Tax Preparers Cautioned About New Scam Involving Tax Software

Cybercriminals Use Scheme To Access Tax Preparers’ Accounts and Steal Client Information

(Washington, DC) – The District of Columbia Office of Tax and Revenue, the Internal Revenue Service, tax agencies from other states, and the tax industry today warned tax professionals to be alert to a new phishing email scam impersonating software providers.

The scam email comes with the subject line, “Access Locked.” It tells recipients that access to their tax prep software accounts has been “suspended due to errors in your security details.” The scam email asks the tax professional to address the issue by using an “unlock” link provided in the email.

However, the link will take the tax professional to a fake web page where they are asked to enter their user name and password. Instead of unlocking accounts, the tax professionals actually are inadvertently providing their information to cybercriminals who use the stolen credentials to access the preparers’ accounts and to steal client information.

The Security Summit partners, which include the IRS, state tax agencies and the nation’s tax community, remind tax professionals and taxpayers to never open a link or an attachment from a suspicious email. These scams can increase during the tax season.

Tax professionals can review additional tips to protect clients and themselves at the Security Summit’s awareness campaign, Protect Your Clients, Protect Yourself, on IRS.gov.

Tax professionals who receive emails purportedly from their tax software providers suggesting their accounts have been suspended should send those scam emails to their tax software provider.  For Windows users, please follow this process to help the investigation of these scam emails:

  1. Use “Save As” to save the scam. Under “save as type” in the drop down menu, select “plain text” and save to your desk top. Do not click on any links.
  2. Open a new email and attach this saved email as a file
  3. Send your new email containing the attachment your tax software provider, as well as copy Phishing@IRS.gov.
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Enhanced Fraud Prevention Measures Could Result in Additional Processing Time for Some Tax Returns

tax_fraudThe Office of Tax and Revenue (OTR) would like to remind taxpayers of its enhanced security measures that have been implemented this filing season to safeguard tax dollars and combat identify theft, as well as tax refund fraud.  These enhanced security measures may result in longer processing times for some tax returns and associated refunds. The processing window for selected tax returns could be up to 25 days.

Taxpayers can check their refund status via OTR’s tax portal, MyTax.DC.gov by clicking the “Where’s My Refund?” tab on the homepage.

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MyTax.DC.gov: How to Check the Status of Your Refund

The Office of Tax and Revenue (OTR) would like to remind individual taxpayers that they can check the status of their refunds via the new tax portal, MyTax.DC.gov. OTR encourages taxpayers to use this feature to stay updated on their refund status throughout this tax filing season.

The How to Check Your Refund Status user guide will provide step-by-step instructions on how to receive a refund status update on MyTax.DC.gov.

To view or download the guide, click the link below.

refund-status-image

Click to view or download the How to Check Your Refund Status User Guide

Stay tuned to this blog for more resources, features, and benefits of MyTax.DC.gov.

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OTR Implements Return Verification Process to Combat Identity Theft Tax Fraud

(Washington, DC) – The Office of Tax and Revenue (OTR) announced that in its continued efforts to combat identity theft tax fraud this filing season, additional verification will be required for selected tax returns.

OTR will issue notices to individual taxpayers whose returns have been selected for further review. The notice will contain a Personalized Identification Number (PIN) along with detailed instructions on how to verify a return using the PIN.

Taxpayers will have three options to complete the verification process:

  • Using OTR’s secure Taxpayer Access Portal, MyTax.DC.gov
  • Calling the Refund Response Unit at (202)741-8629 between the hours of 8:30 a.m. and 4:30 p.m., Monday through Friday
  • Visiting OTR’s Walk-in Center located at 1101 4th St. SW, Washington, DC 20024 between the hours of 8:15 a.m. and 5:30 p.m.

The protection measures taken by OTR during the 2016 tax filing season saved the District and its taxpayers more than $25 million from potentially fraudulent returns. The Office of Tax and Revenue’s Compliance Administration will continue these enforcement efforts to safeguard the identity and tax dollars of the District’s taxpayers and government.

In addition to verifying a return, taxpayers can also use the District’s new online tax portal, MyTax.DC.gov to check the status of a refund, provide substantiating documentation, or communicate with customer service.

