Monthly Archives: February 2017
Today, I was fortunate enough to record a radio interview on The Lake Effect Radio WUWM 89.7FM. The interview topic was on tax scams and how they effect everybody. We are always trying to educate our clients on the tax scams that are out there to protect them from being taken advantage of. I have wrote about these topics many times before, but educating the public about them can not happen enough.
The tax industry is a prime target for criminals to attack. The first real threat to taxpayers came during the 2014 tax season when we began to notice that tax returns were being rejected by the e-file system due to a tax return already being filed under a social security number. To be honest, I am surprised that it took this long for tax returns to be the source of identity theft. Identity theft has been going on for years, but this was the first time it effected the tax industry. The IRS combated the issue by issuing PIN’s to those who’s identity had been compromised. We have seen a decline in the number of tax identity theft cases because of this, but it is still an issue.
The next real threat began in the summer of 2015. This is when we began receiving phone calls from our clients about phone calls that they were receiving from the IRS. We would get these phone calls almost daily, and you could tell some of our clients were really shook up by it. These scam phone calls threatened that if you didn’t pay tax that you owed, you would be put in jail. Since this time, the police have finally began to crack down on the call centers overseas that were conducting these calls. There has been a decline in the volume of call being made, but I know that they are not done.
The next phase of tax scams has shifted to e-mail. Not only are taxpayers being targeted, but tax professionals are also being targeted. As a taxpayer, never click on any link or respond to any e-mail that you are uncertain of. You can forward the e-mail to email@example.com. As tax professionals, we have received e-mails inquiring about our services. They are pretty easy to sniff out based on certain characteristics, so we have not fell subject to their attempt. Their end goal is to use our credentials to file a tax return or to try and hack into our database. All of our client information is kept in a secure, encrypted location. We keep up to date with all tax scams and take extreme precaution to ensure all client information is safe.
Criminal activity, and specifically scams are a never ending cycle. There is always going to be something that someone out there is going to try and exploit to make easy money. Hammernik & Associates will always be ahead of the curve in educating you about potential scams that are out their involving the tax industry.
Here are some key points to always remember….
Nick’s Tax Security Steps
- The IRS will never call you. They communicate via snail mail. Never give out any personal or financial information to somebody you do not trust over the phone.
- Refrain from sending personal and financial information via e-mail. E-mail has become an unsafe venue to send documents, as they can easily be intercepted. Make sure that if you do send something through e-mail that it is encrypted. The preferred method to send documents online is through a secure portal, which we have here at Hammernik & Associates.
- If you receive a suspicious e-mail, do not click on any links or reply to the message. Either immediately delete it, or report it to the IRS.
- If you don’t recognize a phone number that is calling you…don’t answer it. If it is something important, they can leave you a voicemail.
- Trust your gut. If something doesn’t feel right to you, take precaution.
- Find somebody that you can trust to help you make sure you do not fall victim to a scam. We are staffed with Enrolled Agents, the highest credential awarded by the IRS to tax professionals, this means that we can talk to the IRS on your behalf. If you are not sure if it is really the IRS contacting you, let us handle it for you.
- Tax scams are a year-round cycle, they don’t just happen during tax season. We are here all year to answer any questions you have. Don’t be afraid to ask before giving out your information to anyone.
Here’s a link to the IRS website that provides info on how to report suspected tax fraud activity:
The radio segment is set to air in the next couple of weeks. We will announce the day and time when it is known, and we will also post the audio when it becomes available.
Have a great weekend,
Nicholas Hammernik, EA
College tuition has become one of the biggest sources of debt for those who choose to further their education at a University. It is the burden that one takes on for improving their knowledge and skill set to further their career. A way to reduce the amount of tuition that you pay is to apply for certain scholarships and/or grants. This is a great way to reduce the amount of student loans to pay off down the road.
However, when it comes to scholarships and grants, they may be reducing the amount of education credits that you are receiving on your tax return. Education credits are based upon the amount of tuition that was actually paid. Thus, tuition that was paid with scholarships and grants does not count. When reporting Form 1098-T (tuition tax form) you will report both the total tuition and total scholarships/grants. The amount that can be used towards education credits is tuition-scholarships/grants. The American Opportunity Credit is the most beneficial education credit out there. This credit can be up to $2,500 for students in their first 4 years of college. The amount of credit that you will receive is based upon the amount of eligible tuition expenses that you have. Many times students with scholarships will not be able to maximize this full credit, because their tuition expenses just aren’t enough to do so.
So, how do we get the full education credits that are available?
Are you a parent that claims your child as a dependent and they have a scholarship or grant?
We have strategies available to maximize that credit for you and get you a larger refund. If you are someone in this situation and have yet to file your tax return, please contact our office before doing so. If you have already filed your tax return, we can look into amending your tax return if we think changing things will benefit you.
Don’t leave an extra refund out there, call 414-545-1890.