Every year the Internal Revenue Service (IRS) releases its list of tax scams, spotlighting the myriad ways that people try to separate you from your money.¹
The 2014 “Dirty Dozen”
Using your personal information, an identity thief can file a fraudulent tax return and claim a refund. If you’ve been a victim of stolen personal information, you can contact the IRS so the agency can protect your tax account.
Scammers will contact you pretending to be from the IRS. They may say that you are due a large refund or owe money (even threatening arrest or revocation of your driver’s license). If you receive such a call, call the IRS and contact the Federal Trade Commission using their “FTC Complaint Assistant” at FTC.gov.
Promises of “Free Money”
Posing as tax preparers, scam artists may promise large tax refunds and charge big fees, while filing false returns with big refunds payable to them. Individuals may never know a tax filing was ever made in their name.
Return Preparer Fraud
Dishonest preparers use tax preparation to steal your personal information, so only use a preparer who signs the return and has an IRS Preparer Tax Identification Number.
Hiding Income Offshore
The IRS has strengthened its ability to identify offshore holdings, and the failure to report them will be costly.
Impersonation of Charitable Organizations
Using major disasters, fraudulent charities raise money or obtain private information from individuals looking to help. Donate only to recognized charities, and beware of charities whose names sound similar to the well-known ones.
False Income, Expenses or Exemptions
Falsifying your tax return is a high risk, low reward exercise, especially in this age of Big Data.
Ignore promoters of frivolous arguments that promise you tax relief. Not only are they expected to fail, but you may be subjected to penalties and possible jail time.
False Form 1099
Filing a false 1099 to reduce taxes based on the bogus claim that the government maintains secret accounts may open you up to penalties and prosecution.
Abusive Tax Structures
If someone is proposing to eliminate or substantial reduce your taxes through complex tax structures, walk away—they may be nothing more than illegal tax evasion.
Misuse of Trusts
Transferring large amounts of assets into trusts to shift income, exaggerate deductions and avoid estate taxes may be fraudulent, so seek the counsel of a trusted professional.
1. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation.
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2015 FMG Suite.