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www.SonNguyenCPA.com

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(In Vietnam Town Business Plaza, next to Walmart)

Tax Season Hours (January – April):
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For more information, please contact (408) 292-8888.

 

2016-2017 Tax Filing season                                

We broadcast live radio to answer your tax questions:

Radio Channel 1430 AM:  Friday 7:45 am – 8:30 am (year-round)

Radio Channel 1500 AM:  Sunday 1:00 pm – 2:00 pm (tax season)

Tax Preparedness Series: How to Avoid a Refund Delay; Plan Ahead

Note to Editor: This is the second in a series of reminders to help taxpayers prepare for the upcoming tax filing season.

WASHINGTON – As tax filing season approaches, the Internal Revenue Service is reminding taxpayers about steps they can take now to ensure smooth processing of their 2016 tax return and avoid a delay in getting their tax refund next year.

The IRS reminds taxpayers to be sure they have all the documents they need, such as W-2s and 1099s, before filing a tax return. You may also need a copy of your 2015 tax return to make it easier to fill out a 2016 tax return. Beginning in 2017, taxpayers using a software product for the first time may need their Adjusted Gross Income amount from a prior tax return to verify their identity. Learn more about how to verify your identity and electronically sign your tax return at Validating Your Electronically Filed Tax Return. The IRS will begin accepting and processing tax returns once the filing season begins.

Under the Protecting Americans from Tax Hikes Act of 2015 (PATH Act), any Individual Taxpayer Identification Numbers (ITIN) issued prior to 2013 or that haven’t been used for tax-years 2013, 2014 and 2015 will no longer be valid for use on a tax return as of Jan. 1, 2017. Individuals with expiring ITINs who need to file a return in 2017 will need to renew their ITIN. This process typically takes 7 weeks to receive an ITIN assignment letter, but the process can take longer – 9 to 11 weeks if taxpayers wait to submit Form W-7 during the peak filing season, or send it from overseas. Taxpayers who do not renew an expired ITIN before filing a tax return next year, could face a delayed refund and may be ineligible for certain tax credits. For more information, visit the ITINinformation page on IRS.gov.

If you claim the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC) on your tax return, the IRS must hold your refund until February 15. This new law requires the IRS to hold the entire refund — even the portion not associated with EITC or ACTC. This change helps ensure that you receive the refund you are owed by giving the agency more time to help detect and prevent fraud.

The IRS always cautions taxpayers not to rely on getting a refund by a certain date, especially when making major purchases or paying bills. Though the IRS issues more than nine out of 10 refunds in less than 21 days, some returns are held for further review.

The easiest way to avoid common errors that delay processing a tax return is to e-file. E-file is the most accurate way to prepare a return and file. There are a number of e-file options:

Use Direct Deposit.

With direct deposit, the refund goes directly into the taxpayer’s bank account. There is no risk of having the refund check stolen or lost in the mail. This is the same electronic transfer system used to deposit nearly 98 percent of all Social Security and Veterans Affairs benefits into millions of accounts. Direct deposit also saves taxpayer dollars. It costs the nation’s taxpayers more than $1 for every paper refund check issued but only a dime for each direct deposit made.

The IRS has a special page on IRS.gov with steps to take now for the 2017 tax filing season.

IRS Wraps Up the “Dirty Dozen” List of Tax Scams for 2016

WASHINGTON — The Internal Revenue Service today wrapped up its annual “Dirty Dozen” list of tax scams with identity theft topping this year’s list but with phone scams and phishing schemes also deserving special mention. Taxpayers need to guard against any ploys to steal their personal information, scam them out of money or talk them into engaging in questionable behavior with their taxes.

During the past year, as part of the Security Summit initiative, the IRS partnered with states and the tax industry to enhance coordination and create a more secure system for taxpayers. Participants now regularly share details of fraudulent schemes detected so both industry and government can provide increased protection. Many enhancements are invisible to taxpayers.

