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Irs e file extension Publication 80 - Introductory Material Table of Contents Future Developments What's New Reminders Calendar Future Developments For the latest information about developments related to Publication 80 (Circular SS), such as legislation enacted after it was published, go to www. Irs e file extension irs. Irs e file extension gov/pub80. Irs e file extension What's New Social security and Medicare tax for 2014. Irs e file extension  The social security tax rate is 6. Irs e file extension 2% each for the employee and employer, unchanged from 2013. Irs e file extension The social security wage base limit is $117,000. Irs e file extension The Medicare tax rate is 1. Irs e file extension 45% each for the employee and employer, unchanged from 2013. Irs e file extension There is no wage base limit for Medicare tax. Irs e file extension Social security and Medicare taxes apply to the wages of household workers you pay $1,900 or more in cash or an equivalent form of compensation. Irs e file extension Social security and Medicare taxes apply to election workers who are paid $1,600 or more in cash or an equivalent form of compensation. Irs e file extension Change of responsible party. Irs e file extension . Irs e file extension  Beginning January 1, 2014, any entity with an employer identification number (EIN) must file Form 8822-B, Change of Address or Responsible Party—Business, to report the latest change to its responsible party. Irs e file extension Form 8822-B must be filed within 60 days of the change. Irs e file extension If the change in the identity of your responsible party occurred before 2014, and you have not previously notified the IRS of the change, file Form 8822-B before March 1, 2014, reporting only the most recent change. Irs e file extension For a definition of “responsible party”, see the Form 8822-B instructions. Irs e file extension Same-sex marriage. Irs e file extension  For federal tax purposes, individuals of the same sex are considered married if they were lawfully married in a state (or foreign country) whose laws authorize the marriage of two individuals of the same sex, even if the state (or foreign country) in which they now live does not recognize same-sex marriage. Irs e file extension For more information, see Revenue Ruling 2013-17, 2013-38 I. Irs e file extension R. Irs e file extension B. Irs e file extension 201, available at www. Irs e file extension irs. Irs e file extension gov/irb/2013-38_IRB/ar07. Irs e file extension html. Irs e file extension Notice 2013-61 provides special administrative procedures for employers to make claims for refund or adjustments of overpayments of social security and Medicare taxes with respect to certain same-sex spouse benefits before expiration of the period of limitations. Irs e file extension Notice 2013-61, 2013-44 I. Irs e file extension R. Irs e file extension B. Irs e file extension 432, is available at www. Irs e file extension irs. Irs e file extension gov/irb/2013-44_IRB/ar10. Irs e file extension html. Irs e file extension Reminders Additional Medicare Tax withholding. Irs e file extension  In addition to withholding Medicare tax at 1. Irs e file extension 45%, you must withhold a 0. Irs e file extension 9% Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. Irs e file extension You are required to begin withholding Additional Medicare Tax in the pay period in which you pay wages in excess of $200,000 to an employee and continue to withhold it each pay period until the end of the calendar year. Irs e file extension Additional Medicare Tax is only imposed on the employee. Irs e file extension There is no employer share of Additional Medicare Tax. Irs e file extension All wages that are subject to Medicare tax are subject to Additional Medicare Tax withholding if paid in excess of the $200,000 withholding threshold. Irs e file extension For more information on what wages are subject to Medicare tax, see the chart, Special Rules for Various Types of Employment and Payments , in section 12. Irs e file extension For more information on Additional Medicare Tax, visit IRS. Irs e file extension gov and enter “Additional Medicare Tax” in the search box. Irs e file extension Work opportunity tax credit for qualified tax-exempt organizations hiring qualified veterans. Irs e file extension  The work opportunity tax credit is available for eligible unemployed veterans who begin work on or after November 22, 2011, and before January 1, 2014. Irs e file extension Qualified tax-exempt organizations that hire eligible unemployed veterans can claim the work opportunity tax credit against their payroll tax liability using Form 5884-C, Work Opportunity Credit for Qualified Tax-Exempt Organizations Hiring Qualified Veterans. Irs e file extension For more information, visit IRS. Irs e file extension gov and enter “work opportunity tax credit” in the search box. Irs e file extension Outsourcing payroll duties. Irs e file extension  Employers are responsible to ensure that tax returns are filed and deposits and payments are made, even if the employer contracts with a third party to perform these acts. Irs e file extension The employer remains responsible if the third party fails to perform any required action. Irs e file extension If you choose to outsource any of your payroll and related tax duties (that is, withholding, reporting, and paying over social security, Medicare, FUTA, and income taxes) to a third-party payer such as a payroll service provider or reporting agent, visit IRS. Irs e file extension gov and enter “outsourcing payroll duties” in the search box for helpful information on this topic. Irs e file extension Residents of the Philippines working in the Commonwealth of the Northern Mariana Islands (CNMI). Irs e file extension  The IRS will not assert that an employer has understated liability for social security and Medicare taxes because they failed to treat services performed before January 1, 2015, in the CNMI by a resident of the Philippines as employment as defined under Internal Revenue Code section 3121(b). Irs e file extension For more information, see Announcement 2012-43, 2012-51 I. Irs e file extension R. Irs e file extension B. Irs e file extension 723, available at www. Irs e file extension irs. Irs e file extension gov/irb/2012-51_IRB/ar15. Irs e file extension html. Irs e file extension CNMI government employees now subject to social security and Medicare taxes. Irs e file extension  Beginning in the fourth calendar quarter of 2012, CNMI government employees are subject to social security and Medicare taxes. Irs e file extension COBRA premium assistance credit. Irs e file extension  The credit for COBRA premium assistance payments applies to premiums paid for employees involuntarily terminated between September 1, 2008 and May 31, 2010, and to premiums paid for up to 15 months. Irs e file extension See COBRA premium assistance credit in Publication 15 (Circular E), Employer's Tax Guide. Irs e file extension You can get Publication 15 (Circular E) at IRS. Irs e file extension