Friday, May 27, 2016

IRS Warns of Latest Scam Variation Involving Bogus “Federal Student Tax”

WASHINGTON — The Internal Revenue Service today issued a warning to taxpayers about bogus phone calls from IRS impersonators demanding payment for a non-existent tax, the “Federal Student Tax.”

Even though the tax deadline has come and gone, scammers continue to use varied strategies to trick people, in this case students. In this newest twist, they try to convince people to wire money immediately to the scammer. If the victim does not fall quickly enough for this fake “federal student tax”, the scammer threatens to report the student to the police.

“These scams and schemes continue to evolve nationwide, and now they’re trying to trick students,” said IRS Commissioner John Koskinen. “Taxpayers should remain vigilant and not fall prey to these aggressive calls demanding immediate payment of a tax supposedly owed.”

Scam artists frequently masquerade as being from the IRS, a tax company and sometimes even a state revenue department. Many scammers use threats to intimidate and bully people into paying a tax bill. They may even threaten to arrest, deport or revoke the driver’s license of their victim if they don’t get the money.

Some examples of the varied tactics seen this year are:
  • Demanding immediate tax payment for taxes owed on an iTunes gift card.
  • Soliciting W-2 information from payroll and human resources professionals--IR-2016-34
  • “Verifying” tax return information over the phone--IR-2016-40
  • Pretending to be from the tax preparation industry--IR-2016-28
The IRS urges taxpayers to stay vigilant against these calls and to know the telltale signs of a scam demanding payment.

The IRS Will Never:
  • Call to demand immediate payment over the phone, nor will the agency call about taxes owed without first having mailed you a bill.
  • Threaten to immediately bring in local police or other law-enforcement groups to have you arrested for not paying.
  • Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.
  • Require you to use a specific payment method for your taxes, such as a prepaid debit card.
  • Ask for credit or debit card numbers over the phone.
If you get a phone call from someone claiming to be from the IRS and asking for money and you don’t owe taxes, here’s what you should do:
  • Do not give out any information. Hang up immediately.
  • Contact TIGTA to report the call. Use their “IRS Impersonation Scam Reporting” web page or call 800-366-4484.
  • Report it to the Federal Trade Commission by visiting and clicking on “File a Consumer Complaint.” Please add “IRS Telephone Scam” in the notes.
  • If you think you might owe taxes, call the IRS directly at 1-800-829-1040.
More information on how to report phishing or phone scams is available on

Thursday, May 19, 2016

IRS Marks National Military Appreciation Month; Free Tax Guide Focuses on Tax Benefits for Members of the Military

WASHINGTON — May is National Military Appreciation Month, and the Internal Revenue Service wants members of the military and their families to know about the many tax benefits available to them.

Each year, the IRS publishes Publication 3, Armed Forces Tax Guide, a free booklet packed with valuable information and tips designed to help service members and their families take advantage of all tax benefits allowed by law. This year’s edition is posted on Available tax benefits include:
  • Combat pay is partly or fully tax-free.
  • Reservists whose reserve-related duties take them more than 100 miles from home can deduct their unreimbursed travel expenses on Form 2106 or Form 2106-EZ, even if they don’t itemize their deductions.
  • Eligible unreimbursed moving expenses are deductible on Form 3903.
  • Low-and moderate-income service members often qualify for such family-friendly tax benefits as the Earned Income Tax Credit, and a special computation method is available for those who receive combat pay.
  • Low-and moderate-income service members who contribute to an IRA or 401(k)-type retirement plan, such as the federal government’s Thrift Savings Plan, can often claim the saver’s credit, also known as the retirement savings contributions credit, on Form 8880.
  • Service members stationed abroad have extra time, until June 15, to file a federal income tax return. Those serving in a combat zone  have even longer, typically until 180 days after they leave the combat zone.
  • Service members may qualify to delay payment of income tax due before or during their period of service. See Publication 3 for details including how to request relief.
Service members who prepare their own return qualify to electronically file their federal return for free using IRS Free File. In addition, the IRS partners with the military through the Volunteer Income Tax Assistance program to provide free tax preparation to service members and their families at bases in the United States and around the world.

Wednesday, May 18, 2016

Getting Advance Payments of the Premium Tax Credit? Remember to Report Changes in Circumstances

If you purchased 2016 health care coverage through the Health Insurance Marketplace, you may have chosen to have advance payments of the premium tax credit paid to your  insurance company to lower your monthly premiums. If this is the case, it’s important to let your Marketplace know about significant life events, known as changes in circumstances.

These changes – such as those to your income or family size – may affect your premium tax credit. Reporting the changes will help you avoid getting too much or too little advance payment of the premium tax credit.  Getting too little could mean missing out on premium assistance to reduce your monthly premiums. Getting too much means you may owe additional money or get a smaller refund when you file your taxes. If your income for the year turns out to be too high to receive the premium tax credit, you will have to repay all of the payments that were made on your behalf, with no limitation.   Changes in circumstances that you should report to the Marketplace include:
  • an increase or decrease in your income
  • marriage or divorce
  • the birth or adoption of a child
  • starting a job with health insurance
  • gaining or losing your eligibility for other health care coverage
  • changing your residence
Changes in circumstances may qualify you for a special enrollment period to change or get insurance through the Marketplace. In most cases, if you qualify for the special enrollment period, you will have sixty days to enroll following the change in circumstances. You can find Information about special enrollment at

The Premium Tax Credit Change Estimator can help you estimate how your premium tax credit will change if your income or family size changes during the year. This estimator tool does not report changes in circumstances to your Marketplace. To report changes and to adjust the amount of your advance payments of the premium tax credit you must contact your Health Insurance Marketplace.

Find out more about the premium tax credit and other tax-related provisions of the health care law at