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IRS attacks bogus returns and exposes dirty scoundrel schemes

Each tax season, the IRS ups its efforts to detect tax refund fraud to stay a step ahead of the scoundrels. By mid-season, the IRS reported those efforts have identified 9,557 tax returns with approximately $46 million claimed in fraudulent refunds and prevented $22.2 million (48.3 percent) in fraudulent refunds from being issued.

The Interim Results of the 2018 Filing Season report also said the IRS prevented approximately 7,376 fraudulent electronically filed tax returns as of Feb. 28, 2018, and 1,442 paper-filed tax returns as of March 15, 2018, from being accepted into the processing system. ID theft had been identified and confirmed in 2,204 fraudulent tax returns as of Feb. 28, 2018. In all, the number of identified fraudulent returns declined but the dollar amounts involved in identified fraud cases increased.

What scams are being perpetrated?

Each year, the IRS issues its "Dirty Dozen" list of the top 12 tax-related scams seen throughout the year. The list highlights  schemes that you need to guard against, including ploys that steal your personal information, scam you out of money or talk you into engaging in questionable behavior when reporting your taxes.

Be on the lookout for these con games now during tax season and throughout the year:

1) Phishing: Potentially fake emails or websites looking to steal personal information. (IR-2018-39)

2) Phone Scams: Phone calls from criminals impersonating IRS agents. (IR-2018-40)

3) Identity Theft: Tactics aimed at stealing taxpayer identities. (IR-2018-42)

4) Return Preparer Fraud: Schemes perpetrated by unscrupulous return preparers. (IR-2018-45)

5) Fake Charities: Groups masquerading as charitable organizations that solicit donations from unsuspecting contributors. (IR-2018-47)

6) Inflated Refund Claims: Person promising inflated tax refunds often through flyers, phony storefronts or word of mouth. (IR-2018-48)

7) Excessive Claims for Business Credits: Improper claims for fuel tax credits, research credits, and other business credits. (IR-2018-49)

8) Falsely Padding Deductions on Returns: Inflating deductions or expenses on tax returns to reduce tax bill or receive larger refunds. (IR-2018-54)

9) Falsified Income to Claim Credits: Con artists compel unsuspecting taxpayers to invent income to erroneously qualify for tax credits, such as the Earned Income Tax Credit. (IR-2018-55)

10) Frivolous Tax Arguments: Use of frivolous tax arguments to avoid paying tax. (IR-2018-58)

11) Abusive Tax Shelters: Use of tax shelters to avoid paying taxes. (IR-2018-62)

12) Offshore Tax Avoidance: The practice of hiding money and income offshore. (IR-2018-64)

Read more: The IRS Dirty Dozen

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