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Scammers pretending to be from the IRS continue to target taxpayers. These scams take many different forms. Among the most common are phone calls. Thieves use the IRS name to try and steal money from taxpayers. Identity theft can also happen with such scams.

Taxpayers need to be cautious of phone calls or automated messages from scammers who claim to be from the IRS. These criminals often say the taxpayer owes money. They also demand immediate payment. Scammers also lie to taxpayers and say they are due a refund. They do this to lure their victims into giving their bank account information over the phone. The IRS warns taxpayers not to fall for these scams.

Below are tips that will help avoid becoming a victim during the summer months and throughout the year:

The IRS will NOT:

• Call to demand immediate payment using specific payment method such as a prepaid debit card, gift card or wire transfer. Generally, the IRS first mails a bill to taxpayers who owe taxes. If the IRS assigns a case to a Private Debt Collector (PCA), both the IRS and the authorized collection agency send a letter to the taxpayer. Payment is always to the United States Treasury.
• Threaten to immediately bring in local police or other law-enforcement groups to have the taxpayer arrested for not paying.
• Demand payment of taxes without giving the taxpayer the opportunity to question or appeal the amount owed.
• Ask for credit or debit card numbers over the phone.

If a taxpayer does not owe any tax, they should:

• Contact the Treasury Inspector General for Tax Administration. Use TIGTA’s “IRS Impersonation Scam Reporting” web page to report the incident.
• Report the incident to the Federal Trade Commission. Use the “FTC Complaint Assistant” on FTC.gov. Please add “IRS Telephone Scam” to the comments of your report.

If a taxpayer is not sure whether they owe any tax, they can view their tax account information on IRS.gov to find out.

For help with any income tax question call one of our offices:

Plymouth 734.454.4100, Allen Park 313.388.7180,

Grayling 989.348.4055,  Livonia 734-462-6161,

Royal Oak 248.399.7331, or St. Clair Shores 313.371.6600

Taxpayers must report all gambling winnings as income. They must be able to itemize deductions to claim any gambling losses on their tax return.

Taxpayers who gamble may find these tax tips helpful:

1. Gambling income. Income from gambling includes winnings from the lottery, horseracing and casinos. It also includes cash and non-cash prizes. Taxpayers must report the fair market value of non-cash prizes like cars and trips to the IRS.
2. Payer tax form. The payer may issue a Form W-2G, Certain Gambling Winnings, to winning taxpayers based on the type of gambling, the amount they win and other factors. The payer also sends a copy of the form to the IRS. Taxpayers should also get a Form W-2G if the payer withholds income tax from their winnings.
3. How to report winnings. Taxpayers must report all gambling winnings as income. They normally should report all gambling winnings for the year on their tax return as “Other Income.” This is true even if the taxpayer doesn’t get a Form W-2G.
4. How to deduct losses. Taxpayers are able to deduct gambling losses on Schedule A, Itemized Deductions, but keep in mind, they can’t deduct gambling losses that are more than their winnings.
5. Keep gambling receipts. Keep records of gambling wins and losses. This means gambling receipts, statements and tickets or by using a gambling log or diary.

For help with any income tax question call one of our offices:

Plymouth 734.454.4100, Allen Park 313.388.7180,

Grayling 989.348.4055,  Livonia 734-462-6161,

Royal Oak 248.399.7331, or St. Clair Shores 313.371.6600

Identity theft can happen to anyone. Knowing how to respond will help you if you ever have to recover your identity.  If your identity gets compromised you put alerts on your credit reports, notifying the bank, contact all your credit card companies, and get a new driver’s license.

There is a lot more to do to protect your digital identity. Whether you’ve lost your device or you want to be prepared, here are some tips you can take to protect your digital identity:

Smart Phone:

• Lock your phone. Use at least a 6-digit passcode on your device, or use the pattern lock or fingerprint scanner. Set the device to lock when not in use. This is especially important if you use a mobile wallet or money transfer apps.
• Update it and back it up. Back up your device regularly and make sure automatic updates are turned on. Backing up your phone regularly and automatically makes sure that you’ll still have your stuff – if it disappears.
• Get help finding your phone. Install and turn on Find My iPhone (iOS) or Find My Device (Android). These apps could help you locate your device if you lose it. If your phone is stolen, these apps also let you remotely issue a command to erase your device – even if a thief turns it off.
• Alert your wireless provider if your phone is missing. Make the call as soon as you know your device is missing. They can permanently or temporarily disable the SIM card to stop someone from using the device for calls or the internet. It helps, too, if you have a record of your phone’s serial number or IMEI number (a unique identifier for your phone).

