Money for Any Reason You May Need!

6 Shady Tax Scams to Avoid in 2017

Now that January is over, more and more people are beginning to think seriously about that dreaded time of year: tax time. This time of year can be a frightening time for many people, with the thought of owing money looming over their heads. What makes tax time even more frightening, however, is that there are several scams out there, with people looking to steal your money right out from under you. آ Tax scams can take many forms, but it is important to know that falling prey to them can be prevented. Here are six shady tax scams that you should be on the lookout for this year.

1. آ IRS Phone Calls

In one scam, someone calls you and claims to be from the IRS, saying that you owe money, and that they have a warrant out for your arrest.آ  Due to the fact you donق€™t want to go to jail, you will hand over credit card numbers or bank account information and pay them. The IRS NEVER makes phone calls. They will never demand immediate payment, require a specific payment method, ask for credit or debit card information over the phone or threaten you. If you receive a phone call like this, hang up immediately. If you are worried that you might owe taxes, you can call the IRS, who will be more than happy to help you.

2. آ Phishing

Phishing is the practice of sending fraudulent emails pretending to be from a reputable company. In these emails, the sender requests personal information, including passwords, credit card numbers or even your social security number. They may even include a link to a website that looks legitimate, in this case, the IRS website. Much like phone calls, the IRS does not send e-mails. As stated on their website, the IRS will only contact you by mail. If you receive an e-mail from a sender claiming to be the IRS, donق€™t open it or click any links. Report the e-mail and then delete it.

3. آ Preparer Fraud

Doing your own taxes is not the easiest task in the world. In order to help you do them right and avoid any issues, there are plenty of tax preparers out there. However, while there are plenty of great ones available, there are also a few scam artists, looking to take your refund and your personal information, with the plan to use it for other illegal activities including identity theft. There are ways to avoid being swindled by investigating your potential tax preparer. One such way is to ask for an identification number, as all legitimate tax preparers need to be registered with the IRS.

4. آ Promises for Big Refunds

Sure, everyone hopes for a big, fat refund check every tax season. And while many people are able to garner a decent one, you should always be wary of anyone who advertises that they will be able to get you a huge refund. These scams often involve your tax preparer fudging some numbers (which could actually cause you to lose some of your other benefits) or even signing a blank return before the numbers have even been crunched. The preparer then demands a certain percentage of this refund. Even worse, if you get audited, you are the one who is held legally responsible for the information that was written on your return.

5. آ Fake Charities

Fake charities are an issue any time of year, and like to pop up after a disaster, but if you mention them on your tax return for a deduction, you can be hit a second time with more taxes and penalties if you get audited. These charities have logos that look legitimate, and may have names fairly similar to those of well-known and respected charities. However, if you donate to these charities, none of your money is going to the cause they claim to stand for. Another thing to look out for, donق€™t make payments over the phone for these charities, or give out your social security number. If you are interested in donating to the cause they claim to stand for, do some research online and donate via the website.

6. آ Offshore Accounts

Not all scams are done by shady characters trying to swindle you. Sometimes, taxpayers are the ones attempting to scam the IRS. One of the most well-known forms of tax evasion is the act of hiding money in offshore accounts. Hiding money in overseas accounts is illegal, and while it has been done for years, the IRS is only recently starting to crack down on the act. It is becoming increasingly difficult to hide your money. The IRS has even set up the Offshore Volunteer Disclosure Program (OVDP) to help those who have set up offshore accounts in the past come clean and reduce their penalties.

Unfortunately, there are lots of dishonest people out there that want to steal your money and maybe even your identity. By doing a little bit of research, and avoiding shady situations, you can save yourself a lot of unnecessary cost and hassle.