows a criminal to steal your clients’ information. How do they get your login credentials? They use spear phishing emails. The email usually impersonates IRS e-Services in an attempt to trick practitioners into disclosing their username and password.

The IRS asks that tax practitioners:

  • Maintain EFINs: once the EFIN application process is complete and an EFIN has been issued, it is important to keep accounts up-to-date.
  • Monitor EFINs: During the filing season, check on the EFIN’s status to ensure that it is not being used by others.
  • Protect EFINs: Learn to recognize and avoid phishing scams that claim to be from the IRS or e-Services.

Step 8: How to Start Protecting Clients, Businesses from Cybersecurity Threats

All tax practitioners have a legal obligation to protect taxpayer information in their care. That means securing sensitive data from unauthorized disclosure, improper disposal and outright theft.

Tax pros should review Publication 4557 and NIST’s Small Business Information Security: the Fundamentals.

From Publication 4557:

  • Take responsibility or assign someone to be responsible for safeguards
  • Assess the risks to taxpayer information in offices.
  • Make a list of all the locations where taxpayer information is kept.
  • Write a plan of how to safeguard taxpayer information.
  • Use only service providers who have policies in place to also maintain an adequate level of information protection.
  • Monitor, evaluate and adjust security programs as business or circumstances change

5 action-item categories from NIST’s small business guide:

  • Identify: Who has access to business information? Conduct background checks and require individual user computer accounts.
  • Protect: Limit access to data and information and protect it by following cybersecurity protocol.
  • Detect: Install and update anti-virus, spyware and other malware programs.
  • Respond: Develop a plan for disasters and information security incidents.
  • Recover: Make full backups of important data/information.

Step 9: Make Data Security an Everyday Priority

Data security within a tax professional’s office is only as strong as the least-informed employee. And, security awareness must extend beyond the office into homes. Create a culture within your tax practice that takes cybersecurity seriously. Embed these best practices into your every day procedures. Here are some best practices that should be followed and taught to employees:

  • Be careful of email attachments and web links.
  • Use separate personal and business computers, mobile devices and accounts.
  • Do not connect personal or untrusted storage devices or hardware into computers, mobile devices or networks.
  • Be careful downloading software.
  • Watch out when providing personal or business information.
  • Watch for harmful pop-ups.
  • Use strong passwords.
  • Conduct online business more securely.

Step 10: Steps for Tax Pros with Data Incidents; Tips to Help Protect Clients, Taxpayers

The final step is all about reporting an incident when it happens. Criminals work quickly so a quick response once a problem is discovered is crucial and can help avert problems. In the event of a data breach or incident, tax professionals should contact the following agencies.

  • IRS (your local IRS Stakeholder Liaison)
  • FBI (local office)
  • Secret Service (local office)
  • Local police to file a report
  • The Federation of Tax Administrators (
  • State Attorneys General for each state in which the tax professional prepares returns
  • A security expert to determine the cause and scope of the breach
  • Insurance companies to report the breach and check coverage
  • The Federal Trade Commission
  • Credit / identity theft protection
  • Credit bureaus
  • Clients – Send an individual letter to all victims to inform them of the breach but work with law enforcement on timing.

Cybercrime is serious and should be treated as such. This is a lot of information to take in but it’s important to know how cybercriminals work so that you can educate employees and clients. Stay vigilant and follow these best practices. Download our infographic below to share with clients and employees.



Tax subsidies for sports facilities under fire again


AT&T Stadium, originally known as Cowboys Stadium when it opened its doors in 2009 and forever known as Jerry’s World regardless of which company buys naming rights, is home to America’s Team. It also hosts college football’s Cotton Bowl game, as well as a variety of other sports and entertainment activities. NFL team owner Jerry Jones footed most of the billion-dollar stadium’s cost, but Arlington voters approved an increase of the city’s sales, hotel occupancy and car rental taxes to help pay for the facility. Arlington also provided millions in bonds to help Jones cover any cost overruns. (Photo by Kay Bell)

I’m not sure if Donald J. Trump will watch tonight’s Eagles vs. Panthers (go cats!) match, but he’s apparently watching the NFL’s off-field actions.

The lingering controversy over players’ protests during the national anthem has now diverged into the tax world.

The matter of taxes and professional sports got widespread attention when the president broached the subject in, of course, a Twitter post. But some members of Congress beat the prez to the punch, introducing legislation on public funds for sports facilities before Trump logged onto his smartphone this week.

Trump’s NFL tax query: “Why is the NFL getting massive tax breaks,” asked Trump in an early-morning Tweet on Tuesday, Oct. 10, adding “Change tax law!”