Accounts:

• Turn on two-factor authentication. That means you’ll give your password and a second way to prove that you’re you. This extra layer of security makes it much harder for thieves to get into your accounts and lock you out. Many providers give several options to authenticate your identity, so be sure you have a backup method (like one-time use codes or a backup email address) in case you don’t have access to your device to receive texts or phone calls.
• Know which devices have access to your accounts. Many social media sites and email providers, and some phone operating systems, let you view the logins for your devices from the settings menu. You can remove devices from the account, and log out of the site remotely using a computer or another device. That’s handy if ever you lose your phone, tablet, or laptop.
• Check your log-in and account notifications. Many email and social media accounts can notify you if a new device connects to your account, or if someone tried to change your passwords.
• When in doubt, change your passwords. If you’ve lost your device, change your passwords. Many of us set our devices to remember passwords – which could mean that someone who gets your phone could get access to your accounts and personal information. So: if you lose your phone, change your email, social media, online banking, shopping, and other passwords right away.

For more tips on what to do to protect yourself from identity thieves, check out ftc.gov/idtheft.

For help with tax planning, please call one of our offices:

Plymouth 734.454.4100,    Allen Park 313.388.7180,

Grayling 989.348.4055,     Livonia 734-462-6161,

Royal Oak 248.399.7331,    or    St. Clair Shores 313.371.6600

The federal income tax is a pay-as-you-go system. Employers generally withhold tax from workers’ wages. Taxpayers also often have taxes withheld from certain other income including pensions, bonuses, commissions and gambling winnings.

People who do not pay tax through withholding, like the self-employed, generally pay estimated tax. In addition, those who earn income such as dividends, interest, capital gains, rent and royalties are usually required to make estimated tax payments.

Each year, because of life events like changes to household income or family size, some people get a larger refund than they expect while others find they owe more tax.

To prevent a tax-time surprise, the IRS offers these tips:

• New Job. When starting a new job, an employee must fill out a Form W-4, Employee’s Withholding Allowance Certificate. Employers use this form to calculate how much federal income tax to withhold from regular pay, bonuses, commissions and vacation allowances. The IRS Withholding Calculator tool on IRS.gov is easy for taxpayers to use to figure how much tax to withhold to avoid surprises.
• Estimated Tax. People who have income not subject to withholding may need to pay estimated tax. Those expecting to owe $1,000 or more than taxes withheld from their wages may also need to make estimated tax payments to avoid penalties. The worksheet in Form 1040-ES, Estimated Tax for Individuals, helps to figure the tax.
• Life Events. A change in marital status, the birth of a child or the purchase of a new home can change the amount of taxes a taxpayer owes. The Managing Your Taxes After a Life Event page on IRS.gov provides resources to explain the tax impact of these changes. In most cases, an employee can submit a new Form W–4 to their employer anytime.

For help with tax planning, please call one of our offices:

Plymouth 734.454.4100,    Allen Park 313.388.7180,

Grayling 989.348.4055,     Livonia 734-462-6161,

Royal Oak 248.399.7331,    or    St. Clair Shores 313.371.6600

Learning you are a victim of identity theft can be a stressful event. Identity theft is also a challenge to businesses, organizations and government agencies, including the IRS. Tax-related identity theft occurs when someone uses your stolen Social Security number to file a tax return claiming a fraudulent refund. Many times, you may not be aware that someone has stolen your identity. The IRS may be the first to let you know you’re a victim of ID theft after you try to file your taxes. The IRS combats tax-related identity theft with a strategy of prevention, detection and victim assistance. The IRS is making progress against this crime and it remains one of the agency’s highest priorities. Here are ten things to know about ID Theft:

1. Protect your Records.  Do not carry your Social Security card or other documents with your SSN on them. Only provide your SSN if it’s necessary and you know the person requesting it. Protect your personal information at home and protect your computers with anti-spam and anti-virus software. Routinely change passwords for Internet accounts.

2. Don’t Fall for Scams.  The IRS will not call you to demand immediate payment, nor will it call about taxes owed without first mailing you a bill. Beware of threatening phone calls from someone claiming to be from the IRS. If you have no reason to believe you owe taxes, report the incident to the Treasury Inspector General for Tax Administration (TIGTA) at 1-800-366-4484.

