Monthly Newsletter - March 2017

It's tax season, and once again the IRS has compiled its annual list of the "Dirty Dozen" tax scams. The list highlights various schemes that taxpayers may encounter throughout the year, but which often peak during the tax-filing season. Below are the top 12 tax scams for 2017 as identified by the IRS:

1. Phishing (IR-2017-15): Watch out for fake emails or websites looking to steal personal information. Always keep in mind that the IRS will never initiate contact with taxpayers via email about a bill or refund. Don't click on links or attachments in emails claiming to be from the IRS as these are likely scams to steal personal information.

2. Phone Scams (IR-2017-19): Phone calls from criminals impersonating IRS agents, often aggressive or threatening phone calls, remain an ongoing threat to taxpayers. Con artists may threaten taxpayers with police arrest, deportation and license revocation, among other things, for payment or personal information. The IRS says that it would never threaten a taxpayer in any of those forms when attempting to collect taxes.

3. Identity Theft (IR-2017-22): Taxpayers need to watch out for identity theft especially around tax time. The IRS continues to apply safeguards against this crime, The IRS continues to aggressively pursue the criminals that file fraudulent returns using someone else's Social Security number. Taxpayers still need to be extremely cautious and do everything they can to avoid being victimized.

4.  Return Preparer Fraud (IR-2017-23): Be on the lookout for unscrupulous return preparers. The vast majority of tax professionals provide honest high-quality service. There are some dishonest preparers who set up shop each filing season to perpetrate refund fraud, identity theft and other scams that hurt taxpayers.

5.  Fake Charities (IR-2017-25): Be cautious of groups masquerading as charitable organizations, using names similar to familiar or nationally known organization, to attract donations from unsuspecting contributors. IRS.gov has the tools taxpayers need to check out the status of charitable organizations. It pays to take a few minutes to do some due diligence before contributing to a charitable organization.

6.  Inflated Refund Claims (IR-2017-26): Be cautious of tax preparers promising big refunds or charging fees based on a percentage of the refund.

7.  Excessive Claims for Business Credits (IR-2017-27): Make sure that your claims can be substantiated for business credits.

8.  Falsely Padding Deductions on Returns (IR-2017-28): Taxpayers should avoid the temptation to falsely inflate their deductions or expenses to reduce their liability or increase their expected refund.

9.  Falsifying Income to Claim Credits (IR-2017-29): Don't invent income to erroneously qualify for tax credits because this could lead to large bills related to back taxes, interest and penalties in the future.

10.  Abusive Tax Shelters (IR-2017-31): Don't use abusive tax structures to avoid paying taxes. For example, the IRS has placed abusive micro-captive insurance tax shelters on the list for the third year in a row.

11. Frivolous Tax Arguments (IR-2017-33): Don't use frivolous tax arguments. The use of unreasonable or outlandish claims could cost the taxpayer $5,000, which is the penalty for filing a frivolous tax return.  

12. Offshore Tax Avoidance (IR-2017-35): Recent enforcements are showing that it's a bad bet to hide money and income offshore. The IRS offers the Offshore Voluntary Disclosure Program to enable people to catch up on their filing and tax obligations.

For more information, check out the IRS website: Dirty dozen list of tax scams for 2017.