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Tax time is prime time for scammers and scheming tax preparers

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2 years ago

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Do you know who loves tax season?

This is prime time for con artists and shady tax preparers. They know people are eager to land larger refunds or reduce their tax debt.

Every year, the Internal Revenue Service highlights its Dirty Dozen tax scams. These schemes are scary and increasingly sophisticated, so even the most skeptical person may not be able to avoid being victimized.

But soon the IRS will have in place a system that could be extraordinarily helpful in protecting people from scammers impersonating the agency, according to IRS Commissioner Danny Werfel.

This is how it would work. If you get an email, call or text message, all you have to do is go to your IRS online account. Once you sign on, a green banner will indicate the agency is not trying to reach you. It will be a clear and easy way to verify whether someone is trying to scam you.

However, a red banner means the IRS is trying to reach you. If that’s the case, you will contact the agency directly.

“The goal is for this to be ready for next filing season,” Werfel said.

Folks, you have to be careful about any contact you receive about your tax situation. Here are the scams that made the 2024 Dirty Dozen list.

The IRS continues to receive complaints about two main scams.

  • Phishing: You get an email claiming to be from the IRS. The con might involve the promise of a refund or a threat that you owe Uncle Sam.
  • Smishing: This involves a text message with language that would scare most folks. It might say “Your account has now been put on hold” or “Unusual Activity Report,” the IRS says.

Employee Retention Credit

The IRS continues to warn businesses about improperly claiming the Employee Retention Credit.

This is a refundable tax credit available to businesses that continued paying employees after shutting down because of the pandemic, or that had a significant decline in gross receipts from March 13, 2020, to Dec. 31, 2021.

Last month, three New Jersey individuals were charged with falsely seeking more than $2.9 billion in tax benefits, including the employee retention credit, from the IRS by filing 131 false returns.

Fraud was so bad in this area that the IRS announced a processing moratorium on new claims for the credit. The agency said it has stopped $1 billion in ERC claims since last fall. An additional $3 billion in claims is being reviewed by IRS Criminal Investigation, the agency said.

In this scam, a third party offers to help you set up an online IRS account. The goal is to either steal your information to commit identity theft, or to submit a tax return in your name and get a fraudulent refund.

The only place you should go to create an IRS online account is irs.gov.

Don’t wait for the scam alert system the IRS is working to set up by next year. Play defense when it comes to your financial data. If you don’t already have an IRS online account, establish one now.

‘Offer in compromise’ mills

No doubt you’ve probably heard this pitch while listening to the radio: “If you owe $10,000 or more to the IRS, call for a free tax consultation.”

Or: “We can stop IRS liens, levies and wage garnishment.”

But what these ads don’t make clear is that they are promoting a strategy that involves an “offer in compromise,” or OIC. It is an option for those unable to pay the full tax liability or those who would create a financial hardship by doing so.

The claims that they can settle your debt for far less than you owe are exaggerated with excessive fees, money that could be used to pay your taxes.

It can be extremely hard to get an OIC approved, a fact the promoters often don’t disclose. Of the 36,022 offers submitted in fiscal 2022, the IRS accepted 13,165.

Check whether you are eligible for this program by using the IRS’s Offer in Compromise Pre-Qualifier tool on its website.

‘Ghost’ tax preparers

By law, anyone who is paid to prepare or assist in preparing your tax return must have a valid 2024 preparer tax identification number, or PTIN, according to the IRS.

Preparers who won’t sign their work may be trying to “ghost” you. This could mean that the person doesn’t want the IRS to know they worked on your return or that they intend to alter the numbers before filing it electronically.

Here’s the rest of the Dirty Dozen list:

  • False fuel tax credit claims. This credit is only available for off-highway business and farming use.
  • Fake charities that want your money or personal information.
  • Bad tax advice on social media platforms.
  • “Spearphishing,” which targets tax professionals. The agency isn’t going to threaten to send the police to your house. In this scheme, scammers target tax preparers and the trove of information they have on clients.
  • Tax schemes targeting high earners. This might include a scheme to get a deduction for artwork or the fraudulent use of a charitable trust.
  • Bogus tax strategies that inflated certain deductions.
  • Promoters who claim they can show you how to hide assets in offshore accounts or by holding digital assets.

If you want more personal finance advice that’s timeless, order your copy of Michelle Singletary’s Money Milestones.

