What personal information does the IRS have access to?
Stolen Identity Refund Fraud
ALERT: The IRS does not send unsolicited email, text messages or use social media to discuss your personal tax issues. If you receive a telephone call from someone claiming to be an IRS employee and demanding money, you should consult the IRS Tax Scams/Consumer Alerts webpage: http://www.irs.gov/uac/Tax-Scams-Consumer-Alerts. If you know you don’t owe taxes or have no reason to believe that you do, report the incident to the Treasury Inspector General for Tax Administration (TIGTA) at 1.800.366.4484 or at www.tigta.gov.
Stolen Identity Refund Fraud (SIRF) Enforcement
One of the Tax Division’s highest priorities is prosecuting people who use stolen identities to steal money from the United States Treasury by filing fake tax returns that claim tax refunds. Working to stop Stolen Identity Refund Fraud, or SIRF, is vital because these schemes threaten to disrupt the orderly administration of the income tax system for hundreds of thousands of law abiding taxpayers and have cost the United States Treasury billions of dollars.
SIRF crimes are often perpetrated by large criminal enterprises with individuals at all stages of the scheme: those who steal the Social Security Numbers (SSN) and other personal identifying information, those who file false returns with the Internal Revenue Service (IRS), those who facilitate obtaining the refunds, and the masterminds who promote the schemes. These criminal enterprises are able to exploit the speed and relative anonymity of highly automated systems for storing personal information, preparing and filing tax returns electronically, and generating income tax refunds quickly—often in the form of electronic payments.
Identities used in SIRF crimes may be stolen from anywhere. For example, SIRF criminals have used Social Security Numbers stolen from hospitals, nursing homes, and public death lists, thereby exploiting some of the most vulnerable members of our communities, including the elderly, the infirm, and grieving families. However, everyone with a Social Security Number is potentially vulnerable to having his or her identity stolen. The IRS estimated that during the 2013 filing season alone, over 5 million tax returns were filed using stolen identities, claiming approximately $30 billion in refunds. The IRS was able to stop or recover over $24 billion of that total, or approximately 81% of the fraudulent claims.
Typically SIRF perpetrators file the false returns electronically, early in the tax filing season so that the IRS receives the false SIRF return before legitimate taxpayers have time to file their returns. The SIRF perpetrators arrange to have the refunds electronically transferred to debit cards or delivered to addresses where they can steal the refund out of the mail.
SIRF crimes cross state borders, and increasingly, national borders. Successfully prosecuting the wrongdoers involves a national strategy of information sharing and coordinated prosecution. The nationwide reach of the Tax Division’s centralized criminal tax enforcement and its ability to coordinate closely with every United States Attorney’s Office, and through them with local law enforcement and police, makes it possible for the Government to respond efficiently and forcefully to the explosion of SIRF crimes. As part of this effort, the Division has established an Advisory Board of experienced prosecutors to develop and implement uniform national policies for fighting SIRF crimes. The Tax Division also implemented expedited procedures for working with the United States Attorneys’ Offices on SIRF crimes to ensure the quickest possible investigation and prosecution of these cases and has worked with United States Attorneys’ Offices, the IRS, and other law enforcement agencies, to establish task forces in areas with a high concentration of SIRF crime. Additionally, the Division works closely with the IRS to quickly share information obtained from SIRF investigations and prosecutions, which the IRS can use to make it more difficult for the schemes to be successful by blocking the false claims for refunds from being paid.
The Tax Division has had considerable success in SIRF prosecutions, which have generated long sentences for those convicted of SIRF crimes. This page contains links to articles, websites, and press releases with information on how the Justice Department and IRS are dealing with SIRF crimes, guidance for citizens whose identities have been stolen and used to file false tax returns, and efforts by the Justice Department to prosecute these crimes.
Guide to filing your taxes in 2023
The end of the 2023 tax season for most Americans is April 18, 2023. If you are unable to file before that date you still have options.
- You can file for an extension. Filing an extension
gives you an additional six months to October 15, 2023, to submit a complete return. If you believe you will owe taxes you must estimate how much you owe and pay the amount due with your extension form
Exceptions to 2023 tax season filing deadline
- Disaster-area taxpayers in most of California and parts of Alabama and Georgia now have until Oct. 16, 2023 to file a federal tax return
Changes for 2023
When you file your taxes this year, you may have a lower refund amount, since some tax credits that were expanded and increased in 2021 will return to 2019 levels. The 2023 changes
include amounts for the Child Tax Credit (CTC), Earned Income Tax Credit (EITC), and Child and Dependent Care Credit.
