Dirty Dozen 2015 Tax Scams

Each year the IRS posts the worst tax scams across America.   The IRS works with the Department of Justice and its criminal division to shut down these tax scams, but its a never ending saga and scammers steal billions of dollars each year from the public fisc.  Lets take a look at this year's dirty dozen list:

Here is the list the dirty dozen tax scams of 2015:

• Aggressive and threatening phone calls by criminals impersonating IRS agents remains an ongoing threat to taxpayers. The IRS has seen a surge of these phone scams in recent months as scam artists threaten police arrest, deportation, license revocation and other things. The IRS reminds taxpayers to guard against all sorts of con games that arise during any filing season

• Fake emails or websites looking to steal personal information (phishing). The IRS will not send you an email about a bill or refund out of the blue. Don’t click on one claiming to be from the IRS and be wary of clicking on strange emails and websites. They may be scams to steal your personal information. 

• Identity theft continues to be a problem especially around tax time. The IRS is making progress on this front but taxpayers still need to be extremely careful and do everything they can to avoid becoming a victim.

• Unscrupulous return preparers who set up shop each filing season to perpetrate refund fraud, identity theft and other scams that hurt taxpayers. Return preparers are a vital part of the U.S. tax system as approximately 60 percent of taxpayers use tax professionals to prepare their returns.

• Offshore tax cheats and the financial organizations that help them should know that it’s a bad bet to hide money and income offshore. Taxpayers are best served by voluntarily disclosing their offshore income and accounts and getting their taxes and filing requirements in order. The Offshore Voluntary Disclosure Program (OVDP) is available to help.

• Stating refund amounts before looking at documents, asking individuals to sign blank returns and fees based on a percentage of the refund are signs of a bad tax preparer. Scam artists use flyers, advertisements, phony store fronts and word of mouth via community groups and churches in seeking victims 

• Fake charitable organizations with names that are similar to familiar or nationally known to attract donations from unsuspecting contributors. Contributors should take a few extra minutes to ensure their hard-earned money goes to legitimate and currently eligible charities by checking the status of charitable organizations before contributing.

• Hiding income by filing false Form 1099s or other fake documents is a scam not to mention criminal. The mere suggestion of falsifying documents to reduce tax bills or inflate tax refunds is a huge red flag when using a paid tax return preparer. Taxpayers are legally responsible for what is on their returns regardless of who prepares the returns.

• Using abusive tax structures to avoid paying taxes is a bad idea and everyone should be on the lookout for people peddling tax shelters that sound too good to be true. When in doubt, taxpayers should seek an independent opinion regarding complex products they are offered.

• Inventing income to claim tax credits is another sign of a bad scam. Taxpayers are best served by filing the most-accurate return possible because they are legally responsible for what is on their return.

• Erroneously claiming the fuel tax credit is generally limited to off-highway business use, including use in farming. Consequently, the credit is not available to most taxpayers. But yet each year a sizable group of taxpayers erroneously claim the credit to inflate their refunds.

• Using frivolous tax arguments to avoid paying taxes is wrong and most such arguments have been thrown out of court. While taxpayers have the right to contest their tax liabilities in court, no one has the right to disobey the law or disregard their responsibility to pay taxes.The penalty for filing a frivolous tax return is $5,000.