Stephen Merritt, CPA, PC | Certified Public Accountants | (757) 420-5778
233 Business Park Drive, Suite 104, Virginia Beach, VA 23462
- How to Reconstruct Tax Records After a Disaster
- The “Dirty Dozen” IRS Tax Scams
- Happenings at SMCPA
- Hours of Operation
How to Reconstruct Tax Records After a Disaster
While it’s not always possible to prevent an emergency, you can reduce the likelihood that an emergency will become a disaster by being prepared. Here are some tips to do just that.
- Store your documents in a waterproof and fireproof safe that is convenient to access.
- Make copies of your important documents—store paper copies in a different location than the originals. If making digital copies, store them in the cloud and/or on a portable storage device
- Make an inventory of your documents—critical documents to protect include identity documents, court orders, property records, financial and legal documents, and medical records.
In the event that you suffer a loss to your records, the IRS has helpful tips for reconstructing them.
- For tax records, get free tax return transcripts instantly by visiting the Get Transcript tool on IRS.gov.
- To request a copy of past returns by mail, file IRS Form 4506 and (if applicable) write the appropriate disaster designation, such as “HURRICANE HARVEY” in red letters across the top of the forms to expedite processing and waive the normal fee.
- For personal residence and real estate, take photos or videos as soon after the disaster as possible. Contact the title company, escrow company, or bank that handled the purchase of your home to get copies of documents. Establish a basis or fair market value of the home by reviewing comparable sales within the same neighborhood. Review insurance policies, as they will establish a baseline figure for replacement value. If improvements were made to the home, reach out to the contractors who did the work to see if records are available. For inherited property, check court records for probate values. If the property was held in a trust, contact the attorney who handled the trust.
- To establish the current fair market value of vehicles, research online tools such as Kelley Blue Book. If the vehicle was purchased from a dealership, ask for a copy of the purchase contract.
- To catalogue lost items and values of personal property, look on mobile phones for pictures that might show items in question. Check websites that can help establish the cost and fair market value. If items were purchased with a credit or debit card, contact your credit card company or bank to request past statements. When no photos or videos exist, draw a floorplan showing where each piece of furniture was placed and take the time to list memorabilia contained on shelves and tables.
If you have been a victim of a disaster, you have far more important things to worry about than your taxes. Let us help you take that burden away so you can stay in compliance with the IRS and get on with more important things in life.
The “Dirty Dozen” IRS Tax Scams
Each year, the IRS unveils its list of scams that target unsuspecting taxpayers. Below are five of the most common tax scams impacting taxpayers today, as well as tips to not become a victim:
1. Fake Charities are created to exploit natural disasters and other situations such as the current Covid-19 pandemic. Criminals set up fake charities and solicit donations by telephone, text, social media, or email. The fake charity might have a familiar-sounding name, tricking the taxpayer into thinking they are donating to a reputable charity.
When requested, legitimate charities will provide their Employer Identification Number (EIN), which can be used to verify their legitimacy by using the IRS search tool:
IRS Search Tool
2. Immigrant/Senior Fraud scammers target groups with limited English knowledge as well as senior citizens. The taxpayer may receive a threatening phone call from someone pretending to be an IRS representative. The caller might threaten jail time, loss of driver license, or deportation if their demands aren’t met.
The first contact that the IRS makes with a taxpayer will typically be through the mail – they will not initiate communication by phone. Legitimate IRS employees will never use scare tactics such as threatening to revoke licenses or have a person deported.
3. Offer in Compromise “mills”—an Offer in Compromise (OIC) is an agreement between the taxpayer and the IRS to resolve a taxpayer’s tax debt. Taxpayers should be wary of misleading and aggressive sales claims that a company can settle tax debt for “pennies on the dollar” or that they can secure larger offer settlements, which often cost the taxpayer thousands of dollars in vendor charges.
Taxpayers should first check if they qualify for an OIC by using the IRS online pre-qualifier tool: IRS Online Pre-Qualifier Tool
4. “Ghost” Tax Return Preparers will prepare a taxpayer’s return but refuse to sign the return as the paid preparer. Not signing a return is a red flag that the preparer may be looking for a quick profit by promising a big refund or charging fees based on the size of the refund. A “ghost” preparer may require payment in cash only, make up income to qualify the client for a tax credit, claim fake deductions to increase the size of the refund, or list their own bank account instead of the taxpayer’s for direct deposit of refunds.
Avoid falling victim to an unscrupulous tax preparer by choosing your preparer wisely and reviewing their credentials and qualifications carefully.
5. Unemployment Insurance Fraud typically involves individuals obtaining state or local assistance that they are not entitled to, often by coordinating with or against employers and financial institutions. This can entail multiple types of fraud, including identity-related fraud, employer-employee collusion fraud, misrepresentation of income fraud, and more. There are a number of financial red flags to indicate unemployment fraud, including (but not limited to):
- Unemployment payments coming from a state other than the state where the customer supposedly resides/previously worked;
- Multiple unemployment payments made within the same disbursement window;
- Unemployment payments being made in the name of someone other than the account holder;
- A higher amount of unemployment payments in the same timeframe compared to other similar customers
Stay alert to these situations to protect your financial health. For more on the Dirty Dozen, here is the IRS web page: IRS “Dirty Dozen” Web Page
Happenings at SMCPA
Tax Season Hours
Tax Season Schedule December 10, 2021 – May 2, 2022
Monday – Friday
8 AM to 5 PM
Coronavirus Disease (COVID-19)
Stephen Merritt, CPA, P.C. understands the challenge the impact COVID-19 has on our community.
Fully-Vaccinated individuals are not required to wear a mask while in our office.
Unvaccinated or not Fully-Vaccinated individuals must wear masks and follow COVID-19 protocol, such as social distancing, while in our office to stop the spread of COVID-19.
Tax documents may be mailed, FAXed, emailed, uploaded to client portal, or dropped off.
Final Returns can be picked up or mailed out.
As always, please call, we are happy to assist.
Stay safe and healthy!