DJTrump tweet re NFL taxes_10-10-17

Tax geeks across the country immediately jumped on Trump’s tweet, trying to decipher exactly what breaks deserve, in 45’s estimation, changing.

The initial consensus was that Trump was unaware that the National Football League surrendered its tax-exempt operating status years ago.

Tax stats not worth the hassle: After being slammed repeatedly over the years for the favorable tax status, the league’s powers that be decided the adverse PR of the United States’ most popular — and wealthy — professional sports league being a 501(c)(6) organization under the tax code was not worth the hassle.

On April 28, 2015, the NFL announced it would officially change the league’s tax status to that of a taxable entity.

The 501(c)(6) status is one of [too] many nonprofit statuses allowed under the Internal Revenue Code. The one formerly used by the NFL is for business leagues, which still includes the National Hockey League (NHL) and Professional Golfers Association (PGA), as well as for chambers of commerce and real estate boards.

One of the biggest drawbacks of being a tax-exempt group is that salaries of employees must be disclosed. For the NFL, that meant revealing just how much money its very well-paid commissioner makes.

The NFL change in operating status essentially was cosmetic.

While the league itself was tax-exempt, all its member football teams were not. Plus, players pay taxes on their big bucks, including convoluted and costly jock taxes to the various states and cities in which they play games, both regular season and playoffs leading to the Super Bowl.

Taxpayer-paid stadia: The next best tax break to which Trump might have been referring is the tendency for states and cities to underwrite the building of stadiums.

The latest example is the $750 million Las Vegas and Clark County taxpayers, not to mention visitors to Sin City, will shell to build a stadium in the Nevada desert for the Oakland Raiders.

That’s the largest amount of public money spent on an NFL stadium. However, taxpayer dollars accounted for a higher percentage in the construction of venues for the Indianapolis Colts, Cincinnati Bengals and Cleveland Browns, all of which are close in size to Las Vegas.

Such taxpayer subsidies, of course, are not unique to professional football. Michael Farren, in a piece for U.S. News and World Report this summer, noted:

Between 1990 and 2010, 84 new facilities were built for the 122 teams playing in the four largest professional sports leagues. The combined construction cost was $34 billion, with $20 billion coming from public funding. Furthermore, 36 of the 45 new facilities built since the year 2000 were financed using municipal bonds, which are exempt from federal taxes, meaning taxpayers across the nation will contribute at least $3 billion more to subsidizing professional sports.

Those are local government tax decisions made to attract or keep sports franchises within their borders. But, as Farren pointed out, there is a federal tax connection.

Removing federal tax break for local bonds: Specifically, there are federal subsidies for professional sports stadiums and arenas that use tax-exempt state and municipal bonds to build such facilities.

A couple of members of Congress are proposing changes to that in two separate bills.

Rep. Steve Russell (R-Oklahoma) in February introduced the No Tax Subsidies for Stadiums Act (H.R. 811). It’s the latest version of a bill Russell introduced in the last congressional session.

Across Capitol Hill, Sen. Cory Booker (D-New Jersey) has sponsored the Eliminating Federal Tax Subsidies for Stadiums Act (S. 1342).

“Professional sports teams generate billions of dollars in revenue. There’s no reason why we should give these multi-million-dollar businesses a federal tax break to build new stadiums,” said Booker in announcing his bill’s June 13 introduction. “It’s not fair to finance these expensive projects on the backs of taxpayers, especially when wealthy teams end up reaping most of the benefits.”

Both bills have bipartisan support.

Both bills also would, if enacted, end the use of tax-exempt bonds for stadiums.

Both bills are the latest in previously failed efforts to change this law.

Change won’t be easy: President Barack Obama’s fiscal year 2016 and 2017 budgets each included a proposal to make bonds used to finance stadiums and arenas taxable. The Treasury Department estimated Obama’s proposed change would bring in $542 million over 10 years.

That’s a lot of money, especially when Congress and the White House are looking for ways to fund tax reform and tax cuts.

But even if these latest bills became law, they likely wouldn’t change existing subsidies.

Lee Igel, a professor at New York University School of Professional Studies’ Tisch Institute for Sports Management, Media, and Business, told Tax Analysts that existing stadium financing agreements are usually “pretty well locked up” and would have to be undone. Taking away existing subsidies, Igel said, “would take a number of legal maneuvers over time” and would likely result in lawsuits.

As for potential future tax subsidy restrictions, what are the odds of Russell’s or Booker’s bills making it to Trump’s Oval Office desk for his signature? Right now, less than those for the struggling New York Giants to win Super Bowl LII.

