h/t Waukesha Freeman
Experts warn of tax scams as deadline nears
Technology has offered new opportunities for fraud
|By: DAVE FIDLIN – Special to The Freeman||April 1, 2017|
|BROOKFIELD — With weeks to go before the tax filing deadline, swaths of people motivated by deadlines will be handing over sensitive information to professionals to have documents drawn up.
Amid the flurry of activity, local professionals are cautioning people to be mindful of when and where they are giving out sensitive personal information, including Social Security numbers and financial histories.
As with many aspects of life, electronic methods have increased the ease and efficiency in having tax documents prepared. But those same electronic methods have also presented a new series of opportunities for scammers.
“We don’t encourage people to send much information by email,” said Neil Keller, a partner-in-charge of tax services at Sikich LLP’s Brookfield office. “Emails can be intercepted very easily.”
In lieu of sending electronic copies of important documents by email, Keller said he recommends people send their data through a secure, encrypted file sharing service that has more safeguards up against scammers, hackers and other persons who might attempt fraudulent activity.
Enhanced technology also has eased scammers’ ability to access Social Security numbers, despite the litany of safeguards that are in place.
Nick Hammernik of West Allis-based tax services firm Hammernik and Associates said he has met with several clients in recent years that have fallen victim to identity theft. Scammers had fraudulently filed tax returns under the victims’ Social Security numbers and names.
While filing taxes at the last minute does not have any inherent penalties,
Hammernik said filing early in the tax season lessens a scammer’s ability to fraudulently use a victim’s Social Security number.
“Unfortunately, once a person’s Social Security number has been used fraudulently, they can’t file through the traditional method,” Hammernik said. “You have to fill out an identity theft affidavit, and the (Internal Revenue Service) issues you a PIN number.”
Because of its authority, Keller said people tend to be intimidated by the IRS. Scammers take advantage of this fear, he said, as evidenced by the prevalence of phone scams that have cropped up in recent years.
There have been widespread reports of scammers claiming to be with the IRS and demanding, over the phone, that sensitive information be furnished. Keller said he was the recipient of once such call recently.
“The most important thing people should know is the IRS operates a lot by mail,” Keller said. “They won’t be calling you over the phone for information, especially during a first attempt.”
Technology aside, Hammernik said it is important to remember some tried-and-true pieces of wisdom that were important long before computers took hold of everyday life.
“It’s important you are trusting who you are giving your tax returns to,” Hammernik said. “They should be a licensed professional.”
Keller said he encourages people to be mindful of where they store any physical paper copies of documents linked to tax preparation.
“Anything you don’t want should be shredded,” Keller said. “This is especially true if it has your Social Security number on it. Anything you do want should be kept in a secure place.”
In case you missed the radio segment which aired earlier this week on 89.7 FM, I hopped on the radio recently to talk about past, current, and future tax scams. It is our goal to educate our clients and the public of ways to avoid becoming victim to such scams. As always, please contact our office is you ever have any questions about this topic.
Listen Here : http://wuwm.com/post/avoiding-scams-tax-filing-season
Avoiding Scams This Tax Filing Season
BY MITCH TEICH
The often-dreaded April 15th deadline for filing tax returns to the federal and state governments is just under a month away. It’s a busy season for tax preparers – both professional and amateur.
But in the haste and the pressure many feel to get our taxes filed, it is also a season in which some of us could fall victim to scams or other fraud. The sophistication of tax scams has been on the rise for a few years now, according to tax consultant Nick Hammernik.
“2014 tax season is when we really started to notice things happening,” he says. “During that time, we were getting tax returns that were being rejected by the electronic filing system with the IRS because the tax return was already filed under their Social Security Number, which pretty much means that someone got a hold of their Social Security Number and filed a phony tax return under their name.”
Victims of this kind of scam do have recourse. Hammernik says they generally file a paper copy of their taxes with an identity theft affidavit and a copy of their legal identification. In response, the IRS issues them a pin number for the next time they file their taxes, and a different pin number for each additional year.
While Hammernik says issuing a pin number to everyone filing taxes may increase security, he admits that scammers would likely just start looking for ways to get hold of the pin numbers instead. Many scams depend on people being tricked by the scammers over phone or through email.
He warns that any financial information can be valuable to scammers and advises “to keep any financial records that you have, physical copies in a secure location, locked up. Electronic copies, you want to make sure that those are encrypted or stored in a secure location.”
Scammers often gain access to your computer by viruses spread by links in emails. “Anything online that you think is suspicious, do not click on it, do not respond to it,” says Hammernik.
