Optima Tax Relief provides assistance to individuals struggling with unmanageable IRS tax burdens. To assess your tax situation and determine if you qualify for tax relief, contact us for a free consultation.
The IRS will send a notice regarding the debt as well as the penalties and interest that have also accrued in addition to your balance.
Failing to provide all relevant information on your tax return could result in you receiving a certified letter from the IRS notifying you that information was missing.
For those that have already filed their taxes, they may think that tax season no longer affects them but that may not necessarily be true. Some taxpayers may receive a certified letter in the mail from the IRS after filing their tax return notifying them of a balance due or that some information was missing on their tax return. If you’ve received a notice from the IRS, don’t panic, there are options available to you that the IRS offers.
You owe a tax balance.
If you’ve already filed your taxes and owed a tax balance that you have yet to pay off, the IRS will send a notice regarding the debt as well as the penalties and interest that have accrued in addition to your balance. For those taxpayers who are unable to pay their tax liability in full, the IRS offers installment payments that can be made over a period of time in order to satisfy your debt. The IRS will typically present you with a payment plan based on the income that was provided on your tax return. If your income has changed or you are unable to afford the payment plan that was presented to you, it is recommended that you consult with a tax professional to see what additional options you may have.
Information is missing on your tax return.
Failing to provide all relevant information on your tax return could result in you receiving a certified letter from the IRS notifying you that information was missing and they need further assistance from you in order to process your return. Typically this letter is sent to taxpayers who have failed to provide all forms of income on their return and will need to submit additional proof to avoid the IRS looking further into the situation.
Identity theft has caused your tax return to be rejected.
The IRS will notify a taxpayer if they believe that there may be fraudulent activity occurring on their tax return. The IRS will send a letter to you inquiring about a suspicious tax return that you may have not filed. The IRS will request that you do not e-file your return because of the duplicate social security number that was used. Act quickly should you receive this letter from the IRS to avoid further fraudulent activity with your personal information.
If you need tax help, contact us for a free consultation.
Optima Tax Relief provides assistance to individuals struggling with unmanageable IRS tax burdens. To assess your tax situation and determine if you qualify for tax relief, contact us for a free consultation.
Tax Season leaves many taxpayers vulnerable to identity theft and scammers.
Scammers can pose as tax preparers and steal your personal information.
Protect your social security and bank information to ensure it does not end up in the wrong hands.
Ask your tax preparer how you can avoid your personal information getting leaked if there is a data breach.
Most people don’t realize how vulnerable they are to fraud during tax season. The scary truth is that during this time of year, many identities are stolen and fraudulent tax returns are unwittingly filed on behalf of a taxpayer. In order to protect yourself, it is vital to exercise caution and provide only the documents and information that are absolutely necessary. Below are a few scams to be aware of during tax time to help avoid becoming a fraudster’s next victim.
Phone and Email Scams
The most obvious way to protect yourself against scammers is to never give out your personal information to someone you don’t know, especially over the phone. If someone from the “IRS” is attempting to contact you over the phone or by email and asks for your social security or card information, don’t give it to them. The IRS almost never contacts via phone, instead preferring to send notices via mail. Even if you do receive a call from the IRS, they won’t ask for your social security number – they already have that information. If you feel uncomfortable about the validity of a call, hang up and call the IRS yourself – that way you know if what they’re telling you is true.
Accountant fraud
Be wary of scammers who will pose as a tax preparer and then rip off customers through refund fraud or identity theft. These phony accountants will tell you that they can get you a large tax refund and typically prey on low-income and non-English speaking taxpayers.
Even if you go to a legitimate tax preparer, your information can still be exposed if there is a data breach. To avoid this happening – and being left vulnerable – ask your tax preparer what more you can do to protect your information in case of a breach.
Identity theft
Make sure to protect your social security number at all costs. Identity thieves will attempt to steal this information in order to steal not only your identity but your tax refund too. As long as you notify the IRS that your information has been compromised and your refund has been stolen, the IRS will work with you to provide your refund. However, it will take extensive time and paperwork to prove that your information was stolen.
Medical Identity Theft
Financial fraud such as a stolen credit card can be frustrating but can be quickly resolved since it’s easier to detect, and often doesn’t have significant long-term financial impacts. Medical identity fraud, on the other hand, can cost a victim $13,500 on average and be notoriously difficult to resolve. Because of advancements in electronic communication and collaboration in the healthcare industry, personal health information (PHI) is more exposed and accessible. At the same time, this doesn’t always mean that your health provider is on the same page with your insurer. PHI is rarely tracked across multiple networks and this gap can make stealing and using it feasible.
