subject: Tax Scams To Beware Of [print this page] Tax Scams To Beware Of Tax Scams To Beware Of
There are certain tax scams which the IRS is keen to make people aware of. Taxpayers could end up in serious trouble due to taking part in illegal scams, and may end up facing significant penalties if caught, such as criminal prosecution and interest charges. There are several guises that the schemes take, ranging from ways for you to illegally become "un-taxed" or by promising you a significantly large tax refund.
Keep in mind the following guidelines:
If you are promised a bigger refund by a person or company who does not know your specific tax situation, be wary.
Tax return contents are your sole responsibility and liability, and
You should always check to ensure your tax return is accurate before you sign it.
Some common schemes to be aware of:
Preparer Fraud: Preparers who are dishonest continually cause problems for unwary taxpayers. Attracting new customers' with promises of large 2010 tax refunds, these preparers make their money by skimming clients' refunds as well as charging higher preparation fees for their services. Tax preparers should be chosen carefully; as ultimately you are the one responsible should any discrepancies arise through questionable claims.
A requirement will soon be implemented by the IRS which stipulates that every paid preparer is to be registered with them, after which they will be issued with an identification number. Later in 2011, a competency test will have to be passed by each registered preparer, and further educational courses undertaken.
Identity Theft: If an identity thief gains access to personal information, credit card charges and loan applications can be obtained in the victims name. The IRS stipulates that they will never use e-mail when contacting taxpayers, so beware of any e-mails received which claim to be from the IRS asking for personal information. If in any doubt as to the authenticity of any such e-mail, confirm it by contacting the IRS directly by calling: 800-829-1040.
Frivolous Arguments: There have been numerous outlandish claims made by promoters trying to get away with paying their taxes. Arguments such as: the right to privacy as stated in the Fourth Amendment, or being made to file goes against the Fifth Amendment with regards to self incrimination; it is merely voluntary to file returns or pay taxes; and even wages are not an income, have all been heard and discounted by the courts. While taxpayers do have the legal right to go to court and contest tax liabilities, they do not have the right to disobey or ignore the law.