3. Report ID Theft to Law Enforcement.  If your SSN was compromised and you think you may be the victim of tax-related ID theft, file a police report. You can also file a report with the Federal Trade Commission using the FTC Complaint Assistant. It’s also important to contact one of the three credit bureaus so they can place a freeze on your account.

4. Complete an IRS Form 14039 Identity Theft Affidavit.  Once you’ve filed a police report, file an IRS Form 14039 Identity Theft Affidavit.  Print the form and mail or fax it according to the instructions. Continue to pay your taxes and file your tax return, even if you must do so by paper.

5. Understand IRS Notices.  Once the IRS verifies a taxpayer’s identity, the agency will mail a particular letter to the taxpayer. The notice says that the IRS is monitoring the taxpayer’s account. Some notices may contain a unique Identity Protection Personal Identification Number (IP PIN) for tax filing purposes.

6. IP PINs.  If a taxpayer reports that they are a victim of ID theft or the IRS identifies a taxpayer as being a victim, they will be issued an IP PIN. The IP PIN is a unique six-digit number that a victim of ID theft uses to file a tax return. In 2014, the IRS launched an IP PIN Pilot program. The program offers residents of Florida, Georgia and Washington, D.C., the opportunity to apply for an IP PIN, due to high levels of tax-related identity theft there.

7. Data Breaches.  If you learn about a data breach that may have compromised your personal information, keep in mind not every data breach results in identity theft.  Further, not every identity theft case involves taxes. Make sure you know what kind of information has been stolen so you can take the appropriate steps before contacting the IRS.

8. Report Suspicious Activity.  If you suspect or know of an individual or business that is committing tax fraud, you can visit IRS.gov and follow the chart on How to Report Suspected Tax Fraud Activity.

9. Combating ID Theft.  Over the past few years, nearly 2,000 people were convicted in connection with refund fraud related to identity theft. The average prison sentence for identity theft-related tax refund fraud grew to 43 months in 2014 from 38 months in 2013, with the longest sentence being 27 years.   During 2014, the IRS stopped more than $15 billion of fraudulent refunds, including those related to identity theft.  Additionally, as the IRS improves its processing filters, the agency has also been able to halt more suspicious returns before they are processed. So far this year, new fraud filters stopped about 3 million suspicious returns for review, an increase of more than 700,000 from the year before.

10. Service Options. Information about tax-related identity theft is available online. We have a special section on IRS.gov devoted to identity theft and a phone number available for victims to obtain assistance.

For help with your taxes, please call one of our offices:

Plymouth 734.454.4100,    Allen Park 313.388.7180,

Grayling 989.348.4055,     Livonia 734-462-6161,

Royal Oak 248.399.7331,    or    St. Clair Shores 313.371.6600

Summertime is a time of year when people rent out their property. In addition to the standard clean up and maintenance, owners need to be aware of the tax implications of residential and vacation home rentals.

Receiving money for the use of a dwelling also used as a taxpayer’s personal residence generally requires reporting the rental income on a tax return. It also means certain expenses become deductible to reduce the total amount of rental income that’s subject to tax.

Dwelling Unit.  This may be a house, an apartment, condominium, mobile home, boat, vacation home or similar property. It’s possible to use more than one dwelling unit as a residence during the year.

Used as a Home.  The dwelling unit is considered to be used as a residence if the taxpayer uses it for personal purposes during the tax year for more than the greater of: 14 days   or 10% of the total days rented to others at a fair rental price. Rental expenses cannot be more than the rent received.

Personal Use.  Personal use means use by the owner, owner’s family, friends, other property owners and their families. Personal use includes anyone paying less than a fair rental price.

Divide Expenses. Special rules generally apply to the rental of a home, apartment or other dwelling unit that is used by the taxpayer as a residence during the taxable year. Usually, rental income must be reported in full, and any expenses need to be divided between personal and business purposes. Special deduction limits apply.

How to Report. Use Schedule E to report rental income and rental expenses on Supplemental Income and Loss. Rental income may also be subject to Net Investment Income Tax. Use Schedule A to report deductible expenses for personal use on Itemized Deductions. This includes such costs as mortgage interest, property taxes and casualty losses.

