Mitchell Nguyen CPA

06/04/2020

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12/21/2018

W-2 Scams

The IRS is once again warning taxpayers, employers, and tax professionals to be on guard against the latest wave of W-2 scams. This has become one of the more dangerous email scams for tax administration. The emails appear to be from an executive or organization leader to a payroll or human resources employee. It may start with a simple,"Hey, you in today?" By the end of the exchange, all the organization's Forms W-2 for their employees may be in the hands of cybercriminals. This puts workers at risk for tax-related identity theft.

Because payroll officials believe they are corresponding with an executive, it may take weeks for someone to realize a data theft has occurred. Generally, the criminals are trying to quickly take advantage of their theft, sometimes filing fraudulent tax returns within a day or two. This scam is such a threat to taxpayers that a special IRS reporting process has been established.

The following is an abbreviated list of how to report these schemes:
- Email [email protected] to notify the IRS of a W-2 data loss and provide contact information. In the subject line, type "W2 Data Loss" so that the email can be routed properly. Do not attach any employee personally identifiable information data.
- Email the Federation of Tax Administrators at [email protected] to get information on how to report victim information to the states.
- Businesses/payroll service providers should file a complaint with the FBI's Internet Crime Complaint Center (IC3.gov). Businesses/payroll service providers may be asked to file a report with their local law enforcement agency.
- Notify employees so they may take steps to protect themselves from identity theft. The Federal Trade Commission's www.identitytheft.gov provides guidance on general steps employees should take.
- Forward the scam email to [email protected].

Employers are urged to put steps and protocols in place for the sharing of sensitive employee information such as Forms W-2. One example would be to have two people review any distribution of sensitive W-2 data or wire transfers. Another example would be to require a verbal confirmation before emailing W-2 data. Employers also are urged to educate their payroll or human resources departments about these scams.

Recovering from identity theft is a process. Here’s step-by-step advice that can help you limit the damage, report identity theft, and fix your credit.

10/16/2016

simple but powerful definition
The sole proprietorship is the simplest business form under which one can operate a business. The sole proprietorship is not a legal entity. It simply refers to a person who owns the business and is personally responsible for its debts.

10/11/2016

Disclosure of Confidential Client Information Prohibited 5063.3. (a) No confidential information obtained by a licensee, in his or her professional capacity, concerning a client or prospective client shall be disclosed by the licensee without the written permission of the client or prospective client, except the following:
(1) Disclosures made by a licensee in compliance with a subpoena or a summons enforceable by order of a court.
(2) Disclosures made by a licensee regarding a client or prospective client to the extent the licensee reasonably believes it is necessary to maintain or defend himself or herself in a legal proceeding initiated by the client or prospective client.
(3) Disclosures made by a licensee in response to an official inquiry from a federal or state government regulatory agency.
(4) Disclosures made by a licensee or a licensee’s duly authorized representative to another licensee in connection with a proposed sale or merger of the licensee’s professional practice.
(5) Disclosures made by a licensee to either of the following:
(A) Another licensee to the extent necessary for purposes of professional consultation.

(B) Organizations that provide professional standards review and ethics of quality control peer review.
(6) Disclosures made when specifically required by law.
(7) Disclosures specified by the board in regulation.
(b) In the event that confidential client information may be disclosed to persons or entities outside the United States of America in connection with the services provided, the licensee shall inform the client in writing and obtain the client’s written permission for the disclosure.

10/11/2016

Use of Confusing Titles or Designations Prohibited 5058. No person or partnership shall assume or use the title or designation “chartered accountant”, “certified accountant”, “enrolled accountant”, “registered accountant” or “licensed accountant”, or any other title or designation likely to be confused with “certified public accountant” or “public accountant”, or any of the abbreviations “C.A.”, “E.A.”, “R.A.”, or “L.A.”, or similar abbreviations likely to be confused with “C.P.A.” or “P.A.”; provided, that any person qualified as a certified public accountant under this chapter who also holds a comparable title granted under the laws of another country may use such title in conjunction with the title of “certified public accountant” or “C.P.A.” and provided, that any person
enrolled to practice before the Internal Revenue Service and recognized as an enrolled agent may use the abbreviation “E.A.”

11/09/2015

A fund is defined as a fiscal and accounting entity with a self-balancing set of accounts recording cash and other financial resources, together with all related liabilities and residual equities or balances, and changes therein,

which are segregated
for the purpose of carrying on specific activities or attaining certain objectives in accordance with special regulations, restrictions, or limitations.

11/08/2015

1. The absence of a profit motive, except
for enterprise activities, such as utilities
2. A legal emphasis that involves restrictions both in the raising and spending of
revenues
3. An inability to “match” revenues with
expenditures, as revenues are often provided by persons other than those receiving the services
4. An emphasis on accountability or stewardship of resources entrusted to public
officials
5. The use of fund accounting and reporting, as well as government-wide reporting
6. The recording of the budget in governmental funds which legally adopt a
budget (i.e., General Fund)
7. The use of modified accrual accounting
rather than full accrual accounting in
some funds (governmental fund types)

11/08/2015

1.04 Conflicts Between Legal Provisions and GAAP
Where legal requirements conflict with GAAP, the basic financial statements should be prepared in conformity with GAAP. To conform with legal requirements, additional schedules and narrative explanations should be included in the Comprehensive Annual Financial Report (CAFR). The accounting system may be maintained on a legal compliance basis if sufficient records are included to permit reporting in accordance with GAAP.
CHAPTER 1 SUMMARY STATEMENT OF ACCOUNTING PRINCIPLES
PAGE | 4 ACCOUNTING STANDARDS AND PROCEDURES FOR COUNTIES
1.05 Bringing Legal Provisions Into Conformance With GAAP
Every effort should be made to bring applicable laws into conformance with GAAP. The laws should limit the accounting, auditing, and reporting requirements to conformance with GAAP and Generally Accepted Auditing Standards (GAAS). The establishment and implementation of the details of accounting principles, systems, and practice should be the responsibility of qualified administrators. This is particularly important in view of the advances being made in the accounting profession.

11/08/2015

If the dollar amount of supplies is significant, the amount of unused supplies as of the balance sheet date should be reported in the asset account Supplies or Supplies on Hand. The supplies that have been used during the accounting period should be reported in the income statement account Supplies Expense. Basically, supplies are assets until they are used. When they are used, they become an expense.

When the dollar amount of supplies is not significant, many companies will simply debit Supplies Expense when the supplies are purchased. They will report no supplies on hand or a small constant amount. This less-than-perfect accounting treatment of an insignificant amount is allowed because of an accounting concept known as materiality.

11/08/2015

a business transaction is an economic event that initiates the accounting process of recording it in a company's accounting system

11/08/2015

the objectivity concept requires that amounts recorded in the financial statements must be based on independently verifiable evidence

11/08/2015

Accounting is an information system that provides reports to users regarding economics activities and condition of a business