Scam Phone Calls Continue; IRS Identifies Five Easy Ways to Spot Suspicious Calls

Scam Phone Calls Continue; IRS Identifies Five Easy Ways to Spot   Suspicious Calls

WASHINGTON — The Internal Revenue Service issued a consumer alert today providing taxpayers with additional tips to protect themselves from telephone scam artists calling and pretending to be with the IRS.
These callers may demand money or may say you have a refund due and try to trick you into sharing private information. These con artists can sound convincing when they call. They may know a lot about you, and they usually alter the caller ID to make it look like the IRS is calling. They use fake names and bogus IRS identification badge numbers. If you don’t answer, they often leave an “urgent” callback request.
“These telephone scams are being seen in every part of the country, and we urge people not to be deceived by these threatening phone calls,” IRS Commissioner John Koskinen said. “We have formal processes in place for people with tax issues. The IRS respects taxpayer rights, and these angry, shake-down calls are not how we do business.”
The IRS reminds people that they can know pretty easily when a supposed IRS caller is a fake. Here are five things the scammers often do but the IRS will not do. Any one of these five things is a tell-tale sign of a scam. The IRS will never:
1. Call you about taxes you owe without first mailing you an official notice.
2. Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.
3. Require you to use a specific payment method for your taxes, such as a prepaid debit card.
4. Ask for credit or debit card numbers over the phone.
5. Threaten to bring in local police or other law-enforcement groups to have you arrested for not paying.
If you get a phone call from someone claiming to be from the IRS and asking for money, here’s what you should do:

• If you know you owe taxes or think you might owe, call the IRS at 1.800.829.1040. The IRS workers can help you with a payment issue.
• If you know you don’t owe taxes or have no reason to believe that you do, report the incident to the Treasury Inspector General for Tax Administration (TIGTA) at 1.800.366.4484 or at www.tigta.gov.
• If you’ve been targeted by this scam, also contact the Federal Trade Commission and use their “FTC Complaint Assistant” at FTC.gov. Please add "IRS Telephone Scam" to the comments of your complaint.

Remember, too, the IRS does not use email, text messages or any social media to discuss your personal tax issue. For more information on reporting tax scams, go to www.irs.gov and type “scam” in the search box.
Additional information about tax scams are available on IRS social media sites, including YouTube http://youtu.be/UHlxTX4rTRU?list=PL2A3E7A9BD8A8D41D. and Tumblr http://internalrevenueservice.tumblr.com where people can search “scam” to find all the scam-related posts.

Back-to-School Tax Credits

Back-to-School Tax Credits

Are you, your spouse or a dependent heading off to college? If so, here’s a quick tip from the IRS: some of the costs you pay for higher education can save you money at tax time. Here are several important facts you should know about education tax credits:  

• American Opportunity Tax Credit.  The AOTC can be up to $2,500 annually for an eligible student. This credit applies for the first four years of higher education. Forty percent of the AOTC is refundable. That means that you may be able to get up to $1,000 of the credit as a refund, even if you don’t owe any taxes.
• Lifetime Learning Credit.  With the LLC, you may be able to claim a tax credit of up to $2,000 on your federal tax return. There is no limit on the number of years you can claim this credit for an eligible student.
• One credit per student.  You can claim only one type of education credit per student on your federal tax return each year. If more than one student qualifies for a credit in the same year, you can claim a different credit for each student.  For example, you can claim the AOTC for one student and claim the LLC for the other student.
• Qualified expenses.  You may include qualified expenses to figure your credit.  This may include amounts you pay for tuition, fees and other related expenses for an eligible student. Refer to IRS.gov for more about the additional rules that apply to each credit.
• Eligible educational institutions.  Eligible schools are those that offer education beyond high school. This includes most colleges and universities. Vocational schools or other postsecondary schools may also qualify.
• Form 1098-T.  In most cases, you should receive Form 1098-T, Tuition Statement, from your school. This form reports your qualified expenses to the IRS and to you. You may notice that the amount shown on the form is different than the amount you actually paid. That’s because some of your related costs may not appear on Form 1098-T. For example, the cost of your textbooks may not appear on the form, but you still may be able to claim your textbook costs as part of the credit. Remember, you can only claim an education credit for the qualified expenses that you paid in that same tax year.
• Nonresident alien.  If you are in the U.S. on an F-1 student visa, you usually file your federal tax return as a nonresident alien. You can’t claim an education credit if you were a nonresident alien for any part of the tax year unless you elect to be treated as a resident alien for federal tax purposes. To learn more about these rules see Publication 519, U.S. Tax Guide for Aliens.
• Income limits. These credits are subject to income limitations and may be reduced or eliminated, based on your income.

