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Identity Safety And Staying Secure With Wearable Devices

The increasingly connected world brings new conveniences that greatly benefit our everyday lives. No new connected device seems more ubiquitous than wearable devices – nearly 33 million were in use in the U.S. in 2015 by an estimated 20 million people. Smartwatches like Pebble and Apple watch allow us to access the internet with a flick of a wrist. Wearable health tech like the Fitbit and the gadget-class favorite Jawbone help improve the livelihoods of millions.

As much as wearables bring value to our lives, they also create a new opportunity for criminals to extract personally identifiable information. Like many other new technologies, security vulnerabilities in wearables are being exposed and potentially exploited.

The more information that’s collected, the easier it is to identify account numbers and passwords as well as medical ID numbers and tax return data. Better understanding the individual’s routines and habits ensures that criminal activity will go unnoticed for longer periods of time.

But some wearable data can provide quicker wins for identity thieves:

Most wearable devices use an accelerometer and gyroscope to track forward motion and directional orientation. Some even contain an altimeter to measure altitude for hikers and climbers. All of this data is crunched into code that orients the user’s specific location and tracks their activity – sometimes down to a few inches. Shockingly, new research found that ATM PIN codes could be discerned from the data in wearables’ sensors with 80% accuracy on one try and 90% accuracy after three tries.

A flash survey conducted by corporate identity management firm Centrify exposed some worrying trends:

  • 69% of wearable device owners don’t utilize login credentials such as passwords, fingerprint scans, or voice recognition to access their device, and
  • 56% of wearable owners use their device to access corporate applications such as Outlook, Dropbox, and Salesforce.
  • While the sample size was small, the survey was conducted at the RSA Conference, one of the world’s largest gatherings of information security professionals. If those on the frontline of data security leave their personal and corporate data at risk, it’s easy to imagine that the population at large may be even less cautious – jeopardizing their identities and your corporate data security.

Staying Secure With Wearable Devices

While wearables (and all technology, for that matter) are never 100% secure, there are a number of tactics that can be undertaken to minimize the risk of data theft:

  • Opt-out of automatic data transmission that will continually upload information via Wi-Fi or other networks.
  • When using a Wi-Fi, stick to known and/or secure networks.
  • Enable passwords and change them regularly. If available, use two-step authentication.
  • Physically secure the device if it’s not in use. Particularly, when traveling, utilize hotel safes.
  • Take time to learn how to remotely erase data so that the device can be “cleaned” if it’s lost or stolen.
  • Make sure to regularly update the operating system in order to patch known security gaps.

Looking for ways to minimize your risk of identity theft? Maintain a peace of mind while using your wearable device by enrolling in Optima’s ID Protection Plan at optimatax.idprotectiononline.com.

Spring Cleaning For a Secure Identity

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Spring is in full swing with its longer and sunnier days, and for many people, it is time for the annual spring cleaning to disentangle their homes from the build-up of wintertime clutter. However, much of that “clutter” can be pure gold for an identity thief. Junk mail such as credit card offers and unsolicited loan pre-approvals are chock full of valuable information about finances and lifestyle. Virtual clutter is also a target – unsecured and unorganized computer and smart phone data can be mined.

Minimize identity theft risk this spring with these easy tips:

  • Paperwork. Decide which documents need to be saved and then file them in a secure location. Unwanted items that contain personal information should be shredded, including receipts, bank and credit card statements, credit card offers, medical records, and health insurance statements.
  • Computers. Organize personal information and documents into password-protected folders. When deleting old or unneeded files, make sure to regularly empty the computer’s recycle bin. Ensure that all anti-virus software is up-to-date and run a full scan to ensure that the computer is free of viruses and malicious software.
  • Smartphone. Enable the phone’s password-protection features and only use secure networks, especially when using online banking or other apps that transmit sensitive information. When upgrading to a new device, wipe the old phone’s memory and restore to factory settings.
  • Wallet and Purses. Shred old receipts and outdated credit cards. Remove everything that isn’t necessary on a day-to-day basis – especially a Social Security card.

This spring, you can make sure you’re keeping your identity as clean and secure as possible by enrolling in Optima’s ID Protection Plan at optimatax.idprotectiononline.com.

