A Step-by-Step Guide

Receiving a call from the IRS (Internal Revenue Service) can be a nerve-wracking experience. Whether it’s about taxes owed, a potential audit, or simply verifying information, the fear of making a mistake looms large. But don’t panic—knowing how to handle such a call is the key to staying calm and in control. In this blog, we’ll break down what to do if the IRS contacts you and how to protect yourself from potential scams.

Verify the Call

The first thing to do when you receive a call claiming to be from the IRS is to verify its legitimacy. The IRS typically initiates contact by mail, not phone calls. If you haven’t received prior correspondence, be skeptical. Here’s what to look for:

Caller’s Name & Badge Number: Ask for the caller’s name and badge number. A legitimate IRS representative will always provide this.
Hang Up & Call Back: If you’re uncertain, hang up and call the IRS directly at their official number (1-800-829-1040). This ensures you’re talking to an actual IRS agent, not a scammer.

Don’t Provide Sensitive Information

If the caller demands immediate payment, personal information, or sensitive financial details, it’s likely a scam. The IRS will never:

Demand payment via a prepaid debit card, gift card, or wire transfer.
Threaten to involve law enforcement or arrest you for non-payment.
Ask for your Social Security number, credit card information, or bank account over the phone.

Protect yourself by refusing to provide any personal information. Even if the call seems legitimate, only share information through secure, official channels.

Know Your Rights as a Taxpayer

As a taxpayer, you have specific rights that the IRS must respect. According to the Taxpayer Bill of Rights, the IRS must:

Treat you fairly and with respect.
Inform you of any actions being taken on your account.
Give you the right to appeal and dispute any findings.
Provide clear explanations for any tax decisions.

If an IRS agent is pressuring or intimidating you, stand firm. You have the right to ask for a supervisor, request written documentation, or consult with a tax professional.

Take Notes During the Call

If you do verify that the call is from the IRS, make sure you:

Write Down Details: Take notes on the reason for the call, any information requested, and the actions they expect from you.
Ask for Next Steps in Writing: Always ask for confirmation of the issue in writing. The IRS should send official documentation detailing your situation.

This will help you track and follow up on any requests and prevent any misunderstandings later.

Consider Consulting a Professional

If you’re unsure how to respond or feel overwhelmed by the situation, consider seeking professional advice. A tax professional, like those at Kurpas Solutions, can:

Review the details of your situation.
Help you understand your rights.
Communicate directly with the IRS on your behalf, saving you time and stress.

Tax professionals are equipped to handle complex situations and ensure that you’re protected from any unfair treatment or errors.

Beware of Scams

Unfortunately, IRS phone scams have become increasingly common. Scammers often impersonate IRS agents to trick individuals into paying fake debts or providing personal information. Here’s how to protect yourself:

Know the Signs: Scammers often use aggressive language, demand immediate payment, and refuse to answer questions. The IRS will never behave this way.
Hang Up & Report the Scam: If you suspect a scam, hang up immediately. You can report scam calls to the Treasury Inspector General for Tax Administration (TIGTA) at 1-800-366-4484 or the Federal Trade Commission (FTC) at www.ftc.gov.

Stay Calm and Follow the Process

Dealing with the IRS can feel intimidating, but remember that you have control over the situation. Stay calm, gather information, and take steps to verify and address the issue. With the right approach, you can manage any IRS communication with confidence.

Conclusion: You Have Options

If the IRS calls you, don’t panic. Always verify the call, avoid giving out sensitive information, and know your rights as a taxpayer. If the situation feels overwhelming, consult with a tax professional who can guide you through the process. At Kurpas Solutions, we’re here to help you navigate IRS communication, offering personalized advice and professional support.

Make sure you’re prepared—because when it comes to taxes, knowledge is your best defense.

