Tax Concerns Post Tax Season

  
     
May 16, 2017

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Honolulu, HI – May 10, 2017: Tax season ended weeks ago, but many people may still have tax-related concerns, from a missing tax refund check to IRS calls and maybe a potential audit. Hawaii’s Better Business Bureau has the tips and resources to help consumers navigate these confusing and potentially scary tax situations.

Missing Tax Refund Check

If a person filed their taxes weeks ago and is expecting a tax refund, but has yet to receive it, they may be wondering where it is and how to go about checking on its status. 

If a person is wondering where their tax refund is, here is what they need to do according to the IRS. 

  1. Gather all the necessary information. In order to check the status of your tax refund, you will need your social security number, your filing status, and the exact amount you were expecting. 
  2. Check your return status. Your tax return may not have been processed yet, or there may be an error that needs your attention. You can check your tax refund status online if you e-filed, or by calling the IRS at 1-800-829-1040. 
  3. Check your federal tax refund status. If your refund was supposed to come as a direct deposit, contact your bank and see if the deposit was attempted. After, contact the IRS for an update on your refund status. Again this can be done online with the IRS or by calling 1-800-829-1954.

 

Many different things can affect a tax refund. Some tax services may allow a person to pay with their refund. If a person opted for this option, this could cause a minor delay. Also, a paper check rather than direct deposit could take longer.

If at any time a person discovers any strange activity related to their refund or they suspect it may have been stolen, they should contact the IRS immediately at 1-800-829-1040.

 

IRS Calls

The IRS Tax Scam has been the most reported scam nationwide for several years. This scam is most often in the form of a phone call. The caller states that they are with the IRS and they are calling about back taxes due. The caller aggressively tries to intimidate and scare the victim into immediately wiring money to a numbered account.

A twist to the fake IRS call, which is gaining popularity among scammers, involves the scammer using a pre-recorded voice. This pre-recorded voice tells the potential victim that the IRS is trying to contact them and then supplies a number to call back at.

 

Some red flags that the call a taxpayer receives is a scam include:

  • It is the first they have heard about the debt. Tax agencies don’t call, text, or email without first contacting you by mail.
  • The taxpayer is pressured to act immediately. Scammers typically try to push a victim into action before they have had time to think.
  • Payment must be made by wire transfer, prepaid debit card, or other non-traditional payment methods. These methods are largely untraceable and non-reversible.

 

When educating consumers about the IRS scam, the BBB marketplace team used to be able to say, “if anyone calls stating that they are with the IRS and you have back taxes due, hang up!” however this is no longer true. The IRS has hired four independent tax collection agencies who will be calling people to collect past due taxes. Both the IRS and the BBB have identified that this may cause some confusion for taxpayers who are not sure whether the call they are receiving is a scam call.

 

The four companies awarded the contracts to collect on debt are:

  1. CBE Group, 1309 Technology Parkway, Cedar Falls, IA 50613
  2. Performant, 333 N Canyons Parkway, Livermore, CA 94551
  3. Conserve, 200 CrossKeys Office Park, Fairport, NY 14450
  4. Pioneer, 325 Daniel Zenker Dr, Horseheads, NY 14845

 

Additional resources and precautions in relation to these new regulations can be found on the BBB website.  

 

If a taxpayer receives a call from a private collection agency and has any concerns or wants to file a complaint, the IRS advises taxpayers to contact the Treasury Inspector General for Tax Administration (TIGTA) at 800-366-4484, online at tigta.gov or in writing to:

Treasury Inspector General for Tax Administration Hotline, PO Box 595, Ben Franklin Station, Washington DC 20044-0589.

 

Tax Audit

Whether a person has been audited or simply fears they may be at some point, understanding some of the key things that may trigger an audit can help with the stress. Here are 4 IRS audit red flags according to TurboTax.

 

  1. Missing Income: Unreported income is one of the easiest red flags to avoid, but one that is easily overlooked. The IRS will match all reportable income against the items you file. A missing income source will trigger at least a letter audit.
  2. Foreign accounts: Law requires that individuals must report foreign assets worth at least $50,000. The Foreign Account Tax Compliance Act has strict reporting requirements for foreign bank accounts and requires overseas banks to identify American asset holders and provide that information to the IRS.
  3. Business Expenses: Excessive business tax deductions could raise a red flag. The IRS compares typical amounts of business travel and business expenses by profession and a tax return showing 20% or more above the norm will possibly be flagged.
  4. Earning more than $200,000: The more money one make, the more likely they may be to be audited. Last year only 1% of those who made less than $200,000 were audited. 12.5% of people who made over $1 million were audited.

 

If a taxpayer does face an audit here are some things they can expect.

  • If a person is audited the first thing they should do is look back over the return in question. Since most audits will be on past tax returns, they will want to familiarize themselves once again with what is reported on it. Once they have done this, they should begin collecting all the materials needed to support the items in question by the IRS.
  • They may want to seek out assistance from a professional, such as a certified public accountant (CPA). They can begin their search for trusted CPAs and other tax professionals with the BBB directory.
  • Make sure to only supply the required documentation for the items in question to the IRS.
  • If the audit occurs at a person’s place of business, and not via writing or in the IRS office, inform employees not to speak with the IRS agents. All questions should be handled by the person in question. The meeting should be recorded. In order to record the meeting be sure to let the IRS know in writing, 10 days prior.
  • Underpayment may result in a 20%, 75%, or due interest penalty. Serious cases may result in prison time.

 

For more advice on how to handle IRS scams or other tax-related scams, consumers can visit the tax tip's section of the BBB website.

 

ABOUT BBB: For more than 70 years, Hawaii’s Better Business Bureau has been helping people find businesses, brands and charities they can trust. In 2015, people turned to BBB more than 172 million times for BBB Business Reviews on more than 5.3 million businesses and Charity Reports on 11,000 charities, all available for free at bbb.org. The Council of Better Business Bureaus is the umbrella organization for the local, independent BBBs in the United States, Canada and Mexico, as well as home to its national programs on dispute resolution, advertising review, and industry self-regulation.

 

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