7 Tax Scams Of 2016

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Paying taxes is bad enough, but falling prey to a
tax scam can be even worse. Many of the same tax
scams crop up year after year, ensnaring new
victims every tax season. Being aware of
potential pitfalls can make filing taxes easier
and keep you out of trouble with the
IRS. Whether you are getting ready to file your
taxes or still gathering the required paperwork,
you need to be aware of these common tax scams.
Doing your homework ahead of time can protect you
from scams and questionable tax dodges as the
April 15 tax deadline approaches 1 Identity
Theft The tax filing season is prime time for
identity thieves. After all, your tax return
contains a wealth of information identity thieves
can use to get credit in your name, take out
loans and otherwise make your life
miserable. Identity thieves also use personal
information they have already gathered to file
bonus returns and claim refunds to which they are
not entitled. The thieves often file early,
leaving the legitimate taxpayer without the
money they are due. You can protect yourself by
checking your credit report regularly for early
signs of identity theft, and by creating strong
passwords for tax preparation and financial
websites. 2 Tax Preparer Fraud Sometimes the
people you hire to prepare your return violate
that trust instead. Tax preparer fraud takes a
number of different forms, from individuals who
steal Social Security numbers for their own use
to workers who boost client refunds by inventing
dependents
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or claiming bogus credits.You can protect
yourself by checking the return carefully before
you sign. If something does not look right, read
it over carefully and question any discrepancies.
You are responsible for the information on your
return, even if it was prepared by someone
else. 3 Questionable Tax Dodges You may have
heard that paying income taxes is voluntary, or
that only money backed up by gold is subject to
taxation. Those questionable tax theories could
get you in big trouble with the IRS.Virtually
every tax dodge has already been tested by the
IRS and found lacking. Think long and hard
before you try to avoid paying the taxes you owe
the IRS. 4 Phone Scams Phone scams tend to
make the rounds as the April 15 deadline gets
closer. Taxpayers will typically receive a phone
call from someone claiming to be with the IRS.
The caller may request a variety of personal
information, from Social Security numbers and
birth dates to the names and birth dates of
children.If you receive such a call, take a step
back and look at things logically. Do you really
think the IRS does not already know your Social
Security number? Is there any legitimate reason
the tax agency would need your credit card
number?If you feel the call is suspect, ask for
the caller's phone number and offer to call them
back. Chances are they will simply hang up. If
you do manage to get a callback number, contact
the police to report attempted tax fraud. 5
Bogus Emails The IRS has repeatedly said it does
not contact taxpayers via
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email, yet people keep falling for this common
scam. Phishing emails claiming to come from the
IRS start appearing in inboxes in early January
and continue through the April 15 tax filing
deadline.If you receive such an email, you should
flag it as spam and report it to local
authorities. After you have reported the fraud
attempt, you should delete the email, since it
may contain dangerous links that could damage
your computer or comprise your identity. 6
Free Money from the IRS Contrary to what you may
have heard, the IRS is not giving away free
money. These free money scams are often attempts
to gather Social Security numbers, bank
information and other personal data.The thieves
often set up shop in poor areas and target low
income workers and the elderly. The story is
different from year to year, but the bottom line
is always the same the IRS has a program that
is giving money to eligible taxpayers, and it is
important to sign up today. 7 Fake
Charities Giving money to charity is great, and
it can even lower your tax bill. Scam artists
know that, and they use the generosity of
taxpayers to separate them from their hardearned
money.When tax season approaches, scam artists
may set up fake charities to prey on
unsuspecting taxpayers. The charity might look
legitimate, but the contribution will not be
eligible for the promised tax deduction. You can
protect yourself from this common scam by
checking out all charities carefully. A number of
independent agencies keep track of charities,
and they can help you sort out the legitimate
causes from the scams.