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Tax Scams: How Not to Be a Victim

By Jo Madonna, E.A. | January 3, 2020

Thousands of people lose personal data and millions of dollars to tax scams each year, despite the IRS publishing its ‘Dirty Dozen’ list of top scams year after year. The IRS encourages Americans to remain ever vigilant and to become aware of the scams and tactics used in order to protect personal information. While scammers are active year-round, certain activities peak around tax-filing season.

How Scammers Initiate Contact

  • Scammers use regular mail, telephone, email, or social media.
  • While tax scams take many shapes and forms, many IRS impersonators use threats to intimidate and bully people into paying a fabricated tax bill. They may even threaten to arrest or deport their would-be victim if the victim doesn’t comply.
  • For a list of recent tax scams, you can visit https://www.irs.gov/newsroom/tax-scams-consumer-alerts.

How the IRS Will Never Initiate Contact

Unlike scammers, the IRS doesn’t initiate contact with taxpayers by email, text messages, or social media channels to request personal or financial information.

The IRS will never:

  • Call to demand immediate payment through a specific payment method. (Scammers often propose using a prepaid debit card, gift card, or wire transfer.)
  • Demand payment of taxes without allowing you to question or appeal the amount they claim you owe.
  • Threaten to have you arrested by local police, immigration officers, or other law-enforcement for non-payment of taxes. Nor can they revoke your driver’s license, business licenses, or immigration status.

These are all tactics used by scammers to intimidate you into falling for one of their  tax scams.

How the IRS May Contact You

The IRS uses the U.S. Postal Service as its primary means of contacting you. Before any other contact, the IRS will have mailed a bill to anyone who legitimately owes taxes.

Under certain circumstances, the IRS may call or come to your home or place of business. However, they will never demand payment. If they call, they will provide you with an official IRS number where you can call them back. If a caller refuses to give you a contact phone number, that is a good indication that you are dealing with a scammer.

If you do receive a visit from an IRS representative, you have every right to request to see official identification. A legitimate agent will provide you with two forms of ID.

The first will be a pocket commission. This is a red leather folder with the IRS seal embossed in gold on the outside, and the words “United States Treasury Department, Internal Revenue Service.” Two inserts are attached inside and include the representative’s printed legal name and job title, plus issuing information and the representative’s photo and signature.

The other ID will be an HSPD-12 card, which is a government-issued smart card that verifies the identity of Federal employees.  You can ask the representative for the IRS phone number used to verify the information on the HSPD-12 card and confirm the representative’s identity.

If you are comfortable after examining both forms of ID, you can speak with them about your case. Again, though, remember they cannot demand payment immediately.

How to Make Payments to the IRS

If you do owe taxes, the IRS instructs taxpayers to make out payments to the “United States Treasury.” Specific guidelines on how to make tax payments can be found at irs.gov/payments.

Third-Party Collections

The IRS has contracted with four private collection agencies to collect on the tax debt. They are CBE, ConServe, Performant, and Pioneer. First, the IRS will write to you to let you know your overdue tax account was assigned to such an agency. The letter will provide the name and contact information of the agency assigned to your account. Then the private agency will write to you giving details on how to resolve your tax issue.

Both letters provide a Taxpayer Authentication Number linked to your identity. You can also use this number to check that any caller is legitimate, as a scammer will not have it.

Know Who to Contact

If you have any trepidation that someone is trying to scam you, make sure that you do not give any personal information. You can always contact someone directly at the IRS to confirm any questions that you may have. Your tax professional should also be able to determine the legitimacy of the notice or call.

Here are some Federal Government agencies you can contact to report different types of scams:

  • Contact the Treasury Inspector General for Tax Administration to report a phone scam. Use their “IRS Impersonation Scam Reporting” web page. You can also call 800-366-4484.
  • Report phone scams to the Federal Trade Commission. Use the “FTC Complaint Assistant” on FTC.gov. Please add “IRS Telephone Scam” in the notes.
  • Report an unsolicited email claiming to be from the IRS, or an IRS-related component like the Electronic Federal Tax Payment System, to the IRS at phishing@irs.gov.

Lastly, should you have monetary losses related to an IRS incident, report it to the Treasury Inspector General Administration (TIGTA). Also, file a complaint with the Federal Trade Commission (FTC) using their Complaint Assistant, so your information becomes available to investigators.

Trump Taxes

By Justin Fundalinski, MBA | December 20, 2016


Now that the election is over we have to start considering what could happen as President-elect Donald Trump implements (or tries to implement) the center piece of his economic plans – tax reduction.  Please note that this article is based on Trump’s statements during his campaign, is focused on individual taxes (not business), and many items are likely to change.

