Feature Articles: Taxes
Beware of Tax Scams
Reviewed and used with special permission from the IRS by Suzi McGarvey, Extension Associate, HES Extension, 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. If you
think a promise of an unusually large refund or a
proposal to avoid taxes may be unscrupulous report it to
the IRS at 1-800-829-0433.
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. Taxpayers should 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.
Identity Theft:
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. The IRS does not
use e-mail to contact taxpayers about issues related to
their accounts. If you have any doubt whether a contact
from the IRS is authentic call 1-800-829-1040 to confirm
it.
Frivolous Arguments:
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.
Three lessons to remember:
- 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.
For more information about these and other tax scams
visit the IRS Web site at
IRS.gov.
Source: IRS Tax Tip 2006-24
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Last update: Friday, March 28, 2008