 

Optima’s 2017 Annual Food Drive for Second Harvest Food Bank of OC

Cheers to the completion of another successful food drive supporting the Second Harvest Food Bank of Orange County! Our staff set an all-time record by donating 3,500 pounds of food and household supplies, beating the previous record of 2,000 pounds set by our staff last year.

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The wonderful people at Second Harvest informed us that our donation will provide for over 2,800 meals! We’re truly honored to be able to partner with Second Harvest to make this food drive an annual tradition and an important part of our culture at Optima.

Of course, our donation is just a drop in the bucket when compared to the enormity of Second Harvest’s mission. In Orange County alone, Second Harvest serves over 300,000 people, a third of which are children, who struggle with food insecurity. To learn more about their amazing organization and how you can help support them in their fight to end hunger here in Orange County, visit Second Harvest’s website at feedoc.org and be sure to “like” them on Facebook at facebook.com/SecondHarvestFoodBankOC/. There you’ll see the vital programs they run, such as the Kids Café Program, the School Pantry Program, the Senior Grocery Program and much more.

And if you live outside Orange County and want to support the local food banks near you, simply visit feedingamerica.org. There you can look up the non-profits and food banks that are doing this important work in your community. Together we can end hunger!

Tax Season Is Here…And So Are The Scammers

The start of each new year typically brings renewed resolve to get healthy, strengthened desires for personal improvement, and of course, tax season.

Tax season can mean different things to a lot of people. Some look forward to a large refund; for others, it’s one more thing to tack onto their to-do list. For the scammers out there, it means the annual opportunity to rake in fraudulent refunds has finally arrived. Tax scammers are ruthless. They’re unaffected by the thought of families and individuals dependent upon what is likely their biggest check of the year being denied this financial relief.

If there’s one thing we can be sure of, it’s that there will be scams this tax season. Fortunately, there are safeguards you can take to stay protected this tax season.

  • Schedule time with your tax preparer now so you can get your taxes done as early as possible. This will help decrease the chances that a fraudster will get your refund before you do.
  • Sign up for Scam Alerts from the FTC to stay abreast of all the dirty tricks scammers are currently using.
  • Talk to someone in your HR department to see if you can get your W-2 before it’s mailed out. This will help ensure that you actually receive it so you don’t have to risk it being lost or stolen in the mail.
  • Never send emails with personally identifiable information (PII) attached. It’s best to never send them through email at all, but if you must, you should encrypt your message by making a change in your email’s security settings.
  • Beware of computer scams. These can come via email or as popups on your computer asking for your personal information. The IRS saw an approximate 400% surge in phishing and malware incidents in the 2016 tax season.
  • Always use a professional, trustworthy tax preparer. Sometimes, even national tax preparation chains can scam you out of your money or use less-than-secure procedures when it comes to handling your personal information. Make sure you use someone you trust.
  • Never provide any personal information over the phone to someone who says they are from the IRS. The IRS will never contact you via phone, email or social media.

Tax season is stress enough as it is; worrying about tax fraud shouldn’t have to be a part of it. Maintain a peace of mind by filing taxes as early as possible and by enrolling in an Optima Protection Plan at optimatax.idprotectiononline.com.

New Year, New You: Invest in Your Identity Wellness

The holiday season is now a thing of the past and now, New Year’s resolutions are the hot topic of conversation. The ultra-motivated will have a ten-part list covering everything from weight loss goals to finding a new hobby. And then there will of course be some outliers (16% of us according to a Neilson sruvey) that will admit that resolutions just aren’t for them. Wherever your ambitions lie on the spectrum, the one area of your life that can’t afford to be brushed off is your identity wellness.

Though often overlooked, your identity wellness deserves the kind of attention that people tend to put towards their health at the start of each new year. Your identity wellness encompasses everything from your financial security, credit profile, and credit score to digital privacy.

