Tax Scams and Fraud

The IRS warns that tax scams, fraud and outright cheating could make tax season a lot less enjoyable than it already is if you get caught.

We all know that each year the tax man cometh and that paying our fair share of taxes is something we cannot legally avoid. Or do we?

Unfortunately there are people are so caught up in trying to figure out a way to get a larger refund or pay less tax that they easily fall prey to unscrupulous tax preparers, identity theft, email phishing schemes, and less-than-helpful credit counselors. Those are just a few. Lets not forget classic tax fraud schemes like dubious offshore transactions, trust schemes and plain old lying about how much you made last year. There are countless ways to wind up in hot water over your taxes if the IRS catches you.

If someone tells you that they can eliminate your taxes completely you should be especially skeptical. There is no silver bullet for taxes. We all have to pay them. But because people will do almost anything to avoid paying taxes they make themselves easy prey for con artists that are ready, willing and able to capitalize on taxpayer angst. Do you know how to tell a legitimate tax deduction from a fraudulent claim?

Image of Tax forms

Pay them now or pay them later

So what happens when you get caught up in one of the scams to lower your tax bill? First of all you are out the money you paid for your service and on top of that you will have to pay some pretty hefty penalties and the interest owed on past tax bills can set you back quite a bit. It doesn’t matter that you were the victim of a con you will still owe your tax debt to the IRS. If you knowingly participate in a tax scam you could even face jail time.

So while we all hate paying taxes and want to pay as little as possible, don’t fall for any of these schemes. You’ll end up paying your taxes in the end. You can either pay them now and avoid jail, fines and the interest on your original tax bill or you can pay them later plus interest, fines and possibly enjoy a vacation at a federal resort. We also urge you to remember the Golden Rule: If something seems too good to be true then it probably is.

How to Report Suspected Tax Fraud Activity

The following two paragraphs come directly from the IRS website, www.irs.gov. We recommend reviewing their site for further detailed information regarding tax fraud.

Suspected tax fraud can be reported to the IRS using IRS Form 3949-A, Information Referral. Form 3949-A is available for download from the IRS Web site at IRS.gov, or through the U.S. Mail by calling 1-800-829-3676. The completed form or a letter detailing the alleged fraudulent activity should be addressed to the Internal Revenue Service, Fresno, CA 93888.

The mailing should include specific information about who is being reported, the activity being reported, how the activity became known, when the alleged violation took place, the amount of money involved and any other information that might be helpful in an investigation. The person filing the report is not required to self-identify, although it is helpful to do so. The identity of the person filing the report can be kept confidential. The person may also be entitled to a reward.”



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7 Responses

  1. CHARLES DUNCAN says:

    I received a phone call from someone who left this message. Please call back immediately, this is the IRS and this is your last chance to pay before we file a lawsuit against you to recover the money you owe the IRS. The number they left to call back is 716-406-7989. I returned the call knowing that it was probably a scam. I ask them to give me the IRS office they were calling from. They immediately hung up.Please notify the AG ‘s office or BBB to let people know this scam is going on now.

  2. Don Pierini says:

    I received a call that was a recorded message stating that they were the IRS Dept and stated there is a warrant out for my arrest at my home . It is imperative that I call back immediately. Figuring this was a bogus call, I did call back and all they said was let me pull your file; as I asked them what state they were calling from and they said Florida and then just hung up. there number on the caller ID was 1-561-91X-XXXX and the number they said to call was 1-703-27X-XXXX. Please notify whatever agency that can check on this as they represent themselves as the IRS

    Also, received a recorded message on my cell phone from telephone number 978-52X-XXXX saying to call this number back ASAP as they are prepared to enter a judgment against me. They stated they were from the Dept of Justice…another call that should be checked.
    Thanks

  3. Desiree' Atwater says:

    5/18/16-I received a call that there was a warrant out from my arrest from the IRS. They told me to return the call to: 585-XXX-XXXX. I did not call because I knew this was a scam. I just want people to know that this scam is still alive and well, unfortunately.

  4. Lynn Johnson says:

    Received a message to call the IRS immediately at this #206-XXX-XXXX. I am under investigation for tax fraud. I returned the phone call and actually spoke to a person who started to explain. I interrupted him and asked him if he knew that the IRS would never call someone and said he was a fraud and I would report him. He disconnected with me never saying a word.

  5. Christy Douglass says:

    My husband received a call from an “IRS” agent saying he owed $3876 (which is close to the amount we were getting a refund of) from 1-202-XXX-XXXX, got disconnected, they called back from 1-800-XXX-XXXX. They threatened him with imprisonment saying that if he didn’t pay, he would go to Federal prison. He wasn’t even allowed to tell me about it. They were very convincing. They revealed that they had too much information on us already which meant we had been hacked or scammed. I work with HR Block and told him it was a scam. Too many flags went up, so I reported it as fraud and started the long process. The IRS will NEVER call you and can not legally imprison you without a court order. The only thing they can do is hold your refund. I have spent the past 3 days reporting this as fraud, putting a fraud watch on all my accounts and socials and getting new cards. I was told to report it to local police as well as Treasury Inspector General for Tax Administration. Also to get a special PIN number for my taxes for next year just in case my husband didn’t remember giving out our information. Also put a fraud alert at Experian, Equifax and Transunion. They share alerts with each other and will flag your credit for suspicious activity, but will call you before allowing anything to go through.

  6. Greg Scott says:

    Received two calls now from folks claiming to be the IRS and they were going to file a lawsuit against me. I called them back and told them they were full of it and that the IRS did not call people demanding money. They told me “we’ve been scamming people for 5 years so you can go and f**k yourself”, and then hung up.

  7. Mark says:

    A relative died from cancer in May, the “executrix” filed a “inventory/appraisal” in July, UNDER REPORTING/FAILING TO REPORT guns/jewelry/furniture/tools/riding mower/collectables etc.. The executrix is pushing us to sell the property to one specific buyer, “in a hurry” because, “the bank account is shrinking”, “he won’t buy the property if there is mold…”. Yet, there was a insurance policy made out to the relative, from her deceased husband(while he was living), that the exec. refused to cash in for her end of life care/funeral arrangements, telling us, the relative bought this policy and named the exec. as “SOLE BENEFICIARY”. Now we find out that was a lie, and the exec. has told two other differing stories concerning the policy that she is now individually pocketing. Having the “inventory”(mailed across state lines) and the differing “stories”(in emails), would this count as TAX EVASION-MAIL FRAUD-WIRE FRAUD?

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