“We are working hard to protect taxpayers from identity theft and other scams this filing season,” said IRS Commissioner John Koskinen. “Taxpayers have rights and should not be frightened into providing personal information or money to someone over the phone or in an email. We urge taxpayers to help protect themselves from scams — old and new.”

This is the second year the IRS has highlighted its Dirty Dozen list in separate releases over 12 business days. Taxpayers are encouraged to review the list in a special section on IRS.gov and be on the lookout for these scams. Many of these con games peak during filing season as people prepare their tax returns or hire someone to do so.

The IRS this week also renewed a consumer alert for e-mail schemes after seeing an approximate 400 percent surge in phishing and malware incidents so far this tax season. (IR-2016-28)

Perpetrators of illegal scams can face significant penalties and interest and possible criminal prosecution. IRS Criminal Investigation works closely with the Department of Justice to shut down scams and prosecute the criminals behind them. Taxpayers should remember that they are legally responsible for what is on their tax return even if it is prepared by someone else. Be sure the preparer is up to the task. For more see the Choosing a Tax Professional page.

Here is a recap of this year’s “Dirty Dozen” scams:

Identity Theft: Taxpayers need to watch out for identity theft especially around tax time. The IRS continues to aggressively pursue the criminals that file fraudulent returns using someone else’s Social Security number. Though the agency is making progress on this front, taxpayers still need to be extremely careful and do everything they can to avoid being victimized. (IR-2016-12)

Phone Scams: Phone calls from criminals impersonating IRS agents remain an ongoing threat to taxpayers. The IRS has seen a surge of these phone scams in recent years as scam artists threaten taxpayers with police arrest, deportation and license revocation, among other things. (IR-2016-14)

Phishing: Taxpayers need to be on guard against fake emails or websites looking to steal personal information. The IRS will never send taxpayers an email about a bill or refund out of the blue. Don’t click on one claiming to be from the IRS.Be wary of strange emails and websites that may be nothing more than scams to steal personal information. (IR-2016-15)

Return Preparer Fraud: Be on the lookout for unscrupulous return preparers. The vast majority of tax professionals provide honest high-quality service. But there are some dishonest preparers who set up shop each filing season to perpetrate refund fraud, identity theft and other scams that hurt taxpayers. Legitimate tax professionals are a vital part of the U.S. tax system. (IR-2016-16)

Offshore Tax Avoidance: The recent string of successful enforcement actions against offshore tax cheats and the financial organizations that help them shows that it’s a bad bet to hide money and income offshore. Taxpayers are best served by coming in voluntarily and getting caught up on their tax-filing responsibilities. The IRS offers the Offshore Voluntary Disclosure Program (OVDP) to enable people catch up on their filing and tax obligations. (IR-2016-17)

Inflated Refund Claims: Taxpayers need to be on the lookout for anyone promising inflated refunds. Be wary of anyone who asks taxpayers to sign a blank return, promises a big refund before looking at their records, or charges fees based on a percentage of the refund. Scam artists use flyers, advertisements, phony store fronts and word of mouth via community groups where trust is high to find victims. (IR-2016-18)

Fake Charities: Be on guard against groups masquerading as charitable organizations to attract donations from unsuspecting contributors. Be wary of charities with names similar to familiar or nationally-known organizations. Contributors should take a few extra minutes to ensure their hard-earned money goes to legitimate and currently eligible charities. IRS.gov has the tools taxpayers need to check out the status of charitable organizations. (IR-2016-20)

Falsely Padding Deductions on Returns: Taxpayers should avoid the temptation of falsely inflating deductions or expenses on their returns to under pay what they owe or  possibly receive larger refunds. Think twice before overstating deductions such as charitable contributions and business expenses or improperly claiming such credits as the Earned Income Tax Credit or Child Tax Credit. (IR-2016-21)

