It’s Tax Scam Season — What to Watch Out For and How to Stay Safe
Not too many things strike fear into your soul like making sure you do your taxes correctly. The last thing you want is an audit letter from the IRS. But your eagerness to be as accurate as possible and stay out of trouble with the IRS, you could be more susceptible to scams.
That's why the IRS has released what they call the 'Dirty Dozen' list to warn you about probable scams.
First and foremost, know that nobody from the IRS will ever call you asking for personal information. Never give out personal information via a phone line or other means.
"We are doing everything we can to help taxpayers avoid scams as the tax season continues," said IRS Commissioner John Koskinen. "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. We urge taxpayers to visit IRS.gov for more information and to be wary of these dozen tax scams."
With that in mind, here are the "Dirty Dozen" schemes:
Getting a call from someone saying they're with the IRS and demanding you give them information. Don't!
Watch out for fake emails or websites that can steal your information. The IRS will never email you asking for your info.
Tax time is one of the worst times for identity theft. Criminals may file a fake return using your Social Security number.
Return Preparer Fraud
If you have your taxes done by someone, make sure they're reputable. There are some dishonest preparers who'd love to access to all of your information for identity theft purposes.
Offshore Tax Avoidance
Basically, when you keep your money in another country to avoid taxes. Not a good idea. The IRS even offers its Offshore Voluntary Disclosure Program to help you get your taxes in order.
Inflated Refund Claims
This is when someone promises you that, by going with them, they'll guarantee you the most refund. Although this may be true in some cases, the red flag is if they ask you to sign a blank return. This may come with charging fees based on percentage of refund.
Watch out for charities looking for donations from you as they might not be legit. Do the research before donating.
Hiding Income with Fake Documents
Hiding taxable income via fake Form 1099. The idea of fake documents to reduce tax bills or to inflate your refund. You are legally responsible, no matter who fills out the form. Be honest.
Abusive Tax Shelters
The IRS urges you to avoid using abusive tax structures to avoid paying taxes. If it sounds too good to be true, it probably is.
Falsifying Income to Claim Credits
Don't. You may have to prove it.
Excessive Claims for Fuel Tax Credits
This is when you claim gas money as your work requires you to travel say, for instance, if you're a farmer or you have offices in Yakima and Sunnyside and provide your own vehicle. Save those receipts.
Frivolous Tax Arguments
Someone may encourage you to make an extreme claim to avoid paying taxes owed. You may get fined $5,000 if you try.
If you have any questions or need more information on scams or taxes in general, visit the IRS's website.