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Crime Alert: Tax Scams

Mar 28, 2013 06:24PM ● By Anonymous

Phishing
Have you received an e-mail that appears to be from the IRS? It's probably not. Instead, it could be from a scammer who will try to use any information you reply with to steal your identity and money. The IRS does not use e-mail, texts or social media to contact taxpayers for personal or financial information, so relay any such messages to phishing@irs.gov.

Fraudulent Tax Preparers
When choosing a preparer, make sure he or she has an IRS Preparer Tax Identification Number (PTIN). If a preparer doesn't put this number on your tax return as required, or fails to sign the form, that should raise a red flag. And watch out for preparers who base fees on the size of your refund or promise refunds that sound too good to be true.

Illegal Offshore Bank Accounts
The IRS has been cracking down on taxpayers illegally hiding income abroad. Launched in 2009, the agency's voluntary disclosure program has already raked in $5.5 billion in back taxes, interest and penalties from tax cheats for illegally hiding assets in offshore accounts.

Promises Of 'Free Money'
Be skeptical of flyers and advertisements promising you "free money" from the IRS. Scammers have been targeting low-income and elderly people, often through community churches, convincing them to claim credits they aren't entitled to and even Social Security rebates that don't exist.

Bogus Charities
In the wake of disasters like Superstorm Sandy, scammers come out of the woodwork and solicit donations for bogus charities. Some will even impersonate the IRS and contact disaster victims, claiming to be able to help them file casualty loss claims or obtain refunds. Others will steal victims' identities by asking for Social Security numbers and personal information.

Exaggerated Income And Expenses
Reporting higher income or expenses so that you qualify for bigger refundable credits may sound tempting, but doing this can get you in big trouble with the IRS. If you get caught, you'll have to return any refund you fraudulently received and pay interest and penalties on any amount owed.

Refund Claims For Secret Government Accounts
If someone tries to convince you to file a 1099-OID to claim money the federal government is allegedly holding in a secret account for U.S. citizens, don't fall for it. The IRS says this is a common scam -- and not only will you not receive a refund; you could face big fines and even jail time.

Pretending To Earn Zero Income
Taxpayers who fall prey to schemes convincing them to file Form 4852 (a substitute W-2 form) or a corrected Form 1099 in order to falsely reduce their taxable income to zero could face a penalty of $5,000.

Disguising Corporate Ownership
The IRS is on the lookout for firms hiding their true identities by using third parties or forming corporations to make it harder for the IRS to figure out who is the true owner. By creating such entities, some businesses underreport income, fail to file tax returns, claim bogus deductions and even launder money.

Misuse Of Trusts
Schemes recommending that you transfer money into trusts to reduce your income and avoid paying taxes are common, and the IRS has seen a growing number of people improperly stashing money in private annuity and foreign trusts. To avoid getting caught up in an illegal trust arrangement, the IRS recommends consulting with a tax professional.

ANNE ARUNDEL COUNTY POLICE DEPARTMENT
COMMERCIAL SECURITY NETWORK

Darryl R. Hagner
Analyst
8495 Veteran's Highway
Millersville, MD  21108
(410) 222-3298 - Office
(443) 623-0461 - Cell
(410) 987-6462 - FAX
dhagner@aacounty.org