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2016 Tax Scams! Be Aware!

Posted by Keith Huggett on Tue, Feb 2, 2016 @ 10:02 AM

scamalert.jpgEvery tax season, taxpayers have to be on the lookout for con artists looking to run tax scams. With a variety of tactics at their disposal, these criminals find ways to get your personal information and look to turn it into cash. Let's take a look at five of the most common tax scams that the IRS has highlighted in recent warnings to taxpayers.

1. Identity theft
The most insidious tax scam involves thieves stealing your personal information and using it to file false tax returns on your behalf.  Often, the scam goes unnoticed until you later file your legitimate tax return and the IRS informs you that a return has already been filed. The IRS has issued about 1.5 million personal identification numbers aimed at helping victims of identity theft, and it has also started a pilot program in some states that allows people to get PINs even if they haven't been victimized. For most taxpayers, though, the best defense is to protect your personal information as well as you can.

2. IRS impersonation
Some scams involve threatening emails or phone calls from people purporting to work for the IRS, saying that you could be arrested, have your license revoked, or even get deported if you don't agree to comply with their demands. The IRS reminds taxpayers that it will never call to demand immediate payment, ask for credit or debit card numbers over the phone, or threaten to bring in law enforcement officials.

3. Caller ID spoofing
One tool that many criminals have in their arsenal of tricks is the ability to have your caller ID system display what appears to be a legitimate IRS toll-free customer service number. These scams often involve robo-calling systems and can include a combination of tactics, including related emails and phone calls purporting to be from other organizations like police or DMV. The IRS advises that if you're ever uncertain, hang up and then call the IRS back at 1-800-829-1040 FREE. That way, a real IRS representative can confirm whether there's a legitimate issue.

4. Bogus charitable organizations
The end of the year brings a big uptick in charities asking for donations, and criminals have discovered that many people are willing to part with their money for what they think is a good cause. Earlier this year, four charities claiming to raise money for cancer victims were accused of fraud, with the FTC alleging that donors were taken for $187 million over a five-year period. Often, such charities have convincing names, but it's important to go further to check that these organizations are legitimately registered with the IRS as tax-exempt non-profit organizations. This IRS website will let you enter the name of a charity to verify whether it's legitimate and is still eligible to receive tax-deductible contributions.

5. Tax preparer phishing
Not all scammers target individual taxpayers. In one scam, criminals send out emails to accountants and other tax preparation professionals, telling them that they need to update their information in order to keep using the IRS e-services portal. In the process, the con artists hope that unsuspecting accounts will provide their usernames, passwords, and electronic filing identification numbers. That information in turn can help the criminals impersonate tax preparers and seek to get personal information from clients and other individual taxpayers.

Doing your taxes is hard enough without having to worry about tax scams. With plenty of crooks out there, you can't afford to let up your guard. Knowing the tactics they use can help you avoid getting scammed. Filing your taxes early, with a reputable preparer can also help avoid these scams. 

 

Topics: tax fraud, tax scams

Dirty Dozen Tax Scams

Posted by Jenny Shilling on Tue, Feb 17, 2015 @ 14:02 PM

Be Aware Of What Scammers Are Up To

tax scammerAuthor: Jenny Shilling

Every year the IRS posts their list of "Dirty Dozen" Tax Scams.  It's sad to say but the list doesn't change very much from year to year.  In order to avoid being a victim of scams this tax season, please remember that the IRS will ONLY contact you using the United States Postal Service.  They do not use email or the telephone to contact individuals about their tax returns.

At The Tax Office, Inc., we hope that you will find this list helpful in preventing tax scams.

1. Phone Scams – Criminals impersonate IRS agents and threaten taxpayers with arrest, deportation or license revocation in order to steal the taxpayers’ identity.

2. Phishing – Fake emails or websites are used to steal personal information. The email may attempt to gain access to your personal information. Koskinen emphasized that the IRS does not email taxpayers about a tax bill or refund.

3. Identity Theft – Criminals continue to steal Social Security numbers and attempt to e-File and obtain an early tax refund.