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Common Individual Income Tax Return Errors

tax-return-errorsThe Office of Tax and Revenue (OTR) would like to inform taxpayers of the common errors to avoid when filing their individual income tax returns. Errors on tax returns delay processing times and issuance of refunds.  Additionally, OTR strongly urges taxpayers to consider filing returns electronically.  E-filing is faster and ensures less errors than mailing in returns.

Please read the helpful tips below to avoid common errors when preparing your tax returns this tax filing season.

Individual Income Tax Returns

  • Failure to complete the tax return
  • Failure to enter your complete and/or correct Social Security number
  • Failure to double check math calculations
  • Failure to select the correct filing status or not selecting a filing status (e.g. single, married)
  • Failure to clearly print your name, current address, including zip code directly on the tax return
  • Failure to enter on the form Schedule S (Supplemental Information and Dependents Return) your dependent(s)’ information – name, Social Security number, date of birth, and relationship to you
  • Failure to sign and date the tax return. Both signatures are required when filing jointly
  • Failure to staple required items to your tax return. Staple the following items to your tax return in the order and location shown in the D-40 instructions:
    • Any Form 1009 showing DC Withholdings
    • Form 1099 R – Distribution from Pension, Annuities, Retirement, etc.
    • Form W-2 – Wage and Tax Statement
  • Make sure that you receive written confirmation from the tax preparer that your electronically filed DC return was accepted
  • Failure to include on your tax payment your Social Security number, the tax year and the number of the form you are filing
  • Failure to prorate correctly or failure to subtract the income received during the period of non- residence

Deductions:

  • Failure to take same type deduction (itemized or standard) on your District tax return as that taken on your Federal tax return
  • Selecting the standard deduction when itemizing
  • Entering the incorrect number of exemptions
  • Not attaching form Schedule S (Supplemental Information and Dependents Return)

DC tax credits and payments:

  • Computing the tax $100,000 or over incorrectly
  • Failure to attach a completed Calculation J (Tax computation for married or registered domestic partners filing separately on the same DC return)
  • Childcare credit amounts computed incorrectly
  • Failure to attach a Form Schedule U (Additional Miscellaneous Credits and Contributions)
  • Low income and Earned Income Tax Credits (EITC) selected together
  • Taxpayers can only claim 40% of the federal EITC

DC withholding:

  • W-2s and 1099s not attached or filing without all of the W-2s and 1099s

Estimated tax:

  • Claimed but not paid or paid to the IRS
  • Refund issued because the overpayment was not designated as a carry forward

Extension payment:

  • Overstated or not made at all

Amended return:

  • Failure to check as an amended return (OTR’s system enters as a duplicated return)

Head of household:

  • Head of household claimed without dependents or a qualifying child
  • All supporting documents should be attached when submitting the tax return

Homeowner and Renter Property Tax Credit Return

If you file a DC Schedule H (Homeowner and Renter Property Tax Credit Return) to claim a property tax credit:

  • Include the square, suffix and lot numbers if you own the real property for which you are claiming the credit;
  • Include your landlord’s name, address and telephone number and the dollar amount of your rent for the year if claiming the credit based on rent paid; and
  • Report the federal Adjusted Gross Income (AGI) of the members of your tax filing unit

Do not file a DC Schedule H to claim the property tax credit if you lived in public or subsidized housing during the year.

As a reminder, you can check the status of your refund 24/7 via MyTax.DC.gov. Additionally, by signing up, you can make/schedule payments, view notices sent from OTR, and contact e-Services for a quick response to online inquiries.

OTR Quick Links

OTR Customer Service Administration

MyTax.DC.gov FAQs

MyTax.DC.gov Tutorials

OTR Twitter Page – @DC_OTR

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OTR to Begin Processing Electronic and Paper Returns for Tax Year 2016 on January 23, 2017

(Washington, DC) – The Office of Tax and Revenue (OTR) reminds District residents that the tax filing season for individual income tax returns begins Monday, January 23, 2017.

On that day, OTR will officially begin processing individual income tax returns filed electronically or by paper submission. The Internal Revenue Service (IRS) will launch the federal filing season on the same date.

OTR expects to receive and process more than 440,000 individual income tax returns this year.

File Electronically

OTR urges taxpayers and tax preparers to file returns electronically. E-filing is faster, helps to minimize errors, and provides filers with an electronic filing acknowledgement.

