Tax fraud has increased significantly over the years due to the lack of jobs, more electronic filing, and the occurrence of financial hardships. When filing your taxes, it’s important to be leery of whom you choose to prepare your taxes. Prior to filing your taxes, your consultant should inform you of what constitutes as income, what expenses and allowances are considered tax deductible, and the taxes that need to be imposed. As common as these questions may be, not every tax preparer has your best interest, nor do they have the right knowledge and level of expertise to avoid an IRS audit. To avoid a situation that may trigger an audit, while maximizing your savings, you should choose a tax representative that has your best interest!
At Occena Law, P.C., we will determine the best result for you, take the right exemptions, keep clear and complete records, and maximize your tax savings while minimizing your risk of an audit.
Here is a list of 8 tax frauds to beware of:
1. Identify Theft
This occurs when someone uses your personal information, such as your social security number, credit card, or identification card, without your permission to file a tax return or commit another fraudulent crime. Identity theft is the most common form of tax scam that is encountered by the IRS.
2. Telephone Scams
These scams are often times callers who represent themselves as IRS agents, usually providing a fake name and badge number. Some scammers can make the toll-free IRS number appear like a call from the IRS to the victim.
Phishing is a method of fraud through e-mail, where the victim receives an e-mail from what appears to be the IRS. They are asked to visit the IRS website, which is a hoax, where they’re asked to enter all of their personal information. Once this information is collected, the scammer uses that information to commit acts of fraud using the names of the victims.
4. False Promise of “Free Money” from Inflated Refunds
This form of fraud is where a con artist poses as a tax preparer who promises the victims large amounts on their tax returns. They provide faulty information and advice, as they prepare returns that they claim they’ll file for the victims, but for a ridiculous amount.
5. Return Preparer Fraud
Return preparer fraud is very similar to false promise of “free money”, but the tax preparers are not lying about their position. They often take the tax payer’s information and use it for either identity theft or tax refund fraud.
6. Hiding Income Offshore
Sometimes taxpayers find themselves in what seems to be an investment deal, but their money is actually being held in an offshore account. Some reasons for money to be held in a foreign account can be justified legally, but those types of accounts have specific requirements in terms of how they’re reported.
7. Impersonating Charitable Organizations
Often times scammers pose as being a part of a charity. They call, text, or e-mail victims, claiming that all donations to their organization will go towards the organization and are tax-deductible.
8. False Income, Expenses, or Exemptions
In this type of scam, taxpayers claim unearned income or listing false expenses in order to maximize a refund. In some cases, taxpayers will inflate the number of dependents they claim to get the tax credit for each.
Call us today at (781) 629-5147 to schedule a consultation with a tax professional!
Occena Law, P.C.
90 American Legion Hwy
Revere, MA 02151