Tax Musings of a Burbank CPA: Remember Your Auto Mileage Log or You May Regret it Later

  If you are self employed or if you have a job where you drive a lot and don’t get reimbursed for mileage by your employer, make sure you keep a log of your automobile mileage each year. You need to calculate your business miles as a percentage of total miles annually, then use either the business miles at 53 1/2 cents a mile in 2017 or use the percentage to calculate your actual auto expense. If you get audited, your auto log (complete with beginning and ending odometer readings and the purpose of all the business travel daily) is the only piece of taxpayer prepared information that the IRS auditor is supposed to accept (but it doesn’t hurt to give the auditor a couple of auto repair bills that tie to the odometer readings that are in the log). I have been involved in many IRS audits where the automobile expenses were looked at by the auditor and I am pleased to say that to date I have never had a change to taxpayer auto expenses because of the mileage percentages (once we had a problem with some of the actual auto expense documentation, but if the taxpayer took [...]

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Tax Musings of a Burbank CPA: IRS Phone Scams Still a Serious Threat

Aggressive and threatening phone calls by criminals impersonating IRS agents are still a serious threat to taxpayers. People claiming to be from the IRS or the Treasury Department say that your return has been recalculated and that the taxpayer now owes taxes and demand payment by wire transfer, gift cards or a prepaid debit card.  The “agents” threaten the taxpayer with police arrest, deportation and jail time if the tax bill isn’t paid immediately. They can also leave “urgent” callback demands through telephone robocalls and phishing emails. A new claim is that the “payment” by those methods will be tied into the IRS EFTPS system and that the taxpayer will be able to validate the “payment” through that system after it is made. These phone scams have been going on for years and can still be successful, especially with taxpayers who are on extension and think they may owe money and the elderly.  Since October of 2013 the Treasury General for Tax Administration (TIGTA) reports over 10,000 victims have collectively paid more than $54 million because of phone scams.  The IRS will NEVER: * Call to demand immediate payment using a specific payment method like gift cards, prepaid debit cards [...]

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Tax Musings of a Burbank CPA: IRS Warning Taxpayers About “Phishing” Schemes to Steal Personal Information

The Internal Revenue Service has been warning taxpayers to watch out for phony websites and emails looking to steal personal information. The was a big spike in these “Phishing” schemes this last tax season, plus the IRS has seen email scams targeting tax and payroll professionals as well as human resources personnel and schools in addition to average taxpayers. In these scams, criminals pose as a person or organization the taxpayer trusts or recognizes, such as a bank, credit card company, tax software provider or government agency. There are websites that appear legit but have fake login pages so that victims will provide passwords, social security number s and other information that can be used for identity theft directly or can be sold to other criminals to use. Some of the scams are increasingly targeting tax professionals in an attempt to access their cleint list of personal and financial data. These phony emails and websites can also infect the victim’s computer with malware, giving the criminal access to the device so they can find sensitive information as well as track keyboard strokes, allowing access to login information. Just remember that Government Agencies don’t communicate by email but by certified mail. [...]

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