OTR offers two electronic filing methods:

  • Free File: A service that allows taxpayers to choose from a number of free tax prep software options
  • Fillable Form: An online version of the D-40/D-40EZ form and schedules that allows taxpayers to fill in their tax information, e-sign, and e-file their return

Tax Fraud Protection

At the 2015 Security Summit, the IRS partnered with state tax agencies and the electronic tax industry to address identity theft/tax refund fraud.

In keeping with the initiatives of the summit, OTR’s enhanced security measures to safeguard tax dollars and combat identify theft/tax refund fraud may result in longer processing times for some tax returns and associated refunds.  The processing window for selected tax returns could be up to 25 days.

To date, the District’s fraud protection program has saved over $25 million.

MyTax.DC.gov

In November 2016, OTR launched MyTax.DC.gov, an online portal created to make viewing and paying individual income and business taxes in the District simpler, faster, and safer.

Portal Functions:

  • Check refund and return status 24/7
  • View copies of notices sent from OTR
  • Provide substantiating documents to OTR
  • Grant secure third party access
  • Contact e-Services for a swift response to online inquiries
  • Make/schedule payments

Free Tax Preparation Assistance

Customer service specialists in OTR’s walk-in center, located at 1101 4th Street, SW, Suite W270, will prepare DC individual income tax returns at no cost.

No appointment is necessary. Please bring copies of the following:

  • Completed federal tax return
  • Applicable schedules
  • W-2s or statements showing DC withholdings

Filing Deadline

Because April 15 falls on a Saturday and OTR will be closed on Monday, April 17 in observance of Emancipation Day, the deadline to file income tax returns for Tax Year 2016 is Tuesday, April 18, 2017.

Contact OTR

Assistance is available from 8:15 a.m. to 5:30 p.m., Monday through Friday.

  • Walk-In Center:  1101 4th Street, SW, Suite W270
  • Telephone Center:  (202) 727-4TAX (4829)
  • Email: Taxhelp@dc.gov
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Reminder: Withholding Form Changes for 2017

Beginning January 2017, the Office of Tax and Revenue (OTR) is eliminating monthly withholding return filing for District of Columbia taxpayers. This will more closely align with the federal 491 withholding process and make tax filing simpler for District businesses/employers.

If you currently file the Employer/Payor Withholding Tax Monthly Return (FR-900M), you will no longer be required to file monthly withholding tax returns. Instead, you will be required to file the new Employer/Payor Withholding Tax- Quarterly Return, FR-900Q. However, you will still be required to make your tax payments on a monthly basis, with the due dates being the 20th of the following month, as they are now.

There will be an option of bulk filing the FR-900Q via MyTax.DC.gov beginning with the quarterly return due on April 30, 2017.

Additionally, beginning January 2017, another key feature will be a new standalone annual (Non-Payroll) return, FR-900NP. This new form aligns with federal regulations and IRS Form 945, and you can file it through MyTax.DC.gov. To report backup or income tax withholding on non-payroll payments such as pensions, annuities, and gambling winnings, use the FR-900NP only. In the event of an overpayment, a credit can be carried forward or a refund can be requested. Refunds will be issued by paper check once approved.

As a final reminder, the 2016 FR-900B (Employer/Payor Withholding Tax Annual Reconciliation and Report) will be the last reconciliation form filed and it is due by January 31, 2017 via mail to Office of Tax and Revenue P.O. Box 96385 Washington, DC 20090-6385.

Below are the due dates for the quarterly returns:

The Quarter includes Quarter Ends Form FR-900Q is Due
1.  January, February, March March 31 April 30
2. April, May, June June 30 July 31
3. July, August, September September 30 October 31
4. October, November, December December 31 January 31

2017 FR-900A Due Date:

  • The 2017 FR-900A (Employer/Payor Withholding Tax – Annual Return) is due January 31, 2018.

2017 FR-900NP Due Date:

  • The 2017 FR-900NP (Annual Return for Withholding Reported on Forms 1099 and/or W-2G) is due January 31, 2018.

Note: A new 2017 FR-900P (Payment Voucher for Withholding Tax) will be available for any payments made during the 2017 calendar year.

To download the 2017 Withholding tax forms, visit http://otr.cfo.dc.gov/page/withholding-tax-forms-and-publications.

OTR Quick Links

MyTax.DC.gov FAQs

MyTax.DC.gov Tutorials

OTR Twitter Page – @DC_OTR

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