Taxes are inevitable. The government must have money to provide for its operations, whether you agree with what it does with your money or not, you must pay what you legally owe, but no more than that.
We all want to take advantage of every loophole, every deduction available to reduce our tax liability. Some unscrupulous tax preparers lead their clients into a world of trouble by promising means of cutting tax liability through scams that may sound good but are only trouble for the taxpayer.
The IRS has a list of what it calls The Dirty Dozen tax scams. Here are a couple of these, so watch out if some fast talking sharp dealer gives you the idea you can save money by using them.
Hiding Income Offshore: The IRS aggressively pursues taxpayers involved in abusive offshore transactions, as well as anyone promoting these schemes. Taxpayers have tried to avoid or evade taxes by hiding income in offshore banks, brokerage accounts, offshore debit and credit cards, wire transfers, foreign trusts, private annuities or insurance plans. Once the IRS detects such an attempt at getting out of tax liability, the penalties are severe. Consult a reputable advisor before falling for such a scheme.
Identity Theft and Phishing: Identity theft occurs when someone uses an unsuspecting individual’s name, Social Security number, credit card number of other personal information without permission to commit fraud or other crimes. One can use someone else’s information to run up bills on that person’s credit card, empty that person’s bank account or take out a loan in that person’s name. A criminal with someone else’s personal information can file a fraudulent tax return and collect a refund.
Phishing is a scam artist tactic to trick unsuspecting victims into revealing personal or financial information online. They use phony e-mail or websites, even social media. They may pose as an institution such as the IRS. During tax season these impersonators come out of the dark like roaches, and they proliferate like roaches. Spyware can be loaded onto an unsuspecting taxpayer’s computer by opening an e-mail attachment or clicking on a link.
Identity theft is a major problem that affects thousands of taxpayers each year. You must protect your personal information. Good people are shocked at the intentions of those scam artists who are willing to destroy another person just for some personal gain and stay hidden. The trouble to the individual whose identity has been stolen may take years to correct. Anyone who believes personal information has been stolen and used for tax purposes should immediately contact the IRS Identify Protection Specialized Unit at 1-800-908-4490. A suspicious e-mail or an “IRS” Web address that does not begin with http://irs.gov, should be forwarded to the IRS at phishing@irs.gov.
If you’d like to speak with a Beaton Accounting tax representative for professional advice on your taxes, call us today for a FREE consultation: 631-921-6894.
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