When it comes to alerting taxpayers to tax scams, the Internal Revenue Services is on your side. The IRS warns that scams often lead to hefty penalties and accrued interest, plus taxpayers might face prosecution to imprisonment. The varieties of tax fraud range across the board from sizable refunds to evading taxes using unlawful tactics.
Taxpayers should focus on the following guidance:
*Taxpayers are held responsible for content of tax returns, including liability for false statements
*Promises of a large refund from parties who lack your financial tax background is potentially misguiding you
*Critical review of your tax return can spot inaccuracies and should be done before signing
How to Spot Common Tax Fraud:
Tax Preparation Fraud:
Unethical tax preparation agents may perpetrate fraud using a variety of ploys. These parties withhold a portion of customer refunds and overcharge fees for their tax filing services for their personal gain. Large refunds are the bait to attract unwary customers. Keep in mind when shopping for tax prepares the classic warning that if something sounds too good to believe, it is probably a tax scam.
The IRS has stepped up its efforts to enhance the public's confident in its system and to improve taxpayer compliance. To facilitate these goals, the IRS is initiating the requirement that tax preparation parties must register with them. Registrants will receive a tax identification pin number. Part of registration is a tax competency entrance examination, which prospective registrants must pass.
Theft of Identity
In its recognition and attempts to avoid enabling identity theft by unscrupulous parties posing as IRS representatives, the IRS refrains from contacting taxpayers via email about accounts, instead using its toll-free hotline 829-1040.
Outlandish Anti-Taxation Ploys
Fraud promotion using anti-taxation in order to bait taxpayers may site that the 16th Amendment powers of Congress to oversee and tax income failed to pass ratification. Such ploys may also cite that income and wages are not the same references. Tax filing and payment are elective not required, according to these scam artists. For example, media reports about celebrities not filing or paying 2010 tax years from now has no consequences. Such scammers may cite specifically that the 1040 tax form is a violation of the 5th Amendment protection from incriminating yourself. The 4th Amendment might be cited as an antidote to filing because it violates privacy rights. Don't believe the hype because such legal mumbo jumbo have been booted from courts. Although tax liability is something that taxpayers can argue or negotiate with the IRS, taxation is non-negotiable or avoidable, it is the law.
The IRS has a public website (irs.gov) for additional insight and information. Beware Internet domains other than the official government indicator: gov.