 A business may be able to claim a federal income tax deduction for a theft loss. But does embezzlement count as theft? In most cases it does but you’ll have to substantiate the loss. A recent U.S. Tax Court decision illustrates how that’s sometimes difficult to do.
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 In one recent cybercrime scheme, a mortgage company employee accessed his employer’s records without authorization, then used stolen customer lists to start his own mortgage business. The perpetrator hacked the protected records by sending an email containing malware to a coworker.
This particular dishonest worker was caught. But your company may not be so lucky. One of your employees’ cybercrime schemes could end in financial losses or competitive disadvantages due to corporate espionage.  If you file a joint tax return with your spouse, you should be aware of your individual liability. And if you’re getting divorced, you should know that there may be relief available if the IRS comes after you for certain past-due taxes.
 Many debates have focused on whether it is better to use credit cards or debit cards. Renowned former criminal turned security consultant, Frank Abagnale Jr., the subject of the movie Catch Me If You Can, spoke at Google in 2017 and addressed this issue. A transcript of his remarks during that talk follow.
 “Thousands of people have lost millions of dollars and their personal information to tax scams,” according to the IRS. Criminals can contact victims through regular mail, telephone calls and email messages. Here are just two of the scams the tax agency has seen in recent months.
 The Internal Revenue Service began a new private collection program of certain overdue federal tax debts selecting four contractors to implement it.
The new program, authorized under a federal law enacted by Congress, enables these designated contractors to collect, on the government’s behalf, outstanding inactive tax receivables. Authorized under a federal law enacted by Congress in December 2015, Section 32102 of the Fixing America’s Surface Transportation Act (FAST Act) requires the IRS to use private collection agencies for the collection of outstanding inactive tax receivables.  Last week the caller ID on my home phone displayed a call from Rochester, NY. It was an automated call which apparently started before my voicemail picked up. If I didn't know better, I might have been worried by what the computer voice told me.
 Taxpayers need to be wary against scam groups masquerading as charitable organizations, luring people to make donations to groups or causes that don't actually qualify for a tax deduction. These ‘fake’ charities attempt to attract donations from unsuspecting contributors, using a charitable reason and a tax deduction as bait for taxpayers. Fake charities are one of the “Dirty Dozen” tax scams for the 2018 filing season.
Compiled annually, the “Dirty Dozen” lists a variety of common scams that taxpayers may encounter anytime, but many of these schemes peak during filing season as people prepare their tax returns or hire someone to prepare their taxes.  Unfortunately it isn't always easy to know when a scammer is calling you. Millions of dollars and personal information have been lost due to tax scams.
The IRS uses the US Postal Service to initiate all contact with a taxpayer. They will never make their first contact by a phone call, email, text messages, or social media channels to request personal or financial information. However, after multiple letters they may attempt to call you.  Image credit: gilaxia / Getty Images With the recent Equifax breach it seems a good time to remind business owners how to keep their companies safe. I recently read an article at entrepreneur.com (full article here) that shared some important information. Here are some key points copied from that article.
Businesses frequently fall prey to fraud and identity theft because their leaders misunderstand the risks. Entrepreneurs mistakenly believe their small startups are too insignificant for thieves to target. But when it comes to identity theft, size doesn’t matter. As long as a company possesses customer data -- particularly financial information -- it holds value for scammers. |
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