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How to Protect Yourself Against Coronavirus-Related Fraud
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The global coronavirus pandemic has changed every single facet of our world – from the way we work to how we live our day-to-day lives – and we have been forced to quickly adjust to a new normal. Unfortunately, there are those out there who seek to take advantage of this turbulent time. The Internal Revenue Service and other government agencies have noted a rise in scams and other fraudulent activities surrounding the COVID-19 crisis. There are individuals and groups both in the United States and in countries across the world who are attempting to take advantage of unwitting taxpayers and business owners. Let's take a look at what you should look out for as you navigate the current environment. Economic Impact Payments While many Americans may have already received their economic impact payment (sometimes called stimulus checks), there are still some citizens awaiting their payments. Individuals should stay alert for phone calls, emails, or other methods of communication from those seeking their personal information related to the economic impact payments. Targeting Tax Refunds Taxpayers have experienced numerous scams and illegal actions which target intercepting a tax refund owed to a taxpayer, or in some cases, fraudulently creating tax returns with a taxpayers’ personal information. The scams are numerous and come in a variety of forms. One scheme involves filing a fraudulent tax return on behalf of an unsuspecting taxpayer. When the refund is deposited into the taxpayer’s bank account, the fraudster contacts the taxpayer impersonating an IRS representative. The fake IRS representative advises the taxpayer that the refund has been deposited in error and encourages them to purchase gift cards in order to restore the balance to the IRS. When the actual IRS representatives eventually discover the scam, the taxpayer is responsible for repaying the funds a second time. A second scam involves the scammer creating fraudulent tax returns using a taxpayer’s personal information. In this case, the fraudster uses their own deposit information as a way to intercept the refund. If you are expecting a tax refund or receive a deposit from the IRS that you do not recognize, you should reach out directly to the IRS to confirm your status or to receive instructions on next steps. Fake Charities and Investment Opportunities The IRS has advised that there are people setting up charities purported to be for the benefit of those impacted by the COVID-19 virus. In addition, there are individuals who are maintaining that they represent companies who are working on a vaccine to combat the virus. They offer to allow you to invest in their companies and receive a significant return on your investment once the vaccine is ready. What Should You Do? If you think that you may have been the victim of a COVID-19 related scam, you are encouraged to file a report with the appropriate government authorities. The National Center of Disaster Fraud has a complaint form on its website where you can voice your concerns. If you prefer to speak with someone, you can call their hotline number at 866-720-5721. The Treasury Inspector General for Tax Administration is available to receive complaints related to theft of your economic impact payment. Finally, if you are the subject of a phishing scam, where fraudsters are seeking to gain your personal information, you should alert the Internal Revenue Service at their phishing@irs.gov email address. It is important to stay vigilant against those seeking to steal your hard-earned money or personal information during this troubling time. If you have any questions about COVID-19 related fraudulent schemes, or you would like more information, please feel free to reach out to us to schedule an appointment.
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Tax and Financial Insights
by NR CPAs & Business Advisors
2026 IRS Mileage Rates: Key Updates and Insights
The IRS has rolled out the inflation-adjusted mileage rates for 2026, offering taxpayers an efficient way to claim deductions for vehicle-related expenses incurred for business, charity, medical, or moving purposes. These adjustments reflect the continued economic shifts impacting car operation costs.
Effective January 1, 2026, the new standard mileage rates are established as follows:
- Business Travel: Increased to 72.5 cents per mile, inclusive of a 35-cent-per-mile depreciation allocation. This marks a rise from the 70 cents per mile rate set for 2025
- Medical/Moving Purposes: Reduced slightly to 20.5 cents per mile, down from 21 cents in the previous year, reflecting the variable cost considerations.
- Charitable Contributions: Consistent at 14 cents per mile, a fixed rate unchanged for over a quarter-century.
As is typical, the business mileage rate considers the integral fixed and variable costs of automobile operation. Meanwhile, the medical and moving rates remain contingent on variable expenses as determined by the IRS study.
It is critical to note that the One Big Beautiful Bill Act (OBBBA) held firm on disallowing moving expense deductions except for specific cases within the Armed Forces and intelligence community, marking a substantial shift since 2017.
When engaging in charitable work, taxpayers might opt for a direct expense deduction over the per-mile method, covering gas and oil costs. However, comprehensive upkeep and insurance costs are non-deductible expenses.
Business Vehicle Use Considerations: Taxpayers can alternatively compute vehicle expenses using actual costs, which might benefit from shifting depreciation rules, particularly through bonuses and first-year advantages. Keep in mind, however, reverting from actual cost calculations to standard rates in subsequent years is restricted, particularly per vehicle protocol and when exceeding four vehicles in concurrent use.
Additionally, parking, tolls, and property taxes attributable to business can be deducted independently of the general rate, an often-overlooked advantage by many business owners.
Tax Strategies for Employers and Employees: Reimbursements based on the standard mileage framework, providing the right documentation is in place, remain tax-free for employees. Meanwhile, the elimination and continued prohibition of unreimbursed employee deductions continue, with particular exceptions offered to qualified personnel across specific occupations.
Opportunities for Self-employed Individuals: Entrepreneurs remain eligible for deductions on business-related vehicle use via Schedule C, with potential to account for business-use interest on auto loans.
Heavy SUVs and Deduction Advantages: Heavier vehicles exceeding 6,000 pounds but under 14,000 pounds open opportunities for substantial tax deductions through Section 179 and bonus depreciation avenues. The lifecycle of such a vehicle bears implications on recapturing initially claimed deductions, urging cautious tax planning.
For professional guidance on optimizing your vehicle-related tax deductions and understanding their implications on tax strategies, contact our office in Coral Gables, Florida, where expert advice and strategic insights are just a call away.
Educator's Deduction Reform: Key Changes Under OBBBA
The One Big Beautiful Bill Act (OBBBA) introduces significant enhancements for educators' tax deductions starting in 2026, offering both strategic opportunities and planning considerations for educators who qualify. With the reinstated itemized deduction for qualified unreimbursed expenses, educators have a broader spectrum of financial relief. This is complemented by the retention of the $350 above-the-line deduction, allowing educators to maximize their tax benefits by selectively allocating expenses between these avenues.
Understanding the nuances of these changes is crucial for educators and financial advisors alike. The dual-option deduction strategy can potentially enhance tax efficiency, thereby aligning with broader financial planning goals.
At NR CPAs & Business Advisors, based in Coral Gables, Florida, our expertise in tax preparation and planning provides invaluable support to educators navigating these changes. Our comprehensive approach, combined with personalized advice from our experienced team, ensures compliance and optimization in line with the latest tax legislations.
Given these updates, it is imperative to engage with seasoned professionals to fully leverage your deduction strategies. Contact us today to streamline your tax planning under OBBBA's new guidelines and maximize your deductions for upcoming tax years.