The New Year is the perfect time to make proactive identity protection a part of your everyday life. With these tips, you’ll be on your way to a smarter, safer, and more identity-secure you:

  • Check your bank and credit accounts frequently. It’s best to catch fraud as early as possible so that you can take action immediately; this minimizes damage and makes the resolution process easier.
  • Check your credit report regularly. Federal law requires the three major credit bureaus (Equifax, Experian, and TransUnion) to provide you with a free credit report once a year. You can stagger these free reports every four months from each bureau so that you’re seeing your report pretty often. This is why credit monitoring services are so valuable: alerts are sent at the first sign of suspicious activity on your credit profile.
  • Stop connecting to public Wi-Fi. It’s convenient, of course, but frequently it’s unsecure. This means that any information you input while connected could be accessible by someone else. So if you must, just be sure to never access your financial accounts or any other sites that require a password when using public Wi-Fi.
  • Don’t click the “Remember Me” box on your digital accounts. If your computer, laptop, or smartphone ever got into the wrong hands, the perpetrator could have a field day accessing your accounts and gathering important personal information. Even worse, they could log into your bank or credit accounts.
  • Keep your firewall and anti-malware up to date. Firewalls block unauthorized access to your computer’s information, while anti-malware prevents malicious software from being downloaded to it. You must be sure to keep them up to date though, as hackers are constantly creating new ways to infiltrate your computer.
  • Update your passwords or look into a password manager. We all know by now that we should change our passwords often with strong, secure ones. Let’s face it though: most of us don’t. An easier solution might be to keep all of them together in a password manager so that you can use complex ones – without forgetting!
  • Shred your documents before tossing them. This includes your credit card/bank statements, pre-approved credit card offers, utility bills, and anything else that contains your personal information.

Of course nothing beats having a comprehensive identity protection provider that is there 24/7 for when the unexpected happens. Services like credit and identity monitoring send alerts if any suspicious activity is found so that you can take action immediately. To find out how you can protect your identity with Optima’s Protection Plans, visit optimatax.idprotectiononline.com.

10 Tips for 1099 Filers and Small Business Owners

It’s tax time again and the growth of the Gig Economy is about to strain an already overburdened IRS. The proliferation of freelance or part time employees driven by job cutbacks from the recession and the rise of opportunities like Uber and others means that more Americans than ever will file 1099s in 2016.

However, while many 1099 filers are exceptional in their chosen line of work, they also lack familiarity with the form and tax requirements of the designation itself. 1099 essentially creates a tax trap for these individuals because they are lured by an increase in income only to realize a year later that they will likely earn less. Even worse, that means they likely were unaware of how much they needed to properly budget for and save for taxes.

As a result, tax experts expect that both the form itself and the tax implications of working in the new 1099 Economy will inevitably lead to a rash of questions for the IRS and its customer service teams. Unfortunately, the IRS has said it’s unprepared to handle even the standard amount of inquiries this tax season. Last year, roughly 35% of calls to the IRS were answered while the rest experienced “courtesy” hang-ups after wait times of more than 2+hours. The IRS has already forecasted more problems this year as staffing is reduced, more uncertainty looms with tax codes, and downsizing is in the air. This spells frustration and little help for the millions of Americans that are expected to file 1099s and that could turn to the IRS for answers to their tax assistance this year.

So how should small business owners and 1099 filers avoid this logjam on the phones? By understanding the unique challenges of filing as a 1099 workers and adhering to basic best practices in filing strategies, individuals and business owners should be able to avoid many of the most common questions this year. These ten tips should help you plan ahead of time for your tax needs and avoid long waits on the phone.

1.  Income and Self-Employment Tax

As a traditional W-2 filer, workers have taxes removed from their paycheck before they receive it. With a 1099, a filer is responsible for paying their own income taxes and self-employment taxes out of their income. If not properly budgeted for, this can create a much larger tax burden at the end of the year. Only proper budgeting will save the filer from this potentially crushing obligation.

 2.  Be Aware of Deadlines

Missing the 2015 tax year filing deadline of April 18th and owing taxes can result in particularly high “failure to file” penalties as much as 25%. Make sure to track your deadline and file on time.

 3.  Get Organized

Small business owners can be notoriously bad record keepers, but this puts you or your tax preparer at a huge disadvantage comes tax season. Being organized will save you a significant amount of time and money.

4.  Documented Expenses & Deductions

As an independent contractor, a 1099 earner is able to deduct the costs of earning the money from the total amount earned. The challenge is that filers rarely keep detailed records, making it difficult for the tax preparer and creating a potential loss of income because of lost or forgotten deductions.  An example is a mileage deduction, which requires that the filer accurately record the miles they drove in service to their job over the course of a year. One way to get ahead of this is to work with your tax preparer to devise a preferred system of record-keeping or to learn which deductions are allowed in the coming year.