Special Rules.  If the dwelling unit is rented out fewer than 15 days during the year, none of the rental income is reportable and none of the rental expenses are deductible. Find out more about these rules; see Publication 527, Residential Rental Property (Including Rental of Vacation Homes).

Use IRS Free File.  Renting a vacation home can be complicated and IRS Free File can make filing a tax return easier. IRS Free File is available until Oct. 16. Taxpayers earning $64,000 or less can use brand-name tax software. Those earning more can use Free File Fillable Forms, an electronic version of IRS paper forms. Free File is available only through the IRS.gov website. You can get forms and publications on IRS.gov/forms at any time.

Avoid scams. The IRS will never initiate contact using social media or text message. First contact generally comes in the mail. Those wondering if they owe money to the IRS can view their tax account information on IRS.gov to find out.

For help with your taxes, please call one of our offices:

Plymouth 734.454.4100,    Allen Park 313.388.7180,

Grayling 989.348.4055,     Livonia 734-462-6161,

Royal Oak 248.399.7331,    or    St. Clair Shores 313.371.6600

The IRS mails millions of letters every year to taxpayers for a variety of reasons. Keep the following suggestions in mind on how to best handle a letter or notice from the IRS:

1. Do not panic. Simply responding will take care of most IRS letters and notices.
2. Do not ignore the letter. Most IRS notices are about federal tax returns or tax accounts. Each notice deals with a specific issue and includes specific instructions on what to do. Read the letter carefully; some notices or letters require a response by a specific date.
3. Respond timely. A notice may likely be about changes to a taxpayer’s account, taxes owed or a payment request. Sometimes a notice may ask for more information about a specific issue or item on a tax return. A timely response could minimize additional interest and penalty charges.
4. If a notice indicates a changed or corrected tax return, review the information and compare it with your original return. If the taxpayer agrees, they should note the corrections on their copy of the tax return for their records. There is usually no need to reply to a notice unless specifically instructed to do so, or to make a payment.
5. Taxpayers must respond to a notice they do not agree with. They should mail a letter explaining why they disagree to the address on the contact stub at the bottom of the notice. Include information and documents for the IRS to consider and allow at least 30 days for a response.
6. There is no need to call the IRS or make an appointment at a taxpayer assistance center for most notices. If a call seems necessary, use the phone number in the upper right-hand corner of the notice. Be sure to have a copy of the related tax return and notice when calling.
7. Always keep copies of any notices received with tax records.
8.  The IRS and its authorized private collection agency will send letters and notices by mail. The IRS will not demand payment a certain way, such as prepaid debit or credit card. Taxpayers have several payment options for taxes owed.

For help with your taxes, please call one of our offices:

Plymouth 734.454.4100,    Allen Park 313.388.7180,

Grayling 989.348.4055,     Livonia 734-462-6161,

Royal Oak 248.399.7331,    or    St. Clair Shores 313.371.6600

Day camps are common during the summer months. Many parents enroll their children in a day camp or pay for day care so they can work or look for work. If this applies to you, your costs may qualify for a federal tax credit. Here are 10 things to know about the Child and Dependent Care Credit:

1. Care for Qualifying Persons.  Your expenses must be for the care of one or more qualifying persons. Your dependent child or children under age 13 generally qualify.
2. Work-related Expenses. Your expenses for care must be work-related. In other words, you must pay for the care so you can work or look for work. This rule also applies to your spouse if you file a joint return. Your spouse meets this rule during any month they are a full-time student. They also meet it if they are physically or mentally incapable of self-care.
3. Earned Income Required. You must have earned income. Earned income includes wages, salaries and tips. It also includes net earnings from self-employment. Your spouse must also have earned income if you file jointly. Your spouse is treated as having earned income for any month that they are a full-time student or incapable of self-care.
4. Joint Return if Married. Generally, married couples must file a joint return. You can still take the credit, however, if you are legally separated or living apart from your spouse.
5. Type of Care. You may qualify for the credit whether you pay for care at home, at a daycare facility or at a day camp.
6. Credit Amount. The credit is worth between 20 and 35 percent of your allowable expenses. The percentage depends on your income.
7. Expense Limits. The total expense that you can use in a year is limited. The limit is $3,000 for one qualifying person or $6,000 for two or more.
8. Certain Care Does Not Qualify. You may not include the cost of certain types of care for the tax credit, including:

• Overnight camps or summer school tutoring costs.
• Care provided by your spouse or your child who is under age 19 at the end of the year.
• Care given by a person you can claim as your dependent.

