The IRS (Internal Revenue Service) warns taxpayers about aggressive telephone scams conducted coast to coast during this year’s filing season.
“We are doing everything we can to help taxpayers avoid scams as the tax season continues,” said John Koskinen, IRS commissioner. “Whether it’s a phone scam or scheme to steal a taxpayer’s identity, there are simple steps to take to help stop these con artists.”
Illegal scams can lead to significant penalties and interest for taxpayers, as well as possible criminal prosecution. Taxpayers should remember that they are legally responsible for what is on their tax return, even if it is prepared by someone else.
The IRS urges taxpayers to be aware of the following scams:
- Phone scams:Aggressive and threatening phone calls by criminals impersonating IRS agents remain an ongoing threat to taxpayers.
- Phishing:Taxpayers need to be on guard against fake emails or websites looking to steal personal information. The IRS will not send you an email about a bill or refund that you were unaware of filing.
- Identity theft:Taxpayers need to watch out for identity theft especially around tax time. The IRS continues to aggressively pursue the criminals who file fraudulent returns using someone else’s Social Security number.
- Return preparer fraud: The vast majority of tax professionals provide honest, high-quality service, but there are some dishonest preparers who perpetrate refund fraud, identity theft and other scams.
- Offshore tax avoidance:The IRS recommends taxpayers voluntarily get their taxes and filing requirements in order. It’s a bad bet to hide income offshore.
- Inflated refund claims:Taxpayers should be wary of anyone who asks them to sign a blank return, promise a big refund before looking at their records or charge fees based on a percentage of the refund. Scam artists use fliers, advertisements, phony storefronts and word of mouth via community groups and churches in seeking victims.
- Fake charities:Be on guard against groups masquerading as charitable organizations to attract donations from unsuspecting contributors. Take a few extra minutes to ensure your money goes to legitimate eligible charities on the IRS website.
- Hiding income with fake documents:Hiding taxable income by filing false Form 1099s is a scam that taxpayers should always avoid. The mere suggestion of falsifying documents to reduce tax bills or inflate tax refunds is a red flag when using a paid tax-return preparer.
- Abusive tax shelters:Avoid using abusive tax structures to evade paying taxes. The IRS is committed to stopping complex tax avoidance schemes and the people who create and sell them.
- Falsifying income to claim credits:Scam artists will talk people into falsifying income, but taxpayers should note that they are best served by filing the most accurate return possible.
- Excessive claims for fuel tax credits:The fuel tax credit is generally limited to off-highway business use, including use in farming. Consequently, the credit is not available to most taxpayers, yet, the IRS routinely finds preparers who have enticed taxpayers to claim the credit to inflate their refunds.
- Frivolous tax arguments:Promoters of frivolous schemes encourage taxpayers to make unreasonable claims to avoid paying the taxes they owe. The penalty for filing a frivolous tax return is $5,000.
Additional information about tax scams is available on at http://www.irs.gov/.