 5.  The At Home Work Deduction

If you have a qualified home office, you can deduct expenses that are normally not eligible such as portions of home insurance and utilities. The IRS has made it even easier by simplifying this to a maximum of $1,500 or $5 per square foot.

6.  Be Careful if Showing a “Loss”

Generally, the IRS considers your business a “hobby” if you are not able to turn a profit in three out of five consecutive years.  If you are reporting a loss in an effort to avoid taxes, you may want to double-check your records prior to filing.

 7.  Increase in Audits

Beyond a loss of possible deductions, an even more harmful potential result of this poor record keeping is an IRS audit. Self employed individuals are subject to audits because the deductions they have taken are not adequately documented or not backed up with saved receipts.

 8.  To Insure or Not Insure?

All individuals and families are required to hold health insurance as required by the Affordable Healthcare Act, or pay a fine for not carrying insurance. Self employed individuals without health coverage will face much bigger penalties this year, as much as $325 per adult in 2015. If you are uninsured, look into obtaining a qualified coverage to avoid penalties of up to $695 per adult in 2016.

9.  Health Insurance Requirements

The ACA includes an income verification component as part of its insurance requirement. This income verification is somewhat relaxed for 1099 filers because the IRS will actually reconcile your tax return with your ACA application at tax time. Because of this, it is always better to estimate your income higher (rather than lower) on your application because any over-estimation will result in a refund. If the reverse is true and you underestimate, then you will have to pay back a portion of the subsidy credit you received come tax time. An inaccurate guess either way will not incur penalties, but knowingly providing false information can result in fines or even criminal charges.

10.  Consider a “Silver” ACA Plan

ACA plans are ranked as bronze, silver, gold, or platinum, based on their out-of-pocket costs. They all come with the same benefit, but cheaper plans that come with high out-of-pocket costs can present a challenge for independent workers who might have long gaps with little or no income. If you qualify for a cost-sharing reductions based on your income and enroll in a silver plan you get the best of both worlds:  A fairly low premium, plus a lower deductible and other out-of-pocket costs.

 

If you do all the above and still need to call the IRS, remember to be professional and to the point. Agents have limited time to chat about issues unrelated to them and our own staff always get better results when they are polite and treat them professionally.

And above all, be honest. It is against the law to willfully disclose fraudulent information to the IRS and can result in some serious penalties.  The IRS takes notes on every conversation and it is always best to say that you are “unsure” if you are asked a direct question that you do not know how to answer.  If you communicate financial information that is erroneous or commit to a payment that you may not be able to afford it can cause problems later.  Consider hiring a Tax Attorney who has attorney/client privilege if you feel that you are in over your head.

 

About David King

David King is CEO of Optima Tax Relief.  David brings with him 12 years of experience in growing and running financial services firms. As a member of Optima’s founding leadership team, David’s emphasis on customer service and a “Client First” approach has been integral to developing Optima’s industry-leading tax resolution services.

 

New Consumer Warning Issued by the IRS Talks of Recent Surge in e-mail Schemes for 2016 Tax Season

Tax season is once again in full swing, and while that thought alone can be frightening to some, the renewed threat of scammers that are popping up recently is even more alarming. While tax schemes and phishing attempts have long been an unfortunate risk to citizens trying to do the right thing and stay on the “good side” of the IRS, this tax year has already seen a dramatic increase in their nefarious existence.

IRSPhishingThe Internal Revenue Service just released a warning to citizens to beware of suspicious emails after already seeing an approximate 400% increase in these phishing and malware incidents so far this tax season alone. These emails are designed to fool taxpayers into thinking that they are official written communication coming directly from the IRS or other tax authority representatives, including tax software companies.

“This dramatic jump in these scams comes at the busiest time of tax season,” said IRS Commissioner John Koskinen. “Watch out for fraudsters slipping these official-looking emails into inboxes, trying to confuse people at the very time they work on their taxes. We urge people not to click on these emails.”