- Those who got $3,600 per dependent in 2021 for the CTC will, if eligible, get $2,000 for the 2022 tax year.
- For the EITC, eligible taxpayers with no children who received roughly $1,500 in 2021 will now get a maximum of $530 in 2022.
- The Child and Dependent Care Credit returns to a maximum of $2,100 in 2022 instead of $8,000 in 2021.
About filing your tax return
, which is $12,950 for single filers and $25,900 for married couples filing jointly , you may not be required to file a return. However, you may want to file anyway. In many cases, especially for people with low incomes, these features can increase the amount you could receive in a refund. There are some key factors to make sure you look out for.
If you worked during 2022 and had taxes withheld from your paycheck, you may be able to get some or all of that “over-withholding” back in your refund. Make sure you get W2 forms from all your employers and enter that information into the tax form when you fill it out.
The earned income tax credit
If you are eligible for this credit, the maximum amount you could receive is:
- $560 if you have no dependent children
- $3,733 if you have one qualifying child
- $6,164 if you have two qualifying children
- $6,935 if you have three or more qualifying children
The child tax credit (CTC)
is worth a maximum of $2,000 per qualifying child. Up to $1,500 is refundable. To be eligible for the CTC, you must have earned more than $2,500.
Different ways to file your taxes
If you are one of the estimated 100 million people that are eligible to file your tax return for free you can keep all of your refund money by choosing one of three options.
In person full-service free tax preparation
If you meet the requirements below, you may be able to take advantage of in-person, full-service tax preparation services through the IRS Volunteer Income Tax Assistance (VITA)
, AARP Foundation Tax-Aide, and The Tax Counseling for the Elderly (TCE) programs. These free programs have operated for over 50 years and use IRS certified tax preparers and meet high IRS quality standards. This means you can be assured that you will have an accurate return.
You can schedule an appointment with VITA/TCE and Tax-Aide sites if you:
- Generally make $60,000 or less,
- Have a disability,
- Have limited English skills or speak English as a second language, or
- Are 60 years or older
Note: Some VITA or AARP Tax Aide sites are open year-round and some close at the end of tax season. When you search for a site, check the “Dates open” column to find a site that plans to remain open after April 18, 2023.
Remote full-service free tax preparation
You can prepare your own return with help from IRS certified volunteers when you need it through MyFreeTaxes
- Your income is $73,000 or less.
You can get connected to VITA providers around the country virtually to have your return prepared by signing up through GetYourRefund
- Your income is $66,000 or less.
You can prepare and file your own return through IRS Free File
- If your income is $73,000 or less, you can access guided return preparation assistance.
- If your income is greater than $73,000 you can access fillable forms to prepare your own return without assistance.
Free tax filing for servicemembers
You can prepare and file your tax return for free through MilTax
- Active-duty service members, spouses and dependent children of the eligible service members.
- Members of the National Guard and reserve — regardless of activation status.
- Retired and honorably discharged service members, including Coast Guard veterans, within 365 days of their discharge.
- A family member who is managing the affairs of an eligible service member while the service member is deployed.
- A designated family member of a severely-injured service member who is incapable of handling their own affairs.
- Eligible survivors of active-duty, National Guard and reserve deceased service members regardless of conflict or activation status.
- Some members of the Defense Department civilian expeditionary workforce.
Consider these factors before using a fee-based tax preparer
Before choosing to pay someone to prepare your taxes here are a few things to consider:
- The fees you pay will generally be based on the complexity of your return. If for example you have multiple sources of income including self-employment, are claiming certain tax credits, or have had changes in your life circumstances during the course of the year you will likely pay more than if you have a simple return.
- Despite the complexity of your return, you may still be eligible to file your taxes for free if you meet the guidelines listed above so check with the free provider of your choice first before paying to have your taxes done.
Understand refund anticipation checks and refund advance loans
Refund Anticipation Check (RAC)
If you use a fee-based tax preparer and you don’t have the necessary filing fees, some tax preparers may offer you a refund anticipation check (RAC). A RAC allows you to pay the tax preparation fee out of your refund instead of upfront. When you receive your refund, the tax preparer will take out the RAC fee, filing fee, and any other service fees they charged you. A RAC doesn’t deliver your refund more quickly.
