IRS scams: An old movie with new characters

According to the IRS, people are reporting that they received e-mails or calls from IRS agents saying they owed taxes and needed to pay immediately or face hefty consequences including arrest, deportation, or suspension of various licenses.  Others were informed that they had an overdue refund and needed to provide personal information in order to receive it.  Those that simply don’t answer the telephone call are left with an urgent message to call the "agent" back.  At its core, this scam is no different than the emails or calls that request your credit card information or bank account numbers so that you can receive a huge inheritance from that long lost uncle you never met. 

You should know that, according to the IRS website (see link below), an agent will never:

1)  call to demand immediate payment, nor will the agency call about taxes owed without first having mailed you a bill;

2)  demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe;

3)  require you to use a specific payment method for your taxes, such as a prepaid debit card;

4)  ask for credit or debit card numbers over the phone; or

5)  threaten to bring in local police or other law-enforcement groups to have you arrested for not paying.

6)  initiate contact via email.

You can visit this IRS.gov page for more information on tax scams and consumer alerts.

Bradley S. Williamson

Retirement plan check-up

Monitoring your employees’ retirement plan is an important fiduciary responsibility.  Year end is a good time to give your retirement plan a check up.  The following FAQ’s may help:

  

A)   Does the plan have a fidelity bond?  Has it been updated for the required coverage?

Each plan must have a fidelity bond, which is different than fiduciary liability insurance.   Coverage must be based on the plan’s net assets as of the beginning of the year, with limits ranging from $1,000 to $500,000 per plan official.

B)   Has the plan complied with the IRS rules and regulations -- for example: updating the plan document for recent law changes and timely depositing employee elective deferrals? 

The IRS provides a checklistfor 401(K) Plans and also one for 403(b) Plans.  These checklists guide employers through common compliance issues.  The IRS also provides “fix-it guides” for correcting common compliance deficiencies.

C)   Does the plan have an audit requirement?

Plans with more than 100 eligible participants as of the beginning of the plan year generally require an audit.

D)  Is the plan required to file a Form 5500?

Plans must generally file a Form 5500—Annual Return/Report of Employee Benefit Plan, with limited exceptions.

E)   Have participants of the plan who are age 70-½ or older been notified regarding the minimum distribution requirement and amount. 

Required minimum distributions (RMD) are generally due by December 31, for those participants who are 70-½ or older.  The plan administrator or the trustee is generally responsible for notifying the participant of the RMD requirement and amount. 

F)   Has the plan administrator received all fee and expense disclosures from contracted service providers (CSP)? 

CSPs are required to disclose in writing the dollar amount of fees received from the plan or the schedule or formula used to determine the fee payment amounts.  The CSP must notify the plan sponsor in writing within 60 days of any changes in the plan fees.

G)  Have the participants been notified of the fees and expenses paid during the year?

The plan sponsor is required annually to provide all participants with written details about investment fees, plan fees, and other fee information.

The above information is general in nature.  Contact your CPA if you need more assistance with your retirement plan check-up.  

Daria Cruzen, CPA, MBA

Manager—Audit Department