gov. Irs e file extension You must receive written notice from the IRS to file Form 944. Irs e file extension  If you have been filing Forms 941-SS and believe your employment taxes for the calendar year will be $1,000 or less, and you would like to file Form 944, Employer's ANNUAL Federal Tax Return, instead of Forms 941-SS, you must contact the IRS to request to file Form 944. Irs e file extension You must receive written notice from the IRS to file Form 944 instead of Forms 941-SS before you may file this form. Irs e file extension For more information on requesting to file Form 944 visit IRS. Irs e file extension gov and enter “file employment taxes annually” in the search box. Irs e file extension Federal employers in the CNMI. Irs e file extension  The U. Irs e file extension S. Irs e file extension Treasury Department and the CNMI Division of Revenue and Taxation entered into an agreement under 5 USC 5517 in December 2006. Irs e file extension Under this agreement, all federal employers (including the Department of Defense) are required to withhold CNMI income taxes (rather than federal income taxes) and deposit the CNMI taxes with the CNMI Treasury for employees who are subject to CNMI taxes and whose regular place of federal employment is in the CNMI. Irs e file extension Federal employers are also required to file quarterly and annual reports with the CNMI Division of Revenue and Taxation. Irs e file extension For questions, contact the CNMI Division of Revenue and Taxation. Irs e file extension Change of address. Irs e file extension  Use Form 8822-B to notify the IRS of an address change. Irs e file extension Do not mail Form 8822-B with your employment tax return. Irs e file extension Federal tax deposits must be made by electronic funds transfer. Irs e file extension  You must use electronic funds transfer to make all federal tax deposits. Irs e file extension Generally, electronic fund transfers are made using the Electronic Federal Tax Payment System (EFTPS). Irs e file extension If you do not want to use EFTPS, you can arrange for your tax professional, financial institution, payroll service, or other trusted third party to make electronic deposits on your behalf. Irs e file extension Also, you may arrange for your financial institution to initiate a same-day wire payment on your behalf. Irs e file extension EFTPS is a free service provided by the Department of Treasury. Irs e file extension Services provided by your tax professional, financial institution, payroll service, or other third party may have a fee. Irs e file extension For more information on making federal tax deposits, see How To Deposit in section 8. Irs e file extension For more information about EFTPS or to enroll in EFTPS, visit the EFTPS website at www. Irs e file extension eftps. Irs e file extension gov or call 1-800-555-4477 (U. Irs e file extension S. Irs e file extension Virgin Islands only) or 303-967-5916 (toll call) or 1-800-733-4829 (TDD). Irs e file extension Additional information about EFTPS is also available in Publication 966, Electronic Federal Tax Payment System: A Guide To Getting Started. Irs e file extension Electronic filing and payment. Irs e file extension  Using electronic options can make filing a return and paying your federal tax easier. Irs e file extension Use the Electronic Federal Tax Payment System (EFTPS) to make deposits or pay in full, whether you rely on a tax professional or prepare your own taxes. Irs e file extension You can use IRS e-file to file certain returns. Irs e file extension If there is a balance due on the return, you can e-file and e-pay in a single step by authorizing an electronic funds withdrawal (EFW) from your bank account while e-filing. Irs e file extension Do not use EFW to pay taxes that are required to be deposited. Irs e file extension Visit the IRS website at www. Irs e file extension irs. Irs e file extension gov/efile for more information on filing electronically. Irs e file extension For more information on paying your taxes using EFW, visit the IRS website at www. Irs e file extension irs. Irs e file extension gov/e-pay. Irs e file extension A fee may be charged to file electronically. Irs e file extension For EFTPS, visit www. Irs e file extension eftps. Irs e file extension gov or call EFTPS Customer Service at 1-800-555-4477 (U. Irs e file extension S. Irs e file extension Virgin Islands only) or 303-967-5916 (toll call). Irs e file extension For electronic filing of Forms W-2AS, W-2CM, W-2GU, W-2VI, Wage and Tax Statements; W-3SS, Transmittal of Wage and Tax Statements; and W-2c, Corrected Wage and Tax Statement, visit www. Irs e file extension socialsecurity. Irs e file extension gov/employer. Irs e file extension If you are filing your tax return or paying your federal taxes electronically, a valid EIN is required. Irs e file extension If a valid EIN is not provided, the return or payment will not be processed. Irs e file extension This may result in penalties and delays in processing your return or payment. Irs e file extension Electronic option for filing Forms W-2AS, W-2CM, W-2GU, or W-2VI. Irs e file extension  Employers in American Samoa, the CNMI, Guam, and the U. Irs e file extension S. Irs e file extension Virgin Islands can now use the Social Security Administration's W-2 Online service to create, save, print, and submit up to 50 Forms W-2AS, W-2CM, W-2GU, or W-2VI at a time over the Internet. Irs e file extension Form W-3SS will be generated automatically based on your Forms W-2AS, W-2CM, W-2GU, or W-2VI. Irs e file extension For more information, visit Social Security Administration's SSA website at www. Irs e file extension ssa. Irs e file extension gov/bso/bsowelcome. Irs e file extension htm. Irs e file extension Credit or debit card payments. Irs e file extension  For information on paying your taxes with a credit or debit card, visit the IRS website at www. Irs e file extension irs. Irs e file extension gov/e-pay. Irs e file extension However, do not use credit or debit cards to make federal tax deposits. Irs e file extension Hiring new employees. Irs e file extension  Record the number and name from each new employee's social security card. Irs e file extension An employee who does not have a social security card should apply for one on Form SS-5, Application for a Social Security Card. Irs e file extension See section 3. Irs e file extension Reporting discrepancies between Forms 941-SS (or Form 944) and Forms W-2. Irs e file extension  File Schedule D (Form 941), Report of Discrepancies Caused by Acquisitions, Statutory Mergers, or Consolidations, to explain certain wage, tax, and payment discrepancies between Forms 941-SS (or Form 944), and Forms W-2 that were caused by acquisitions, statutory mergers, or consolidations. Irs e file extension For more information, see the Instructions for Schedule D (Form 941). Irs e file extension Apply for an employer identification number (EIN) online. Irs e file extension  You can apply for an EIN online by visiting IRS. Irs e file extension gov and clicking on the Apply for an EIN Online link under Tools. Irs