Excessive Claims for Business Credits: Avoid improperly claiming the fuel tax credit, a tax benefit generally not available to most taxpayers. The credit is generally limited to off-highway business use, including use in farming. Taxpayers should also avoid misuse of the research credit. Improper claims generally involve failures to participate in or substantiate qualified research activities and/or satisfy the requirements related to qualified research expenses. (IR-2016-22)

Falsifying Income to Claim Credits: Don’t  invent income to erroneously qualify for tax credits, such as the Earned Income Tax Credit. Taxpayers are sometimes talked into doing this by scam artists. Taxpayers are best served by filing the most-accurate return possible because they are legally responsible for what is on their return. This scam can lead to taxpayers facing big bills to pay back taxes, interest and penalties. In some cases, they may even face criminal prosecution. (IR-2016-23)

Abusive Tax Shelters: Don’t use abusive tax structures to avoid paying taxes. The IRS is committed to stopping complex tax avoidance schemes and the people who create and sell them. The vast majority of taxpayers pay their fair share, and everyone should be on the lookout for people peddling tax shelters that sound too good to be true. When in doubt, taxpayers should seek an independent opinion regarding complex products they are offered. (IR-2016-25)

Frivolous Tax Arguments: Don’t use frivolous tax arguments in an effort to avoid paying tax. Promoters of frivolous schemes encourage taxpayers to make unreasonable and outlandish claims Even though they are wrong and have been repeatedly 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. The penalty for filing a frivolous tax return is $5,000. (IR-2016-27)

Additional information about tax scams is available on IRS social media sites, including YouTubehttp://www.youtube.com/irsvideos and Tumblr http://internalrevenueservice.tumblr.com, where people can search “scam” to find all the scam-related posts.

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

Consumers Warned of New Surge in IRS E-mail Schemes during 2016 Tax Season; Tax Industry Also Targeted

IR-2016-28, Feb. 18, 2016                                                        Español

WASHINGTON — The Internal Revenue Service renewed a consumer alert for e-mail schemes after seeing an approximate 400 percent surge in phishing and malware incidents so far this tax season.

The emails are designed to trick taxpayers into thinking these are official communications from the IRS or others in the tax industry, including tax software companies. The phishing schemes can ask taxpayers about a wide range of topics. E-mails can seek information related to refunds, filing status, confirming personal information, ordering transcripts and verifying PIN information.

Variations of these scams can be seen via text messages, and the communications are being reported in every section of the country.

“This dramatic jump in these scams comes at the busiest time of tax season,” said IRS Commissioner John Koskinen. “Watch out for fraudsters slipping these official-looking emails into inboxes, trying to confuse people at the very time they work on their taxes. We urge people not to click on these emails.”

This tax season the IRS has observed fraudsters more frequently asking for personal tax information, which could be used to help file false tax returns.

When people click on these email links, they are taken to sites designed to imitate an official-looking website, such as IRS.gov. The sites ask for Social Security numbers and other personal information. The sites also may carry malware, which can infect people’s computers and allow criminals to access your files or track your keystrokes to gain information.

The IRS has seen an increase in reported phishing and malware schemes, including:

  • There were 1,026 incidents reported in January, up from 254 from a year earlier.
  • The trend continued in February, nearly doubling the reported number of incidents compared to a year ago. In all, 363 incidents were reported from Feb. 1-16, compared to the 201 incidents reported for the entire month of February 2015.
  • This year’s 1,389 incidents have already topped the 2014 yearly total of 1,361, and they are halfway to matching the 2015 total of 2,748.

(Numbers provided are for phishing and malware incidents combined.)

“While more attention has focused on the continuing IRS phone scams, we are deeply worried this increase in email schemes threatens more taxpayers,” Koskinen said. “We continue to work cooperatively with our partners on this issue, and we have taken steps to strengthen our processing systems and fraud filters to watch for scam artists trying to use stolen information to file bogus tax returns.”

As the email scams increase, the IRS is working on this issue through the Security Summit initiative with state revenue departments and the tax industry. Many software companies, tax professionals and state revenue departments have seen variations in the schemes.