He suggests reporting any suspicious emails or phone calls by contacting the IRS directly at: phishing@IRS.gov.
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 firstname.lastname@example.org. 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.
When Will I Get My Tax Forms?
As I am writing this post on January 20, 2017, the IRS officially opens the 2016 tax return filing in 3 days. Tax season is here, which means that it is time to gather all of your tax documents that are needed to prepare a tax return. So, when will you be receiving all of these forms? These dates are also important if you are a business owner and need to issue any W-2’s or 1099’s.
|Form||Due to Recipient||E-file to IRS|
|1099-MISC||Feb 1, 2016||Mar 31, 2016|
1099-MISC boxes 8 or 14
|Feb 15, 2016||Mar 31, 2016|
|Other 1099 Forms
|Feb 1, 2016||Mar 31, 2016|
|W-2||Feb 1, 2016||Mar 31, 2016|
- Health Insurance Statements through the Marketplace (Form 1095-A) should be available in your online account by 2/1/17. This year, employers have until 3/2/17 to distribute health insurance statements (Form 1095- B or C) to their employees.
- If you are involved in a Partnership or S-Corporation, when you receive your K-1 will depend on when the Partnership or Corporation decides to file their tax return. The filing due date is 3/15/17, but you may have to wait longer if they decide to file an extension.
- Rule of Thumb: If you receive a document that you think may be pertinent to your tax return, keep it just in case! If you need a guideline to make sure you have all the documents you need, you can download our tax organizer.
Get Your Tax Return Won?
Having a background in marketing, I always pay attention to commercials and all aspects involved in them. Some people may change the channel when commercials are on, but I enjoy analyzing them. Naturally, I am even more interested when I see commercials during tax season. I realize that these large corporations have a massive marketing budget, and in most cases they are trying to repeatedly beat a message into your mind. However, I have found some of these campaign messages laughable. Last year, Turbo Tax is the company that really gave me a chuckle. “You don’t need to be a genius to do your own taxes”. While this statement is true(BREAKING NEWS: I AM NOT A GENIUS), you don’t need to be a genius to do 99% of things in life. There is a difference between being a genius and being an expert in your field. Do you need to be a genius to repair your car? No, but you take it to a mechanic because they are experts in fixing cars. The alternative is trying to fix it on your own, and then you run the risk of creating more damage and wasting your time. You can apply this reasoning to almost everything in life that you opt to have someone professionally do for you. You can try to do your own taxes, but is it worth the time and also the risk of a) dealing with the IRS or b) missing out on a potential extra refund.
This year, H&R Block hands down takes the cake so far. They have cast Jon Hamm to be their spokesman in a bunch of just weird commercials. Their message is “Get Your Tax Return Won”. How does one get their tax return won? I suppose their message is to try and make consumers feel like they became a winner when they got their taxes done at H&R Block? In that case, you get your tax return “won” if it is prepared correctly. I would think that if you are hiring a professional to help you with your taxes, a correct tax return is assumed. Broadcasting that this is a big deal to them just misses the mark in my opinion. The truth is, you can’t win against the tax system when filing your tax return. The outcome is already decided at that time, there isn’t anything you can change besides contributing to an IRA. Winning your tax return takes a game plan, a game plan that must be executed before the end of the year.
Hammernik & Associates motto is “More Than Just A Tax Return”. This means that we aren’t just here to help you file your taxes, we are here throughout the year to help you execute that winning game plan. Your game has already been decided for 2016, do you think you won or loss? Now is the time to begin the game for 2017. Who will win, you or the IRS? The only true way to get your tax return won is to set up a game plan now!
end rant 🙂
Today is the day a new President steps into office.Whether you are in favor or not in favor, it is important to be prepared for what may come. When Donald Trump was elected President, I put together an e-book of what he would like to do with tax law. Some of these ideas may never come to fruition, some may come sooner than you expect, some may come in the future, and some may come in a modified form. As we always stress, it is important to prepare for what may come in the future. Take a look to see if any of these may effect you positively or negatively. Either way, we will be on top of tax law changes for you. Major tax planning may be needed to prepare for some of the changes, that is what we are here for!
Once you think you have all your tax documents, give us a call to schedule your appointment…we’re waiting!
