A Tax Consultant for All Seasons

Here is the top ten list of scams the IRS warns taxpayers about. For more information on these scams, visit the IRS website. If you are a victim of one of the scams, you can contact the Taxpayer Advocate Office if attempts to work out your problem through regular channels have not worked. Your could also contact an Enrolled Agent or tax consultant.

1. Phishing

Phishing is a tactic used by Internet-based thieves to trick unsuspecting victims into revealing personal information they can then use to access the victims’ financial accounts. Taxpayers who receive unsolicited e-mail that claims to be from the IRS can forward the message to a special electronic mailbox, phishing@irs.gov, using instructions contained in an article titled “How to Protect Yourself from Suspicious E-Mails or Phishing Schemes.”Remember: the only official IRS Web site is located at www.irs.gov.

2. Scams Related to the Economic Stimulus Payment

Some scam artists are trying to trick individuals into revealing personal financial information that can be used to access their financial accounts by making promises relating to the economic stimulus payment, often called a “rebate.” IRS urges taxpayers to be extra-vigilant. The IRS will not contact taxpayers by phone or e-mail about their stimulus payment.

3. Frivolous Arguments

Promoters of frivolous schemes encourage people to make unreasonable and unfounded claims to avoid paying the taxes they owe. The complete list of frivolous arguments is on the IRS Web site at IRS.gov.

4. Fuel Tax Credit Scams

The IRS is receiving claims for the fuel tax credit that are unreasonable.

5. Hiding Income Offshore

Individuals continue to try to avoid paying U.S.taxes by illegally hiding income in offshore bank and brokerage accounts or using offshore debit cards, credit cards, wire transfers, foreign trusts, employee leasing schemes, private annuities or life insurance plans.

6. Abusive Retirement Plans

The IRS continues to uncover abuses in retirement plan arrangements, including Roth Individual Retirement Arrangements (IRAs). The IRS is looking for transactions that taxpayers are using to avoid the limitations on contributions to Roth IRAs. Taxpayers should be wary of advisers who encourage them to shift appreciated assets into Roth IRAs or companies owned by their Roth IRAs at less than fair market value.

7. Zero Wages

Filing a phony wage- or income-related information return to replace a legitimate information return has been used as an illegal method to lower the amount of taxes owed. Typically, a Form 4852 (Substitute Form W-2) or a “corrected” Form 1099 is used as a way to improperly reduce taxable income to zero.

8. False Claims for Refund and Requests for Abatement
This scam involves a request for abatement of previously assessed tax using Form 843, “Claim for Refund and Request for Abatement.”

9. Return Preparer Fraud

Dishonest tax return preparers can cause many problems for taxpayers who fall victim to their schemes. These scam artists make their money by skimming a portion of their clients’ refunds and charging inflated fees for return preparation services. They attract new clients by promising large refunds.

10. Disguised Corporate Ownership

Some people are going as far as forming domestic shell corporations in certain states for the purpose of disguising the ownership of a business or financial activity.

1. You need to Apply for Financial Aid for College

2. You Need to Apply for a Loan

3. You want to avoid penalties and interest from the IRS

4. You owe the IRS and want to get into an Installment Agreement

5. You have a wage levy and need resolution.

6. You don’t want to increase your chances of being audited.

7. You need to determine your social security benefits

8. You need to determine your unemployment compensation

9. You want a good credit score

10.. You want to apply for a job where good credit is crucial

1. Keep good records
2. Only list items on your return you can document
3. Use a Tax Consultant for complicated issues
4. Check your math on your return
5. Be sure to double check your children’s Social Security Number on your Return
6. Be sure to include all income on your return (Don’t forget interest, dividends, gambling winnings, stock sales etc)
7. File your return on time
8. Pay your taxes when due or call to make arrangements
9. Respond promptly to any correspondence
10. Don’t listen to anyone who says you don’t have to pay taxes

1. Spouse is claimed as a dependent

2. Married couple filing separately file as Head of Household

3. Income left off tax return

4. Social Security numbers for children are left off

5. Withdrawals from IRA left off return

6. Schedule C–All expenses are rounded off–indication you dont have backup

7. Schedule SE left out–required if you are self employed and had net income

8. Schedule C–Home office deduction taken and mortgage interest included as well

9. Self employed individuals don’t take health insurance deduction

10. Married filing separate but don’t include spouse’s Social Security Number