e file extension Dishonored payments. Irs e file extension  Any form of payment that is dishonored and returned from a financial institution is subject to a penalty. Irs e file extension The penalty is $25 or 2% of the payment, whichever is more. Irs e file extension However, the penalty on dishonored payments of $24. Irs e file extension 99 or less is an amount equal to the payment. Irs e file extension For example, a dishonored payment of $18 is charged a penalty of $18. Irs e file extension Private delivery services. Irs e file extension  You can use certain private delivery services designated by the IRS to send tax returns or payments. Irs e file extension The list includes only the following: DHL Express (DHL): DHL Same Day Service. Irs e file extension Federal Express (FedEx): FedEx Priority Overnight, FedEx Standard Overnight, FedEx 2Day, FedEx International Priority, and FedEx International First. Irs e file extension United Parcel Service (UPS): UPS Next Day Air, UPS Next Day Air Saver, UPS 2nd Day Air, UPS 2nd Day Air A. Irs e file extension M. Irs e file extension , UPS Worldwide Express Plus, and UPS Worldwide Express. Irs e file extension For the IRS mailing address to use if you are using a private delivery service, go to IRS. Irs e file extension gov and enter “private delivery service” in the search box. Irs e file extension Your private delivery service can tell you how to get written proof of the mailing date. Irs e file extension Private delivery services cannot deliver items to P. Irs e file extension O. Irs e file extension boxes. Irs e file extension You must use the U. Irs e file extension S. Irs e file extension Postal Service to mail any item to an IRS P. Irs e file extension O. Irs e file extension box address. Irs e file extension Recordkeeping. Irs e file extension  Keep all records of employment taxes for 4 years. Irs e file extension These should be available for IRS review. Irs e file extension There is no required format for such records, but they should include your EIN; the amounts and dates of all wage payments (including fringe benefits) and tips reported; the names, addresses, and occupations of employees receiving such payments and their social security numbers; copies of returns filed; dates of employment; and the dates and amounts of deposits made. Irs e file extension Farm employers must keep a record of the name, permanent address, and EIN of each crew leader. Irs e file extension See Farm Crew Leaders in section 2. Irs e file extension Disregarded entities and qualified subchapter S subsidiaries (QSubs). Irs e file extension  Eligible single-owner disregarded entities and QSubs are treated as separate entities for employment tax purposes. Irs e file extension Eligible single-member entities that have not elected to be taxed as corporations must report and pay employment taxes on wages paid to their employees using the entities' own names and EINs. Irs e file extension See Regulations sections 1. Irs e file extension 1361-4(a)(7) and 301. Irs e file extension 7701-2(c)(2)(iv). Irs e file extension Photographs of missing children. Irs e file extension  The IRS is a proud partner with the National Center for Missing and Exploited Children. Irs e file extension Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. Irs e file extension You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. Irs e file extension Calendar   If any date for filing a return, furnishing a form, or depositing taxes falls on a Saturday, Sunday, or legal holiday, the due date is the next business day. Irs e file extension A statewide legal holiday delays a filing due date only if the IRS office where you are required to file is located in that state. Irs e file extension However, a statewide legal holiday does not delay the due date of federal tax deposits. Irs e file extension See Deposits on Business Days Only in section 8. Irs e file extension For any filing due date, you will meet the “file” or “furnish” requirement if the envelope containing the return or form is properly addressed, contains sufficient postage, and is postmarked by the U. Irs e file extension S. Irs e file extension Postal Service on or before the due date, or sent by an IRS-designated delivery service on or before the due date. Irs e file extension See Private delivery services under Reminders. Irs e file extension The following are important dates and responsibilities. Irs e file extension Also see Publication 509, Tax Calendars. Irs e file extension By January 31. Irs e file extension   Furnish wage and tax statements to employees. Irs e file extension Give each employee a completed Form W-2AS, W-2CM, W-2GU, or W-2VI. Irs e file extension See section 10 for more information. Irs e file extension File Form 943, Employer's Annual Federal Tax Return for Agricultural Employees, with the IRS. Irs e file extension If you deposited all Form 943 taxes when due, you have 10 additional calendar days to file. Irs e file extension U. Irs e file extension S. Irs e file extension Virgin Islands employers only must file Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return, with the IRS. Irs e file extension Pay or deposit (if more than $500) any balance of the tax due. Irs e file extension If you deposited the full amount of taxes when due, you have 10 additional calendar days to file. Irs e file extension File Form 944 with the IRS if you were notified by the IRS to file Form 944 instead of quarterly Forms 941-SS. Irs e file extension If you deposited the full amount of taxes when due, you have 10 additional calendar days to file. Irs e file extension By February 28. Irs e file extension  File paper wage and tax statements with the Social Security Administration (SSA). Irs e file extension File Copy A of Forms W-2AS, W-2CM, W-2GU, or W-2VI, and Form W-3SS with the Social Security Administration (SSA). Irs e file extension For electronically filed returns, see By March 31 next. Irs e file extension By March 31. Irs e file extension  File electronic Forms W-2AS, W-2CM, W-2GU, or W-2VI with the SSA. Irs e file extension Visit the SSA's Reporting Instructions & Information webpage at www. Irs e file extension socialsecurity. Irs e file extension gov/employer for more information. Irs e file extension By April 30, July 31, October 31, and January 31. Irs e file extension  File Form 941-SS with the IRS. Irs e file extension If you deposited the full amount of taxes when due, you have 10 additional calendar days to file. Irs e file extension Do not file Forms 941-SS for these quarters if you have been notified to file Form 944 and you did not request to file quarterly Forms 941-SS. Irs e file extension Deposit FUTA tax for the quarter (including any amount carried over from other quarters) if over $500. Irs e file extension If $500 or less, carry it over to the next quarter. Irs e file extension See section 11 for more information. Irs e file extension Prev  Up  Next   Home   More Online Publications
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IRS Releases the “Dirty Dozen” Tax Scams for 2014; Identity Theft, Phone Scams Lead List

