Don't fall for these tax scams
Every year thousands of taxpayers are scammed into believing tax schemes that are too good to be true. Falling for these scams will cost you hard-earned money and may subject you to civil and criminal tax penalties. Here are a few illegal tax schemes you should be aware of.
Let us file for a refund. Anyone who promises you a big refund without knowing your tax situation could be misleading you. One such scheme involves social security tax refunds. For an upfront paperwork fee of $100, plus a percentage of the refund, these con artists offer to file a claim for all the social security taxes you have paid in your lifetime.
You don't have to pay taxes. Some con artists brag about not paying taxes and offer to sell you their tax-avoidance "secrets." Other scam operators promote abusive trust schemes. These promoters charge big bucks for a "trust" package (trust legal documents, trustee fees, foreign bank accounts, and corporations) that promises to keep you from ever paying taxes again.
Buy our products and cut your taxes. Some promoters charge a hefty fee for bogus home-based businesses. They'll tell you that you can write off most of your personal expenses as business expenses. This is another claim that is too good to be true.
Another popular scheme is selling expensive pay phones with volume controls for the disabled. Con artists contend that you'll be able to claim up to a $5,000 tax credit if you purchase one of their phones. In reality, this credit is limited to businesses upgrading their facilities to comply with the Americans with Disabilities Act.
Pay your taxes directly to us. Phone scam artists tell you to send your tax payment to a special address and you'll receive a prize. If you do, they'll pocket your money and you'll still owe the IRS. Never mail your return or payment anywhere but to an IRS Service Center.
You should also be suspicious of anyone who shows up at your door claiming to be an IRS agent there to collect money. IRS representatives carry picture IDs, and they will normally contact you before they visit.