RAC fees typically range from $30 to $50.
Refund Advance Loan (RAL)
Some fee-based tax preparers may offer you a refund advance loan (RAL) so that you can get a portion of your expected refund in advance. Tax preparers may call them a “tax refund advance.” If you decide to do an advance, you will borrow money upfront from the preparer, and once the IRS issues your refund to the tax preparer, you receive the remaining portion, minus the RAL fee, and any other service fees they charged you. The amount of a RAL is typically a percentage of your estimated tax refund.
All tax preparation firms are different. Some firms offer RALs with no fees or interest, but others may charge fees and interest.
Keep in mind that when you file electronically, the IRS typically issues most refunds in less than 21 days, so you may end up paying a big RAL fee for a short-term advance.
As with any financial product or service, carefully consider all fees and charges, as well as timing, to help make an informed decision that’s best for your situation.
Access your tax refund quickly and safely
If you think you may receive a refund, here are some things to think about before you file your return:
- Electronically filing and choosing direct deposit is the fastest way to get your refund. When using direct deposit, the IRS normally issues refunds within 21 days. Issuance of paper check refunds may take much longer. The IRS estimates 4 to 6 weeks.
- If you already have an account with a bank or credit union, make sure you have your information ready — including the account and routing number — when you file your tax return. You can provide that information on the tax form and the IRS will automatically deposit the funds into your account.
- If you have a prepaid card that accepts direct deposit, you can also receive your refund on the card. Check with your prepaid card provider to get the routing and account number assigned to the card before you file your return.
- Learn more about choosing the right prepaid card.
Watch out for tax scams!
Scammers usually target you by impersonating the IRS to get you to share your personal information with them. Thousands of people have lost millions of dollars and their personal information to tax scams. Scammers use mail, telephone, or email to target individuals, businesses, and payroll and tax professionals.
The IRS does not initiate contact with taxpayers by email, text messages, or social media channels to request personal or financial information. Learn how to recognize the telltale signs of a scam
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Having a problem with a financial product or service? We have answers to frequently asked questions and can help you connect with companies if you have a complaint.
Does the IRS Have Access to Your Bank Accounts in the U.S.?
In today’s post 911 world, the value of privacy is at an all-time high. Many U.S. taxpayers simply do not realize how exposed their financials already may be, both to third parties and the federal government. Based on statements made recently by IRS officials, any unwanted financial transparency is likely to increase over time.
Most recently, the Treasury Department has announced revisions to its plan to implement specific reporting requirements against domestic banks and offshore banks who have U.S. taxpayer clients. These proposals have been strictly scrutinized by the domestic and international banking communities and conservative legislators, but the IRS is making no secret that it plans to use the new measures as soon as they are available. This would lead to more civil audits and criminal tax prosecutions, which should alarm all taxpayers, not just those at the top of the earning chain.
You may be able to act now to reduce the chances of a costly government audit or criminal tax investigations. The first step in that process is scheduling a consultation with the Law Offices of David W. Klasing. Our dual-licensed Tax Lawyers and CPAs can assess your tax reporting history, no matter how complicated, and help you guarantee a pass on criminal tax prosecution in the right circumstances. Call today at (800) 681-1295 or schedule online today to book a reduced rate initial consultation.
Treasury Department Amends Initial Proposal for Bank Reporting Requirements
The U.S. government is making changes to an original plan that would heighten reporting requirements for U.S. banks. The initial plan, proposed in May of 2021, would require banks with U.S. account holders to disclose the total amount of money moving in and out of an account. These figures would have to be broken down according to whether the transaction involved a foreign entity and whether the same account holder controlled both the source account and the recipient. Any account with more than $600 of transactions would be subject to the reporting requirements proposed in May.
In response to widespread concern about the initial proposal, the Biden administration and the Treasury Department have now made changes to the proposal that would constitute a substantial step down from what was initially proposed in May. In the new proposal, the trigger for IRS reporting would come when more than $10,000 in transfers occur on a single account over the course of one year. The proposed $10,000 threshold would not take into account deposits of salary or wages. Banks would be able to round their reported figures to the nearest $1,000.
Banks are naturally bent on opposing this action. The American Bankers Association (ABA) has indicated that they will oppose any such measure, regardless of the recent changes, so long as the plan implements additional reporting requirements.
How Does the New IRS Reporting Initiative Affect Bank Accounts in the U.S.?
