Each year, the IRS puts out a list of the top 12 scams to watch out for -- or not perpetrate. This year’s list:
Identity theft The IRS says it has a comprehensive strategy targeting ID theft. It also has increased internal reviews “to spot false tax returns before tax refunds are issued and is working to help victims of identity theft refund schemes.”
Phishing, in which a thief sends an email or sets up a fake website with the hope of luring consumers to giving up some of their personal information. The IRS doesn’t send you an email out of the blue asking for information. And if you get such an email, you should forward it to firstname.lastname@example.org.
Return preparer fraud Shady preparers have taken clients’ refunds, overcharged customers and have promised fat refunds to gain new clients. If you don’t deserve a fat refund, though, you can end up getting burned.
Hiding income offshore
“Free money” from the IRS & tax scams involving Social Security The IRS says this scam has been cropping up in community churches. The scammers convince the elderly and those with low-income that they are entitled to money from the IRS and Social Security. The con artists collect a fee, but the filer’s claims are rejected.
False/Inflated Income and Expenses
False Form 1099 Refund Claims This involves creating a false federal income tax form to claim tax breaks
Frivolous Arguments One of them is that the 16th amendment that permits tax collections wasn’t ever ratified so you don’t have to pay taxes. Not true, as some jailed celebrities have found out.
Falsely Claiming Zero Wages
Abuse of Charitable Organizations and Deductions
Disguised Corporate Ownership Some people hide the true ownership of a business so they can avoid taxes
Misuse of Trusts You can’t always use a trust to shelter assets from taxes.