Watch out for tax scams! (First of two parts)

Although tax scams occur any time of year, the government warns taxpayers to be particularly cautious during the filing season when con-artists’ tactics tend to peak.The IRS recently released the 2013 version of its annual “dirty dozen” scams. This year, the first six includes:

1. Identity theft. You probably read last year’s blog about the enormity of this issue and it’s only getting worse. The IRS now employs 3,000 staff members working on identity theft-related cases, more than twice the number needed in late 2011. Read the IRS’ Identity Protection Tips to help prevent yourself from becoming a victim.
2. Phishing.  If you receive an unsolicited email from the IRS don’t be fooled! Scammers try to intimidate taxpayers into giving up their confidential information by sending emails that appear to come from the IRS or the Electronic Federal Tax Payment System (EFTPS). Remember, the IRS does not initiate contact via email.  You can report phishing by forwarding your email to phishing@irs.gov.
3. Preparer fraud.  If you need help to prepare your return, choose wisely!  You are responsible for the return, no matter who prepared it, so select an individual or company you trust. CPAs may cost more than other alternatives, but they must adhere to strict standards and each CPA will stand behind his or her work in the event of an IRS audit. The IRS offers tips to be sure you’re getting what you pay for.
4. Hiding income offshore. The IRS works closely with the Department of Justice to prosecute tax evaders, so don’t let anyone tell you hiding your money in an overseas account is a good idea. If you do hold money overseas, be sure to file Form 90.22.1 (sometimes known as an FBAR) by June 30 each year to avoid the appearance of tax evasion.
5. Free money from the IRS. Sound too good to be true? It is! Scammers prey on low income people who don’t even need to file returns, persuading them they are eligible for tax credits they are not entitled to. The promoters are long gone by the time the victims’ claims are rejected by the IRS. When it doubt, consult a trusted CPA.
6. Impersonation of charitable organizations. These scams are particularly prevalent after major disasters, either soliciting donations or approaching victims (or donors) to obtain confidential information with the intent of stealing identities or financial resources. Only donate to legitimate, qualified charities. If you’re unsure, the IRS provides a search feature for you to check.

We’ll discuss the latter six of the “dirty dozen” in next week’s blog. Until then, be vigilant to avoid being deceived by scammers to reveal private information or participate in schemes to defraud the IRS. It’s much better to consult a professional than to find yourself on the wrong side of the law.Of course, if we can help, contact us at Patrick & Robinson CPAs:  Office@CPAsite.com or 904-396-5400.