This year’s steep increase in this fraudulent activity has officials very concerned. They are not only using the traditional phone and email methods of communicating with would-be victims, but are also now reaching people via text messaging. The messages appear to be legitimate and ask taxpayers to provide a wide variety of information. Some requests inquire about filing status, requests to verify PIN information, or verification of refund information, while others seek to confirm personal information or even order official transcripts.

So what do fraudsters do with this information?

They can actually use the stolen information to be able to file false tax returns, amongst other things. When an unknowing victim clicks on one of these emails, they are redirected to websites that look very legitimate and often imitate official web pages like one might find at IRS.gov or on other real websites. These fraudulent sites then ask for social security numbers and other personal information that thieves can use to file false income tax returns.

Many of these sites also contain malware, which can infect your computer and allow criminals to access your files or obtain additional information, such as passwords and logins, by tracking your keystrokes.

According to the official news release, the IRS has seen an increase in reported phishing and malware schemes, including:scam-alert

  • There were 1,026 incidents reported in January, up from 254 a year earlier.
  • The trend continued in February, nearly doubling the reported number of incidents compared to a year ago. In all, 363 incidents were reported from Feb. 1-16, compared to the 201 incidents reported for the entire month of February 2015.
  • This year’s 1,389 incidents have already topped the 2014 yearly total of 1,361, and they are halfway to matching the 2015 total of 2,748.

As the email scams increase, the IRS is working with other leaders in the tax industry to find a resolution for this issue.

“While more attention has focused on the continuing IRS phone scams, we are deeply worried this increase in email schemes threatens more taxpayers,” Koskinen said. “We continue to work cooperatively with our partners on this issue, and we have taken steps to strengthen our processing systems and fraud filters to watch for scam artists trying to use stolen information to file bogus tax returns.”Phishing_magnifying_glass_fi

One way the IRS, state revenue departments and other tax organizations are trying to protect taxpayers, is by providing them with as much knowledge of the situation as possible. Combining forces to form the “Taxes. Security. Together” campaign, they hope to educate consumers and help keep them away from these potential scammers that could cause financial devastation to many tax payers.

What should you do if you think you have received a phony or questionable email or text message from the IRS?

If a taxpayer receives an unsolicited email that appears to be from either the IRS e-services portal or an organization closely linked to the IRS, they are urged to report it by sending it to phishing@irs.gov.

Recent email examples the IRS has seen include subject lines and underlying text referencing:

  • Numerous variations about people’s tax refund.
  • Update your filing details, which can include references to W-2.
  • Confirm your personal information.
  • Get my IP Pin.
  • Get my E-file Pin.
  • Order a transcript.
  • Complete your tax return information.

Also, it is important to keep in mind that the IRS generally does not initiate contact with taxpayers by email to request personal or financial information. This includes any type of electronic communication, such as text messages and social media channels.

To learn more about this latest warning, you can visit their website or call the IRS if you feel you have been a victim of these very crafty and cunning criminals.

IRS Completes the “Dirty Dozen” Tax Scams for 2015

irs-says-phone-scams-continue-to-beThe Internal Revenue Service recently presented its list of the 2015 “Dirty Dozen” list of tax scams with a warning to taxpayers about aggressive telephone scams continuing coast-to-coast. Scam artists use flyers, advertisements, phony storefronts and word of mouth via community groups and churches to seek victims. Scams are especially common during tax filing season, but can occur any time of the year.

“We are doing everything we can to help taxpayers avoid scams as the tax season continues,” said IRS Commissioner John Koskinen. “Whether it’s a phone scam or scheme to steal a taxpayer’s identity, there are simple steps to take to help stop these con artists. We urge taxpayers to visit IRS.gov for more information and to be wary of these dozen tax scams.”

The list below represents the list of this year’s “Dirty Dozen” tax-related scams:

Phone Scams

Aggressive and threatening phone calls by scam artists posing as IRS agents remain an ongoing threat to taxpayers. There has been a surge of these scams — threatening arrest, deportation, license revocation and other adverse consequences. The IRS reminds taxpayers that the IRS will never solicit personal information by email or by phone calls not initiated by taxpayers.

Phishing

The IRS never sends taxpayers unsolicited emails or refunds. If you receive such a message; it is almost certainly a scam. Taxpayers should be wary of clicking links contained in strange emails and websites. They may be attempts to steal your personal information.