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Tax Reform Issues

Speaker Ryan explaining tax reform at 10/4/17 Facebook Event,
holding the postcard form (see my comment below though)

There are a lot of uncertainties in trying to fully understand tax reform with a few pages of ideas where lots of important information is missing. Don’t get me wrong, tax reform is needed as our system is too complex, inequitable, inefficient and doesn’t collect all of the tax owed (leaves about $385 billion uncollected annually).

On 10/10, Speaker Ryan noted 5 ways that tax reform will save people taxes in 2018. Each seems correct, but each has uncertainty connected with it because we don’t have legislative language yet or hides that the framework, despite suggestions of modernization, doesn’t fully modernize our tax system. Here are his five items:

1. Bigger standard deductions – He says it will be “nearly doubled.” The framework indicates, for example, that the standard deduction for a single person will be $12,000. It is $6,300 today. What he doesn’t say though is that the personal and dependency exemptions go away. Today, that’s $4,050 per person. While the child credit is supposed to increase and apply to more families, today, it only applies to children under age 17 while the dependency exemption can cover some children up to age 23. So, not enough details yet to indicate that any individual paying income tax today will see lower income taxes in 2018, particularly if they have a few children and lose itemized deductions that would have been larger than the new standard deduction.

2. Lower individual rates – The framework suggests rates of 12%, 25% and 35% and perhaps a higher rate for high income individuals. Today, the lowest rate is 10%.  Actually, the lowest rate today and under the plan is 0%. If someone today has income too low to pay income taxes, that should continue under the framework. These folks – about 45% of individual filers, won’t see bigger paychecks. There is no talk of lowering the 15.3% payroll tax. Some of these zero bracket filers might be getting a larger refundable child credit, but they won’t see that until they file their tax return. Also, we don’t know where the rate brackets start and end so we don’t know for sure if everyone drops income into lower rates.

3. Capped rate on small business of 25% – Leading up to the release of the framework, there was talk that this would not apply to all businesses and perhaps some personal services, such as accounting, would not get the cap. Again, depending on where the individual rates start and end, most small business owners should not be in the 35% rate because they are not today. [TaxProToday, 9/13/17]

4. Immediate write-offs for business investments – The framework suggests allowing expensing of capital investments. Ideally, this would also include intangibles and both acquisition of new and used depreciable property.  Details are missing.

5. Increased child tax credit – Apparently, this is to adjust for repeal of the dependency exemption. The dependency exemption though can apply to more than your child. Also, the current child credit covers a narrower age range than the dependency exemption.

Speaker Ryan also notes that if compliance costs go down, that is also a tax cut. I’m not sure we’ll see a significant drop in compliance costs. There are still complexities such as the child tax credit and hopefully, the Earned Income Tax Credit remains. Promotion of IRS VITA sites and other low-income tax preparation clinics would help keep compliance costs down for many.

Caution – A postcard size return doesn’t say anything about the complexity level of a system. We could file on postcards today if the IRS would take less information on the components of our taxable income. The postcard in the Republican blueprint of June 2016 didn’t have a place to sign or a penalty of perjury statement or information about the taxpayer or where to deposit any refund.  AND, why are we modernizing our tax system to fit on a postcard rather than to use today’s technology to not even have to file for most people because the system already has enough information to just sent a bill or deposit the overpaid taxes in your account or send you a secure debit card?

There is a lot of good about tax reform and it would be good to hear more about that rather than claims that don’t seem completely accurate or complete.  And there is a lot of information often missing such as the effect on the deficit and debt, distribution of the tax cuts among different income levels, transition, timing, and more. Speaker Ryan’s 10/10 post includes a video of him explaining the tax system and notes many good ideas, we just need to be critical listeners and watch for missing pieces.

IRS e-Services is bait in new tax ID theft phishing scheme


Tax identity thieves apparently are paying close attention to official security moves that the Internal Revenue Service is making and using that information to create new schemes.

The latest effort by crooks to steal taxpayer personal data comes in the form of a new phishing scam designed to steal tax professionals’ passwords and data.

e-Services is hook for latest ID theft effort: In an email alert sent this (Oct. 11) afternoon to tax pros, the IRS warned that this latest scheme tries to trick them into signing a new e-Services user agreement.

The phishing email claims to be from “e-Services Registration” and uses “Important Update about Your e-Services Account” in the subject line.

The fake email states, in part, “We are rolling out a new user agreement and all registered users must accept its revised terms to have access to e-Services and its products.”

