For Consumer Protection Week, we are digging deeper into IRS and tax season scams. Victims of scams often lose money and may also face identity theft. Taxpayers or tax professionals trying to run their own scams commit tax fraud and could face significant penalties.
Info on the Dirty Dozen Tax Season Scams from the IRS
Each year, the IRS collects and distributes information to consumers about current tax season scams. This year they released 12 days of info in hopes of increasing consumer awareness. Here are 5 of those scams that tax payers and tax preparers need to know about this year from the IRS.
Tax Season Scams By Phone
“Aggressive and threatening phone calls by criminals impersonating IRS agents remains an ongoing threat to taxpayers. The IRS has seen a surge of these phone scams in recent months as scam artists threaten police arrest, deportation, license revocation and other things. The IRS reminds taxpayers to guard against all sorts of con games that arise during any filing season.”
Inflated Tax Refund Claims
“Taxpayers need to be on the lookout for anyone promising inflated refunds. 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 flyers, advertisements, phony store fronts and word of mouth via community groups and churches in seeking victims.”
Tax Return Preparer Fraud
“Taxpayers need to be on the lookout for unscrupulous return preparers. The vast majority of tax professionals provide honest high-quality service. But there are some dishonest preparers who set up shop each filing season to perpetrate refund fraud, identity theft and other scams that hurt taxpayers. Return preparers are a vital part of the U.S. tax system. About 60 percent of taxpayers use tax professionals to prepare their returns.”
Filing Fake Charities
“Taxpayers should be on guard against groups masquerading as charitable organizations to attract donations from unsuspecting contributors. Contributors should take a few extra minutes to ensure their hard-earned money goes to legitimate and currently eligible charities. IRS.gov has the tools taxpayers need to check out the status of charitable organizations. Be wary of charities with names that are similar to familiar or nationally known organizations.”
Hiding Income with Fake Tax Documents
“Hiding taxable income by filing false Form 1099s or other fake documents is a scam that taxpayers should always avoid and guard against. The mere suggestion of falsifying documents to reduce tax bills or inflate tax refunds is a huge red flag when using a paid tax return preparer.”
Keep these tax season scams in mind moving forward. Always remember that you are responsible for the information on your tax return. Use a professional if you are unsure about filing your own taxes. Get recommendations to find a reputable tax preparer.