UntitledIdentity Theft

Attempts at identity theft are especially common during tax filing season. A common tactic is filing fraudulent returns using someone else’s Social Security number. The IRS aggressively pursues identity theft attempts, but taxpayers must also practice due diligence in protecting their information.

Return Preparer Fraud

Return preparers are a vital part of the U.S. tax system. About 60% of taxpayers use tax professionals to prepare their returns. Although the vast majority of tax professionals provide honest high-quality service, dishonest preparers set up shop each filing season to perpetrate refund fraud, identity theft and other scams. Taxpayers must be wary of such bad actors.

Offshore Tax Avoidance

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As the recent string of successful enforcement actions against offshore tax cheats and the financial organizations that help them shows, it’s a losing bet to attempt to shelter income and assets offshore. Taxpayers are best served by taking advantage of the IRS Offshore Voluntary Disclosure Program (OVDP) to get their federal income tax affairs in order.

Inflated Refund Claims

Taxpayers should be wary of preparers promising inflated refunds — especially before looking at their financial records, and refuse to sign blank returns. Taxpayers should also be wary of preparers who charge fees based on a percentage of the refund. For more information on selecting paid tax preparers, see the Choosing a Tax Professional page on IRS.gov.

Fake Charities173572251_Charity scam

Especially during the holiday season, taxpayers should be on guard against fake charitable organizations. Check out the group to ensure that hard-earned cash isn’t filtered into a sham operation BEFORE making a contribution. IRS.gov has tools taxpayers need to check out the status of charitable organizations. Be especially wary of charities with names that are similar to familiar or nationally known organizations.

Hiding Income with Fake Documents

The mere suggestion by paid preparers that taxpayers should falsify to reduce tax bills or inflate tax refunds is a huge red flag. The IRS reminds taxpayers who might be tempted to allow paid preparers to cut corners that they are legally responsible their returns regardless of who prepares them.

Abusive Tax Shelters

While the vast majority of taxpayers voluntarily pay their fair share, the IRS is committed to stopping abusive tax shelters and prosecuting the people who create and sell them. Taxpayers should be wary for tax breaks that sound too good to be true. When in doubt, seek an independent opinion regarding questionable offers before making a commitment.

Falsifying Income to Claim Credits

Unscrupulous tax preparers sometimes persuade otherwise honest taxpayers to artificially inflate their income to erroneously claim tax credits. While taxpayers are entitled to take advantage of all legal tax breaks, avoiding questionable credits and deductions is the best policy in the long run. If the IRS discovers a discrepancy, the taxpayer is legally responsible, even if someone else preparedthe return.

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Excessive Claims for Fuel Tax Credits

Unlike the mileage tax credit, the fuel tax credit is generally limited to off-highway business use, including use in farming. Consequently, the credit is not available to most taxpayers. Nonetheless, the IRS routinely encounters unscrupulous preparers who have enticed sizable groups of taxpayers to erroneously claim fuel tax credits to inflate their refunds.

Frivolous Tax Arguments

Taxpayers are entitled to present legitimate disputes about tax liabilities. However, despite routinely being thrown out of court, there are unscrupulous taxpayers who insist on making outlandish claims to avoid paying taxes they rightfully owe. The IRS reminds taxpayers who are tempted to file frivolous returns that the penalty for doing so is $5,000. Additional information about tax scams is available on IRS social media sites, including YouTube and Tumblr, where people can search “scam” to find scam-related posts.

Tax Scams: Just Don’t Do Ittax-fraud

Illegal scams can lead to significant penalties and interest for taxpayers, as well as possible criminal prosecution. Taxpayers should also remember that they are legally responsible for the content of their tax returns even if they are prepared by someone else. The IRS Criminal Investigation division works closely with the Department of Justice to prosecute criminals who perpetrate tax scams.

IRS e-File Crash May Delay Some Refunds

If you’re planning to file your federal income tax returns in the hope of receiving an early refund, you might have to wait a day or two longer to receive your money. A hardware failure knocked several IRS.gov services offline February 3, 2016. According to a statement on the IRS.gov website, delays resulting from the outage are expected to be slight, and the agency still anticipates thatit will be able to process most refunds within normal time lines. The message that appeared on the IRS webpage read as follows:

statementThe outage itself was brief. As of February 4, the IRS.gov website displayed the following message on its Modernized e-File (MeF) Status Page: “The Modernized e-File Production and Assurance Testing Systems are now operational. Please resume sending federal and state submissions, sending state acknowledgements and retrieving federal and state acknowledgements. We thank you for your patience and apologize for the inconvenience.”