The scam message asks tax pros to review and accept the agreement. However, tax preparers who follow the phishers’ instructions end up going to a fake site instead.

Real IRS e-Services changes on the way: This phishing scam comes just as the IRS is about to tighten its online authentication procedures.

Later this month, says the IRS, its e-Services will move to Secure Access authentication, which employs two-factor protections. Cybercriminals likely will make more last-ditch efforts to compromise tax professionals and their valuable client data before the security system transition is complete.

Remember, notes the IRS, identity theft schemes over the past few years have become more sophisticated and adaptive, like the changes made this summer to the massive fake IRS agent telephone tax scam.

Everyone — tax professionals and all us individual taxpayers — should be cautious when we receive any tax or financial-related unsolicited emails.

Take scam precautions: If you haven’t yet received the phishing email, the standard security recommendations from the IRS and its Security Summit partners apply to this situation. They include:

  • Be leery of any email seeking confidential data.
  • Never, ever, ever open a link or an attachment from an unsolicited email. Legitimate software providers and the IRS do not embed links into emails asking tax pros to validate passwords.
  • Make sure that every member of your tax and/or accounting office knows these rules in order to protect not only your clients’ data, but also your tax business.
  • Alert the IRS of the phishing attempt by sending a copy of it to

If, however, you have clicked on this link, the IRS suggests you perform a deep scan with your security software, contact your office’s IT/cybersecurity personnel and get in touch with the IRS e-Help Desk.

You also can read more about what the IRS is doing to protect accounts with Secure Access authentication at the agency’s e-Services landing page on

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10 filing tips for folks who got a Form 1040 tax extension

Tax deadline reminder

Based on Internal Revenue Service tax return filing data, it looks like around 7 million Americans have yet to submit their 2016 forms.

They need to get busy. (Yes, I get to say they, not we, this year since I filed my 1040 this summer.) The absolute, final due date is less than a week away.

The six-month filing extension typically kicks the extended deadline to Oct. 15. But since that’s on a Sunday this year, the IRS is giving extreme procrastinators until Monday, Oct. 16.

So that you don’t waste any of these last few days you have to work on filling out your Form 1040 — not to mention not wasting any possible tax savings — here are 10 last-minute filing tips.

1. File by Oct. 16. 
No kidding. This is it. If you miss this deadline, you’ll face penalties for not filing, which are stiffer than those for not paying. If you’re filing electronically, you have until midnight your time to get your return to the IRS. But don’t wait until 11:59 p.m. to hit send. Your computer could crash. The system could be jammed with lots of other late filers. So send it as early in the day as possible.

If you’re going the old-fashioned route, get to your local U.S. Post Office in time to have the envelope postmarked Oct. 16. That’s considered timely filing by the IRS.

You also can use a private delivery service if you wish. Again, check with the approved carriers as to when you need to get your tax material to them so they can get it to the IRS by Oct. 16.

2. Try IRS Free File.
If your adjusted gross income is $64,000 or less, you still can use Free File, the online tax preparation and e-filing option created by the IRS and the tax software industry.

Even if you made more than this year’s Free File income threshold, you still can use the online program’s downloadable forms option. It’s also free. And while there’s no electronic tax prep help, if you know what you need to put on which forms, you can fill them out online and e-mail them at no cost.

Both Free File options are available at through Oct. 16.

3. Don’t cheat yourself.
We all have a tendency under pressure to make mistakes. And there’s no pressure like tax filing pressure. Don’t let it get to you or it could cost you.

Check out these 10 common filing mistakes and make sure you don’t make any of them. They could mean you’ll end up owing Uncle Sam more.

Similarly, don’t be in such a final filing rush that you overlook tax breaks and cost yourself valuable tax savings.

4. Pay any tax you owe.
When you got your filing extension, you paid a good estimate of what you thought your final tax liability would be. If, however, you discover that your underestimated, pay up with your filing.

The bad news is that the IRS will add under-penalties to your due amount. So pay it in full with your filing, or at least as much as you can. If you need to, set up an installment agreement to pay the bill over time.

If you are paying your full tax bill, you have several electronic options. You can use IRS Direct Pay, which will move the money directly (hence the name) from your checking or savings account to the U.S. Treasury. If you have an Electronic Federal Tax Payment System (EFTPS) account, you can pay that way. You also can pay with your credit or debit card.

5. Use direct deposit. 
Yes, it’s true. Some folks who get refunds put off filing. I don’t get it, either, but who am I to judge. If that’s your case, you can make sure you finally get your tax cash back more quickly by e-filing and telling the IRS to directly deposit your self-belated refund.

