Alert: Beware of practitioner scams against taxpayers with limited English proficiency and certain non U.S. citizens

May 18, 2016

Reports have detailed unscrupulous preparers instructing their clients to make Individual Shared Responsibility (ISRP) payments directly to the preparer rather than the IRS. In particular, current scams focus on those who primarily speak Spanish and those with Individual Taxpayer Identification Numbers (ITIN). So choose your tax professional carefully.

The requirement to pay the ISRP (and the ability to claim the Premium Tax Credit) is based on whether the individual was “lawfully present,” and does not necessarily correspond to whether they had an ITIN or a Social Security Number (SSN).

If you are not a U.S. citizen or national, and are not lawfully present in the United States, you are exempt from the ISRP and do not need to make a payment. For this purpose, an immigrant with Deferred Action for Childhood Arrivals (DACA) status is considered not lawfully present and therefore is exempt.  If you are in that situation you may also qualify for this exemption even if you have a SSN.

Disclosure of Immigration Status by IRS

Taxpayers have the right to confidentiality, and the IRS is limited in what information it can share with other agencies such as the Department of Homeland Security. Thus, taxpayers should be wary of claims that they have to make tax related payments directly to a tax return preparer or direct their refunds to a tax return preparer because of immigration status.

Disclosure of Immigration Status by Insurance Marketplaces

Federal and state Marketplaces and state Medicaid and CHIP agencies can’t require applicants to provide information about the citizenship or immigration status of any family or household members who aren’t applying for coverage.

Information provided by applicants or beneficiaries won’t be used for immigration enforcement purposes. See the More Information for Immigrant Families page on Healthcare.gov.

Report Improper Tax Preparation Practices to the IRS

If you believe you have been targeted by an unscrupulous preparer or you have been financially affected by a tax return preparer’s misconduct or improper tax preparation practices, you can report it to the IRS on Form 14157, Complaint: Tax Return Preparer.

Alternate Language Versions Information is Available

IRS Health Care Tax Tip 2016-10 gives information about practitioner Affordable Care Act related scams, tax practitioner selection, and tips about the Individual Shared Responsibility payments. IRS.gov also has these alternative language versions of ACA pages Español , 中文 , 한국어, TiếngViệt , Pусский and related publications as well.

For more information on the Taxpayer Bill of Rights and what that means for you, visit these pages; Taxpayer Bill of Rights, Español, 中文, 한국어, TiếngViệt , Pусский.