Exploring High-Yield Savings Accounts (HYSA)

It might be tempting to stash your money under the mattress—especially after the fictional “end of the world” during the solar eclipse on April 8th! But in reality, your cash will serve you better in a High-Yield Savings Account (HYSA). In this post, I’ll dive into why we recommend HYSAs, and why they are the smart choice for your money in 2024. Also, how you can earn more without taking on stock market risk.

The Rise of Online Banking and High-Yield Savings Accounts

What is a High-Yield Savings Account?

Gone are the days when traditional banks offered savings accounts with a meager 0.01% interest. With the rise of online banking, you can now get much higher interest rates due to the lower overhead costs of digital banks. Many banks have transitioned to online-only models, eliminating brick-and-mortar locations and passing those savings on to you, the consumer, in the form of higher yields.

As of April 2024, it’s not uncommon to find HYSAs offering between 4% and 5% annual percentage yield (APY). These accounts provide a guaranteed return on your savings without the risks of the stock market.

Why Choose a HYSA Over the Stock Market?

It’s true that you can typically earn around 10% in the stock market, but the key difference is risk. Stock investments can fluctuate, and you could lose money. Meanwhile, a HYSA offers guaranteed returns and is typically FDIC insured, meaning your deposits are protected up to $250,000.

To put things into perspective, let’s compare the returns of a traditional bank versus a HYSA. A traditional savings account at a bank like Wells Fargo might offer a 0.25% APY. If you deposit $10,000, you’ll earn a mere $25 in interest over the year. But, with a 4.5% APY in a HYSA, that same $10,000 earns you $450 annually—without any added risk!

That extra $450 could buy you nearly 90 Starbucks iced coffees, all by just choosing a better place to park your money.

Top 4 High-Yield Savings Accounts in 2024

1. SoFi Savings Account

APY: 4.6%
Key Features:

Checking and savings account bundle
No monthly fees
$300 bonus with direct deposit setup

The SoFi savings account offers a 4.6% APY, but there’s a catch: you need to pair it with a SoFi checking account and set up direct deposits or deposit $5,000 every 30 days to qualify for the high rate. However, if you’re looking for a new bank, this is a fantastic option—especially with the $300 sign-up bonus for setting up direct deposit.

2. EverBank High-Yield Savings

APY: 5.15%
Key Features:

No monthly fees or minimum balance
FDIC insured
In-person branches (Florida only)

EverBank is offering one of the highest APYs available at 5.15%. With no minimum balance and no fees, it’s an attractive option. However, in-person branches are limited to Florida. If you’re comfortable with online banking, EverBank provides a solid, safe way to maximize your returns.

3. Lending Club High-Yield Savings

APY: 5%
Key Features:

No monthly fees
ATM access
$100 minimum deposit to open

Lending Club offers a solid 5% APY with no account fees and convenient ATM access. The only downside is the $100 minimum deposit required to open the account. However, once open, you don’t need to worry about maintaining a minimum balance.

4. UFB Direct Secure Savings Account

APY: 5.25%
Key Features:

Highest available APY (5.25%)
No monthly fees or minimum balance
24/7 customer support

UFB Direct currently offers the highest APY at 5.25%, making it an incredibly competitive option. They also offer no account fees and 24/7 customer support. However, one downside is that interest rates can fluctuate, so you may need to monitor your account to ensure you’re getting the best rate.

Why Use a HYSA for Your Savings?

HYSAs are ideal for emergency funds or idle cash that you want to keep safe but accessible. Since HYSAs are FDIC insured, your money is protected even in the unlikely event of a bank failure. Unlike the stock market, you won’t risk losing your principal, and you can earn competitive returns without locking up your funds.

Conclusion: Use a HYSA to Maximize Your Returns Safely

In 2024, HYSAs are one of the safest and most profitable places to store your money. With interest rates as high as 5.25% and FDIC protection, they offer a great way to earn a guaranteed return on your savings while keeping your funds easily accessible. Remember, though, that a savings account is not an investment vehicle. If you want to explore more ways to grow your wealth, check out my other blogs on investment strategies!

September 2024

What to Do If the IRS Calls You