Until next time,
Nicholas Hammernik, EA
With the holiday season upcoming, we thought it would be a great idea to compare your finances to the classic Christmas tale, “A Christmas Carol”. The main plot for this story is the life of one, Ebenezer Scrooge. The ‘Ghost of Christmas Past’ takes Scrooge back in time to remind him of how his life used to be and the way he used to act. The ‘Ghost of Christmas Present’ gives Scrooge a synopsis of his current daily life. Finally, the “Ghost of Christmas Future’ takes Scrooge into the future and shows him how his life will look in the future if he keeps living the same way he is in the present. So, let’s see how this compares to your financial situation…
My Financial Past, Present & Future
Your Financial Past:
- Hammernik & Associates helps taxpayers recover from mistakes that they may have made in their past. If information was accidentally not reported on a prior tax return, or if a tax return was not filed correctly, we are able to file an amended tax return for up to 3 years.
- What if you receive a letter from the IRS saying that they want to make changes to a prior tax return, or they want to audit your tax return? As Enrolled Agents, we are able to address these situations for you. We are able to correspond with the IRS on your behalf so that you don’t need to personally speak to them at all!
- The IRS is on your back for past taxes that you owe them. They have the power to place liens on your accounts and start taking the money that you owe them. Hammernik & Associates is able to represent you and get you back on the right track. We will work with the IRS agent to remove any liens, get a payment plan in place, and get you on the road back to financial freedom.
Your Financial Present:
- The tax code is always changing, and may be in store for another overhaul in the new presidency. Hammernik & Associates is always studying and taking classes to keep up with all tax law changes. Have the peace of mind that you are receiving all the credits and deductions that you deserve and are reducing your tax liability.
- Stay compliant. We will help make sure the tax return that you are submitting is compliant with IRS standards to avoid future problems.
- Set a game plan now for the next year. Maybe you did not take advantage of tax planning this year and it cost you some money, don’t make the same mistake again for the next year. Get a game plan set up now that will help you in the future.
Your Financial Future:
- You cannot change the present (your tax return when it is filed) if you don’t plan for the future. Be proactive with your tax planning. There may be strategies available that can save you money at the end of the year by taking actions throughout the year.
- If you expect changes in your life that may effect your financial situation, plan for them now!
- Definition of Insanity: Doing the same thing over and over and expecting different results. What are you going to change? It’s your future, make it great.
My Financial Past, Present & Future is the basis around our Year End Newsletter which is set to hit our client’s mailboxes next week. If you would like to view an electronic version of the newsletter, it can be viewed on the homepage of hammernikassoc.com. Also available there, you will find our tax organizer if you want to get a head start on gathering up all of your tax documents.
Merry Christmas & Happy Holidays!
…Tax Season Is Coming.
2017 Filing Season Begins January 23rd
The IRS has announced that it will begin accepting electronically filed tax returns on January 23rd, 2017. What does this mean for taxpayers? You can have your tax return prepared earlier than the 23rd if you have all of your documents, however, the tax return cannot be submitted until 1/23/17.
Note: There is no advantage to trying to file a tax return earlier than this by mail, it will not get filed any earlier than the 23rd.
Tax Filing Deadline is April 18th
Typically when you think of the last day to file a tax return, you think April 15th. However, the Tax Gods blessed us with 3 extra days this year! Yay…
This year, April 15th falls on a Saturday. This results in having to move the day to the next business day, which is Monday. However, Monday the 17th is a legal holiday in Washington D.C., Emancipation Day. Therefore, Tuesday the 18th is the last day to file a tax return without an extension to avoid late filing.
Reminder: Refunds To Be Delayed
As I blogged about a couple of months ago, the IRS is delaying certain refunds until February 15th. If you file for certain credits on your tax return, your refund will be delayed to allow extra time to verify the credits that are claimed. The IRS is warning that these refunds may be delayed until February 27th based on workflow. Plan accordingly.
It is always important to plan ahead for your tax return filing. Identity theft is not dead, and a good way to combat it is to file as early as you can. Once you are confident you have all the necessary documents needed to file a tax return, schedule your appointment to come in!
Next Friday is Black Friday. Next Saturday is Small Business Saturday. Instead of waking up at 4 am to wait in line at a big box retailer on Friday, explore the small businesses that help your community thrive on Saturday. As a small business ourselves that specializes in helping small businesses with their accounting, Small Business Saturday is a movement that we are totally behind. A small business not only helps the economy of your community, but it also provides jobs to your community.
While we suggest that you support your small businesses throughout the year, American Express decided to dedicate a specific day to promote small businesses. They started the movement in 2010 and it has grown to the point where last year approximately 95 million people went out to shop at a small business last year. American Express also adds incentive to their credit cars holders by giving extra rewards for purchases at small businesses. You can search for local small businesses in your area here: SBS Locations. Some communities have come together to promote the day. Take for instance, the Third Ward. They have created a website dedicated to Small Business Saturday that displays the local small businesses and some deals that they are offering for the day:Third Ward SBS.