4. Return Preparer Fraud – Unscrupulous return preparers may be involved in refund fraud or identity theft.

5. Offshore Tax Avoidance – It is unlawful to hide money and income offshore. The IRS Offshore Voluntary Disclosure Program (OVDP) may help you get your taxes in order.

6. Inflated Refund Claims – Do not sign a blank return or have your tax return prepared by someone who bases their fees on a percentage of your refund.

7. Fake Charity – There are individuals who claim to represent a charitable organization and solicit donations. You should check to be sure that your gifts go to legitimate charities that qualify for a deduction.

8. Fake Documents – Some individuals attempt to hide income by filing a false Form 1099 or other documents. A taxpayer is responsible for paying his or her tax, regardless of who prepares the return.

9. Abusive Tax Shelters – There are complex tax avoidance schemes that sound “too good to be true.” You should seek advice of a qualified advisor before using any aggressive tax strategy.

10. Inventing Income to Claim Credits – Some taxpayers have claimed increased income in an effort to qualify for the earned income tax credit.

11. Fuel Tax Credits – The fuel tax credit for off-highway business use, such as farming, can be used to apply for an improper tax refund.

12. Frivolous Tax Arguments – Various promoters have urged taxpayers to make unreasonable and outlandish claims. These claims have regularly been held invalid by the courts and tax protesters have suffered substantial penalties.

If you believe you have been contacted by someone perpetuating a scam, you should report it to the IRS. 

To report promoters of these scheme types or any other types you are aware of that are not listed here, please send a completed referral form, along with any promotional materials to the Lead Development Center:

Mail:
Internal Revenue Service Lead Development Center
Stop MS5040
24000 Avila Road
Laguna Niguel, California 92677-3405

Fax: (877) 477-9135

Topics: Jenny Shilling, tax scams

Tax Scams On The Rise

Posted by Jenny Shilling on Thu, Aug 28, 2014 @ 07:08 AM

Beware of Imitation IRS Agents

tax scamAuthor: Jenny Shilling

Have you recently received a telephone call from someone claiming to be from the IRS?  Chances are it's a scam.  Con artists are using the telephone to demand money from unsuspecting people by claiming they are from the IRS.

The fake IRS representatives tell the person who answer the phone that if they don't pay up immediately, they could have their driver's license revoked or even face jail time. With this type of threat looming, a lot of people act out of fear and comply with this demand.

Through mid-August, the Treasury Inspector General for Tax Administration, or TIGTA, has received around 90,000 complaints about the scam-IRS calls via its own telephone hotline. More than 1,000 of those who were contacted believed the con artists and handed over an estimated $5 million, according to the IRS.

To avoid becoming a victim of these scams, you should know:

  • The IRS will first contact you by mail if you owe taxes, not by phone.
  • The IRS never asks for credit, debit or prepaid card information over the phone.
  • The IRS never insists that you use a specific payment method to pay your tax.
  • The IRS never requests immediate payment over the telephone.
  • The IRS will always treat you professionally and courteously.

If you get a phone call from someone claiming to be from the IRS, here’s what you should do:

  • If you know you owe taxes or you think you might owe taxes, call the IRS at 800-829-1040. IRS employees can help you with a payment issue if you owe taxes.
  • If you know you don’t owe taxes or don’t think that you owe any taxes, then call and report the incident to TIGTA at 800-366-4484.
  • If cons have tried this scam on you, you should also contact the Federal Trade Commission and use their “Complaint Assistant” at FTC.gov. Please add "IRS Telephone Scam" to the comments of your complaint.



Topics: Jenny Shilling, tax scams

Be Aware of False Corporate Communications

Posted by Keith Huggett on Tue, May 21, 2013 @ 09:05 AM

Watch Your Mail for Advertisements From False Government Departments

false advertisement corporate documentsAuthor: Keith Huggett 

Once you've filed the documents required to operate your corporation, you are required to file a few more. There are quite a few forms you need to have to fill out your Corporate Book, however that's not really what we're talking about today. Today, it's about shady advertising. There are companies that would be happy to provide Annual Minutes, Bylaws, or other Coporate Documents to you by hiding behind an advertisement that makes them look like a very official Government Agency.