In conclusion…
Tax Season is now upon us, and it’s important to protect your personal information and ensure that it can’t be compromised. Always be wary of phone calls or emails that you receive claiming to be from the IRS, especially when they’re asking for your bank information or social security number. Also, do your research when looking for a tax preparer to file your taxes for you, and make sure they have their license, as well as positive reviews from previous clients. Lastly, make sure to monitor your social security number to ensure that your data has not been breached and your identity hasn’t been stolen.
If you need tax help, contact us for a free consultation.
As a taxpayer, one of the most frightening things you could receive in the mail is an IRS letter. Depending on the notice that you receive from the IRS, it can cause anxiety and fear, and you may even feel unsure about what your next move will be or what tax solutions may be available to you. The IRS does have tools available that taxpayers can utilize for IRS tax help, even if they received a notice that makes it unclear what their next steps would be. Below are some of the most common collection notices sent out to taxpayers every year.
CP501/502
If you’ve received a CP501 notice, it means that the IRS is attempting to notify you of a past balance due. The IRS will request that you take action in order to resolve your outstanding balance. A CP502 notice also doubles as a reminder that the IRS sends about your tax balance. Typically, each notice indicates the interest and penalties that have accrued in addition to what you owe to the IRS.
If you receive these types of notices, the IRS is letting you know of what the current balance, including interest and penalties, is owed. Once you confirm that the balance is accurate, you can either pay the balance for the tax year in question or contact the IRS to get set up on a payment plan.
CP504
A CP504 notice is a secondary notice that the IRS will send to alert you of your tax debt if you owe a tax balance. This notice is to also notify you that they’re preparing to start collection action and to seize any tax refund you may have received. The IRS will continue their collection action against a taxpayer until their balance is paid in full.
To avoid the IRS sending you into collections, it is important to stay compliant. You can do this by paying off your balance in full with the IRS or asking to be placed on a payment plan. It is also paramount that you continue to monitor your mail to ensure that you don’t receive any further notices from the IRS.
LT11/CP90
An LT11 is a notice to remind a taxpayer that they have an overdue payment for overdue taxes.
The IRS will send a CP90 notice if they have attempted to reach out to a taxpayer multiple times about their tax balance and have yet to receive a response. The letter states that the IRS has the intent to seize a taxpayer’s property or rights to their property if they fail to resolve their outstanding balance.
Both these notices are a warning that the IRS will begin to take collection action against the taxpayer and it is up to the taxpayer to either continue to stay in collections with the IRS or settle their debt and get compliant. At this point in time, it is vital that you attempt to rectify the situation and get help with IRS debt by contacting them immediately to resolve your liability in addition to any interest and penalties that you have accrued.
Regardless of what notice you have received, it is important to review the notice and resolve the situation if needed. The IRS typically sends written communication to taxpayers to notify them of their tax balance and to reconcile their liability as soon as possible. If you need tax help and don’t know the first step to resolving your balance with the IRS, a tax relief company may be your best bet. A tax relief company will work with the IRS on your behalf to address your tax issues so you can be compliant moving forward.
Optima Tax Relief provides assistance to individuals struggling with unmanageable IRS tax burdens. To assess your tax situation and determine if you qualify for tax relief, contact us for a free consultation.
The IRS can be problematic to deal with – especially if you don’t have a clue about anything tax-related. For those who owe a liability to the IRS, it is important to understand how the IRS works in addition to any potential action the IRS can take against you. If a tax balance is owed, they can place you into collections, garnish your paychecks, place a lien on your physical assets, or even levy your bank account(s). Here is what you need to know about the IRS taking action against you, and how to prevent yourself from tax liabilities.
3 Different Tax Liabilities
Tax Liens
A tax lien is something that the IRS can place against you if you owe any tax liabilities. The IRS has the ability to place liens on physical assets such as a home or vehicle in order to ensure they receive the max amount of money if a taxpayer intends on selling their assets; they will take a portion of the profit of the sold asset and apply it to the balance owed to them. You can avoid having a lien placed against you by paying your balance owed in full and on time or, if you cannot afford to pay your balance off, you can contact the IRS to see what type of payment plan options you can be placed on.
Tax Levies
The IRS would send several collection notices warning a taxpayer of their intent to levy if the balance owed has yet to be paid in full. A tax levy occurs once the IRS considers you a delinquent taxpayer and they will go after your bank accounts, wages, or property in order to settle the debt that is owed. In some cases, the IRS will only seize a small sum of money from a taxpayer. Other times, they will take a taxpayer’s entire savings and apply it to their tax balance. To stop an IRS tax levy, you can contact them directly and request they release the levy if you can prove that you are currently in a hardship. They will also release their levy if you can pay the amount owed in full, the collection period to collect the tax liability on your balance has ended, or the value of your property is more compared to the amount owed to the IRS.
