Table of Contents
1. Phishing EmailsThese are emails that look legitimate because scammers use the appropriate logo or email id that appears to be from IRS.
2. Phone ScamsThese are unsolicited phone calls where callers claim to be IRS employees and demand immediate payment.
3. Identity TheftTax Identity Thefts happen when someone else uses your Social Security Number (SSN) to claim tax returns.
4. False CharitiesThese are charities set up by scam artists to steal money or personal information.
5. Return Preparer FraudIn this type of fraud, tax professionals file false income tax returns. The taxpayer may or may not know about the tax professional’s intentions
6. Inflated Refund ClaimsTax preparers lure taxpayers during the tax season by promising them large tax refunds.
7. Excessive Claim For Business CreditsThis scam involves an improper claim for fuel and research credits to receive inflated refunds.
8. Offshore Tax AvoidanceTaxpayers try to hide income by transferring money or other assets to foreign properties.
9. Falsely Padding Deductions On ReturnIn this scam, taxpayers intentionally inflate expenses and deduction in order to receive higher returns.
10. Falsify Income to Claim CreditsSome taxpayers claim the wrong income or hide income from the IRS to gain maximum credits.
11. Abusive Tax ShelterIn this scam, taxpayers claim tax shelters that have no economic importance to reduce income tax.
12. Frivolous Tax ArgumentsTo avoid paying taxes, taxpayers use legal claims that are unreasonable and outlandish.
Here are some precautions to take so that you are not a victim of these tax scams –
- Use cloud tax software to make sure that all the data is safe and regularly backed up on the secure cloud servers.
- Identify and protect high-risk data like personal identification information, financial data, and employment information.
- Never reply to any email containing a suspicious request.
- Don’t click on unknown links or open attachments from unsolicited emails.
- Keep your anti-virus and anti-malware software up to date.
- Do not use public or free Wi-Fi networks to conduct financial business.
- Use strong and unique passwords for all your accounts.
- Keep in mind that the IRS will never call and ask for immediate payment. Generally, the IRS will mail the bill to any taxpayer.
- Contact TIGTA or Report to Federal Trade Commission in case of any telephone scam.
- File tax returns as soon as possible to protect yourself from any tax scams.
- Do not share your Social Security Number with anyone.
- Before sending any donation, make sure whether it is a qualified legal charity or not.
- Keep paper records in non-transparent envelopes and electronic records encrypted.
- Don’t give or send cash. For security purposes, always pay by check or credit card.
- Before consulting any tax professional, check their IRS Preparer Tax Identification Number (PTIN).
- Do not consult a tax preparer charging based on the refund amount received.
- Don’t make up income by falsely claiming expense or deductions as it is illegal and can lead to legal prosecution.
- If you think that you are a victim of any tax fraud or scam, report it as soon as possible by taking a few steps on the official site of IRS.
- Never sign any blank check, tax paperwork, or any official document.
- Stay updated regarding the recent news release in accounting and tax so that you can protect yourself from any new scam.