The Internal Revenue Service has revealed its list for 2017 of what it dubs the “dirty dozen” tax scams. This is a list of the most common fraudulent tax scams carried out against taxpayers.
Although taxpayers may face these tax scams throughout the year, there is an increase in these scams during the first quarter of the year when people are filing their federal income tax returns. Therefore, the IRS wants individuals to be especially on the lookout this time of year.
The IRS takes steps to protect taxpayers from identity theft and other tax scams. In addition, those who carry out tax scams face criminal prosecution that can lead to fines and jail time. However, taxpayers need to be aware of the types of tax scams that are out there, because falling victim to one of the tax scams can result in a loss of time and money that the taxpayer may never recover.
“Dirty Dozen” Tax Scams for 2017
Taxpayers need to be aware of emails or web site designed to steal their personal information. The IRS will never use email to contact a taxpayer about money owed or a refund. Taxpayers should not click on links included in emails that claim to be the from the IRS. In addition, taxpayers should not enter their personal information into websites unless they are sure the site is legitimate.
Criminals will place phone calls to taxpayers claiming to be a representative of the IRS. These types of calls continue to increase year by year, with criminals threatening taxpayers with arrest or deportation if they do not provide a credit card or other information to supposedly settle a tax debt owed.
Identity theft concerning federal income tax involves someone filing a false income tax return under a taxpayer’s name to steal their refund. Take care in protecting your Social Security Number to minimize your susceptibility to identity theft.
Return Preparer Fraud
Not all entities who advertise they can prepare and file your tax return are legitimate. Although most tax preparers are honest, there are some who set up their businesses for the sole purpose of stealing your personal information. They then use this information to carry out identity theft.
Some groups masquerade as charitable organizations to solicit donations from taxpayers. Such charities often have names similar to legitimate charitable organizations. Such fake charities do not allow a taxpayer to legally benefit from a charitable deduction on their tax return.
Inflated Refund Claims
If someone promises they can get you a higher refund than anyone else before they have even looked at your financial records, asks you to sign a blank tax return, or charges a fee based on the amount of refund they can get you, be on the lookout. Such promises are often a sign of someone entering bogus deductions on your tax return.
Excessive Claims for Business Credits
There are certain business credits, such as the fuel tax credit, that are not available to most taxpayers. Be sure that you qualify for any business tax credits you claim on your tax return.
Falsely Padding Deductions on Returns
Taxpayers should not inflate the amount of their deductions or expenses in an effort to increase their income tax refund.
Falsifying Income to Claim Credits
Taxpayer should not invent income in order to qualify for tax credits. This is another approach that may be used to inflate your refund.
Abusive Tax Shelters
Taxpayers should not use complicated tax avoidance schemes in order to reduce their tax burden. Such approaches are often illegal, and taxpayers should seek a second opinion about such shelters before using them to confirm the are legitimate.
Frivolous Tax Arguments
Taxpayers should not use frivolous tax arguments that have been repeatedly rejected in a court of law in an effort to reduce their tax burden.
Offshore Tax Avoidance
Taxpayers should not hide money in offshore accounts in an effort to avoid paying income tax on that money.
Where can I get help when filing my income taxes or dealing with legal issues involving the IRS?
A tax attorney has the training and experience to help you avoid falling culprit to the common tax scams noted above. In addition, you need to speak with a tax attorney if you owe back taxes or are experiencing any other legal issues involving the IRS. Only a tax attorney has the training and experience to represent you about tax-related legal matters.
You can get help today by completing the form below or calling the number at the top of this site. So take the first steps to put your legal issues behind you by speaking with a tax attorney.
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Mark has been a contributor to legal web sites related to bankruptcy, tax, and criminal law since 2011. He has an Accounting degree from Texas A&M University.