Here are some tips to help protect you from falling victim to a tax scam:

  • The agency isn’t going to threaten to send the police to your house.
  • Look for a letter. If the IRS has an issue with you, you will get a notice.
  • The IRS won’t ask you to pay a tax bill with a gift card or cryptocurrency.
  • The IRS will not initiate contact with you by phone or email to ask for your personal or financial information. If you get an email or text message, don’t reply. Don’t open any attachments. Don’t click any links.

Basically trust nothing and no one. Verify everything and anything with the IRS.

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Personal Finance

$20,000 Caution Bond Requirement for US Visa Applications imposed on 50 Countries

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6 days ago

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August 8, 2026

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The United States Department of State has officially implemented a revised visa policy introducing a mandatory posting requirement for caution payments of up to $20,000 on select foreign travel applications. Under the updated regulatory framework, consular officials are authorized to require temporary nonimmigrant visa applicants from targeted foreign countries to post a refundable financial bond of $20,000 as a condition for visa issuance. The policy mechanism is designed to address diplomatic concerns regarding high overstay rates among temporary visitor, business, and educational visa categories.

The caution bond pilot program applies selectively to foreign nationals from designated countries whose diplomatic entities record historical visa overstay rates exceeding established federal thresholds. Under administrative guidelines published by the State Department, the full financial deposit is posted directly to a dedicated federal escrow account prior to final visa issuance. The entire caution payment is automatically refunded to the applicant upon verified proof of timely departure from the United States in strict compliance with the authorized duration of stay. Conversely, failure to depart within the legal timeframe results in full forfeiture of the posted financial bond to the United States government.

Diplomatic representatives and travel policy experts have expressed varying perspectives regarding the operational implementation of the caution bond system. Administration officials emphasize that the measure serves as an effective, market-based incentive to enforce international travel compliance and preserve domestic immigration security standards. However, international trade organizations and foreign diplomatic missions have raised concerns regarding the financial burden imposed on legitimate business travelers, foreign students, and commercial partners from developing nations.

The United States finalized the rule to make the temporary visa bond program permanent, taking effect on August 3, 2026. The updated permanent regulation replaces the prior 12-month pilot, eliminates the lowest $5,000 tier, and raises the maximum required bond amount to $20,000 for specific B-1/B-2 business and tourist visa applicants.

Here is the list of the 50 countries on the list as o August 3, 2026

African Nations (31 Countries)

  • Algeria
  • Angola
  • Benin
  • Botswana
  • Burundi
  • Cabo Verde (Cape Verde)
  • Central African Republic
  • Côte d’Ivoire (Ivory Coast)
  • Djibouti
  • Ethiopia
  • Gabon
  • The Gambia
  • Ghana
  • Guinea
  • Guinea-Bissau
  • Lesotho
  • Malawi
  • Mauritania
  • Mauritius
  • Mozambique
  • Namibia
  • Nigeria
  • São Tomé and Príncipe
  • Senegal
  • Seychelles
  • Tanzania
  • Togo
  • Tunisia
  • Uganda
  • Zambia
  • Zimbabwe

Asian & Eastern European Nations (11 Countries)

  • Bangladesh
  • Bhutan
  • Cambodia
  • Georgia
  • Kyrgyzstan
  • Mongolia
  • Nepal
  • Papua New Guinea
  • Tajikistan
  • Turkmenistan
  • Uzbekistan

Caribbean & Latin American Nations (5 Countries)

  • Antigua and Barbuda
  • Cuba
  • Dominica
  • Grenada
  • Venezuela

Oceanian Nations (3 Countries)

  • Fiji
  • Tonga
  • Vanuatu

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Personal Finance

Next-Generation Retirement Planning: Managing Longevity Risk and Variable Income Streams

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1 week ago

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August 7, 2026

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Retirement planning strategies are evolving in 2026 to address increased life expectancies, shifting dynamic market conditions, and the transition away from traditional defined-benefit pensions. Individual investors and financial advisors are abandoning rigid retirement models in favor of flexible, multi-asset strategies designed to mitigate longevity risk and preserve purchasing power over multi-decade retirement horizons.

Mitigating Longevity Risk with Dynamic Asset Allocation
As average life expectancies extend past eighty-five years, one of the primary financial risks facing retirees is outliving their accumulated wealth. Traditional fixed income allocations—such as the standard 60/40 equity-to-bond portfolio—are being reevaluated to ensure portfolios generate sufficient capital growth alongside reliable income.

