Learning for Better Living
Beware of tax scams
Reviewed and adapted with special permission from the IRS by: Andrew Zumwalt, Assistant Extension Professor & Associate State Specialist, Personal Financial Planning, University of Missouri Extension
Don’t fall victim to tax scams. These schemes take several shapes, ranging from promises of large tax refunds to illegal ways of “untaxing” yourself.
The IRS suggests that you remember three important guidelines:
- You are responsible and liable for the content of your tax return.
- Anyone who promises you a bigger refund without knowing your tax situation could be misleading you, and
- Never sign a tax return without looking it over to make sure it is accurate.
Beware of these common schemes.
Return Preparer Fraud
Dishonest tax return preparers can cause many headaches for taxpayers who fall victim to their ploys. Such preparers derive financial gain by skimming a portion of their clients’ refunds and charging inflated fees for return preparation services. They attract new clients by promising large refunds. Choose carefully when hiring a tax preparer. As the saying goes, if it sounds too good to be true, it probably is. No matter who prepares your tax return you are ultimately responsible for its accuracy and for any tax bill that may arise due to a questionable claim.
It pays to be choosy when it comes to disclosing personal information. Identity thieves have used stolen personal data to access financial accounts, run up charges on credit cards and apply for new loans. The IRS is aware of several identity theft scams involving taxes or scammers posing as the IRS itself.
A related issue to be aware of is that the IRS does not use email to contact taxpayers about issues related to their accounts. If you have any doubt whether a contact from the IRS is authentic, call 800-829-1040 to confirm it. Of particular interest are emails related to refunds. Again, the IRS will never contact you by email to alert you of your personal refund status.
Promoters have been known to make outlandish claims that the Sixteenth Amendment concerning congressional power to establish and collect income taxes was never ratified; that wages are not income; that filing a return and paying taxes are merely voluntary; and that being required to file Form 1040 violates the Fifth Amendment right against self-incrimination or the Fourth Amendment right to privacy. Don’t believe these or other similar claims. Such arguments are false and have been thrown out of court. Taxpayers have the right to contest their tax liabilities in court, but no one has the right to disobey the law.
For more information about these and other tax scams visit the IRS website at www.irs.gov – this is the link of the official IRS governmental website. Remember that for the genuine IRS website be sure to use .gov. Don't be confused by internet sites that end in .com, .net, .org or other designations.
- The Truth about Frivolous Tax Arguments
- Tax Fraud Alerts
- Abusive Return Preparer - Criminal Investigation
Resource: Andrew Zumwalt, 573-884-1690
Last update: Monday, February 29, 2016