You will receive in the mail a document, or many documents, that look very official, and like they come from a Government Agency. If you look VERY, VERY closely, you will see at the bottom, in very small print the disclaimer, stating that the company is not affiliated with any government service. This document implies that your company is either out of compliance or soon will be and that you *need* to use this service to become compliant again. They send this form for Corporate Minutes, Annual Meetings, and Bylaws. These companies are NOT affilitated with any government service at all and are merely sending you advertisements. You do not need to respond to them in any way. 

For information on corporate documentation and compliance, please download our whitepaper "Staying Compliant in a Corporate World." If you have questions about your business structure, our specialists at the Tax Office, Inc. would be happy to take your call.  We can help you with your Corporation documentation should you need any assistance.  We are always available to speak with you whenever you'd like to talk, whether it's regarding taxes, bookkeeping, payroll, or the weather. Give us a call. We'd love to hear from you. You can even ask us questions on Twitter at #plan4tax - We hope to hear from you.

 

Topics: Keith Huggett, tax scams

Beware of Tax Scams!

Posted by Keith Huggett on Tue, Apr 2, 2013 @ 09:04 AM

Taxpayers Who Buy Into Tax Scams Can Pay the Price

tax scamsAuthor: Keith Huggett 

According to the IRS, tax scams tend to peak right around now, at the apex of tax season.  If a taxpayer gets caught up in an illegal tax scam, the taxpayer may end up facing significant penalties and interest and can even face criminal prosecution. As the cliche goes, if it sounds too good to be true, it usually is.  Please be aware, and be on the lookout for the following:

  • Identity Theft - The IRS is doing it's best to combat identity theft. The IRS’s ID theft strategy focuses on prevention, detection and victim assistance. If you believe you  are at risk of identity theft due to lost or stolen personal information should immediately contact the IRS so the agency can take action to secure their tax account. If you have received a notice from the IRS, call the phone number on the notice. You may also call the IRS’s Identity Protection Specialized Unit at 800-908-4490800-908-4490 FREE.
  • Phishing.  Phishing typically involves an unsolicited email or a fake website that seems legitimate but lures victims into providing personal and financial information. Once scammers obtain that information, they can commit identity theft or financial theft.
  • Tax Scams Involving Social Security.  Beware of scammers who prey on people with low income, the elderly and church members around the country. Scammers use flyers and ads with bogus promises of refunds that don’t exist. The schemes target people who have little or no income and normally don’t have to file a tax return.
  • Impersonating a Charitable Organization.  Following major disasters, it’s common for scam artists to impersonate charities to get money or personal information from well-intentioned people. 
  • Frivolous Arguments.  Promoters of frivolous schemes advise taxpayers to make unreasonable and outlandish claims to avoid paying the taxes they owe. These are false arguments that the courts have consistently thrown out. While taxpayers have the right to contest their tax liabilities in court, no one has the right to disobey the law.
  • Disguised Corporate Ownership.  Scammers improperly use third parties to form corporations that hide the true ownership of the business. They help dishonest individuals underreport income, claim fake deductions and avoid filing tax returns. They also facilitate money laundering and other financial crimes.
  • Misuse of Trusts.  There are legitimate uses of trusts in tax and estate planning. But some questionable transactions promise to reduce the amount of income that is subject to tax, offer deductions for personal expenses and reduced estate or gift taxes. Such trusts rarely deliver the promised tax benefits. They primarily help avoid taxes and hide assets from creditors, including the IRS.

There are other scams out there that can also get the taxpayer into trouble. If you are uncertain about something, you can always contact your tax preparer and ask. It is always better to ask a question and get a proper answer than to take a risk on a sketchy proposition.

As always, the professionals at The Tax Office, Inc. are here to answer any questions you might have, whether they are about taxes, scams, accounting, or tax representation. We are always here for you.

Topics: Keith Huggett, tax scams