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Beware New IRS Phishing Scam---Go Fish For Deductions Instead
Photo Credit: Forbes Business

Beware New IRS Phishing Scam---Go Fish For Deductions Instead

Mar 29 2014, 2:45pm CDT | by

The IRS warns of a new email phishing scam with hooks that look like they are from the IRS Taxpayer Advocate Service. They’re not. The scammers say your 2013 income is being reviewed and that the...

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17 weeks ago

Beware New IRS Phishing Scam---Go Fish For Deductions Instead

Mar 29 2014, 2:45pm CDT | by

The IRS warns of a new email phishing scam with hooks that look like they are from the IRS Taxpayer Advocate Service. They’re not. The scammers say your 2013 income is being reviewed and that the Taxpayer Advocate Service will help resolve it. Just click these links! Don’t!

Taxpayers who get these messages should not respond or click any links. Forward the scam emails to the IRS at phishing@irs.gov. For more information, visit the IRS’s Report Phishing web page.

Can you phish or fish as a business? Maybe. In Lowe v. Commissioner, Janice Lowe was the primary breadwinner, working full time as controller for a steel company for 38 years. Her husband Steve worked on home improvements from 1986 to 1999. And he fished.

When he attended a fishing tournament with a prize of $6,000, it spawned his interest in tournament fishing. Believing it would be like shooting fish in a barrel, Steve took to tournaments like a fish to water. Steve competed in 26 tournaments and eked out gross income of $4,241 in 2005. He entered 15 tournaments in 2006, and his gross income swelled to $10,932.

That may sound like a pretty full creel. Until you look at Steve’s expenses, that is. He racked up nearly $100,000 of expenses between 2005 and 2006, losing almost $50,000 in 2005 and $40,000 in 2006. But was he trying to land a profit? He said he was, but the IRS thought it was a fish story.

That meant Tax Court. Steve showed that he read books, magazines and newspapers about fishing. He even consulted professional fishermen seeking to improve profitability, so he was no bottom-feeder. Unfortunately, Steve’s tournament track record spoke for itself.

Steve may have had the best of intentions, but his winnings were never close to covering his entry fees, let alone his travel costs or depreciation on his equipment. Steve’s fishing activities seemed more recreational than business. Steve testified that his fishing started out as recreational.

But by 2005, he lamented, it was sure no fun! Professional fishing turned out to be a different kettle of fish. Despite all the points in Steve’s favor, the Tax Court found that Steve really hadn’t shown that he intended to make a profit. Plus, Steve hit a major snag, a veritable underwater redwood: He consistently entered his spouse as his tournament partner.

Steve’s breadwinning wife always went along and he deducted all her entry fees, but she never fished. This gave him a built-in handicap in the tournaments. By registering as a team, but with only Steve fishing, he had to catch twice as many fish! This conduct was inconsistent with intending to make a profit, said the court.

After considering all the factors, the Tax Court concluded that Steve’s fishing activity was not for profit. That meant no deductions. Still, Steve was reasonable and the court seemed to like him. So no penalties either. This is no fish story.

You can reach me at Wood@WoodLLP.com. This discussion is not intended as legal advice, and cannot be relied upon for any purpose without the services of a qualified professional.

Source: Forbes Business

 
Update
10

7 weeks ago

RM47mil KWSG contributions still unclaimed

Jun 9 2014 7:54am CDT | Source: Business Times Malaysia

KUALA LUMPUR: About RM47 million of contributions in the Teachers Provident Fund (KWSG) still remain unclaimed, the Dewan ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
9

7 weeks ago

Gold shop lost almost RM1mil

Jun 9 2014 3:50am CDT | Source: Business Times Malaysia

KANGAR: A gold shop owner lost almost RM1 million after after the safe on in his shop was broken i ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
8

7 weeks ago

Motion to debate MAS losses in Dewan Rakyat rejected

Jun 9 2014 3:39am CDT | Source: Business Times Malaysia

KUALA LUMPUR: AN emergency motion to debate the losses incurred by Malaysia Airlines last year, amounting to RM1.2 billion was rejected by the Dewan Rakyat today ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
7

7 weeks ago

MH370 Tragedy: Hisham: RM27.6 mil spent on 1st phase of SAR

Jun 9 2014 2:11am CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia spent some RM27.6 million in its first phase of the search operations for missing Malaysia Airline flight MH370, said Acting Transport Minister, Datuk Seri Hishammuddin Huss ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
6

7 weeks ago

9.1m litres of diesel seized in a month

Jun 8 2014 1:11am CDT | Source: Business Times Malaysia

PUTRAJAYA: The Domestic Trade, Cooperatives, and Consumerism ministry has seized some 9.1 million litres of diesel and property worth RM58 million since mounting ‘Operasi Diesel Selatan’ in the southern stat ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
5

7 weeks ago

Girl, 9, awarded RM2.78m compensation for medical negligence

Jun 6 2014 4:56am CDT | Source: Business Times Malaysia

KUALA LUMPUR: A nine-year-old girl who suffered brain damage during her birth at a government hospital was awarded over RM2.78 million in comp ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
4

7 weeks ago

Malaysia's total trade in April up 12pc

Jun 5 2014 11:52pm CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia's total trade in April 2014 rose by 12 per cent from a year ago to RM123.86 billion due to growing trading activities, International Trade and Industry Minister Datuk Seri Mustap ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
3

7 weeks ago

Works Ministry to spend RM20m for upgrading works at 50 accident black spots

Jun 4 2014 11:35pm CDT | Source: Business Times Malaysia

JOHOR BARU: The Works Ministry will implement upgrading works at 50 accident prone locations in the country that have been identified this year involving an a ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
2

7 weeks ago

Najib launches loan scheme for Ramadan traders

Jun 4 2014 10:24pm CDT | Source: Business Times Malaysia

PUTRAJAYA: Prime Minister Datuk Seri Najib Razak today launches RM45 million Ramadan Bazaar Scheme 201 ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
1

8 weeks ago

Residents bring up objection against Kidex to Suhakam

Jun 4 2014 4:49am CDT | Source: Business Times Malaysia

PETALING JAYA: A group of 20 Petaling Jaya residents held a meeting with the Human Rights Commission of Malaysia (Suhakam) over their objection against the proposed RM2.2 billion Kinrara Damansara S ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 

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