Some Top Tax Scams and Ways to Avoid Them

At Maicher CPA Pllc, we’re committed to helping individuals and businesses to avoid tax related scams.  What are some top scams?  What are some ways to avoid them?   

  1. Arrangements Promising Large Tax Deductions.  Beware of promises of large tax deductions particularly by promoters.  These promises often rely on abusive arrangements which will attract IRS scrutiny and won’t deliver lawful deductions despite promoters’ high fees.  Common examples of abusive arrangements are:  syndicated conservation easements and micro-captive arrangements (i.e. fictitious “insurance” policies covering implausible risks duplicating existing policies).  Before pulling the trigger on an arrangement promising large deductions, call Maicher so we can review the likely legitimacy of the deduction.  
  2. Scams To Steal Your Tax Payments, Tax Refunds Or Taxpayer Identity.   Beware of third-party scams to steal your tax payments, tax refunds or taxpayer identity. These scams include: (a) threatening phone calls typically demanding immediate payment of taxes under the threat of arrest or similar threats and (b) “phishing” schemes through fake emails, text messages, websites, and social media seeking to steal personal information like social security numbers or bank account numbers.   Do not be intimidated by calls threatening arrest or similar threats because the IRS doesn’t make such threats.  If you do get a call or other communication from the IRS about a tax bill, call us at Maicher because we can represent you in negotiations.   Concerning “phishing” schemes, do not provide personal information to third parties who are not personally known by you.
  3. Beware of “Ghost” Tax Preparers.   Don’t fall prey to income tax return preparers known as “ghosts,” who typically prepare returns but refuse to sign as a preparer and do not have a Preparer Tax Identification Number issued by the IRS.  These ghost preparers often require cash payment, invent income for tax credits, claim fake deductions, and may even divert client refunds to themselves.  To avoid these pitfalls, the IRS recommends taxpayers: (a) seek preparers available year-round, (b) verify the preparer has an IRS Preparer Tax Identification Number, (c) verify whether the preparer is an enrolled agent or certified public accountant, (d) check the preparer’s qualifications by using the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications, and (e) confirm that the preparer offers IRS e-file.  Lastly, review your return before signing it and don’t sign blank returns — be wary of preparers asking otherwise.   Significantly, Maicher satisfies these IRS recommendations.  

Take away:  Scams cost honest taxpayers money and may subject them to audit, or even more serious legal trouble.   Maicher provides tax-saving yet ethical tax services to individuals and businesses.   Call us today about preparing your return for 2021 and for some proactive tax strategies in 2022. 

 

Sources:

“IRS announces “Dirty Dozen” tax scams for 2021,” IRS Publication (November 1, 2021).

“IRS Wraps up its 2021 “Dirty Dozen” Scams List with Warning about Promoted Abusive Arrangements,” IRS Publication (November 1, 2021).

“The IRS Outlines Five of the Top Twelve Tax-Related Scams Of 2021,” Forbes (July 23, 2021).