Through my experience working with small business owners, I have learned a lot about what small business is all about. A small business owner really loves what they do. They enjoy providing the services in which they provide, they enjoy helping their customers, and they enjoy being part of their community. There are not any corporate agendas involved, the business is like a family.
We help these owners with their small business accounting in Milwaukee, Waukesha, Brookfield, New Berlin, Wauwatosa, West Allis, Mukwonago, Oconomowoc, and other surrounding cities. Our goal is to provide these business owners with more time to focus on growing their business.
Small Business Saturday this year is on Saturday, November 26th. Please show your support to the small businesses that you frequent often, or try out a new business for the first time. Save your money that you would give to a corporate business on Black Friday and use it to support your community. If you know of any small businesses that you think people should visit next Saturday, please feel free to share on our Facebook Page. You can follow along with the movement by using the hashtag on social media of #shopsmall.
Happy Small Business Saturday!
My fellow American taxpayers,
On Tuesday night, Donald J. Trump was elected as the next President of the United States. Whether you are happy, upset or indifferent with that outcome, one thing is for certain, uncertainty with the tax code lies ahead. ‘Trump Tax’ is here. However, this is nothing new; the tax code is always evolving, it has been for the past 100 years. Just take a look at what a 1040 tax form looked like in the year 1913:
That’s right…one page. Today, some taxpayers have a tax return the size of a High School textbook. Hammernik & Associates wasn’t around in 1913, but we have been staying on top of the tax code for the last 30 years. Over that time span, there have been many overhauls, tweaks, and changes to the way you report your income tax today. No matter the uncertainty that lies ahead with your tax return, rest assured that Hammernik & Associates will use our proactive approach to keep or clients informed and prepared for possible change.
With that being said, Donald Trump wants to change your tax return. Does this scare you, or are you intrigued that his proposals might save you money?
TRUMP TAX PROPOSALS
- Goodbye, Obamacare?
- Tax Bracket Change
- Standard Deductions Rise
- Child Care Credit Increase
- Alternative Minimum Tax (AMT) Removed
- Net Investment Income Tax (NIIT) Removed
- Estate Tax Removed
- Flat Tax Rate For All Businesses
Do you want to find out how Trump might effect YOUR tax bill? We have put together an E-Book, “The 7 Ways Donald Trump Wants To Change Your Taxes”. You can download this E-Book on the homepage of our website, www.hammernikassoc.com.
Hammernik & Associates will stay ahead of the Trump changes, as well as any other change to the tax law. We will help you tax plan for your unique tax situation. With tax uncertainty looming, it is a good idea to ask your tax professional about our tax planning packages when you meet with them in a few months. Make Hammernik & Associates your trusted candidate for the role of tax adviser in 2017 and the future.
P.S. Milwaukee tax accountants Dale Hammernik, Dave Biskup, and Nick Hammernik will be holding a ‘Trump Tax’ round table for a more in depth discussion of the tax proposals from Donald Trump. Stay tuned for the release of that video next week.
Our office is full of leftover Halloween candy. It is hard to walk by it all day an resist grabbing something to snack on. How about you? Did you sneak a stash of your kid’s candy for personal use. Halloween candy is like Thanksgiving dinner…there is always going to be leftovers! So, Milwaukee, can that leftover candy help with your tax preparation this year?
I came across this article from one of my favorite follows, Kelly Phillips Erb, who is a writer for Forbes.
The title of this article can be a little tricky if you take it literally, but what a treat this article is to read. You can use the tax consequences in this article for any exchange of goods that apply.
A lot of this article is tongue and cheek, but #7 is actually a legitimate use for leftover candy. If you can find a qualified charitable organization that accepts candy, you can deduct the fair market value of the candy that you donate to them.
What about that costume that you wore for Halloween this year? Think you will ever use it again? If not, donate it to Goodwill and not only receive a tax deduction, but you might help out somebody looking for an affordable costume next Halloween!
While we are on the topic of charitable donations, Hammernik & Associates is jumping on board with Movember to raise awareness for men’s health. While you may be accustomed to always seeing Dale with a mustache, you might be seeing a few more mustached men around the office this month. Donate Here!
Halloween candy and mustaches…exactly what you thought you would read about in a tax blog, right? 😉
Enjoy this beautiful fall weekend!
Nicholas Hammernik, EA
Halloween circa 2007