Dirty Dozen, Part 2

A few weeks ago the IRS issued their “Dirty Dozen” list of tax scams to avoid.  In the last article, we talked about a few of them.  You may have already filed your tax return by now, but these scams occur all year long, and tend to be repeated year after year.

Here are a few more:  Articles have been appearing in community churches and other places around the country stating that the IRS is offering free money to individuals.  The scammer files an erroneous tax return for the unsuspecting individual, who many times doesn’t need to file a tax return anyway because they have little or no income.  They make erroneous claims for deductions and credits that are either nonexistent, or that the individual doesn’t qualify for.  By the time the IRS responds to the erroneous tax return, the scammer is gone, along with the exorbitant fee he charged the individual to file the return.

Some scammers have claimed erroneous information on an individual’s tax return to get non-existent Social Security benefits.  Sometimes the taxpayer may really be due a credit or refund, but uses inflated information to complete the return.  Beware of doing this, because intentional mistakes of this kind can result in a $5,000 penalty.

Another scam occurs during the period following a natural disaster.  Some scammers contact people by telephone claiming to be from a bogus charity, soliciting gifts for the victims.  To avoid being caught in this type of scam, be sure to only donate to recognized charities.

Also be aware of charities whose names are very similar to a nationally-known charity.  The IRS has a search feature on its website, Exempt Organizations Select Check, where you can check to see if an organization is legitimate.  If you do make a contribution, do so by check or credit card so that you have documentation of the gift for tax and security purposes.  Do not send cash.

Sometimes the scammers contact the victims themselves, claiming to be from the IRS or other organization, and try to get their Social Security number and other information for use in stealing their identities.   Know that the IRS never contacts people in this manner.  In most cases, common sense can be your guide.

(Note: In my March 28 column about identity theft, I misidentified the name of a website people can visit for help. The correct URL is idtheftcenter.org.)

About the Author
Valerie, the Foundation's Executive Vice President and Chief Operations Officer, is a certified public accountant and certified financial planner. She joined the Foundation in 2000 and has over 20 years' experience in the financial and estate planning fields. Valerie is responsible for investment oversight, estate planning, audit, tax, and account management.

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