Each year the IRS publishes a “Dirty Dozen” list of tax-related scams. Some of the highlights from the 2015 list are:

Phone scams. An aggressive and sophisticated phone scam targeting taxpayers, including recent immigrants, has been making the rounds throughout the country. Callers claim to be employees of the IRS, but are not. These con artists can sound convincing when they call, using fake names and bogus IRS identification badge numbers.

Victims are told they owe money to the IRS and it must be paid promptly through a pre-loaded debit card or wire transfer. If the victim refuses to cooperate, they are then threatened with arrest, deportation or suspension of a business or driver’s license. In many cases, the caller becomes hostile and insulting.

Remember, the IRS will always attempt to contact you first via mailed correspondence, not via a phone call. Also, the IRS will not dictate how tax payments must be made in order to be valid.

Email scams. Con artists are also using emails or phishing techniques to steal taxpayers’ personal information. You should never click on unfamiliar links or attachments, or enter personal information on websites that you are unfamiliar with. Also, pay close attention to the web address; many of these fake websites use names that look official, but are slightly off from the real address (for example, the IRS website is www.irs.gov, not www.irs.com).

As noted above, the IRS will not email you as a form of initial communication. A letter will always be mailed to your home first.

Fake charities. Fake charities are created to steal your money, identity, or both. You can always confirm the validity of a non-profit organization by verifying the tax-exempt organization with the IRS’ Exempt Organization Select Check on-line search tool. The web address is here. You can also see independent ratings of charities by viewing the Guidestar website.

Abusive tax shelters. Abusive shelters use structures ranging from phony entities with no real assets to complex multi-entity conglomerates with offshore accounts. Be careful of investments that emphasize tax avoidance over growth or earnings. Participation in such a shelter may result in significant penalties.

Identity theft. Your financial identity may be stolen through phone scams, phishing, misuse of information provided to businesses, or even dumpster diving. Protect your social security number and other personal information, and avoid providing such data whenever possible. Also, be sure to shred important documents that are no longer needed so that the information doesn’t fall into the wrong hands.

We know that taxes can be confusing enough even without con artists and the like. Remember to keep these tips in mind so that you don’t get tricked into divulging personal information.

 

*This newsletter is issued quarterly to provide you with an informative summary of current business, financial, and tax planning news and opportunities. Do not apply this general information to your specific situation without additional details and/or professional assistance.