IR-2014-16, Feb. 19, 2014

WASHINGTON — The Internal Revenue Service today issued its annual “Dirty Dozen” list of tax scams, reminding taxpayers to use caution during tax season to protect themselves against a wide range of schemes ranging from identity theft to return preparer fraud.

The Dirty Dozen listing, compiled by the IRS each year, lists a variety of common scams taxpayers can encounter at any point during the year. But many of these schemes peak during filing season as people prepare their tax returns.

"Taxpayers should be on the lookout for tax scams using the IRS name,” said IRS Commissioner John Koskinen. “These schemes jump every year at tax time. Scams can be sophisticated and take many different forms. We urge people to protect themselves and use caution when viewing e-mails, receiving telephone calls or getting advice on tax issues.”

Illegal scams can lead to significant penalties and interest and possible criminal prosecution. IRS Criminal Investigation works closely with the Department of Justice (DOJ) to shutdown scams and prosecute the criminals behind them.

The following are the Dirty Dozen tax scams for 2014:

Identity Theft

Tax fraud through the use of identity theft tops this year’s Dirty Dozen list. Identity theft occurs when someone uses your personal information, such as your name, Social Security number (SSN) or other identifying information, without your permission, to commit fraud or other crimes. In many cases, an identity thief uses a legitimate taxpayer’s identity to fraudulently file a tax return and claim a refund.

The agency’s work on identity theft and refund fraud continues to grow, touching nearly every part of the organization. For the 2014 filing season, the IRS has expanded these efforts to better protect taxpayers and help victims.

The IRS has a special section on IRS.gov dedicated to identity theft issues, including YouTube videos, tips for taxpayers and an assistance guide. For victims, the information includes how to contact the IRS Identity Protection Specialized Unit. For other taxpayers, there are tips on how taxpayers can protect themselves against identity theft.

Taxpayers who believe they are at risk of identity theft due to lost or stolen personal information should contact the IRS immediately so the agency can take action to secure their tax account. Taxpayers can call the IRS Identity Protection Specialized Unit at 800-908-4490. More information can be found on the special identity protection page.

Pervasive Telephone Scams

The IRS has seen a recent increase in local phone scams across the country, with callers pretending to be from the IRS in hopes of stealing money or identities from victims.

These phone scams include many variations, ranging from instances from where callers say the victims owe money or are entitled to a huge refund. Some calls can threaten arrest and threaten a driver’s license revocation. Sometimes these calls are paired with follow-up calls from people saying they are from the local police department or the state motor vehicle department.

Characteristics of these scams can include:

  • Scammers use fake names and IRS badge numbers. They generally use common names and surnames to identify themselves.
  • Scammers may be able to recite the last four digits of a victim’s Social Security Number.
  • Scammers “spoof” or imitate the IRS toll-free number on caller ID to make it appear that it’s the IRS calling.
  • Scammers sometimes send bogus IRS emails to some victims to support their bogus calls.
  • Victims hear background noise of other calls being conducted to mimic a call site.

After threatening victims with jail time or a driver’s license revocation, scammers hang up and others soon call back pretending to be from the local police or DMV, and the caller ID supports their claim.

