Current Items:
- Hunting Season
- IRS Pot Page
- Scan Your IRS
- Penalty Take
- Biden Tax Plan?
1). The IRS is trying to stay on top of security issues especially as more people holiday shop online as well as work from home. It says that this is the start of the “hunting season” for online thieves. According to the agency these are the steps that everyone should be taking to protect themselves:
- Don’t forget to use security software for computers and mobile phones – and keep it updated.
- Make sure purchased anti-virus software has a feature to stop malware, and there is a firewall that can prevent intrusions.
- Phishing scams – like imposter emails, calls and texts — are the No. 1 way thieves steal personal data. Don’t open links or attachments on suspicious emails. This year, fraud scams related to COVID-19 and the Economic Impact Payment are common.
- Use strong and unique passwords for online accounts. Use a phrase or series of words that can be easily remembered or use a password manager.
- Use multi-factor authentication whenever possible. Many email providers and social media sites offer this feature. It helps prevents thieves from easily hacking accounts.
- Shop at sites where the web address begins with “https” – the “s” is for secure communications over the computer network. Also, look for the “padlock” icon in the browser window.
- Don’t shop on unsecured public Wi-Fi in places like a mall. Remember, thieves can eavesdrop.
- At home, secure home Wi-Fis with a password. With more homes connected to the web, secured systems become more important, from wireless printers, wireless door locks to wireless thermometers. These can be access points for identity thieves.
- Back up files on computers and mobile phones. A cloud service or an external hard drive can be used to copy information from computers or phones – providing an important place to recover financial or tax data.
- Working from home? Consider creating a virtual private network (VPN) to securely connect to your workplace.
2) In my last bulletin I mentioned the plight of marijuana business owners unable to deduct their ordinary and necessary business expenses with the exception of cost of goods sold. A bill in the House has been delayed which would have decriminalized marijuana. So even in states where it is legal to buy and Puff the Magic Dragon these deductions are not allowed. And it gets worse. IRS agents are focusing on weed dispensaries for examination looking to disallow write-offs that are claimed. So far, courts have sided with the IRS until congressional action is taken. But who would’ve ever thought that the IRS would have a “pot page” on its website which includes a short list of FAQs! I can just imagine a bunch of 60s hippies sitting around sharing their iPads while puffing and perusing the pot page. Man, it is a brave new world.
3) Oh, for the good old days! When the clients received a notice from the Internal Revenue Service what did they do? Yes, called their lawyer or maybe their accountant especially if they owned back taxes. The language of those notices was designed to scare the hell out of average taxpayers many of whom immediately coughed up any balance due. Then enter the cyber-criminal issuing phony IRS notices and making scam calls. But IRS has come up with an interesting way to defeat some of these issues. A Barcode. IRS is adding a barcode on many of their notices which can be scanned with a smart phone which will take the taxpayer directly to the IRS website for information on resolving the balance due on line. It may one day also include a sell by and use by date.
4) Don’t be thinking that IRS is out of the penalty business. In fiscal year 2019, IRS assessed $40.5 billion in civil penalties. In fact, 35% of the fines were on income tax returns filed by individuals, estates and trusts. IRS says it abated $11.4 billion of these penalties but that still leaves a hefty sum. According to IRS using civil penalties in tax audits is a priority except for presidents who have managed to dodge taxes for 15 years or pay a measly $750.
5) Assuming the current president does in fact vacate the White House without needing a formal eviction involving the Army, Navy and Marines and that Joseph Biden does in fact take the oath of office, the next question is: what will the tax code look like next year? I think the safest bet is to say, not much different than it does this year. With the best of intentions increasing taxes on those earning $400,000 or more probably stands no chance whatsoever, but it made a great political talking point. Expiring provisions may get some attention, but it’s the virus and the economy that will take the wind out of the tax sails. But stay alert as the changes will come…just not now.
Don’t be alarmed if a guy with a Mask comes down your chimney this Holiday Season. He means no harm…Especially if he’s bringing a vial of vaccine in his bag for all us good and not so good boys and girls.
Happy Everything.
Ted