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Tax scams are more and more common every day. As the economy continues to struggle, more and more people are trying to find an easy dollar. The IRS is constantly trying to stop tax scams, crimes that hurt not only the IRS but ultimately hurt YOU the tax payer. By recognizing various tax scams you can help prevent them and report them. Participation on a tax scam can result in prison time and fines not to mention repayment of taxes with penalties and interest. Here are a few of the most common tax scams. If you are a victim of or witness to one of these scams make sure that you report them to the appropriate contact shown here. Abusive tax schemes can take a multitude of forms. They can include anti-tax law, misstatement of a home based business, trust fraud, and fraudulent off-shore activities. One of the most common forms is the preparation on fraudulent tax returns. By misstating income, deductions, and taxes paid, people have found a way to show mammoth tax refunds with hopes that the IRS won’t catch their errors and will pay the refund. There have been a number of cases in recent years where people claimed refund in the MILLIONS of dollars. Retirement plans are also a common source of tax fraud. People may report fraudulent withdrawals and/or contributions in an effort to gain a tax benefit. Finally, one of the great benefits that the IRS provides are those to tax exempt organizations. In many cases these are charities. While the benefits are wonderful and meant for those who need them the most, this has not stopped criminals from taking advantage of those and forming fake or fraudulent organizations. Keep in mind that these are just a few of the many ways criminals make an effort to trump the system. If you become aware of any of these scams make sure to report them to the IRS ASAP. Remember, these types of crimes hurt us all.
Every year the IRS releases its most common “tax scams.” These 12 scams, referred to by the IRS as the “Dirty Dozen,” are the most common pitfalls for tax payers and are prevalent year round. With that being said, taxpayers are most likely to encounter them around tax time, which is, NOW. I will provide a brief description of a few of these scams but you can find the detailed list here. • Identity Theft - Becoming more and more common identity theft are some of the most common and complex issues faced by the IRS. The IRS will notify a taxpayer if multiple returns have been filed using their information. The IRS also maintains a robust screening process to weed out fraudulent returns. However, if you believe you are a victim of identity theft contact the IRS immediately. • Phishing - Phishing can begin from a fraudulent email or letter encouraging you to provide your personal information. Please note that the IRS will never send a letter or email requesting such information. If you receive an email or letters like this contact the IRS immediately. • Return Preparer Fraud - First and foremost you can avoid this by preparing your own return on TaxSlayer.com!! Some preparers take advantage of their customers by filing inflated returns or even skimming off the top of their refunds. These are just the three most common scams. Make sure that you read over the entire list to help prevent yourself from falling victim to one of them. TaxSlayer.com has safeguards built in to help make sure you are protected.