Financial planners recommend maintaining a meaningful equity allocation throughout retirement to offset long-term inflation erosion. High-dividend equity funds, global real estate investment trusts (REITs), and inflation-indexed Treasuries are combined to create diversified portfolios that deliver both growth and income stability.

The Transition to Dynamic Withdrawal Strategies
The classic “4% safe withdrawal rule” is increasingly replaced by dynamic withdrawal strategies that adapt annually based on market performance. Under a dynamic withdrawal framework, retirees adjust their annual distribution rates within pre-set caps and floors:
– Market Upside: During strong market returns, retirees can increase discretionary spending or fund family legacy gifts.
– Market Downturns: During market pullbacks, spending distributions are temporarily reduced to prevent sequence-of-returns risk and preserve core investment principal.

Guaranteed Lifetime Income Options and Deferred Annuities
To establish a guaranteed baseline for essential living expenses, individuals are incorporating modern fixed-indexed and deferred longevity annuities into their broader retirement architectures. Modern annuity structures offer competitive return caps, transparent fee schedules, and inflation-adjustment options.

By funding essential expenses—such as housing, healthcare, and insurance—with guaranteed income streams from Social Security, pensions, and annuities, retirees can manage discretionary investment portfolios with greater flexibility and lower emotional stress during market volatility.

Actionable Steps for Future Retirees
1. Calculate Baseline Retirement Expenses: Determine fixed living costs and map guaranteed income sources to cover essential expenditures.
2. Adopt Flexible Withdrawal Rules: Implement dynamic spending rules to protect investment principal against market downturns.
3. Incorporate Inflation-Protected Assets: Maintain exposure to dividend-growing equities and inflation-indexed bonds to safeguard long-term purchasing power.

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Personal Finance

Building Generational Wealth: Family Governance, Estate Tax Optimization, and Asset Protection

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2 weeks ago

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August 1, 2026

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As the largest intergenerational transfer of wealth in history accelerates, high-net-worth families, entrepreneurs, and individual investors are placing heightened emphasis on comprehensive estate planning, family governance, and asset protection. Preserving capital across generations requires a balanced approach combining tax-efficient legal structures with open family communication and financial literacy education.

Optimizing Estate Tax Exemptions and Trust Structures
With potential modifications to federal estate tax exemption thresholds on the horizon, proactive estate planning is essential for high-net-worth households. Estate planning attorneys and wealth advisors are establishing multi-generational trust structures to transfer wealth efficiently while minimizing estate and gift tax exposure.

Popular structural strategies include:
– Irrevocable Life Insurance Trusts (ILITs): Utilizing life insurance proceeds to provide liquidity for estate tax obligations without expanding the taxable estate.
– Grantor Retained Annuity Trusts (GRATs): Transferring rapidly appreciating assets to beneficiaries with minimal gift tax consequences.
– Dynasty Trusts: Preserving wealth across multiple generations while providing long-term asset protection from creditor claims and legal liabilities.

Establishing Family Governance and Financial Education
Legal and financial structures alone cannot guarantee long-term wealth preservation without effective family governance. Financial advisors report that a significant percentage of multi-generational wealth dissipation stems from lack of communication and inadequate financial preparation among heir generations.

Families are establishing formal family governance frameworks, including periodic family meetings, written mission statements, and structured philanthropic foundations. Involving younger family members in charitable grant-making and investment discussions fosters financial stewardship and prepares heirs to manage family assets responsibly.

Digital Asset Custody and Legacy Planning
In today’s modern economy, estate planning must extend beyond physical real estate and traditional brokerage accounts to encompass digital assets. Comprehensive estate plans now include detailed inventories and legal access protocols for corporate domain names, intellectual property, digital media rights, and cryptocurrency holdings.

Fiduciaries and estate executors should be provided with secure, encrypted access mechanisms and clear legal authority to manage and transfer digital holdings in accordance with the owner’s estate directions.

Practical Steps for Legacy Planning
1. Review and Update Estate Documents: Ensure wills, revocable trusts, and power-of-attorney designations accurately reflect current family structures.
2. Establish Structured Trusts: Utilize irrevocable trusts to protect assets from creditors and minimize future estate tax liabilities.
3. Create a Digital Estate Inventory: Document access protocols and legal permissions for all online accounts, intellectual property, and digital assets.

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