During the outage, taxpayers were instructed to continue to file their returns electronically through their e-file providers. However, providers were instructed to hold the returns rather than forward them to the IRS. The “Where’s My Refund?” service was also affected by the outage, but was also back online as of February 4.

freefileThis year, the IRS launched a new version of its FreeFile system, along with expanding eligibility to taxpayers earning $62,000 or less annually, an increase of $2,000 over the limit for last year’s returns. The system includes additional safeguards put into place to prevent a repeat of the embarrassing data breach in 2015, which exposed the information of more than 300,000 taxpayers nationwide.

The previous data breach was blamed on Russian hackers. However, a statement issued on the IRS website on Feb 3 did not name a source for the most recent crash, stating instead “the IRS is still assessing the scope of the outage.”

Taxpayers whose returns were filed before the February 3 outage were not affected, and should not re-file their returns.

IRS Criminal Investigation Releases Fiscal Year 2014 Annual Report

The Internal Revenue Service announced the release of its IRS Criminal Investigation (CI) annual report for fiscal year 2014.   IRS CI initiated 4,297 cases in FY 2014, focusing on international tax fraud, return preparer and questionable refund fraud, identity theft, public corruption, bank secrecy act violations, significant money laundering investigations and terrorist financing cases.

BN-IG445_IRSCYB_J_20150505144950“There is no doubt that we have had to be creative to overcome some of the budget challenges this year,” said Richard Weber, Chief, IRS Criminal Investigation Division. “But in so doing, we maintained a steady focus on what is important. Our highest priority is to enforce our country’s tax laws and support tax administration to ensure compliance with the law and combat fraud.”

 

Historical Snapshot and Agency Priorities

The annual report highlights the agency’s successes while providing a historical snapshot of the makeup and priorities of the organization. Lincoln Irey, the first chief of IRS CI, released an annual report every year during his tenure, which extended from 1919 to 1946.

As the only federal law enforcement agency with jurisdiction over federal tax crimes, CI boasted the highest federal law enforcement conviction rate in FY 2014 — an impressive 93.4%. Prosecutors nationwide routinely call on IRS CI to lead financial investigations for financial crimes ranging from identity theft to international tax evasion and transnational organized crime.

“We are incredibly proud of our conviction rate,” said Weber. “As a federal law enforcement agency, that conviction rate reflects the pride of our agents and the quality of our case work. We are the best financial investigators in the world and I am extremely proud of our special agents and professional staff.”

Big Wins for IRS CI

CI investigates potential criminal violations of the Internal Revenue Code and related financial crimes in an effort to generate confidence in the tax system and encourage compliance with the law. The 40-page report includes case summaries on a range of tax crimes, including money laundering, public corruption, terrorist financing and narcotics trafficking financial crimes. The report also reflects the diversity and complexity of CI investigations, which touch almost every part of the world.

511aa8b798600.preview-620For example, two of the biggest tax fraud stories of the year — Credit Suisse and Bank Leumi — are included in the report. In the largest tax fraud case ever filed, Credit Suisse pleaded guilty to conspiracy to aid and assist U.S. taxpayers in filing false income tax returns and agreed to pay a total of 2.6 billion dollars. CI also led the investigation against Bank Leumi Group, a major Israeli international bank that admitted conspiring to aid and assist U.S. taxpayers to prepare and present false tax returns and agreed to pay 270 million dollars. Bank Leumi also pledged to cease providing banking and investment services for accounts held or beneficially owned by American taxpayers. The Bank Leumi Group case marks the first time an Israeli bank has admitted to such criminal conduct.

“The budget challenges facing our agency are nothing new. In the past five years, CI’s staff has been reduced approximately 11 percent bringing staffing to 1970’s levels. This trend cannot continue,” Weber added. “We will continue to remain focused on finding and investigating great cases that make a real difference in compliance of our nation’s tax laws.”