Contained within the proposal are critical details that could impact how banks function going forward if passed. While the proposal does not include any additional taxes or tax increases, these additional measures may impact the way your bank handles your account.
Banks are already responsible for reporting interest income. The form that is used for this purpose, Form 1099-INT, would get a little bit longer. However, the government claims that spending data will not be collected through this form, and that the requirement is limited to the sum of money that flows in and out of the account.
While the administration insists that the measure is intended to target upper-class tax evaders with opaque income streams from sources other than salary, opponents of the measure are wary of its impact on other taxpayers. Legislators on the opposite side of the aisle warn that the new reporting guidelines could be used to catch working class taxpayers on honest mistakes. This would fit the pattern of previous behavior from the IRS, who actually target lower-earning American taxpayers for audits at higher rates than higher-earning individuals.
With the prospect of this proposal becoming law in the future, banks face the difficult task of increasing oversight and generating more complex filings with the government. Satisfying these requirements will cost time and money. It should be expected that these costs will likely be passed on to the account holder. If the new plan is passed, you would be reasonable to expect to see bank fees hike to compensate for the extra legwork.
What Can You Do to Prevent Possible IRS Audits?
If the IRS is granted access to this new data directly from banks, the doors on potential civil, eggshell and reverse eggshell audits and criminal tax investigations will likely swing wide open, leaving tens of thousands of taxpayers exposed in a way they had not been before. If you are concerned about the prospect of a civil audit or criminal tax investigation in light of these new developments in Washington, you may act proactively to protect your net worth and your very liberty.
One way in which you can defend yourself against an audit is through voluntary disclosure. Many U.S. taxpayers avail themselves of the government’s voluntary disclosure program every year. Essentially, the IRS is more likely to look favorably upon taxpayers who come forward voluntarily with additional information that modifies inconsistencies in past filings. By incurring this favor, disclosing taxpayers will ordinarily see their possible civil fines reduced and criminal exposure eliminated entirely.
Voluntary disclosure is a delicate process. If the government is already aware of the tax impropriety to be disclosed the disclosure may hurt the taxpayer more than it helps. Never attempt to voluntarily disclose additional financial information to the government without first speaking to one of the dual-licensed Tax Attorneys and CPAs at the Tax Law Offices of David W. Klasing. Whether you are already facing an audit or are concerned about an IRS criminal investigation special agent showing up at your door in the future, we urge you to reach out to us today for help.
Note: As long as a taxpayer that has willfully committed tax crimes (potentially including non-filed foreign information returns coupled with affirmative evasion of U.S. income tax on offshore income) self-reports the tax fraud (including a pattern of non-filed returns) through a domestic or offshore voluntary disclosurebefore the IRS has started an audit or criminal tax investigation / prosecution, the taxpayer can ordinarily be successfully brought back into tax compliance and receive a nearly guaranteed pass on criminal tax prosecution and simultaneously often receive a break on the civil penalties that would otherwise apply.
It is imperative that you hire an experienced and reputable criminal tax defense attorney to take you through the voluntary disclosure process. Only an Attorney has the Attorney Client Privilege and Work Product Privileges that will prevent the very professional that you hire from being potentially being forced to become a witness against you, especially where they prepared the returns that need to be amended, in a subsequent criminal tax audit, investigation or prosecution.
Moreover, only an Attorney can enter you into a voluntary disclosure without engaging in the unauthorized practice of law (a crime in itself). Only an Attorney trained in Criminal Tax Defense fully understands the risks and rewards involved in voluntary disclosures and how to protect you if you do not qualify for a voluntary disclosure.
As uniquely qualified and extensively experienced Criminal Tax Defense Tax Attorneys, KovelCPAs and EAs, our firm provides a one stop shop to efficiently achieve the optimal and predictable results that simultaneously protect your liberty and your net worth. See our Testimonials to see what our clients have to say about us!
Want to Learn More About the Impact of IRS Access to Your Bank Account? Call Us Today
If you have failed to file a tax return for one or more years or have taken a position on a tax return that could not be supported upon an IRS or state tax authority audit, eggshell audit, reverse eggshell audit, or criminal tax investigation, it is in your best interest to contact an experienced tax defense attorney to determine your best route back into federal or state tax compliance without facing criminal prosecution.
At the Tax Law Offices of David W. Klasing, our dual-certified tax lawyers and CPAs stay current on developments in tax legislation so that our clients remain protected. Call our offices at (800) 681-1295 to schedule your first appointment.