Tax Scams For 2013

Every year the Internal Revenue System puts out a list that they call the “Dirty Dozen.” The “Dirty Dozen” is a list of the top tax scams that affect taxpayers.

Here is a look at this year’s “Dirty Dozen:

1. Identity Theft

2. Phishing. A phishing scam is when a person attempts to steal your information through either emails or fake websites.

3. Return Preparer Fraud. Though most tax professionals are honest, professional people others are not. Some tax specialists will attempt to encourage filers to claim improper credits, deductions or exemptions to increase their tax return.

4. Hiding Income Offshore. Having money in an offshore account is not illegal. What is illegal is to hide it offshore accounts for the purpose of not paying United States taxes on the funds.

5. “Free Money” from the IRS & Tax Scams Involving Social Security. Even though there is no such thing as Free Money scammers try to convince potential victims otherwise.

6. Impersonation of Charitable Organizations. Every time disasters happen, scammers strike.

7. False/Inflated Income and Expenses. This is when taxpayers are encouraged to bump up their income in order to maximize their refundable credits.

8. False Form 1099 Refund Claims. This is basically a redemption scheme. This is where a person files a series of false tax forms to gain a fraudulent tax return.

9. Frivolous Arguments. This is where scammers encourage taxpayers to make unreasonable and outlandish claims to avoid paying the taxes that they owe.

10. Falsely Claiming Zero Wages. Taxpayers are too often convinced that they can reduce their taxable income to zero.

11. Disguised Corporate Ownership. Here scammers attempt to hide where there income is really going or they manufacture false deductions.

12. Misuse of Trusts. Trusts have many legitimate purposes, but many people use trusts illegally to get out of paying the amount of taxes that they owe.