By Alan Olsen, CPA, MBA (tax)
Greenstein Rogoff Olsen & Co. LLP
It’s tax season and for a lot of people that can be a very scary time of year. Some people will attempt to go it alone and use an online tax program, while others will go the old fashion way and paper file. Still, others turn to professional help to make sure they get the job done right. For many, trying to decipher and understand the IRS’s tax codes and policies is like trying to explain what salt tastes like without using the word salty. In other words, it’s basically impossible.
To make matters worse, and another aspect of taxes that can give a lot of people angst, is the fact that this time of year there are always a lot of people who are looking for easy victims to scam via their tax returns. The IRS warns taxpayers every year to be aware of these kinds of scams, yet inevitably scammers find plenty of people to prey on every year. They use many different tactics and methods, which is why you should educate and arm yourself in order to avoid them.
Beware of These Tricks
Let’s take a look at some of the most common schemes that these scammers use.
Abusing Trusts – beware of preparers who try to set up trusts solely to hide money from the IRS. This is a good way to catch the IRS’s eye and there will be repercussions.
Claiming Zero Wages – make sure you don’t fall for this plan to hide your true wages. It might take a little longer, but the IRS will eventually discover your fraud by comparing the real information received from employers and 1099 contractors.
Don’t Have to File – despite many claims to the contrary, everyone has to file a tax return and all kinds of income are subject to incomes taxes. If someone tells you otherwise, they are incorrect. The IRS has stiffer penalties for those who don’t file than they do for those who file false returns.
False Charity – don’t be fooled by fake charitable organizations. These scammers prey on giving people who want to help a good cause. If you donate money to a bogus charity, not only will your money not go to a good cause, you won’t get a tax deduction for it either.
Fraudulent Preparers – don’t get fooled by a sketchy tax preparer. Some prepares will try to keep more of your return for themselves and some will flat out file false returns in order to profit from them. Stay way from any preparer who uses shady tactics.
GROCO Has You Covered This Tax Season
The really scary thing is that if you end up being the victim of one of these scams, you might not only lose your refund or have your identity stolen, but if the IRS discovers improprieties in your return, you could also be held accountable even if you had no idea it was happening. That is a risky proposition. It also means that it’s a good idea to trust your taxes to a professional, like our experienced team at GROCO. Please contact us for help with any of your tax planning or preparation needs. Just click here or give us a call at 1-877-CPA-2006.