1. Identity theft. This is becoming very problematic, as criminals steal your identity (your social security number) and file for fraudulent refunds. If this has happened to you, call me at 1-800-721-7054 or log on to www.IRS.gov/identitytheft for more information.
2. Phishing. We are getting blistered by fraudulent spam these days. Here's a simple rule to protect yourself. The IRS never, I repeat, never sends email to taxpayers, period. Don't fall for this trick. If you get one of these emails, forward it to [email protected] .
3. Return preparer fraud. There are some unscrupulous preparers that may try to talk you into exemptions and deductions to which you are not entitled, and try to take some of your refund. Break up with these preparers immediately, to avoid getting yourself into trouble with IRS' investigations department crack downs on preparers.
4. Hiding income offshore. There is nothing wrong with having an offshore account (ask Mitt Romney). There is something wrong, however, with failing to report income that goes into that account. The IRS offered (and extended) an amnesty program to taxpayers willing to come clean about their offshore accounts, and I would imagine that there will be more in the future.
5. "Free money" from the IRS and Social Security Tax Scams. Many of these scams lure unsuspecting elderly with promises of non-existent Social Security refunds or rebates. There are penalties of at least $5,000 for intentional mistakes.
6. False/inflated income and expenses. This happens alot with boosting income to take advantages of credits or refunds. Don't fall for it.
7. False form 1099 refund claims. Often scammers file these to justify a false refund claim on a corresponding tax year on the false theory that the feds maintain secret accounts on all taxpayers. This one carries criminal prosecution as a deterrent.
8. Frivolous arguments. We have gone over these extensively on this site. All you need to know: taxes are constitutional. You have to file and you have to pay if the law says you do. Just ask Wesley Snipes.
9. Falsely claiming zero income. Just like it sounds. This is fraud, illegal and could result in a $5,000 penalty.
10. Abuse of Charitable Organizations and Deductions. The hot issue here is individuals and organizations making non-cash donations and overvaluing the donation on the return and/or buying back the asset below market price.
11. Disguised Corporate Ownership. These scams include disinterested individual requests for employment identification numbers to underreport, claim fictitious deductions avoid filing, money laundering and financial crimes.
12. Misuse of Trusts. Trusts are still popular. They are a vehicle for legitimate tax planning, but can be abused to avoid income and hide assets.
Call us at 1-800-721-7054 for advice on any of these subjects. Stay safe in 2012!