For more information, visit the Tax Benefits for Education Information Center on IRS.gov. Also, check Publication 970, Tax Benefits for Education. You can get it on IRS.gov or by calling 800-TAX-FORM (800-829-3676).

Additional IRS Resources:

• Education Credits – AOTC and LLC
• Education Credits: Questions and Answers
• Education Credits Frequently Asked Questions and Answers
• Form 1098-T, Tuition Statement (see instructions for student)
• Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits)
• Form 1040A, U.S. Individual Income Tax Return
• Form 1040, U.S. Individual Income Tax Return

IRS YouTube Videos:

• Education Tax Credits – English | Spanish | ASL

IRS Podcasts:
Education Tax Credits – English | Spanish

2012 Individual Income Tax Returns Complete Report (Publication 1304) Now Available

2012 Individual Income Tax Returns Complete Report (Publication 1304) Now Available

WASHINGTON — The Internal Revenue Service today announced the availability of Statistics of Income—2012, Individual Income Tax Returns Complete Report (Publication 1304). U.S. taxpayers filed 144.9 million individual income tax returns for tax year 2012, down 0.3 percent from 2011. The adjusted gross income less deficit reported on these returns totaled $9.1 trillion, which is an 8.7-percent increase from the prior year.
The report is based on a sample drawn from the 144.9 million individual income tax returns filed for tax year 2012 and provides estimates on sources of income, adjusted gross income, exemptions, deductions, taxable income, income tax, modified income tax, tax credits, self-employment tax, and tax payments.
Classifications include tax status, size of adjusted gross income, marital status, age, and type of tax computation. A brief text reviews the requirements for filing tax returns, explains the changes in tax law, and describes the sample used to produce the report. Publication 1304 is currently available for download at irs.gov/taxstats.
For more information about these data, please write to the Director, Statistics of Income Division, RAS:S, Internal Revenue Service, 1111 Constitution Avenue, K-Room 4122, Washington, DC 20224.

Seven Good Reasons Why You Should Become a Tax Volunteer

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Seven Good Reasons Why You Should Become a Tax Volunteer

If you’re looking for a way to help others in your community, then think about becoming a tax volunteer. The IRS is looking for people who will provide free tax help next year.

The Volunteer Income Tax Assistance and Tax Counseling for the Elderly programs offer free tax help across the country. Each year VITA and TCE volunteers prepare tax returns for free for people with low-to-moderate incomes. 

Here are seven good reasons why you should become a VITA or TCE volunteer.
1.    You don’t need prior experience. You’ll receive specialized training and can serve in a variety of roles. You can even help those who do not speak English if you are fluent in another language.

2.    The IRS provides free tax law training and materials. You’ll learn how to prepare basic tax returns and learn about tax deductions and credits that benefit eligible taxpayers. These include credits such as the Earned Income Tax Credit, Child Tax Credit and Credit for the Elderly.

3.    The volunteer hours are flexible. Volunteers generally serve an average of three to five hours per week. The programs are usually open from mid-January through the tax filing deadline in April. A few sites are open all year.

4.    VITA and TCE sites are located in communities throughout the nation. Sites are often set up in neighborhood centers, libraries, schools, shopping malls and other similar places. The programs offer free tax preparation and free electronic filing for both federal and state tax returns.

5.    You can also help those who serve our country, because the IRS also needs volunteers to provide tax help to military personnel and their families.