For example, tax professionals are also reporting phishing scams that are seeking their online credentials to IRS services, for example the IRS Tax Professional PTIN System. Tax professionals are also reporting that many of their clients are seeing the e-mail schemes.

As part of the effort to protect taxpayers, the IRS has teamed up with state revenue departments and the tax industry to make sure taxpayers understand the dangers to their personal and financial data as part of the “Taxes. Security. Together” campaign.

If a taxpayer receives an unsolicited email that appears to be from either the IRS e-services portal or an organization closely linked to the IRS, report it by sending it to phishing@irs.gov.  Learn more by going to the Report Phishing and Online Scams page.

It is important to keep in mind the IRS generally 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 protect taxpayers from email scams.

Phishing and malware schemes again made the IRS “Dirty Dozen” tax scam list this year. Check out the last IRS Phishing Scam news release for more info.

What to look for in these scams

Taxpayers receive an official-looking email from what appears to be an official source, whether the IRS or someone in the tax industry.

The underlying messages frequently ask taxpayers to update important information by clicking on a web link. The links may be masked to appear to go to official pages, but they can go to a scam page designed to look like the official page. The IRS urges people not to click on these links but instead send the email to phishing@irs.gov.

Recent email examples the IRS has seen include subject lines and underlying text referencing:

  • Numerous variations about people’s tax refund.
  • Update your filing details, which can include references to W-2.
  • Confirm your personal information.
  • Get my IP Pin.
  • Get my E-file Pin.
  • Order a transcript.
  • Complete your tax return information.

IRS, States and Tax Industry Announce New Steps to Help Public to Protect Personal Tax Data

WASHINGTON — The Internal Revenue Service, state tax administrators and the private-sector tax industry today announced a new campaign aimed at encouraging more people to protect their personal and financial data online and at home.

The “Taxes. Security. Together.” campaign is designed to raise public awareness that even routine actions on the Internet and their personal devices can affect the safety of their financial and tax data. The education campaign will complement the expanded series of protections the IRS, states and tax industry are putting in place for the start of the 2016 filing season to address tax-related identity theft. (See IR-2015-117 and Fact Sheet 2015-23.)

“Identity thieves are evolving, and so must we. Everyone has a part to play,” said IRS Commissioner John Koskinen. “The IRS, the states and the tax industry are putting in place even tougher safeguards for 2016. But, we need the public’s help. We need people to join with us and take an active role in protecting their personal and financial data from thieves.”

The campaign — which will continue through the April tax deadline — was announced today at an event hosted by the Federation of Tax Administrators, comprised of state revenue departments across the nation. The effort is part of the Security Summit, a collaborative effort started in March between the states, the IRS and the tax industry.

The joint consumer campaign includes several components, including YouTube videos, consumer-friendly Tax Tips each week and local events across the country. Several IRS publications have been added or updated to help taxpayers and tax professionals. The information will also be shared across IRS.gov, state web sites and platforms used by the tax software community and others in the tax community.

“The governments and industry are taking new steps to protect taxpayers. To build on this even further, we are joining forces to share important information across our websites — whether it’s at the state level, in the tax industry or at the IRS. This is an unprecedented collaborative effort for tax administration,” said David Sullivan, Tax Administrator for the Rhode Island Division of Taxation and immediate past president of the Federation of Tax Administrators.

It is clear that increasingly sophisticated identity thieves have access to excessive amounts of personal and financial data, which they buy and sell on the black market, and use this data to file fraudulent tax returns using victims’ names and Social Security numbers. While the IRS, states and tax industry are taking new steps to toughen their systems to protect taxpayers, there are also things people can do as well.

“People handle some of their most sensitive personal and financial information when they prepare their taxes on their home computer. But when they sit down, we want to help make sure they are preparing their taxes on a device that is secure. Tax time is two months away, but it’s not too early for people to make sure they are doing the right things to protect themselves,” said Bernie McKay, an executive vice president at Intuit, one of more than 20 members of the tax industry participating in the Summit process.

