There are a lot of tax myths circulating around this year. Some of them are related to 2018 tax changes; others are just rumors that the blogs have picked up and reported as facts. Still, others relate to persistent questions that the IRS frequently faces.
If you get too wrapped up in tax myths, you can easily get overwhelmed. However, you don’t have to let this happen to you. For the most part, you can go about filing your taxes just as you normally would. Here’s a breakdown of three tax myths you should know about.
1. Tax Myths: Phone Calls and the IRS
There are several different tax myths when it comes to speaking with the IRS by phone.
Fact: The IRS May Call You, But Be Wary
The first myth is that the IRS never calls you. This myth came about because there are a lot of unfortunate scams out there. If someone contacts you via email, phone, or even in person, claiming to be an IRS representative, then you should definitely be wary of a scam. Oftentimes, scammers do exactly this. They do so to get your information and/or your money. Don’t give it to them.
However, it’s a myth that the IRS will never call. In fact, they do call people. They also visit people in their homes. There are three common situations that might trigger the IRS to call or visit you at your home or business:
- You have an overdue tax bill
- Your tax return is delinquent
- There is a delinquent employment tax payment
- To tour business as part of a criminal investigation or an audit
Here’s What You Need to Know
Based on an April 2017 Fact Sheet from IRS.gov:
- The IRS almost always contacts you by snail mail first, usually multiple times.
- The representative carries two forms of IRS ID. You have the right to see them.
- In fact, you can request the phone number to verify the ID and the person has to give it to you.
- They will never demand immediate payment, even if you owe money to the IRS.
- They will advise you of your rights as a taxpayer.
- A real representative will never make any threats.
In almost every instance that an IRS representative might call you, it won’t be a surprise, because you’ll have received several notices in the mail. You are always notified in advance of audits and delinquencies. After a long period of unpaid taxes, during which you’ll have received many notices, the IRS can pass your debt off to a private tax collector. You’ll be notified about that in writing.
So, the myth is that IRS calls are always a scam. The truth is that the IRS may call you, but only under certain conditions, and you have a lot of recourse to make sure they really are who they say they are.
Fact: You Can Call the IRS
Another related tax myth is that you can’t call the IRS. This is a bit of a fuzzy one. The truth is that you can indeed call the IRS. You can even sometimes talk to a real live person. However, the reason that this myth persists is that calling the IRS is often a waste of time.
If you want to call the IRS, they have different numbers depending on whether you’re calling about an individual, business, or special taxes (such as excise taxes). You’ll need to look up the correct number then call during their advertised hours of availability, which are typically 7-7 M-F. Wait times can be very long, especially at the peak of tax season.
It’s important to understand that if you’re calling about your own refund, it takes time to get an answer. Don’t bother calling if it’s been less than three weeks since you filed an electronic return or six weeks since filing a paper return. If you have IRS questions, your best bet is to search the IRS.gov website. However, if you do need to talk to a person on the phone, it is possible to do so.
2. Tax Myths: 2018 Tax Refunds Will Be Slow to Come
There have been reports all over the Internet that tax refunds will take forever to arrive this year. People are reporting this for a number of reasons. The recent government shutdown concerned some people. Others said that adapting to the new tax changes will slow the IRS down. However, the IRS reports that this isn’t true at all.
The IRS says that 90% of refunds are sent within ten days of receipt by the IRS.
It is true that if you already filed your taxes early this year then you might have seen some delay in your refund. In particular, people who received the Earned Income Tax Credit and/or Additional Child Tax Credit had some delays. However, those delays don’t apply to people filing closer to the April 15th deadline.
As with all other years, you’ll receive your tax refund most quickly if you file electronically and also accept a direct deposit return. If you file by mail and/or request a physical check, then it naturally takes longer. All people who file by April 15th should receive their returns no later than May 24, 2019.
3. Tax Myths: Confusion over Tax Transcripts
You can request a tax transcript free online from the IRS. It has all of the major information that you need about all of the federal tax returns you have filed in the past. People typically request these when they need that information to qualify for a loan but haven’t kept their own records.
So, what’s the myth? Apparently, a lot of people presume that requesting a transcript will give them information about the status of their refund. That’s not true. In other words, if you’ve filed your taxes, and you want to know when you’ll get your refund, your tax transcript isn’t going to help you. It doesn’t have any information about the timing of the refund or even the amount you will get.
The IRS has an online tool called Where’s My Refund if you do want that information.
Have you heard any new tax myths this year? Share with us in the comments below.