6.    As a volunteer, you’ll join a program that’s helped millions of people file tax returns at no charge for more than 40 years. Your help will make a difference. It’s people helping people. It's that simple.

7.    Tax Professionals (Enrolled Agents and Other Tax Return Preparers) can earn Continuing Education Credits when volunteering as a VITA/TCE instructor, quality reviewer or tax return preparer. See the IRS fact sheet for more information on Continuing Education Credits.

To find out more, visit IRS.gov and type "tax volunteer" in the search box. If you are interested you will need to submit Form 14310, VITA/TCE Volunteer Sign Up, by email through the IRS website.


Additional IRS Resources:

• IRS Tax Volunteers
• IRS Free Tax Return Preparation Programs
• Link & Learn Taxes

Electronic Management System (EMS) Downtime for BATS in Memphis

Electronic Management System (EMS) Downtime for BATS in Memphis

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The Electronic Management System, located at Memphis, Tennessee will be unavailable for Business Acceptance Testing (BATS) beginning Friday, August 8, at 6:00 a.m. Eastern Time until August 11, 2014 at 12:00 p.m. Eastern Time for maintenance. We apologize for any inconvenience this may cause you.

Free Webcast about The Affordable Care

What: Free Webcast about The Affordable Care Act: How Applicable Large Employers Should Report Health Care Coverage under IRC Section 6056

When: August 14, 2014, Noon (Eastern)  

Learn about 

• Internal Revenue Code Section 6056 
• Who is required to report
• What elements are required to be reported
• When Applicable Large Employers must report
• How do government entities designate reporting

Register for this event. You will use the same link to attend the event.

Please feel free to forward this message to anyone who you believe would be interested and value this educational opportunity.

If you have any questions about this presentation, please send us an e-mail.

Vacation Home Rentals

Vacation Home Rentals

If you rent a home to others, you usually must report the rental income on your tax return. But you may not have to report the income if the rental period is short and you also use the property as your home. In most cases, you can deduct the costs of renting your property. However, your deduction may be limited if you also use the property as your home. Here is some basic tax information that you should know if you rent out a vacation home:

• Vacation Home.  A vacation home can be a house, apartment, condominium, mobile home, boat or similar property.
• Schedule E.  You usually report rental income and rental expenses on Schedule E, Supplemental Income and Loss. Your rental income may also be subject to Net Investment Income Tax.
• Used as a Home.  If the property is “used as a home,” your rental expense deduction is limited. This means your deduction for rental expenses can’t be more than the rent you received. For more about these rules, see Publication 527, Residential Rental Property (Including Rental of Vacation Homes).
• Divide Expenses.  If you personally use your property and also rent it to others, special rules apply. You must divide your expenses between the rental use and the personal use. To figure how to divide your costs, you must compare the number of days for each type of use with the total days of use.
• Personal Use.  Personal use may include use by your family. It may also include use by any other property owners or their family. Use by anyone who pays less than a fair rental price is also personal use.
• Schedule A.  Report deductible expenses for personal use on Schedule A, Itemized Deductions. These may include costs such as mortgage interest, property taxes and casualty losses.
• Rented Less than 15 Days.  If the property is “used as a home” and you rent it out fewer than 15 days per year, you do not have to report the rental income.
• Use IRS Free File.  If you still need to file your 2013 tax return, you can use IRS Free File to make filing easier. Free File is available until Oct. 15. If you make $58,000 or less, you can use brand-name tax software. If you earn more, you can use Free File Fillable Forms, an electronic version of IRS paper forms. Free File is available only through the IRS.gov website.

Publication 527 is available on IRS.gov. You can also call 800-TAX-FORM (800-829-3676) to get it by mail.

Additional IRS Resources:

• Tax Topic 415 - Renting Residential and Vacation Property
• Rental Income and Expenses - Real Estate Tax Tips

IRS YouTube Videos:

• Renting Your Vacation Home – English | Spanish | ASL

IRS Podcasts:

• Renting Your Vacation Home – English | Spanish