On January 23, 2019

Don’t fall for tax scams or the temptation to perpetrate your own

By Kevin Theissen

Every year the IRS releases its list of tax scams, spotlighting the myriad ways that people try to separate you from your money or reduce tax liability. Here are the “dirty dozen” that have regularly made the list in recent years.

Identity theft

Using your personal information, an identity thief can file a fraudulent tax return and claim a refund. If you’ve been a victim of stolen personal information, you can contact the IRS so the agency can protect your tax account.

Phishing

Be wary of fake emails or websites looking to steal your personal information. If you receive a request for information that appears to be from the IRS, contact the IRS directly to verify the request.

Telephone scams

Scammers will contact you pretending to be from the IRS. They may say that you are due a large refund or owe money (even threatening arrest or revocation of your driver’s license). If you receive such a call, call the IRS and contact the Federal Trade Commission using their “FTC Complaint Assistant” at FTC.gov.

Promises of free money

Posing as tax preparers, scam artists may promise large tax refunds and charge big fees, while filing false returns with big refunds payable to them. Individuals may never know a tax filing was ever made in their name.

Return preparer fraud

Dishonest preparers may use tax preparation as an excuse to steal your personal information, so only use a preparer who signs the return and has an IRS Preparer Tax Identification Number.

Hiding income offshore

The IRS has strengthened its ability to identify offshore holdings, and the failure to report them will be costly.

Impersonation of charitable organizations

Fraudulent charities raise money or obtain private information from individuals looking to help. Donate only to recognized charities and beware of charities whose names sound similar to the well-known ones.

False income, expenses or exemptions

Falsifying your tax return is a high risk, low reward exercise, especially in this age of Big Data.

Frivolous offers

Ignore frivolous promotions that promise you tax relief. Not only are they expected to fail, but you may be subjected to penalties and possible jail time.

Falsely padding deductions or returns

Dishonestly reporting deductions to reduce tax bills or inflate refunds may open you up to penalties and prosecution.

Abusive tax structures

If someone is proposing to eliminate or substantially reduce your taxes through complex tax structures, walk away – they may be offering nothing more than illegal tax evasion.

Excessive claims for business tax credits

This happens when taxpayers or their tax preparers improperly claim the research credit or the fuel tax credit, which is generally limited to off-highway uses, such as farming.

Be careful and be aware this tax season and make sure your financial advisors are protecting you and helping you do the right thing.

Kevin Theissen is principal and financial advisor of Skygate Financial Group and HWC.

Do you want to submit feedback to the editor?

Send Us An Email!

Related Posts

Shaping what’s ahead

January 15, 2025
History tends to demonstrate that humans aren’t too fond of change. Sure, we progress and adapt over time and with technology, but do we fundamentally change? Not much. Rather than change and actively work towards a better future, we tend to dwell on the past. Make sure things are great again. The good ol’ days,…

‘The Brutalist’ is a monumental achievement in film

January 15, 2025
With home viewing becoming the preferred way to watch movies, it’s a rare delight to encounter a film that demands to be seen in a theater. Brady Corbet’s "The Brutalist" is one such film. This 215-minute epic, shot in stunning VistaVision and presented in 70mm, is a cinematic experience that makes the journey to the…

Working it out on the skin track

January 15, 2025
“How much longer until we get to where you are taking me?” I hear the voice reach out from behind me. We’d been skinning (or climbing uphill with our skis on) for about an hour when my ski sister finally decided to ask where we were going. We had started with some work road and…

The sweet sound of success: ‘Norman’s Rare Guitars Documentary’

January 15, 2025
In September of last year, I put my son on a flight to Australia, where he would spend the next month backpacking throughout t that country’s eastern coast. He then flew to Bangkok, Thailand, for another month, this time enjoying the jungles and beaches in the surrounding regions. Finally, he concluded his Pacific trek with…