Duane Morris Tax Accounting Group

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Thrilled to announce for the ninth consecutive year, another Philadelphia Inquirer Top Workplace win for our Philly Headquarters and TAG team! Once again we are grateful and blessed to be working with some of the brightest, kindest, and most committed in the business. Always passionately going above and beyond and showing the industry we continue to be an organization of choice. Guess what? We're hiring! From young and emerging to seasoned and experienced CPAs, from tax technicians to business developers. Check us out at https://lnkd.in/gud5Kku. Come join our talented and Top Workplace team! #tax #taxlaw #taxadvisory

We recently released an alert about tax planning for working students. Please have a read as a little planning this summer can pay dividends come tax time next April, and potentially much larger dividends come retirement.

Each year, we share what the IRS calls its “Dirty Dozen” list of tax scams, which started in 2002. With the recent release of the IRS’ 2024 list, the service has confirmed that scammers continue to deploy tried and true as well as new and creative methods of social engineering in an attempt to obtain sensitive tax data, while the scammers simultaneously deploy even more sophisticated scams to dupe others. The scams on the 2024 IRS Dirty Dozen list can be encountered at any time during the year, but they peak during regular and extended tax seasons. With numerous tax changes continuously impacting taxpayers, tax scams continue to occur at an alarming rate and an increasing number of people fall prey. Don’t be one of them.

IRS - Classic Scams and New Threats Top 2024 List Schemes Involving International Elements―Maltese Individual Retirement Arrangements, Offshore Accounts and Digital Assets International tax compliance remains a high priority for the IRS. The IRS continues to scrutinize taxpayers attempting to hide assets in offshore accounts and accounts holding digital assets, such as cryptocurrency. U.S. persons are subject to tax on their worldwide income, unless they can establish there is a statutory or treaty exemption. A newer international scheme involves U.S. citizens or residents attempting to avoid U.S. tax by contributing to foreign individual retirement arrangements in Malta or another country. These countries allow for contributions in a form other than cash and do not limit the amount of contributions by reference to employment or self-employment activities. By improperly asserting this as a "pension fund" for U.S. tax treaty purposes, the U.S. taxpayer improperly claims an exemption from U.S. income tax on gains and earnings in, and distributions from, the foreign individual retirement arrangement. The IRS continues to aggressively identify individuals who attempt to conceal income in offshore banks, brokerage accounts, digital asset accounts and nominee entities. The IRS scrutinizes structured transactions, private annuities, employee leasing schemes, foreign trusts, the use of nominee ownership and other arrangements used to conceal taxable income, beneficial owners and assets. To complement its enforcement investigations, the IRS requires individuals holding foreign assets and third parties to report to the IRS on foreign assets, foreign accounts, foreign entities and digital assets. Reporting requirements carry substantial penalties for failure to file. Asset protection professionals and unscrupulous promoters continue to lure U.S. persons into placing their assets in offshore accounts and structures, saying they are out of reach of the IRS. Similarly, unscrupulous promoters recommend digital assets as being untraceable and undiscoverable by the IRS. These assertions are not true. The IRS can identify and track anonymous transactions of foreign financial accounts as well as digital assets. Many of these schemes are promoted and advertised online, but all these schemes have one thing in common: They promise tax savings that are too good to be true and will likely cause legal harm to taxpayers. Exercise Caution - Protect Your Personal Information and Data

IRS - Classic Scams and New Threats Top 2024 List Abusive Tax Avoidance Schemes The IRS is warning taxpayers to beware of promoters peddling bogus tax schemes aimed at reducing taxes or avoiding them altogether. These schemes can take many shapes, ranging from abusive deals involving syndicated conservation easements to microcaptive insurance arrangements. They can also involve an international component, such as hiding cash and digital assets offshore or using Maltese foreign individual retirement accounts or foreign captive insurance, a type of insurance company whose owners elect to be taxed on the captive's investment income only and often lack many attributes of legitimate insurance. Exercise Caution - Protect Your Personal Information and Data

IRS - Classic Scams and New Threats Top 2024 List Schemes Aimed at Wealthy Taxpayers and High-Income Filers The IRS cautions taxpayers to resist questionable tax practitioners and independent promoters selling schemes aimed at wealthy taxpayers. They are tempting targets for a variety of schemes and aggressive and fraudulent tax strategies designed to reduce taxes. These potentially abusive arrangements involve things like charitable remainder annuity trusts (CRATs), which permit individuals to donate assets to charity and draw annual income for life or for a specific time period, and monetized installment sales, where promoters find taxpayers seeking to defer the recognition of gain upon the sale of appreciated property. They facilitate a purported monetized installment sale for the taxpayer in exchange for a fee. These tools can be misused by promoters, who can advertise these schemes to attract clients. Promotors also peddling improper art donation deductions by encouraging taxpayers to buy art that they promise is worth significantly more than the purchase price. Promoters may suggest taxpayers donate art annually and allow them to buy a quantity of art that guarantees a specific deductible amount. Promoters may even arrange for certain charities to take the donations. The promoters misapply the rules and leave the filers vulnerable, not to mention subjecting taxpayers to significant penalties. Exercise Caution - Protect Your Personal Information and Data

IRS - Classic Scams and New Threats Top 2024 List Suspicious Email Requests - Spearfishing The IRS urges tax professionals and businesses to be on the lookout for a variety of suspicious email requests. Through these spear phishing emails, scammers try, by impersonating new clients, to steal client data, tax software preparation credentials and tax preparer identities with the goal of getting fraudulent tax refunds. These are also sometimes referred to as “new client scams”, and the fraudulent requests can range from an email that looks like it’s from a potential new client to a request targeting payroll and human resources departments asking for sensitive Form W-2 information. The IRS recommends, as do we, using a two-person review process when receiving these types of requests for Forms W-2. The IRS also recommends that businesses require that any requests for payroll be submitted through an official process, like the employer's human resources portal. There are easy steps that tax pros and businesses can take to avoid being fooled by these common schemes, including extra caution when opening emails, clicking on links or sharing sensitive client data. Extra care can go a long way to protect tax professionals and businesses as well as their clients and customers. Exercise Caution - Protect Your Personal Information and Data

IRS - Classic Scams and New Threats Top 2024 List Social Media Tax Advice Just because it appears on TikTok, Facebook and similar social media outlets does not mean it’s authoritative. Often, it can be quite the opposite. Social media can circulate inaccurate or misleading tax information. In a nutshell, there are many schemes and these schemes encourage people to submit false, inaccurate information in hopes of getting a refund. Moreover, providing any personal information at any level through social media can subject taxpayers to tax identity theft. Exercise Caution - Protect Your Personal Information and Data

IRS - Classic Scams and New Threats Top 2024 List Unscrupulous Tax Return Preparers Taxpayers should be careful of shady tax professionals and watch for common warning signs, including charging a fee based on the size of the refund. Some “ghost” tax preparers refuse to sign the tax return, ask people to sign a blank return or refuse to provide or include their IRS preparer tax identification number as required by law. They also encourage taxpayers to take advantage of tax credits and benefits for which they do not qualify. These are all common warning signs, and people should always rely on a trusted tax professional. Exercise Caution - Protect Your Personal Information and Data