The IRS posts a list of tax scams each year that you should be aware of:
Phishing: This is when fake emails are sent claiming to be from the IRS, however, the IRS never initiates contact with taxpayers via email about a bill or tax refund. You’ll see more of these during tax season.
Phone scams: I have even received some of these calls on my cell phone. Criminals, many times calling from overseas, will state that they are from the IRS and then threaten that you will be arrested, deported, etc. if you do not immediately pay a tax balance. By the way, the IRS will not do this, and they especially will not ask you to purchase gift cards from CVS or to wire them money to take care of your balance.
Identity theft: You usually find this out when your tax return gets rejected because it has been filed already. This is because your identity was stolen and criminals filed a return using your social security number to obtain a fraudulent refund. Always try to protect your personal data when you can to help to minimize this risk.
Fake charities: The IRS says that fake charities may even have similar names as national organizations. Make sure the charity is legitimate, and you can even check out the status of a charity at the IRS website. By the way, when I first started my practice years ago, I came across someone who started a fake charity and solicited donations to help people after 9-11. Supposedly, they used the money to pay for expensive vacations instead. Know your charities.
Abusive tax shelters: These are schemes that are promoted to avoid paying taxes that are illegal. If it sounds too good to be true, then it probably isn’t true.
Other scams include: return preparer fraud, inflated refund claims, excessive claims for business credits, falsely padding deductions, falsifying income to claim credits, frivolous tax arguments, and offshore tax avoidance.
Most of these scams can be avoided just by using a competent and trusted tax preparer.
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