By Francis Laryea, Spring 2015 Student Intern.
This week, we’re covering the Internal Revenue Service’s list of 12 scams, known as the “Dirty Dozen.” For Part II, we’ll be covering and explaining three more scams on the list and providing tips on how to protect yourself.
- Return Preparer Fraud – You should remember that you’re responsible for what goes on your tax refund. Be mindful of tax professionals that offer tax services for the express purposes committing tax fraud or identity theft. One way to stay safe is to verify the preparer’s IRS Preparer Tax Identification Number. For more tips, check out the IRS’s helpful Choosing a Tax Professional guide here.
- Offshore Tax Avoidance– Some taxpayers attempt to hide their money in unreported offshore accounts. This can backfire. According to the IRS, your interests are “best served by coming in voluntarily and getting their taxes and filing requirements in order.” The IRS offers the Offshore Voluntary Disclosure Program to help. The IRS has been successful in enforcement actions against offshore tax cheats and the financial organizations that help them, thus in order to avoid a possibly costly legal battle, it is best to be honest and not evade taxes.
- Inflated Refund Claims– This normally involves “inflated refunds.” What are the warning signs? If you are asked to sign a blank return before a preparer has reviewed any records, beware. Read more about how to avoid this type of fraud here.