What Is The Best Defence Against IRS Scams & ID Thefts ?

List some Simple Procedures Tax Payers can Implement to Prevent IRS Scams & ID Theft ?

1. Don't Reply Emails that request any Financial Data or Offer a Reward - IRS Never Sends emails.
2. Destroy Credit / Debit Card Offer letters that are Unused.
3. Destroy any Insurance or Financial Document  with *****4 Digit number on it.
4. Don't be Intimidated by Phone callers who Threaten with IRS/Legal/ Police Action.
5.  Note IRS Only Uses US Postal Service to communicate with Tax Payers.

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" What Are The Tax Effects Of Divorce or Separation ? "

Some of the major effects of a Divorce or Separation are discussed below:
1. Child Support:  Not Deductible to the Payer and Non-Taxable to the Recipient.
2. Alimony Paid:  If the Alimony payments are made under a Divorce or Separation Decree or Separation Agreement, they can be deducted as Alimony for Federal Tax Purposes.
3. Alimony Received:  Spousal Alimony is taxable in the Year received. So  Plan for additional Taxes or make additional Estimated Tax Payments to avoid the Tax Surprise.
4.  Spousal IRA: If there is a Final decree of Divorce or Separate Maintenance by the Year end, you can't deduct the Contribution made to the Former Spousal's Traditional IRA. However, you can deduct Contribution to Your own IRA.
5. Name Changes - If you change your name after your Divorce, notify Social Security Administration about the change. Fill out Form SS-5. Your name on the Tax Return must match the SSA records.  A name mismatch can delay tax refund.

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" How Much Gambling Losses Can You Deduct in Taxes? "

Tax payer Reports Gambling Winnings & Losses in the Tax Year they happened. Winnings From Lottery,  Horse Racing, Sports Betting, Horse Racing, and Casinos are Taxable events including Cash and Non-Cash prizes. Fair Market Value Of Cars And Trips are Reported.
1. Gambling Establishment gives W2G Form for the winnings and sends a copy to IRS if the Tax is withheld. Taxpayer gets W2G Form.  The Winnings are included as Ordinary Income for Tax Purposes.
2.  However, if there are Gambling Losses, they are Limited to the extent of Gambling Income. So, the Gambling losses in Excess of Gambling Income can't be claimed by the Tax Payer.
3.  Keep Gambling Receipts i.e. all winnings & Losses
4. How to Deduct such losses ?  Schedule A Itemized Deductions on your Tax Return.

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" What Disaster Tax Relief IRS Provides ? "

With Hurricane Season on the Horizon, it's good to know what Relief can IRS Provide if you live in a Federally Declared Disaster area. See the Tips & Help listed below:
1.  Make Disaster Preparedness Plan before the Hurricane Season Start.
2.  Special Tax Laws Apply the Federally Declared Disaster e.g IRS might Extend Tax Return  Filing Dead line.
3. Faster Refunds for the Disaster Losses related to the prior year Tax Return.
4. Refer to the Disaster Declaration Page for Tax Relief.
5. Go to Around The Nation Section on www.irs.gov Web site, to find the Local Tax News.
6.  For more Relief, visit the Page for Disaster Relief Resources for Charities and Contributors.

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" Are You A Victim Of Recent IRS Hack Attack ? "

Are you One of the 100,000 IRS Data Theft Victims whose ID was stolen by the Global Gang of Foreign Hackers to Steal 50 Million Refund Dollars ?. Actually 200,000 Fraudulent Attempts were made using IRS "Get Transcript" On Line Program for the Prior Year's Tax Returns. What should you do following this event ?   If You are Affected this is What IRS Suggests:

1.  IRS Will now provide Copies Of Fraudulent Returns to Victims.
1.  IRS Will provide Free Credit Monitoring Services for the 200,000 affected Taxpayers.
2.  Affected Taxpayers will be Flagged For The Upcoming And Future Tax Returns.
3.  Victims Qualify for Six-Digit Identity Protection Pin to Verify Identity when Filing Returns.
4.  Taxpayers should Stay Vigilant about their Accounts.
5.  Affected Taxpayers should take Advantage of the Free Credit Monitoring Services.
6.  IRS will provide Redacted Fraudulent Return Copies to Hack Victims

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" How to Respond Best to IRS Letter ? "

Tips on how to Best Respond to IRS Tax Letters and Notices:

1. Read the Tax Issue Raised by IRS Letter for the Appropriate Tax Year mentioned in the Notice.
2. Read Instructions In Letter For Proper Response e.g. Where ? when ? Address ?  Whom ? Issue ?
3. If IRS has made Changes To Your Tax Return, Review and Compare the Info. with your documentation.  If you agree with Changes Generally, you need not reply.
4. If You Disagree with Changes, then you must respond in a timely manner at the address in the notice.  Explain your reason for disagreement to IRS. Mail your reply with Bottom Tear Off from the Original Notice.  Generally reponse time is 30 days but comply with your letter time frame.
5.  Most IRS Notices can be answered by a phone to the Tel# in the letter.  Not necessary to visit IRS Center.
6.  Keep copy of all your IRS Correspondence and notices.
7.  Send Response to IRS Notice through US Mail  i.e. Certified Letter with Return Receipt
8.  If you can't Solve the Tax Issues in Phone calls Or IRS Center Visits, Arrange a Tax Specialist i.e. CPA or Enrolled Agent to Represent you as early as possible.
9.  Beware Of Scammers who Try to Advanage of you and Steal Your Personal Data For Identity Theft.

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" Did You Take Tax Return Amendment 101 Class ? "

List Suggestions about When a Tax Return should be Amended:
1.  Filing Status Errors
2. To Correct Income/ Deductions/Credits

You generally don't want to Amend Tax Return for the following:
a) Math & Missing Form Errors -  IRS will fix these for you.
b)  Health Insurance Market Place Form 1095-A Statement Errors.  IRS Might contact you for a copy of  Corrected Form 1095-A to verify the Information

Other Amendment Issues:
A)  Last date to Amend Return to Claim TY 2011 Refund was April 15, 2015.  If you have not claimed this Refund, now IRS owns it.
B)  Wait 16-20 weeks to Amend a Amended Return, since time to process the Amendment is around 16-20 weeks.
C) Amended Returns are Not Electronically Filed but are Paper Filed through US Mail System
D)  Submit Form 1040X to Amend Return along with updated schedules.
E)  Don't forget to include Form 1040X when CA Sate Return is amended.

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