IRS cautions taxpayers about identity theft

The IRS has made preventing identity theft a top priority this year.

Here’s what identity thieves have been doing: They steal a taxpayer’s personal information and use it to file a tax return claiming a refund under the taxpayer’s name. Then when the taxpayer actually files a return, the IRS won’t accept it and notifies the taxpayer that a return under his name and ID number has already been filed.

The IRS recommends that taxpayers should do the following in order to avoid becoming an identity theft victim:

* Guard your personal information. Identity thieves can get your information by stealing your wallet or purse, going through your trash, or posing as someone who needs your information for a legitimate reason.

* Watch out for IRS impersonators. Don’t fall for phone calls, faxes, e-mails, or other contacts made by people claiming to be from the IRS. Don’t respond to the message. Don’t open any attachments in an e-mail or click on any links. Do not enter your personal information.

The IRS recommends that you enter “phishing” in the search box at the top of its website (www.irs.gov) to get more information on avoiding tax scams. E-mail suspected scams to phishing@irs.gov.

* Protect information on your computer. Protect your tax information with a password, and once you’re finished with your tax data, take it off your hard drive.

David Bradsher, CPA

New law causes filing season delay

The delayed passage of the “American Taxpayer Relief Act of 2012” has put the IRS behind schedule. Due to several provisions of the law affecting 2012 tax returns, the IRS could not open the Form 1040 filing season for the majority of taxpayers until late January.

Those taxpayers filing Form 5695 (Energy Credit), Form 4562 (Depreciation), and Form 3800 (General Business Credit) will not be able to file until late February or possibly not until March. Apparently a large percentage of taxpayers in this group typically file later in the season because they have more complex returns.

The IRS must complete the updating of forms and computer programming and testing before it is ready to accept any filings either on paper or electronically. The IRS said that taxpayers will receive refunds faster by e-filing and using direct deposit.

If we can be of assistance to you in preparing any of your 2012 tax filings, please contact us.

David Bradsher, CPA