IRS Warns against Fake IRS Emails and Phone Calls

Tax scammers are using email and phone calls that appear to come from the IRS, using the IRS name and logo. Scammers often call or email potential victims to release their personal and financial information, which, if obtained, is used to commit identity theft or to steal the victim’s money. Some call to demand payment on a pre-aid debit card or by wire transfer. The IRS has provided advice on what to do (or not do) upon receiving this type of “phishing” email or a phone call from someone claiming to be from the IRS. IRS Tax Tip 2014-19.

On 2/19/2014, the IRS published its annual list of prevalent tax scams that taxpayers may encounter. The list covers a broad range of schemes including identity theft, phone scams, phishing, and return preparer fraud. Although these types of tax scams may be used at any time of year, the IRS has noted that this type of fraudulent activity peaks during the spring filing season. The Dirty Dozen list reminds taxpayers to use caution when preparing their returns and makes them aware of which patterns indicate criminal behavior. News Release IR 2014-16 .

On 2/14/2014, the IRS released its first set of statistics regarding the 2014 tax filing season. Tax filings as of 2/7/2014 had increased by 2.5% over those filed at the same time last year. Electronically filed returns account for almost 96% of the returns filed so far this year. More than 13 million tax returns have been filed from home computers, an increase of 14.7% compared to the same time last year. Almost 19.5 million refunds have been issued this year, an increase of over 18% compared to this time period last year. News Release IR 2014-15

An unemployed taxpayer who lived in Florida agreed to a work assignment for a company in Missouri and was assured that the assignment would be completed by the end of the year, at which time the employment would end. The taxpayer paid for his own lodging expenses (a hotel during the first few weeks, followed by an apartment lease). Due to financial difficulties, the company ended the employment arrangement within six months. On his tax return for that year, the taxpayer claimed mileage expenses of $4,060 and $27,200 for food and lodging (the $170 per diem rate for meals, incidental expenses, and lodging × 160 days) as unreimbursed employee business expenses. The IRS disallowed the deductions due to lack of substantiation and because it didn’t consider them ordinary and necessary business expenses. The Tax Court disagreed, concluding that the taxpayer’s six-month work assignment was temporary and that his “tax home” didn’t shift to Missouri. Thus, he was entitled to deduct travel, lodging, and meal expenses related to the job. However, some of deductions were reduced because he failed to substantiate his expenses and/or they were personal in nature. Roj. C. Snellman, TC Summary Opinion 2014-10 .