9. Keep Records and Receipts. Keep all your receipts and records for when you file taxes next year. You will need the name, address and taxpayer identification number of the care provider. You must report this information when you claim the credit on Form 2441, Child and Dependent Care Expenses.
10. Dependent Care Benefits. Special rules apply if you get dependent care benefits from your employer.

Keep in mind this credit is not just a summer tax benefit. You may be able to claim it at any time during the year for qualifying care. IRS Publication 503, Child and Dependent Care Expenses, provides complete details on all the rules. Get it anytime on IRS.gov.

For help with your taxes, please call one of our offices:

Plymouth 734.454.4100,    Allen Park 313.388.7180,

Grayling 989.348.4055,     Livonia 734-462-6161,

Royal Oak 248.399.7331,    or    St. Clair Shores 313.371.6600

This Fourth of July all across the country, people will show their love for America by displaying flags along streets, hanging them from porches, and proudly carrying them in parades and festivals. Old Glory will be everywhere. But did you know there are official rules on properly displaying the U.S. flag? This infographic from USAGov, based on the Federal Flag Code, can help you show respect for the flag as you celebrate America’s 241st birthday:

• When: You can display the flag outside from sunrise to sunset. If you want to fly it after dark, it will need to be lit. Don’t fly the flag during inclement weather, unless it’s an all-weather flag.
• On the porch: The union of the flag–the blue section with white stars–should be placed at the peak of the staff unless the flag is at half-staff. When the flag is suspended from a rope on a pole extending from a house, the flag should be hoisted out, union first, from the building.
• On the wall or the window: When the flag is displayed on a flat surface like a wall, the union should be at the top left.
• On the street: The flag should be suspended vertically with the union to the north in an east and west street or to the east in a north and south street. The flag should never touch anything beneath it, so make sure it’s hoisted at the proper height.
• At the office: Suspend the flag vertically with the union to the observer’s left upon entering. If the building has more than one main entrance, the flag should be suspended vertically near the center of the corridor or lobby with the union to the north when entrances are to the east and west, or to the east when entrances are to the north and south. If there are entrances in more than two directions, the union should be to the east.
• On a vehicle: The staff should be fixed firmly on the right side of the vehicle. Do not drape the flag over the hood, top, sides, or back of a vehicle or a boat.
• Half-staff: During periods of mourning, it’s common to see the flag flying at half-staff. Only presidents can proclaim such periods for a national remembrance (PDF, Download Adobe Reader). Governors can also declare mourning periods at a local level. In some cases, heads of federal agencies can order the flag flown at half-staff on grounds under their supervision. Traditionally, states and local governments follow the president’s proclamation during a period of national mourning.

Take care of your flag. Many dry cleaners will clean U.S. flags for free during the months of June and July. Store your flag in a well-ventilated area. If it gets wet, make sure it’s completely dry before storing it. If the flag is damaged or worn out, it should be burned and disposed of with dignity. Learn more about the flag, its history, protocol, and ways to pay your respects, including the proper way to fold it.

Have a happy and safe Forth of July from all of our offices:

Plymouth 734.454.4100,    Allen Park 313.388.7180,

Grayling 989.348.4055,     Livonia 734-462-6161,

Royal Oak 248.399.7331,    or    St. Clair Shores 313.371.6600

You get a call from someone who says he’s from the IRS and tells you that you owe back taxes. These call usually involve threats for immediate payment. The caller may know part of your Social Security number. And your caller ID might show a Washington, DC area code. But is it really the IRS calling?

No. The real IRS doesn’t call and if they do contact you about unpaid taxes, they do it by mail, not by phone.

Here’s what you can do:

1. Stop. Don’t wire money or pay with a prepaid debit card. Once you send it, the money is gone. If you have tax questions, go to irs.gov or call the IRS at 800-829-1040.
2. Pass this information on to a friend. You may not have gotten one of these calls, but the chances are you know someone who has.

Please Report Scams

If you believe you’ve been the victim of an IRS scam, please report it to the Treasury Inspector General for Tax Administration.

For help with your taxes, please call one of our offices:

Plymouth 734.454.4100,    Allen Park 313.388.7180,

Grayling 989.348.4055,     Livonia 734-462-6161,

Royal Oak 248.399.7331,    or    St. Clair Shores 313.371.6600