Washington – The Internal Revenue Service today warned of a new twist tied to an old scam aimed at international taxpayers and non-resident aliens. In this scam, criminals use a fake IRS Form W-8BEN to solicit detailed personal identification and bank account information from victims.

Here’s how the scam works. Criminals mail or fax a letter indicating that although individuals are exempt from withholding and reporting income tax, they need to authenticate their information by filling out a phony version of Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting. Recipients are requested to fax the information back.

The Form W-8BEN is a legitimate U.S. tax exemption document, however, it can only be submitted through a withholding agent. In the past, fraudsters have targeted non-residents of the U.S. using the form as a lure to get personal details such as passport numbers and PIN codes. The legitimate IRS Form W-8BEN does not ask for any of that information. The phony letter or fax also refers to a Form W9095, which does not exist. Furthermore, the IRS doesn’t require a recertification of foreign status.

Scam variations

Be alert to bogus letters, emails and letters that appear to come from the IRS or your tax professional requesting information. Scam letters, forms and e-mails are designed to trick taxpayers into thinking these are official communications from the IRS or others in the tax industry, including tax software companies. These phishing schemes may seek personal information, including mother’s maiden name, passport and account information in order steal the victim’s identity and their assets.

Note that the IRS does not:

• Demand that people use a specific payment method, such as a prepaid debit card, gift card or wire transfer. The IRS will not ask for debit or credit card numbers over the phone. For people who owe taxes, make payments to the United States Treasury or review IRS.gov/payments for IRS online options.  
• Demand immediate tax payment. Normal correspondence is a letter in the mail and taxpayers can appeal or question what they owe. All taxpayers are advised to know their rights as a taxpayer.
• Threaten to bring in local police, immigration officers or other law enforcement to arrest people for not paying. The IRS also cannot revoke a license or immigration status. Threats like these are common tactics scam artists use to trick victims into believing their schemes.

Taxpayers who receive the IRS phone scam or any IRS impersonation scam should report it to the Treasury Inspector General for Tax Administration at its IRS Impersonation Scam Reporting site and to the IRS by emailing phishing@irs.gov with the subject line “IRS Impersonation Scam.” 

Seminar topics for the 2018 IRS Nationwide Tax Forums are now available. You can choose from multiple sessions on tax reform, cyber-security and much more. Seminars are available for practitioners at all levels, and tax professionals earn continuing education credits for attending. Visit www.irstaxforum.com for more information and to register.

With National Small Business Week approaching later this month, the IRS is preparing a special series of presentations to help people navigate difficult tax issues

Sign up now for the following National Small Business Week Webcasts:

April 30: Can I Deduct This?
May 1: Employee versus Independent Contractor
May 2: Pay Now? Pay Later? Can’t Pay?
May 3: Small Business Resources
May 4: PayCheck Check-Up

Two 30-minute sessions are available each day, Session 1 at 11 a.m. and Session 2 at 1 p.m. ET.

To register, click on the links below:

April 30     Session 1    -    Session 2
May 1        Session 1    -    Session 2 
May 2        Session 1    -    Session 2
May 3        Session 1    -    Session 2
May 4        Session 1     -   Session 2     

Closed Captioning will be available for Session 2 only. Continuing education credits will not be offered. For questions, email: SBSE.SL.Web.Conference.Team@irs.gov

The Tax Cuts and Jobs Act, signed Dec. 22, 2017, changed some laws regarding depreciation deductions. For example, the new law increases the maximum deduction for a section 179 property deduction from $500,000 to $1 million. It also increases the phase-out threshold from $2 million to $2.5 million. Read the depreciation and expensing fact sheet for more.

As a tax professional, you know how important it is to keep good records. Did you know that includes records of electronic and telephone contacts with the IRS? If questions later arise, having a complete record of all documents and contacts may speed up resolution of your issue.

If you need to contact the IRS by telephone, note key information from the conversation, such as:

• The date and time of the call

• The name and employee identification number of the contact representative

• Any resolution or information you received from the representative. 

Before you call, also check IRS.gov for the topics and information people ask about most. You may find the information you are looking for without having to call the IRS.

Cross References
- IRS Letter to NAEA Dated March 15, 2018

The IRS has informed the National Association of Enrolled Agents (NAEA) that Enrolled Agents (EAs) are no longer allowed to use the previously IRS approved EA logo.

The IRS did create the logo for the EA program and supported its use. Unfortunately, the logo created legal concerns. The EA logo included a likeness or imitation of a government insignia or seal (the IRS eagle). Use of such insignia, seals or emblems are prescribed for the use of officers and employees of departments and agencies of the United States. Use of such likenesses and imitations without specific statutory authorization or regulation authorized by law may be criminally actionable if found to be in violation of 18 USC section 333, if it is interpreted or construed as conveying the false impression that an advertisement, solicitation, business activity, or product is approved, authorized by, or associated with the Department of Treasury. EAs are not employees of the IRS or Department of Treasury. They are simply licensed by the IRS and any advertisement or solicitation that could infer more than licensure is not consistent with the advertising and solicitation provisions of section 10.30(a) of Circular 230, and may also be in violation of 18 USC section 333.

For these reasons, use of the prior logo must cease. The IRS Return Preparer Office and the Office of Professional Responsibility have not yet taken any action against EAs using the prior approved logo. However, continued use of the logo by an EA could be subject to a cease and desist action. EAs must take action within six months of the release of a new IRS approved logo to delete the prior logo from advertising, websites, business cards, and other communications with clients or prospective clients.

NAEA will inform its members when the new IRS approved logo is ready for use.

Urgent: IRS provides an extra day for taxpayers to file, pay their taxes following system issues. File by midnight, April 18. 

Did You Know? Paid tax professionals aren’t permitted to endorse or otherwise negotiate a refund check issued to a taxpayer. This is true, even if the taxpayer requests their refund be directed into your bank account or in your name. Failure to comply could result in an Internal Revenue Code, Section 6695(f) penalty of $510 for each tax return with no maximum penalty amount and no reasonable cause exceptions.

For more information on Preparer Penalties visit: www.irs.gov/tax-professionals/summary-of-preparer-penalties-under-title-26

Did You Know? Internal Revenue Code, Section 6107(b) requires tax return preparers to:

a. Retain a completed copy of all returns prepared or a list containing the names, taxpayer identification numbers, tax years, and types of all returns prepared, and

b. Make such records available for inspection upon request by the IRS for a three-year period

For each failure to comply, you could be subject to an Internal Revenue Code Section 6695(d) penalty of $50 with a maximum penalty of $25,500 per year.

For more information on Preparer Penalties visit: www.irs.gov/tax-professionals/summary-of-preparer-penalties-under-title-26

Preparer Penalty Awareness: IRC 6695(c) Failure to Furnish Identifying Number

Did You Know? Internal Revenue Code, Section 6109(a)(4) requires paid tax return preparers to include an identifying number along with their name when signing the return. IRS regulations require the identifying number be a Preparer Tax Identification Number (PTIN). Failure to provide a PTIN may result in an Internal Revenue Code, Section 6695(c) penalty of $50 for each failure with a maximum penalty of $25,500 in any calendar year.

For more information on Preparer Penalties visit: www.irs.gov/tax-professionals/summary-of-preparer-penalties-under-title-26