In another variation, one sophisticated phone scam has targeted taxpayers, including recent immigrants, throughout the country. Victims are told they owe money to the IRS and it must be paid promptly through a pre-loaded debit card or wire transfer. If the victim refuses to cooperate, they are then threatened with arrest, deportation or suspension of a business or driver’s license. In many cases, the caller becomes hostile and insulting.

If you get a phone call from someone claiming to be from the IRS, here’s what you should do: If you know you owe taxes or you think you might owe taxes, call the IRS at 800-829-1040. The IRS employees at that line can help you with a payment issue – if there really is such an issue.

If you know you don’t owe taxes or have no reason to think that you owe any taxes (for example, you’ve never received a bill or the caller made some bogus threats as described above), then call and report the incident to the Treasury Inspector General for Tax Administration at 800-366-4484.

If you’ve been targeted by these scams, you should 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.

Phishing

Phishing is a scam typically carried out with the help of unsolicited email or a fake website that poses as a legitimate site to lure in potential victims and prompt them to provide valuable personal and financial information. Armed with this information, a criminal can commit identity theft or financial theft.

If you receive an unsolicited email that appears to be from either the IRS or an organization closely linked to the IRS, such as the Electronic Federal Tax Payment System (EFTPS), report it by sending it to phishing@irs.gov.

It is important to keep in mind the IRS does not initiate contact with taxpayers by email to request personal or financial information. This includes any type of electronic communication, such as text messages and social media channels. The IRS has information online that can help you protect yourself from email scams.

False Promises of “Free Money” from Inflated Refunds

Scam artists routinely pose as tax preparers during tax time, luring victims in by promising large federal tax refunds or refunds that people never dreamed they were due in the first place.

Scam artists use flyers, advertisements, phony store fronts and even word of mouth to throw out a wide net for victims. They may even spread the word through community groups or churches where trust is high. Scammers prey on people who do not have a filing requirement, such as low-income individuals or the elderly. They also prey on non-English speakers, who may or may not have a filing requirement.

Scammers build false hope by duping people into making claims for fictitious rebates, benefits or tax credits. They charge good money for very bad advice. Or worse, they file a false return in a person's name and that person never knows that a refund was paid.

Scam artists also victimize people with a filing requirement and due a refund by promising inflated refunds based on fictitious Social Security benefits and false claims for education credits, the Earned Income Tax Credit (EITC), or the American Opportunity Tax Credit, among others.

The IRS sometimes hears about scams from victims complaining about losing their federal benefits, such as Social Security benefits, certain veteran’s benefits or low-income housing benefits. The loss of benefits was the result of false claims being filed with the IRS that provided false income amounts.

While honest tax preparers provide their customers a copy of the tax return they’ve prepared, victims of scam frequently are not given a copy of what was filed. Victims also report that the fraudulent refund is deposited into the scammer’s bank account. The scammers deduct a large “fee” before cutting a check to the victim, a practice not used by legitimate tax preparers.

The IRS reminds all taxpayers that they are legally responsible for what’s on their returns even if it was prepared by someone else. Taxpayers who buy into such schemes can end up being penalized for filing false claims or receiving fraudulent refunds.

Taxpayers should take care when choosing an individual or firm to prepare their taxes. Honest return preparers generally: ask for proof of income and eligibility for credits and deductions; sign returns as the preparer; enter their IRS Preparer Tax Identification Number (PTIN); provide the taxpayer a copy of the return.

Beware: Intentional mistakes of this kind can result in a $5,000 penalty.

Return Preparer Fraud

About 60 percent of taxpayers will use tax professionals this year to prepare their tax returns. Most return preparers provide honest service to their clients. But, some unscrupulous preparers prey on unsuspecting taxpayers, and the result can be refund fraud or identity theft.

It is important to choose carefully when hiring an individual or firm to prepare your return. This year, the IRS wants to remind all taxpayers that they should use only preparers who sign the returns they prepare and enter their IRS Preparer Tax Identification Numbers (PTINs).

The IRS also has a web page to assist taxpayers. For tips about choosing a preparer, details on preparer qualifications and information on how and when to make a complaint, view IRS Fact Sheet 2014-5, IRS Offers Advice on How to Choose a Tax Preparer.

Remember: Taxpayers are legally responsible for what’s on their tax return even if it is prepared by someone else. Make sure the preparer you hire is up to the task.

IRS.gov has general information on reporting tax fraud. More specifically, you report abusive tax preparers to the IRS on Form 14157, Complaint: Tax Return Preparer. Download Form 14157 and fill it out or order by mail at 800-TAX FORM (800-829-3676). The form includes a return address.

Hiding Income Offshore

Over the years, numerous individuals have been identified as evading U.S. taxes by hiding income in offshore banks, brokerage accounts or nominee entities and then using debit cards, credit cards or wire transfers to access the funds. Others have employed foreign trusts, employee-leasing schemes, private annuities or insurance plans for the same purpose.

The IRS uses information gained from its investigations to pursue taxpayers with undeclared accounts, as well as the banks and bankers suspected of helping clients hide their assets overseas. The IRS works closely with the Department of Justice (DOJ) to prosecute tax evasion cases.

While there are legitimate reasons for maintaining financial accounts abroad, there are reporting requirements that need to be fulfilled. U.S. taxpayers who maintain such accounts and who do not comply with reporting requirements are breaking the law and risk significant penalties and fines, as well as the possibility of criminal prosecution.

