Question: Regarding the IRS questioning someone’s identity (808ne.ws/3QPaLph), is this more likely if the person claimed certain credits? I think it is.
Answer: Yes, claiming credits prone to fraud may prompt an identity-verification letter from the IRS, followed by another letter — IRS Notice 3176c — seeking documentation to prove the filer qualifies for the credits, according to an IRS consumer alert Tuesday. Refunds for these filers are frozen in the meantime.
Thousands of dubious income tax returns claiming the Fuel Tax Credit, the Sick and Family Leave Credit or Household Employment taxes have been filed, apparently fueled by social media scammers and disreputable tax preparers who falsely touted them as a way to get big refunds, the tax agency said. We asked how many suspicious returns were filed from Hawaii, but an IRS spokesperson did not respond by deadline Friday.
Any tax filer who claimed any of the three without being eligible should promptly file an amended return to delete the credits and avoid penalties, the IRS said.
>> Fuel Tax Credit: Specialized credit for off-highway business and farming use. “Taxpayers need a business purpose and a qualifying business activity such as running a farm or purchasing aviation gasoline to be eligible for the credit,” the IRS said. Most taxpayers don’t qualify.
>> Credits for Sick Leave and Family Leave: Pandemic-era credit available for self-employed individuals for 2020 and 2021 tax years; not available for 2023. “The IRS is seeing repeated instances where taxpayers are incorrectly using Form 7202, Credits for Sick Leave and Family Leave for Certain Self-Employed Individuals, to incorrectly claim a credit based on income earned as an employee and not as a self-employed individual,” the consumer alert said.
>> Household Employment taxes: “Taxpayers ‘invent’ fictional household employees and then file Schedule H (Form 1040), Household Employment Taxes, to claim a refund based on false sick and family medical leave wages they never paid.”
See irs.gov/newsroom for more information.
Q: Are the Duke Kahanamoku license plates available now?
A: No. They should be available to the public in six to nine months, according to a spokesperson for Honolulu’s Department of Customer Services.
Several readers have asked, having heard that Gov. Josh Green on Wednesday signed Senate Bill 116, authorizing the issuance of special Hawaii license plates to honor the legendary waterman. Several entities must work together to approve a design for this plate, sales of which will raise money for the Outrigger Duke Kahanamoku Foundation “to fund programs that promote water safety and swim education across the state while developing world-class water athletes as a tribute to, and in the spirit of, Duke Kahanamoku,” the bill said.
Once it’s available, the Duke Kahanamoku plate will be Hawaii’s fourth speciality license plate, following the issuance of license plates that help support Hawaii Volcanoes National Park, Haleakala National Park and the Polynesian Voyaging Society. Each plate has a distinct design and costs more than a regular Hawaii license plate because of the fundraising aspect.
Q: Can I get through airport security with an expired license since REAL ID isn’t enforced yet?
A: It depends on how long your license has been expired. “TSA currently accepts expired driver’s licenses or state-issued ID a year after expiration,” according to the Transportation Security Administration’s website.
The deadline for REAL ID enforcement has been extended to May 7, 2025.
Mahalo
Thank you to the woman with flowers who was in the parking lot of the Kailua Safeway, for starting my car. — Lorraine
Write to Kokua Line at Honolulu Star-Advertiser, 500 Ala Moana Blvd., Suite 7-500, Honolulu, HI 96813; call 808-529-4773; or email kokualine@staradvertiser.com.