The IRS, states and tax industry are urging the public to take active steps to protect themselves. The partners are encouraging people to:

  • Use security software to protect computers. This includes a firewall and anti-virus protection. If tax returns or sensitive data are stored on the computers, encrypt the files. Use strong passwords.
  • Beware of phishing emails and phone scams. A common way for identity thieves to steal names and Social Security numbers, passwords, credit card numbers, bank account information is to simply ask for it. Clever criminals pose as trusted organizations that you recognize and send spam emails, calls or texts. Their email may ask you to update a bank account or tax software account and provide a link that to a fake website that is designed solely to steal your logon information. They may call posing as the IRS threatening you with jail or lawsuits unless you make an immediate payment. They may provide an attachment which, if you download, will infect your machine and enable the thief to access sensitive files or track your key strokes.
  • Protect personal information. Do not routinely carry your Social Security number. Properly dispose of old tax returns and other sensitive documents by shredding before trashing. Check your credit reports and Social Security Administration accounts at least annually to ensure no one is using your good credit or using your SSN for employment. Oversharing on social media also gives identity thieves even more personal details.

“These are all basic, common sense steps that you no doubt have heard many times if you are a regular Internet user. But there are 150 million households that file taxes, and problems still happen. Security software still gets turned off. And there are still, on a regular basis, victims who are tricked by these clever phishing schemes. Not only can this harm the individuals attacked, this can have a direct impact on tax administration,” Koskinen said.

The partners are asking all tax preparers and businesses to share information with employees, clients and customers. See www.irs.gov/taxessecuritytogether for more information. There also is IRS Publication 4524, Security Awareness for Taxpayers, which provides a brief overview of steps people can take.

In March, Koskinen convened an unprecedented meeting of IRS, state tax officials and the tax industry to determine what additional steps could be taken. On October 20, the Security Summit participants provided an update to the public.

For the 2016 filing season, there will be new standards for logging onto all tax software products such as minimum password requirements, new security questions and standard lockout features. The software industry will provide more than 20 additional data elements from the tax return submission to the IRS and, in turn, to the states to help identity fraudulent returns. All parties agreed to information sharing on a weekly basis to help quickly identify and adjust to new and emerging tax-related fraud schemes.

The IRS also continues to work to help victims of identity theft and pursue criminals using identity information to file fraudulent tax returns. IRS Criminal Investigation has worked on thousands of identity theft cases. Since 2013, nearly 2,000 identity thieves have been convicted, with the average sentence running well over three years.

IRS Spotlights Year-Round Tax Help in 6 Languages

WASHINGTON ― The Internal Revenue Service today reminded taxpayers that a wide range of publications and online resources are available in six languages on IRS.gov, the agency’s popular web site.

IRS.gov features online resources in Chinese, Korean, Russian and Vietnamese, as well as English and Spanish. These multilingual resources are available throughout the year, not just during tax season.

Available resources include the agency’s cornerstone Taxpayer Bill of Rights document, Publication 1, titled “Your Rights as a Taxpayer.” The publication outlines the 10 key provisions that make up the Taxpayer Bill of Rights, including the right to: be informed, quality service, pay no more than the correct amount of tax, challenge the IRS’s position and be heard, appeal an IRS decision in an independent forum, finality, privacy, confidentiality, retain representation and a fair and just tax system.

Also available in English and Spanish is Publication 17, Your Federal Income Tax. This comprehensive tax guide for individuals can be a worthwhile year-round reference for anyone still working on their 2014 return, as well as those planning for the years ahead. Other online resources are designed to help taxpayers understand the audit process, the collection process, the special rules that apply to taxpayers abroad and how to respond to IRS bills and notices. There is also information on tax fraud, including tips on spotting a phone scam, currently the most widespread tax-related scam.

To access these multilingual online resources, open the “Language” option in the top right-hand corner of IRS.gov or look for the “Other Languages” section at the bottom of each page of the website.

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www.SonNguyenCPA.com