Today, it is apparent that tax scams come in different forms, so Alfa One Corporation Accounting Solutions provides the list of these scams and describes each of them with some basic tips on how to prevent them.

A. Suspicious IRS phone calls

Scammers are sharp and witty. They could change or use different caller ID numbers to appear as if they’re calling from the Internal Revenue Service (IRS). Based on scam reviews, scammers often target the most vulnerable individuals such as the senior citizens and new immigrants. They often threaten them with arrest or deportation.

Scammers could recite the last four digits of your Social Security number to gain your trust. They may say that you have a refund due and you need to provide your personal information in order to claim it. They may also demand payments from you and send a follow-up email that appears to be from the IRS, stating that your payments should be made through prepaid debit cards.

Alfa One Corporation Accounting Solutions needs you to remember that the real IRS wouldn’t ask any of your personal and financial information through phone, email, text, or social media. If someone calls and says he or she is an IRS agent and asks you to send money, end the call.

B. Phishing

Scammers may send “phishing” emails that appears to be from the IRS and says that the recipient either owes money or is due a refund. Their purpose is to acquire sensitive information from their victims to steal their identity or their money.

If you receive a suspicious email that looks like from the IRS, or any government agencies, Alfa One Corporation Accounting Solutions suggests that don’t open any of the attachments, and don’t click on the links within each email. This may allow the scammers to collect your personal and financial information, or infect your computer with malicious code.

C. Stolen refunds

Identity thieves could file fraudulent tax returns and claim refunds by stealing your sensitive information such as your Social Security number. The scammers usually file early in the season, which is obviously to outrun you. And when you file, that could be the first time you learn your identity and money has been stolen.

Don’t just give out your Social Security to any strangers. Also, don’t carry your Social Security card or any documents showing your Social Security number or Individual Taxpayer Identification Number (TIN) with you, so that in case of theft or loss, your private information is safe. Just bring them if they’re totally needed.

Alfa One Corporation Accounting Solutions also recommends that you should use firewalls and anti-virus software to protect your computer from being hacked and once an update is available, make sure to download it to guarantee your system’s protection.

Furthermore, always check your credit report every year and your Social Security earnings statement to become familiar if there’s anything unusual happening to your accounts.

D. Dishonest tax preparers

Some tax preparers are honest, others are not. Dishonest tax preparers are sometimes involved in identity theft, tax refund fraud, and other illegal scams. When hiring preparers, make sure they have a Preparer Tax Identification Number (PTIN) for 2015, don’t base their fees on your refund, can e-file returns, are available after April 15, and sign your return.

Never sign a blank or incomplete return since you’re legally responsible for the information. Make sure that there are no errors and that each of your question has been answered before singing it.

E. Hidden money offshore

U.S. tax filers who have offshore accounts and don’t report them may face large fines and penalties from the IRS. Individuals who have fallen for scammers selling an offshore tax scheme are also included in this punishment.

According to Alfa One Corporation Accounting Solutions review, a new set of reporting rules are being phased in under the Foreign Account Tax Compliance Act that will oblige foreign financial institutions to report accounts held by U.S. citizens to the IRS.

F. Promises of bizarre refunds

Scammers pretending to be tax preparers attract clients with promises of unrealistic tax refunds. Most of their victims are people who don’t have a filing requirement, such as low-income individuals or the elderly.

Scammers also target people who are going to file and expect a refund. They will promise to get them a much bigger one by telling them they are entitled to tax breaks they don’t ordinarily take. They may also promise an outsized refund based on fictitious government benefits or rebates.

Don’t fall for this scam because you will not only lose out on the refund you are legitimately owed, but you may also have to pay penalties for filing a false claim and getting a fraudulent refund.

G. Fake charities

The Alfa One Corporation Accounting Solutions suggests that before giving money on charities, you must first confirm its legality. Fake charities use names that appear to be renowned ones, and make sure that their websites looks exactly the same.

If you wanted to make a tax-deductible contribution to a charity, you should pay by check or credit card so that you’ll have a record of the payment. Never give or send cash. The charity should also send your receipt. Please be extra careful when someone asks you to help victims of a natural disaster.

H. Preparers that lie for you

If you allow a tax preparer to understate your income to lower your tax bill, or get you a bigger refund, you might be in big trouble with the IRS. One common way this scam is executed is when a dishonest preparer set up a “corrected” 1099 or W-2 form that claims your taxable income is actually zero.

Don’t allow anyone to convince you into claiming deductions or credits to which you’re not entitled, and never let others file a false return on your stead.

I. Promoters of abusive tax shelter

Don’t fall prey to someone who tries to sell you a complicated scheme that promises to reduce or eliminate your tax bill. Scam promoters create abusive tax shelters wherein they move your income-producing assets into a trust, limited liability company (LLC), limited liability partnership (LLP), international business company (IBC), or foreign financial account.

Once you put your assets into the shelter, a string of complicated transactions is led solely for the purpose of hiding your money from taxes and making it look like you can claim fat deductions, escape self-employment taxes, and shift money out of your taxable estate. Sometimes the taxpayers themselves perform this scam. If you get caught, it could mean large penalties, interest and even criminal prosecution.

J. Big tax credits you don’t qualify for

Cheating on your taxes usually means understating your income. But sometimes a dishonest tax preparer will try to inflate clients’ income. Some people make too little to owe federal income taxes, but may still qualify for a refund by claiming certain refundable credits, like the Earned Income Tax Credit (EITC). Dishonest preparers will report that clients earned more than they did to make sure their clients get the maximum, and they get a bigger fee. If caught, however, tax filers will have to repay the erroneous refund, plus interest and penalties.

K. A pumped up fuel tax credit

For all the gas you buy, chances are good you can’t claim a credit on your 1040 for the federal fuel taxes you paid. Eligibility rules for the fuel tax credit are pretty limited: Do you run a commercial fishing boat or a school bus company? If not, you probably don’t quality. And yet, dishonest tax preparers push the idea. The IRS usually finds deceitful preparers who have enticed sizable groups of taxpayers to erroneously claim the credit to inflate their refunds. Identity thieves also file a fraudulent return for a business or farm to claim the credit.  

L. A frivolous tax return

Scammers try to convince fee-paying tax filers that they don’t owe any income tax at all by making frivolous tax arguments such as: filing and paying your taxes are voluntary, you may refuse to pay taxes on religious or moral grounds by invoking the First Amendment, only federal government workers owe income tax, you don’t owe federal income taxes if you file a return saying that you have no income and no tax liability. Taxpayers may contest their tax liabilities, but no one has the right to disobey the law or disregard their responsibility to pay taxes.