Income Taxes:

Tax brackets may be consolidated into only three brackets compared to the current seven brackets.   We cannot give Trump credit for this concept as it mirrors the House GOP’s Tax Reform Blueprint released in June of 2016. Notably, while the Blueprint does specify the income levels that fall within each bracket, Trump’s plan does not (yet) — so how this impacts tax payers is really unknown. However, based on my review of the Tax Reform Blueprint it could mean marginally lower tax rates for those with taxable income up to about $230k with the margin getting larger for those with income greater than this (assuming that the standard deduction is also increased – as proposed).

The standard deduction is also supposed to be increased to $15,000 for single individuals and $30,000 those married filing jointly.  Comparing this to the assumed 2017 respective figures of $6,350 and $12,700 this increased deduction will decrease the amount of taxable income as well as reduced the need for many filers to itemize their deductions.

Estate and Gift Taxes:

Trump proposed to repeal the federal estate and gift tax.  Currently, there is a credit in place that essentially negates any estate and gift taxes unless the amount transferred exceeds $5.49 million (in 2017) or double that for married couples.   Clearly this repeal only impacts those with estates exceeding $5.49 million.  This is likely going to get a lot of opposition from Democrats as they have discussed increasing estate taxation as well as eliminating basis step-ups inherited assets.

Alternative Minimum Tax:

Trump also proposed to eliminate the alternative minimum tax (AMT). Currently the AMT is a secondary method of calculating your taxes. Depending which method causes the higher tax liability is the method used to calculate your taxes. According to the tax policy center, people with incomes less than $200,000 are generally not affected by AMT, while those with incomes between $200k and $1MM take the brunt of the tax.

Childcare Benefits:

A few proposals were made to help parents with child care expenses. First there are proposed rebates to lower-income families (assumedly those who cannot afford child care) that would be implemented through the Earned Income Tax Credit to help pay for some child care. Second, there is a deduction to taxable income for those who can afford child care. It is assumed these reforms would replace the current childcare tax credit which is geared strictly toward those who owe tax as well as those who must use child care in order to go to work.

In my opinion, it appears that the tax benefits for child care will benefit a greater quantity people due to the lower restrictions under Trump’s proposal. However, those who are used to the current tax credit may end up paying more in taxes depending on the income levels, child care expenses and the number of children they have.

Affordable Care Act

While we really have no idea how it will all shake out if and when Trump and congress “repeals and replaces” the Affordable Care Act (ACA, ObamaCare) we do know one thing Trump has harped on several times.  The additional 3.8% Net Investment Income (NII) Tax that is imposed on passive income and capital gains (when income levels exceed certain thresholds) is on the chopping block.  The NII was brought about as a Medicare surtax under the ACA and affects those with a modified adjusted gross income greater than $200k if filing single and $250k if filing married.

In Conclusion

While tax reform appears to be a top priority, rhetoric only goes so far.  Since simple majority votes in Senate can only be taken once the discussion/debate around a bill is complete, it is quite possible opposing parties can and will filibuster.  The only way to overcome this is to obtain 60 votes in congress and the republican majority is not that strong.  As with everything in congress there are concessions to be made.  You give me this, I’ll give you that.  Time will tell what actually happens – stay tuned.

A History of W.T. Early

By Julia | July 15, 2015

W.T. Early home

Those of you who have visited us at 506 E. Mulberry St. in Fort Collins know that the office occupies a remodeled house that was originally built in 1904 by W.T. Early. This historic home and its original occupants have always sparked our interest, so recently Jim asked G. Sam Foster of Trees and Trees Ancestry to look into the history of W.T. Early and his family. Sam did a fantastic job compiling a timeline of the Earlys for us and we thought it would be fun to take this opportunity to let you know what he found out.

