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12 Tax Scams To Watch Out This Tax Season

ТAX TAX SCAMS TO WATCH OUT FOR THIS TAX SEASON Taxpayers are targeted every tax season. While you are preparing to gather tax documents and file taxes, cybercriminals and fraudsters are preparing to cash on in this tax season. People reported losing $1.48 billion to fraud last year. A 38% increase over 2017. 14.4 million people were a victim [2] Scammers received a total of $423 million last year by electronic transfer. " of tax-related identity theft in 2018. IRS announces the "Dirty Dozen" every year that highlights various schemes you may encounter during the tax season. DON'T BE A VICTIM OF THESE SCAMS Here are some of the Dirty Dozen scams that taxpayers should know to avoid the same. 1 Phishing Emails These emails are fraud emails requiring private information to steal identity and file tax returns on your name. EMAIL: O0000 O0 PASSWORD: HOW TO AVOID SCAM NEXT Watch out for text messages and unsolicited emails that require personal information. Think twice or thrice before giving any financial information online. 2 Phone Scams These are phone calls from criminals acting like IRS agents using fake names and phony IRS ID numbers. HOW TO AVOID SCAM Always keep in mind that the IRS does not call and demand immediate payment. File a report if the case you are receiving repetitive calls. 3 Identity Theft In this, scammers use stolen Security or Taxpayer Identification Number to claim tax refunds or returns. HOW TO AVOID SCAM IRS accepts only one tax return per social security number, file a tax return as soon as possible. Keep track of credit reports regularly and do not share your Social Security Number 4 False Charities Fraudsters set up fake charities to deceive taxpayers to make donations. HOW TO AVOID SCAM IRS.gov has tools to check out the current status of a charitable organization. If you are willing to donate, then do not give them financial info and do not pay in cash. 5 5 Return Preparer Fraud In this fraud, tax preparers file false income tax returns. They claim excessive credits, deductions, exemptions, and expenses. ТАХ RETURN HOW TO AVOID SCAM Be aware of these unethical tax professionals. IRS recommends taxpayers to check the tax preparer's IRS preparer identification number. 6 Inflated Refund Claims Scammers promise taxpayers a much larger tax refund than they are entitled to get. They ask taxpayers to file the blank return, guarantee a big refund. HOW TO AVOID SCAM Stay away from advertisements, flyers, fake word of mouth claiming high tax returns. Never choose a tax preparer charging based on the refund received. 7 Excessive Claim For Business Credits There are two business credits: Research credit, and fuel credit. HOW TO AVOID SCAM Avoid misusing research credit and fuel credit as it can lead to penalties. If a credit report is prepared by a third-party, review report carefully. 8 Offshore Tax Avoidance This involves hiding money in offshore accounts to avoid taxes. HOW TO AVOID SCAM If you have been hiding money, then the IRS has an Offshore Voluntary Discloser Program, which lets taxpayers come clean. a Falsely Padding Deduction On Return TAX DEDUCTION In this scam, taxpayers exaggerate tax deduction and credits such as the Child Tax 0999999 Credit, charitable contributions, or business expenses. 9+ HOW TO AVOID SCAM Taxpayers can be subject to criminal prosecution if found preparing and filing fraudulent returns. In addition to this, the taxpayer can also be accessed a penalty of 75% of the amount owed. 10 0 Falsify Income To Claim Credits INCOME In this scam, taxpayers falsely increase the income they report to the IRS. HOW TO AVOID SCAM Don't fake income as it can lead to penalties, interest, and sometimes criminal prosecution. This scam is a chance for tax prepares to increase their fee, so choose tax preparer carefully. 11 Abusive Tax Shelters INCOME These are investment schemes used by taxpayers to reduce income tax without changing the taxpayer's income and assets. HOW TO AVOID SCAM IRS has a list of transactions that are abusive tax shelters go through them before planning any investment. IRS can penalize the people investing in the abusive tax shelter. 12 Frivolous Tax Arguments Taxpayers use doubtful and legal claims to avoid paying taxes. TAX HOW TO AVOID SCAM Go through list of some common frivolous arguments provided by IRS before claiming any of them. There is a penalty of $5000 for filing a frivolous tax return. Criminals know how to trigger and emotionally engage victims. Remember the scams and precautions above. In order to stay ahead of scammers and reduce the chances of being victim of a fraud this tax season. Sources 1) The Top Frauds Of 2018- Federal Trade Commission 2) Facts + Statistics: Identify Theft And Cybercrime- Insurance Information Institute Ace Cloud Hosting www.acecloudhosting.com ex DONATE

12 Tax Scams To Watch Out This Tax Season

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This infographic lists these “Dirty Dozen” scams that taxpayers should be aware of in the upcoming tax season

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