Since 2009, tens of thousands of individuals have come forward voluntarily to disclose their foreign financial accounts, taking advantage of special opportunities to comply with the U.S. tax system and resolve their tax obligations. And, with new foreign account reporting requirements being phased in over the next few years, hiding income offshore is increasingly more difficult.

At the beginning of 2012, the IRS reopened the Offshore Voluntary Disclosure Program (OVDP) following continued strong interest from taxpayers and tax practitioners after the closure of the 2011 and 2009 programs. The IRS works on a wide range of international tax issues with DOJ to pursue criminal prosecution of international tax evasion. This program will be open for an indefinite period until otherwise announced.

The IRS has collected billions of dollars in back taxes, interest and penalties so far from people who participated in offshore voluntary disclosure programs since 2009. It is in the best long-term interest of taxpayers to come forward, catch up on their filing requirements and pay their fair share.

Impersonation of Charitable Organizations

Another long-standing type of abuse or fraud is scams that occur in the wake of significant natural disasters.

Following major disasters, it’s common for scam artists to impersonate charities to get money or private information from well-intentioned taxpayers. Scam artists can use a variety of tactics. Some scammers operating bogus charities may contact people by telephone or email to solicit money or financial information. They may even directly contact disaster victims and claim to be working for or on behalf of the IRS to help the victims file casualty loss claims and get tax refunds.

They may attempt to get personal financial information or Social Security numbers that can be used to steal the victims’ identities or financial resources. Bogus websites may solicit funds for disaster victims. The IRS cautions both victims of natural disasters and people wishing to make charitable donations to avoid scam artists by following these tips:

  • To help disaster victims, donate to recognized charities.
  • Be wary of charities with names that are similar to familiar or nationally known organizations. Some phony charities use names or websites that sound or look like those of respected, legitimate organizations. IRS.gov has a search feature, Exempt Organizations Select Check, which allows people to find legitimate, qualified charities to which donations may be tax-deductible.
  • Don’t give out personal financial information, such as Social Security numbers or credit card and bank account numbers and passwords, to anyone who solicits a contribution from you. Scam artists may use this information to steal your identity and money.
  • Don’t give or send cash. For security and tax record purposes, contribute by check or credit card or another way that provides documentation of the gift.

Call the IRS toll-free disaster assistance telephone number (866-562-5227) if you are a disaster victim with specific questions about tax relief or disaster related tax issues.

False Income, Expenses or Exemptions

Another scam involves inflating or including income on a tax return that was never earned, either as wages or as self-employment income in order to maximize refundable credits. Claiming income you did not earn or expenses you did not pay in order to secure larger refundable credits such as the Earned Income Tax Credit could have serious repercussions. This could result in repaying the erroneous refunds, including interest and penalties, and in some cases, even prosecution.

Additionally, some taxpayers are filing excessive claims for the fuel tax credit. Farmers and other taxpayers who use fuel for off-highway business purposes may be eligible for the fuel tax credit. But other individuals have claimed the tax credit although they were not eligible. Fraud involving the fuel tax credit is considered a frivolous tax claim and can result in a penalty of $5,000.

Frivolous Arguments

Promoters of frivolous schemes encourage taxpayers to make unreasonable and outlandish claims to avoid paying the taxes they owe. The IRS has a list of frivolous tax arguments that taxpayers should avoid. These arguments are wrong and have been thrown out of court. While taxpayers have the right to contest their tax liabilities in court, no one has the right to disobey the law or disregard their responsibility to pay taxes.

Those who promote or adopt frivolous positions risk a variety of penalties.  For example, taxpayers could be responsible for an accuracy-related penalty, a civil fraud penalty, an erroneous refund claim penalty, or a failure to file penalty.  The Tax Court may also impose a penalty against taxpayers who make frivolous arguments in court.   

Taxpayers who rely on frivolous arguments and schemes may also face criminal prosecution for attempting to evade or defeat tax. Similarly, taxpayers may be convicted of a felony for willfully making and signing under penalties of perjury any return, statement, or other document that the person does not believe to be true and correct as to every material matter.  Persons who promote frivolous arguments and those who assist taxpayers in claiming tax benefits based on frivolous arguments may be prosecuted for a criminal felony.

Falsely Claiming Zero Wages or Using False Form 1099

Filing a phony information return is an illegal way to lower the amount of taxes an individual owes. Typically, a Form 4852 (Substitute Form W-2) or a “corrected” Form 1099 is used as a way to improperly reduce taxable income to zero. The taxpayer may also submit a statement rebutting wages and taxes reported by a payer to the IRS.

Sometimes, fraudsters even include an explanation on their Form 4852 that cites statutory language on the definition of wages or may include some reference to a paying company that refuses to issue a corrected Form W-2 for fear of IRS retaliation. Taxpayers should resist any temptation to participate in any variations of this scheme. Filing this type of return may result in a $5,000 penalty.

Some people also attempt fraud using false Form 1099 refund claims. In some cases, individuals have made refund claims based on the bogus theory that the federal government maintains secret accounts for U.S. citizens and that taxpayers can gain access to the accounts by issuing 1099-OID forms to the IRS. In this ongoing scam, the perpetrator files a fake information return, such as a Form 1099 Original Issue Discount (OID), to justify a false refund claim on a corresponding tax return.

Don’t fall prey to people who encourage you to claim deductions or credits to which you are not entitled or willingly allow others to use your information to file false returns. If you are a party to such schemes, you could be liable for financial penalties or even face criminal prosecution.

