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Taxpayers shouldn’t let gift card scammers ruin the holidays
During the holiday season, taxpayers should be aware of gift card scams thieves commonly use this time of year. Con artists will target taxpayers by asking them to pay a fake tax bill with gift cards. They may also use a compromised email account to send emails requesting gift card purchases for friends, family or co-workers. This scam is easy to avoid if taxpayers remember that the IRS never asks for or accepts gift cards as payment for a tax bill.

Here's how this scam usually happens:

• The most common way scammers request gift cards is over the phone through a government impersonation scam. However, they will also request gift cards by sending a text message, email or through social media.
• A scammer posing as an IRS agent will call the taxpayer or leave a voicemail with a callback number informing the taxpayer that they are linked to some criminal activity. For example, the scammer will tell the taxpayer their identify has been stolen and used to open fake bank accounts.
• The scammer will threaten or harass the taxpayer by telling them that they must pay a fictitious tax penalty.
• The scammer instructs the taxpayer to buy gift cards from various stores.
• Once the taxpayer buys the gift cards, the scammer will ask the taxpayer to provide the gift card number and PIN.

Here's how taxpayers can tell if it's really the IRS calling. The IRS will never:

• Call to demand immediate payment using a specific payment method such as a gift card, prepaid debit card or wire transfer. Generally, the IRS will first mail a bill to any taxpayer who owes taxes.
• Demand that taxpayers pay taxes without the opportunity to question or appeal the amount they owe. All taxpayers should be aware of their rights.
• Threaten to bring in local police, immigration officers or other law enforcement to have the taxpayer arrested for not paying.
• Threaten to revoke the taxpayer's driver's license, business licenses or immigration status.

Any taxpayer who believes they've been targeted by a scammer should:

• Contact the Treasury Inspector General for Tax Administration to report a phone scam. Use their IRS Impersonation Scam Reporting webpage.  They can also call 800-366-4484.
• Report  phone scams to the Federal Trade Commission. Use the FTC Complaint Assistant on FTC.gov. They should add "IRS phone scam" in the notes.
• Report threatening or harassing telephone calls claiming to be from the IRS to phishing@irs.gov. People should include "IRS phone scam" in the subject line.

IRS launches new Tax Withholding Estimator:  

The Internal Revenue Service today launched the new Tax Withholding Estimator, an expanded, mobile-friendly online tool designed to make it easier for everyone to have the right amount of tax withheld during the year.   To get started, check out the Tax Withholding Estimator on IRS.gov. 

Consumer Alerts on Tax Scams

‪Note that the IRS will never:

• Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. Generally, the IRS will first mail you a bill if you owe any taxes.
• Threaten to immediately bring in local police or other law-enforcement groups to have you arrested for not paying.
• Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.
• Ask for credit or debit card numbers over the phone.

For more information on tax scams, please see Tax Scams/Consumer Alerts. For more information on phishing scams, please see Suspicious Emails and Identity Theft.

Enhanced Business Deductions

The Internal Revenue Service reminds business taxpayers to plan now to take advantage of the enhanced 100% deduction for business meals and other tax benefits available to them when they file their 2022 federal income tax return. Business Meals:  Businesses can generally deduct the full cost of business-related food and beverages purchased from a restaurant. Otherwise, the limit is usually 50% of the cost of the meal. To qualify for the higher limit, the business owner or an employee of the business must be present when food or beverages are provided. Moreover, the expense cannot be lavish or extravagant. Restaurants include businesses that prepare and sell food or beverages to retail customers for immediate on-premises or off-premises consumption. For this purpose, grocery stores, convenience stores and other businesses that primarily sell pre-packaged goods not for immediate consumption, do not qualify as restaurants. Additionally, an employer may not treat certain employer-operated eating facilities as restaurants, even if they are operated under contract by a third party. For more information about this provision, as well as details on the special recordkeeping rules that apply to business meals, see IRS Publication 463, Travel, Gift, and Car Expenses. 

Home Office Deduction:  With a growing number of business owners now working from home, many may qualify for the home office deduction, also known as the deduction for business use of a home.  Usually, a business owner must use a room or other identifiable portion of the home exclusively for business on a regular basis. Exceptions to the exclusive-use standard apply to home-based daycare facilities and to portions of the home used for business storage, where the home is the only fixed location for that business.  Those eligible can figure the deduction using either the regular method or the simplified method. To choose the regular method, fill out and attach Form 8829, Expenses for Business Use of Your Home. In general, this form divides the expenses of operating the home between personal and business use. Direct business expenses are fully deductible. On the other hand, the business portion of indirect expenses, such as real estate taxes, mortgage interest, rent, casualty losses, utilities, insurance, depreciation, maintenance and repairs, is figured on this form, based on the percentage of the home used for business.   Alternatively, instead of filling out the 44-line Form 8829, business owners can choose the simplified method, based on a 6-line worksheet found in the instructions to Schedule C, the tax form for sole proprietors. This method has a prescribed rate of $5 a square foot for business use of the home. The maximum deduction is $1,500, based on business use of at least 300 square feet.  Though homeowners choosing the simplified option cannot depreciate the portion of their home used for business, they can still claim allowable home mortgage interest, real estate taxes and casualty losses as itemized deductions on Schedule A. These deductions need not be allocated between personal and business use, as is required under the regular method. Business expenses unrelated to the home, such as advertising, supplies and wages paid to employees, are still fully deductible. Under both the regular and simplified methods, business expenses in excess of the gross income limitation are not deductible. For more information about this limit along with other details on the home office deduction and both methods for figuring it, see Publication 587, Business Use of Your Home.