Dirty Dozen: tax scams you should watch out for in 2017

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In February, the US Federal Tax Service (IRS) published its annual list of “Dirty Dozen Tax Frauds”. This list outlines the schemes that taxpayers may encounter throughout the year. Many of them are especially widely used in the period of submission of tax reports. Taxpayers need to beware of attempts to steal their personal information, extract money from them, or involve them in questionable actions regarding taxes.

“We are making a lot of efforts to protect taxpayers from identity theft and other frauds,” says John Koshkinen, IRS Commissioner. - People need to be aware of new schemes that are constantly changing. We ask taxpayers to do everything to avoid such scams, both new and old. ”

For the third consecutive year, the IRS has announced a “dirty dozen” of frauds, encourages taxpayers to review the list in special section on the IRS.gov website and be alert.

Citizens involved in illegal schemes may be fined large sums and even brought to justice. The IRS Criminal Investigation Division works closely with the US Department of Justice to punish all those responsible for such atrocities. Taxpayers should remember that they are legally responsible for the contents of their tax returns, even if they are made by someone else. Make sure that this person knows what he is doing. More information is on the page "Choosing a tax professional».

Below is a list of the “Dirty Dozen Tax Frauds” that should beware of in 2017.

“Phishing” (Internet fraud to extract personal data)

Beware of fake emails and sites that are aimed at stealing personal information. The IRS never contacts taxpayers via email to invoice them or report a refund. Do not open such letters from the alleged IRS. These may be hooks in order to extract personal data from you. (IR-2017-15)

Telephone fraud

Phone calls from scammers posing as IRS agents are a popular scam. Over the past few years, the number of such cases has increased. Scammers threaten taxpayers with arrests, deportation, license revocation and other troubles. (IR-2017-19)

Theft of personal data

Such frauds need to be especially wary of during tax reporting periods. The IRS regularly catches criminals filing false reports under someone else’s social security number. Despite the positive results, taxpayers should still be very careful and do everything to avoid becoming a victim of such frauds. (IR-2017-22)

Fake tax advisors

Beware of unreliable tax return fillers. Most tax professionals provide quality services, but there are a number of dishonest people who, each tax season, open temporary bureaus for allegedly helping with tax filing, and then stealing personal data and committing other tax crimes. (IR-2017-23)

Fake charities

Beware of groups disguised as charities to attract donations from unsuspecting people. Check organizations if their names are similar to very well-known All-American funds. Spend a few minutes on this before you give your honestly earned money to scammers. A tool to check the status of charities is on the IRS website. (IR-2017-25)

Promises of large tax refunds

Beware those who promise large tax returns. Do not sign blank forms and specify the cost of services of these people as a percentage of the refund amount. To search for victims, fraudsters use flyers, advertisements, lime windows and "word of mouth" in groups where there is a high level of trust between people. (IR-2017-26)

Applications for tax subsidies for business

Avoid people who promise to apply for tax subsidies, including fuel. Such subsidies are provided, as a rule, to large organizations, including farmer ones. Also, research grants cannot be abused. If you submit a similar application, then it will be more difficult for you to apply for research activities or receive similar funding. (IR-2017-27)

Pointing a large amount of expenses for tax refund

Avoid exaggerated amounts of deductions in your tax reports in order to pay less taxes or get more returns. Think twice before pointing out higher costs for a business or charity than they were in reality. (IR-2017-28)

Pointing an incorrect income to ask for a subsidy

Do not invent incomes in order to meet the criteria for obtaining tax subsidies, for example, Earned Income Tax Credit, as some scammers suggest. It is best to honestly fill out a tax return, since you are legally responsible for its contents. Such a fraud can lead to a large taxpayer billing for tax refunds, fines and penalties. In some cases, even criminal liability. (IR-2017-29)

Abuse tax haven

Do not abuse tax structures for the purpose of tax evasion. The IRS is making every effort to stop these complex schemes. Therefore, taxpayers should also beware of people offering tax havens that sound too good to be true. If you are in doubt about the quality of the product that you are offered, consult with an alternative tax expert. (IR-2017-31)

Frivolous tax arguments: Do not use frivolous tax arguments to avoid paying tax. Those who offer such schemes encourage taxpayers to write absurdities, despite the fact that they themselves have been repeatedly expelled from court. Yes, you have the right to challenge the amount of your tax debt in court, but there is no right to violate the law or to avoid tax liability. Penalty for false tax return - $ 5 thousand. (IR-2017-33)

Offshore tax avoidance

Фото: Depositphotos

A number of recent successful cases of the use of coercive measures by the authorities to people involved in tax evasion through offshore companies and financial organizations that help them indicate that hiding money and income offshore is a bad idea. The best thing is to voluntarily surrender and show offshore streams. The IRS has a program for voluntary disclosure of offshores, with which you can fulfill your tax obligations. (IR-2017-35).

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