Abusive Tax Structures

Abusive tax schemes have evolved from simple structuring of abusive domestic and foreign trust arrangements into sophisticated strategies that take advantage of the financial secrecy laws of some foreign jurisdictions and the availability of credit/debit cards issued from offshore financial institutions.

IRS Criminal Investigation (CI) has developed a nationally coordinated program to combat these abusive tax schemes. CI's primary focus is on the identification and investigation of the tax scheme promoters as well as those who play a substantial or integral role in facilitating, aiding, assisting, or furthering the abusive tax scheme (e.g., accountants, lawyers).  Secondarily, but equally important, is the investigation of investors who knowingly participate in abusive tax schemes.

What is an abusive scheme? The Abusive Tax Schemes program encompasses violations of the Internal Revenue Code (IRC) and related statutes where multiple flow-through entities are used as an integral part of the taxpayer's scheme to evade taxes.  These schemes are characterized by the use of Limited Liability Companies (LLCs), Limited Liability Partnerships (LLPs), International Business Companies (IBCs), foreign financial accounts, offshore credit/debit cards and other similar instruments.  The schemes are usually complex involving multi-layer transactions for the purpose of concealing the true nature and ownership of the taxable income and/or assets.

Form over substance are the most important words to remember before buying into any arrangements that promise to "eliminate" or "substantially reduce" your tax liability.  The promoters of abusive tax schemes often employ financial instruments in their schemes.  However, the instruments are used for improper purposes including the facilitation of tax evasion.

The IRS encourages taxpayers to report unlawful tax evasion. Where Do You Report Suspected Tax Fraud Activity?

Misuse of Trusts

Trusts also commonly show up in abusive tax structures. They are highlighted here because unscrupulous promoters continue to urge taxpayers to transfer large amounts of assets into trusts. These assets include not only cash and investments, but also successful on-going businesses. There are legitimate uses of trusts in tax and estate planning, but the IRS commonly sees highly questionable transactions. These transactions promise reduced taxable income, inflated deductions for personal expenses, the reduction or elimination of self-employment taxes and reduced estate or gift transfer taxes. These transactions commonly arise when taxpayers are transferring wealth from one generation to another. Questionable trusts rarely deliver the tax benefits promised and are used primarily as a means of avoiding income tax liability and hiding assets from creditors, including the IRS.

IRS personnel continue to see an increase in the improper use of private annuity trusts and foreign trusts to shift income and deduct personal expenses, as well as to avoid estate transfer taxes. As with other arrangements, taxpayers should seek the advice of a trusted professional before entering a trust arrangement.

The IRS reminds taxpayers that tax scams can take many forms beyond the “Dirty Dozen,” and people should be on the lookout for many other schemes. More information on tax scams is available at IRS.gov.

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Page Last Reviewed or Updated: 21-Feb-2014