Census Reports

Most of the information regarding William Thomas Early comes from census reports. The first appearance of Mr. Early was in the 1861 England Census. He was listed as born in 1861, Southwark, Surry, England. At the time of this census, W.T. Early was listed as living with his father, William Early (born 1827 in Southwark), mother, Jane (born 1822 in Lancaster) and sister, Ada (born 1858). The family residence was recorded as St. Peter Walworth Sub-district, Newington St. Mary Parish, Surrey, London. In the 1871 England Census, all the Early Family’s demographic information remained the same, except that they had moved to St. Giles in the Fields Civil Parish, London. The Earlys must have been a family of some means, because W.T. Early had the ability to travel. Between the 1871 and 1881 census, he seems to have come of age and started striking out on his own. In July of 1878 he took a trip to Paris, France and later in 1878 and again in 1879, he traveled to Holly Hill in England. (Just as an aside, Holly Hill still seems to be a tourist destination. We know of his travels because of a travel diary that survived and is currently housed in the Archives and Special Collections Room of the Morgan Library at Colorado State University. By the 1881 census, Mr. Early was living on his own as a lodger at 19 Ernest St, Bermondsey Civil Parish, London. His occupation was listed as Journeyman Carpenter and his birth year was listed as 1856. It is about here in Mr. Foster’s report to us that you start realizing that record keeping in the 1800’s was not as accurate as it could have been and that keeping track of your birth year wasn’t as big a deal as it is now. This census lists Mr. Early a full five years older than the previous censuses.

Travel Bug

The travel bug bit Mr. Early again in a big way in 1886. In the previously mentioned travel diary, W.T. Early records his trip from Fort Qu’Appelle, NW Territory (now Saskatchewan) to Fort Collins, CO. Personally, I’d like to know how he got to Saskatchewan, but his diary does not mention this journey. His trek to Colorado from Canada was quite the adventure rife with flooded rivers and horse thieves and you can read about it here if you’d like. Mr. Early doesn’t mention why he came to Colorado or what he did here, but Fort Collins must have made quite an impression on him, because he eventually moved back, but not right away. The 1901 England Census has Mr. Early listed as a lodger at Edinburgh Chambers, Spitalfields Civil Parish, London. His birth year this time is 1854. (See what I mean about not needing to keep track of your birth year?)

Back to Colorado

Sometime between the 1901 England Census and September 1902, Mr. Early came back to Colorado. On Sept. 3, 1902, he married Sina Mary Myers in Denver. The Reverend H.M. Hart presided over the ceremony.

Sina Early

From the little bit we know about them, Sina and her family must have been some interesting people. Sina was born on April 3, 1866 in Franklin, IA to Dr. Joseph Myers and Sarah Cline Myers. Dr. Myers was a medical doctor and served as an army physician for the North during the Civil War. His profession as a physician must have allowed the Myers family to have a little more social standing than your average family at the time.

It is interesting to note that Sina Myers Early and W.T. Early, after their marriage, purchased property at 430 Whedbee (now 506 E. Mulberry) in order to build a house. The Warranty Deed for the property was issued to Sina Early and not her husband on November 1, 1902.  With W.T. Early being a carpenter, he started building a house for himself and Sina at the 430 Whedbee location sometime during 1904 and most likely finished construction during 1905. Probably not a moment too soon for Sina since she and W.T. Early welcomed their first and only child, Walter Thomas Early into the world on December 10, 1904.

From this point on, it looks as if the Earlys spent some quiet years living in Fort Collins. In the 1910 US Census, W.T., Sina and Walter are listed as living in Ward 4, Fort Collins, Larimer County, Colorado. W.T.’s year of immigration was listed as 1865 and his occupation was listed as contractor/carpenter. In the 1920 US Census, the Earlys are listed as living at 510 Maberly (Mulberry). We’re not sure if this is an error, or if the Earlys actually did move into the house that sits just to the east of this one on Mulberry. This time, W.T. listed his birth year as 1858 (ahem), his year of immigration as 1886 and his year of naturalization as 1912. His occupation was still carpenter and the census indicates that he owned his home “free” of mortgage. The 1920 census is the last one in which W.T. Early appears. He passed away sometime in 1921 and is buried in Grandview Cemetery here in Fort Collins. (His birth year is listed as 1856 on his headstone, by the way.)

According to a 1925 city directory, sometime after W.T.’s death, Sina moved to 618 S. Meldrum St in Fort Collins. Records indicate that she remained at this address until at least 1933. Between 1933 and 1940, Sina moved away from Colorado to be with family. In the 1940 US Census, Sina is listed as living with her brother-in-law, Charles Luber and his family at 223 N. Johnson St., Kahoka, Clark County MO. Sina passed away in 1946 (location unknown) and she was brought back to Fort Collins and laid to rest with her husband in Grandview Cemetery.

William T and Sina Early

We’re thankful to the Earlys for the house we now occupy and since we appreciate being grounded in the past with an eye to the future, we’re grateful to have the chance to know more about them and their lives in Fort Collins. We hope you’ve enjoyed learning a little more about the folks who built and lived in the home our office is now in. If you’d be interested in finding out more about the history of your own family, you can contact G. Sam Foster at Trees and Trees Ancestry, (970) 420-9166 or treesandtrees6@gmail.com.