6. Don’t panic if you’re in a disaster area.
People who have an extension and live or work in a disaster area often have more time to file. Currently, taxpayers impacted by Hurricanes Harvey, Irma and Maria as well as people in parts of Michigan and West Virginia qualify for this relief. The IRS’ disaster relief page (as well as the recovery section of the ol’ blog’s Storm Warnings page) has more information.

7. Take your time if you’re in a combat zone.
If you’re serving the United States in a combat zone, you have more important things to think about than filing 1040s. The IRS understands. Military members and those serving in a combat zone generally get more time to file. If this applies to you, you typically have until at least 180 days after you leave the combat zone to both file returns and pay any taxes.

8. Don’t FUBAR your FBAR.
New laws changed a lot of tax deadlines this year. Most of the due-date changes affected businesses.

But one change applies to owners of foreign financial accounts. The new annual due date for filing Reports of Foreign Bank and Financial Accounts, or FBAR, for foreign financial accounts is April 15 to coincide with the federal income tax filing season.

The change, which was part of the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015, also provides for a maximum six-month extension of the filing deadline. That automatic extension also coincides with the individual extension due date of Oct. 15, or this year on Oct. 16.

Remember, you must file a FBAR electronically with the Financial Crimes Enforcement Network (FinCEN) if you had an interest in, or signature or other authority, over foreign financial accounts whose aggregate value exceeded $10,000 at any time during the tax year.

9. Make tax-saving retirement contributions.
Sorry, this advice doesn’t apply to IRAs. That deadline came and went back in April.

But as I posted earlier, if you’re self-employed and got an extension, that also gave you an extension to contribute to your self-employment retirement account. If you don’t have such an account, you also have until Oct. 16 to open one and then contribute.

10. Don’t forget your state tax returns.
If you filed for a federal tax extension, you probably got one for your state tax returns, too, since they tend to rely on your federal 1040’s data. Make sure you give yourself enough time as the October deadline nears to finish up your state returns, too.

That’s it. Now get to work on those tax returns! If you finish them this week, you can enjoy your weekend without worrying about Oct. 16.




Retirement tax moves to make by Oct. 16

Retirees enjoying a lazy day outdoors-left_Pug50 via Flickr

So that you can enjoy lazy days in your retirement like this couple, take advantage of tax-saving retirement moves by the October filing extension deadline. (Photo by Pug50 courtesy Flickr CC)

If you’re one of the millions who’s put off filing your tax return until October, you know that due date — it’s Monday, Oct. 16, this year — is just a week away.

But mid-October is also a key deadline for other tax tasks, particularly when it comes to retirement savings.

Here are a couple of retirement-related tax matters to consider, and take care of if they apply to you, by next Monday.

Open or contribute to your self-employment retirement plan.
Self-employed folks, be it full-time or even just the occasional side hustle to supplement regular paychecks, can open or add to a self-employment retirement plan if we got a filing extension.

This is a tax technique I have personally used over the years. The extra six months gives me time to come up with my self-employment retirement plan money. Even better, I then deduct that contribution as an above-the-line deduction.

Depending on your income, your self-employment plan contribution also might make you eligible to claim the retirement saver’s tax credit. This tax break, which maxes out at $1,000, rewards low- and moderate-income individual for adding to their retirement accounts. Even better, it’s a credit, which means it directly reduces your tax bill dollar-for-dollar.

You have a wide variety of self-employment retirement plans from which to choose. If you haven’t opened one yet, do it now and take advantage of putting in tax-saving money by Oct. 16.

Recharacterize your Roth conversion.
When you converted your traditional IRA to a Roth IRA last year, it seemed like a good idea. Now not so much.

The good news is that you get a do-over. But you need to act fast.

If you have second thoughts about your Roth, tax law gives you until the October extension deadline of the tax year following the conversion year to put the money back into a traditional IRA. Again, this year that’s Monday, Oct. 16.

Why would you want to go back from a tax-free retirement plan to a tax-deferred one? The most common reason to reverse a Roth conversion is that the retirement account has lost money since the change.

That means in addition to the Roth being worth less, you owe income tax on the converted amount. A recharacterization can erase that Roth conversion tax bill.

The market’s been surging, so if that’s your situation, in addition to recharacterizing your under-performing Roth IRA, you might want to reconsider your financial adviser. But that’s a post for another day.

Whatever your reason for Roth recharacterization, don’t wait until the final day.

You can’t move the money from your Roth back to a traditional IRA yourself; it must be done trustee-to-trustee. You need to get that process underway before the deadline, like this week.

You also might find these items of interest: