Tax Relief Tip: Beware of Tax Scams
There is an official list of tax scams made available by the IRS known as the ‘dirty dozen list of tax scams’. It reveals phishing, schemes regarding return preparer fraud and the non-disclosure of offshore held income. Tax schemes are illegal and the consequences could be incarceration and fines for the scammer and/or taxpayer. The list is to help taxpayers recognize such illegal schemes.
There are return preparers who scam taxpayers. They inflate fees, take money from clients’ tax refunds and make unrealistic promises to get new clients. Hundreds of preparers have been court ordered to stop operating and endorsing deceit.
The IRS wants to better trust and compliance in the system of tax law and they have put into action certain steps for the new filing periods:
- Paid tax preparers must be IRS registered.
- They must have a PTIN (preparer tax identification number).
- They must complete both proficiency tests.
- They must keep up with ongoing professional education for paid tax preparers (excluding enrolled agents, attorneys and qualified public accountants).
Such steps ensure tax preparers’ service standards are raised and taxpayers are protected. The IRS benefits from better compliance.
The IRS shows no mercy to taxpayers, professionals, promoters and others who permit or assist in the abuse of unlawful offshore transactions for the sake of concealing income and evading tax. This includes offshore insurance plans, debit cards, private annuities, credit cards, employee-leasing schemes, wire transfer, private annuities and foreign trusts. The IRS encourages taxpayers with hidden offshore funds to volunteer their tax information to prevent criminal charges.
Taxpayers are duped into handing over financial and personal data online by a tactic called phishing. One tactic is to pretend to be the IRS. This scam usually increases during the filing period. Scam artists utilize faxes, phones, emails, fake websites and tweets to con taxpayers. They inform you of a tax refund in order to get you to hand over personal information. They do this to gain access to your credit cards, bank accounts and loan applications all in your name. Never open an attachment in an IRS email and an IRS website must only start with http://www.irs.gov. You can contact the IRS regarding phishing at firstname.lastname@example.org.