The Irs E File Extension

Irs e file extension Car Expenses Table of Contents Introduction Depreciation of CarSpecial Depreciation Allowance Depreciation Limit Amended Return Election Not To Claim Special Allowance If you purchased a car after September 10, 2001, for use in your business (or as an employee) and figure your deductible expenses using the actual car expense method, new law contains provisions that may affect your depreciation deduction for that car. Irs e file extension Publication 463, Travel, Entertainment, Gift, and Car Expenses, contains information on figuring depreciation on your car. Irs e file extension However, Publication 463 does not contain the new provisions because it was printed before the law was enacted. Irs e file extension The new provisions are in the Supplement to Publication 463, which is reprinted below. Irs e file extension Supplement to Publication 463 Travel, Entertainment, Gift, and Car Expenses   Introduction This supplemental publication is for taxpayers who purchased a car for business purposes after September 10, 2001, and figure their deductible expenses, including a deduction for depreciation, using the actual car expense method. Irs e file extension After Publication 463 was printed, the Job Creation and Worker Assistance Act of 2002 was signed into law by the President. Irs e file extension Certain provisions of this new law may reduce your taxes for 2001. Irs e file extension The new law contains the following provisions. Irs e file extension A new depreciation deduction, the special depreciation allowance. Irs e file extension An increase in the limit on depreciation for any car for which you claim the new special depreciation allowance. Irs e file extension If you have already filed your 2001 return, you may wish to file an amended return to claim any of these benefits. Irs e file extension See Amended Return, later. Irs e file extension Depreciation of Car If you used the actual car expense method to figure your deduction for a car you own and use in your business (or as an employee), you generally can claim a depreciation deduction. Irs e file extension However, there is a limit on the depreciation deduction you can take for your car each year. Irs e file extension See Depreciation Limit later. Irs e file extension Special Depreciation Allowance The new law allows you to claim a special depreciation allowance. Irs e file extension This special allowance is a deduction equal to 30% of the depreciable basis of qualified property. Irs e file extension You figure the amount of the special depreciation allowance after any section 179 deduction you choose to claim, but before figuring your regular depreciation deduction under the Modified Accelerated Cost Recovery System (MACRS). Irs e file extension See Depreciation Deduction under Actual Car Expenses in chapter 4 of Publication 463 for information about MACRS. Irs e file extension You can claim the special depreciation allowance only for the year the qualified property is placed in service. Irs e file extension Qualified property. Irs e file extension   Qualified property includes a car (any four-wheeled vehicle, including a truck or van not more than 6,000 pounds, that is made primarily for use on public streets, roads, and highways) that meets all of the following requirements. Irs e file extension You bought it new. Irs e file extension You bought it after September 10, 2001. Irs e file extension (But a car is not qualified property if a binding written contract for you to buy the car was in effect before September 11, 2001. Irs e file extension ) You began using it for business after September 10, 2001, and used it more than 50% in a qualified business use. Irs e file extension Example. Irs e file extension Bob bought a new car on October 15, 2001, for $20,000 and placed it in service immediately, using it 75% for business. Irs e file extension Bob's car is qualified property. Irs e file extension Bob chooses not to take a section 179 deduction for the car. Irs e file extension He does claim the new special depreciation allowance. Irs e file extension Bob first must figure the car's depreciable basis, which is $15,000 ($20,000 × . Irs e file extension 75). Irs e file extension He then figures the special depreciation allowance of $4,500 ($15,000 × . Irs e file extension 30). Irs e file extension The remaining depreciable basis of $10,500 ($15,000 - $4,500) is depreciated using MACRS (200% declining balance method, half-year convention) and results in a deduction of $2,100 ($10,500 × . Irs e file extension 20), for a total depreciation deduction for 2001 of $6,600 ($4,500 + $2,100). Irs e file extension However, Bob's depreciation deduction is limited to $5,745 ($7,660 × . Irs e file extension 75), as discussed next. Irs e file extension Depreciation Limit The limit on your depreciation deduction for 2001 is increased to $7,660 for a car that is qualified property (defined above) and for which you claim the special depreciation allowance. Irs e file extension The limit is increased to $23,080 if the car is an electric car. Irs e file extension The section 179 deduction is treated as depreciation for purposes of this limit. Irs e file extension If you use a car less than 100% in your business or work, the limit is $7,660 (or $23,080 for an electric car) multiplied by the percentage of business and investment use during the year. Irs e file extension For cars that do not qualify for (or for which you choose not to claim) the special depreciation allowance, the limit remains $3,060 ($9,280 for electric cars). Irs e file extension Amended Return If you filed your 2001 calendar year return before June 1, 2002, and did not claim the new special depreciation allowance for a qualified car, you can claim it by filing an amended return on Form 1040X, Amended U. Irs e file extension S. Irs e file extension Individual Income Tax Return, by April 15, 2003. Irs e file extension At the top of the Form 1040X, print “Filed pursuant to Revenue Procedure 2002–33. Irs e file extension ” If you are an employee, attach Form 2106, Employee Business Expenses (revised March 2002). Irs e file extension If you are self-employed, attach Form 4562, Depreciation and Amortization (revised March 2002). Irs e file extension Or, you can claim the special depreciation allowance by filing Form 3115, Application for Change in Accounting Method, with your 2002 return. Irs e file extension For details, see Revenue Procedure 2002–33. Irs e file extension (But, filing Form 1040X for 2001 enables you to claim the special allowance earlier than attaching Form 3115 to your 2002 return. Irs e file extension ) You cannot claim the special depreciation allowance on an amended return (or by using Form 3115) if you made, or are treated as having made, the election not to claim it described later. Irs e file extension Example. Irs e file extension The facts are the same as in the previous example except that Bob filed his original 2001 income tax return on April 15, 2002, and claimed a $3,000 ($20,000 x . Irs e file extension 75 x . Irs e file extension 20) depreciation deduction for his new car using MACRS. Irs e file extension Bob now wishes to claim the special depreciation allowance for his new car on an amended 2001 return. Irs e file extension Bob, who is an employee, files Form 1040X, by April 15, 2003, with an updated Form 2106 (revised March 2002) attached, increasing his total depreciation deduction to $5,745, as figured in the earlier example. Irs e file extension Bob's new filled-in Form 2106 is shown later. Irs e file extension Election Not To Claim Special Allowance You can elect not to claim the special depreciation allowance for a car by making a statement attached to, or written on, your return indicating that you are electing not to claim the special depreciation allowance for 5-year property. Irs e file extension As a general rule, you must make this election by the due date (including extensions) of your return. Irs e file extension You can have an automatic extension of 6 months from the due date of your return (excluding extensions) to make the election with an amended return. Irs e file extension To get this extension, you must have filed your original return by the due date (including extensions). Irs e file extension At the top of the statement, print “Filed pursuant to section 301. Irs e file extension 9100–2. Irs e file extension ” If you elect not to claim the special depreciation allowance for a car, you cannot claim it for any other 5-year property placed in service during the same year. Irs e file extension Unless you elect (or are treated as electing) not to claim the special depreciation allowance, you must reduce the car's adjusted basis by the amount of the allowance, even if the allowance was not claimed. Irs e file extension Deemed election for return filed before June 1, 2002. Irs e file extension   If you did not make the election not to claim the special depreciation allowance in the time and manner described above, you will still be treated as electing not to claim it if all of the following apply. Irs e file extension You filed your 2001 return before June 1, 2002. Irs e file extension You claimed depreciation on your return but did not claim the special depreciation allowance. Irs e file extension You did not file an amended 2001 return by April 15, 2003, or a Form 3115 with your 2002 return, to claim the special depreciation allowance. Irs e file extension Form 2106, Page 1, for Bob Smith Form 2106, Page 2, for Bob Smith Prev  Up  Next   Home   More Online Publications