Tax Garnishments of Wages
The IRS can also garnish your wages if you have an unpaid balance. The IRS can legally seize your income and apply it to the balance owed to them and garnish your paychecks, commissions, or any bonuses. There are a couple of ways to stop the IRS from garnishing you, you can either pay your balance in full or contact the IRS to set up a payment plan or hardship agreement if you qualify.
The IRS will act against those who fail to pay their tax balance and they can and potentially will attempt to garnish, levy, or place a lien against you should you ever owe tax liabilities. It is expected that all taxpayers remain compliant with the IRS and adhere to the most current tax laws in order to stay out of collections.
Optima Tax Relief provides assistance to individuals struggling with unmanageable IRS tax burdens. To assess your tax situation and determine if you qualify for tax relief, contact us for a free consultation.
You’ve just received a notice from the IRS. It indicates that, after multiple attempts to get in touch with you, they are going to levy you. You start to panic; you don’t remember the IRS ever attempting to reach out to you. Maybe you’ve never even owed a tax liability. After calling the number on the notice, the agent on the line tells you to pay up – or face the consequences. Afraid that the IRS will levy your bank account – and possibly seize your house – you provide your payment information over the phone. You check your bank account and your entire savings are gone. You contact the number again, but the line has been disconnected. When you do get in touch with a real IRS Agent, they tell you that you never owed a balance with them in the first place. You were just scammed.
Millions of Americans will receive communication from scammers impersonating the IRS, using scare tactics to get people to fork over their hard earned money. These scammers will attempt to take your money by calling your personal phone, sending malicious emails, and sending fake letters like the one in the example above. Below we will break down these different forms of communication and the different tactics they will take to gain your trust and steal your money.
One of the most common forms of tax scams is by leaving automated voicemails on your personal phone that tell you the IRS will be collecting on owed taxes or that there is a warrant for your arrest. In some cases, they will even mirror their number to make it appear similar to an actual IRS number. These fraudsters will most likely ask for cash payments sent to a temporary address or try to get you to tell them your social security number. Some may even ask for your bank account number directly in an attempt to bleed your account dry.
Sending false emails is a tactic known as “phishing.” When people click on a link in these emails, it uploads a virus that steals your sensitive information, allowing them access to your passwords, and even your bank accounts and credit cards.
Fake IRS notices are sent in an attempt to have you call the number listed on the letter. Once they have you on the line, they bully you just so they can gain access to your personal information. The letter itself may look like it was directly sent to you by an assigned revenue officer from the IRS, and it can be difficult to tell the difference.
There are ways to protect yourself from scammers. It is important to know that the IRS will never ask for your bank account or card information over the phone, nor will they ever demand you to pay back your supposed balance immediately without first providing you with balance due notices in the mail. The IRS will also never ask you for your payment in one specific or unusual way, such as with gift cards or prepaid cards. In addition, if the IRS is claiming that there are discrepancies on your tax return and you feel as though their claim is wrong, the IRS will allow you to provide proof your tax return is accurate. Finally, the IRS will never call you and tell you that they are going to have you arrested or sued for not paying your tax liability back to them.
It is important to always verify where the source of notices, phone calls or emails you receive are coming from. Owing the IRS can be frightening, but what’s even scarier is knowing that there are scammers preying on taxpayers, trying to steal from them. Always be cautious and aware of your tax situation and be sure to verify who you’re speaking with and where your money is going. You can contact the IRS directly at 1-800-829-1040 or you can go directly onto the IRS’s website to learn more about preventative measures to take to ensure you won’t get scammed.
Some safeguards you can take to stay protected this tax season are:
Schedule time with your tax preparer now so you can get your taxes done as early as possible. This will help decrease the chances that a fraudster will get your refund before you do.
Sign up for Scam Alerts from the FTC to stay abreast of all the dirty tricks scammers are currently using.
Talk to someone in your HR department to see if you can get your W-2 before it’s mailed out. This will help ensure that you actually receive it so you don’t have to risk it being lost or stolen in the mail.
Never send emails with personally identifiable information (PII) attached. It’s best to never send them through email at all, but if you must, you should encrypt your message by making a change in your email’s security settings.
Beware of computer scams. These can come via email or as popups on your computer asking for your personal information.
Always use a professional, trustworthy tax preparer. Sometimes, even national tax preparation chains can scam you out of your money or use less-than-secure procedures when it comes to handling your personal information. Make sure you use someone you trust.
Never provide any personal information over the phone to someone who says they are from the IRS. The IRS will never contact you via phone, email or social media.
Optima Tax Relief provides assistance to individuals struggling with unmanageable IRS tax burdens. To assess your tax situation and determine if you qualify for tax relief, contact us for a free consultation.
