8 of the Biggest Tax Scams to Avoid

Tax day is nearly here and anyone still working on their returns should be cautious and avoid any obvious scams.

Tuesday, April 17 is the day that all U.S. citizens must have their 2017 tax return paperwork turned in by, and some are waiting until the very last minute.

For those people who just seem to work better under the pressure of a deadline, there will be many shortcut opportunities that present themselves, but it’s very important to be wary of anything that sounds too good to be true.

Below, you will find a list of tax scams that it could be very easy to fall into, as originally shared by KDVR.

Slide 1/8 – Phone Scammers

Phone scams are just about the oldest trick in the book.

Any phone calls from people claiming to be with the IRS should not be entertained as they are almost definitely a scam.

The IRS will never contact you randomly phone and ask you to provide bank or credit card information.

Slide 2/8 – Fraudulent Tax return preparers

It can sometimes be easier to have someone else prepare your tax paperwork for you, rather than do it yourself.

Be alert, however, as anyone who bases their pay rate on the size of your refund or tries to get you to report tax breaks that you are not eligible for is probably not legit.

If you need help with your taxes the IRS provides a directory of credentialed preparers that can be useful.

Slide 3/8 – Abusive tax shelters

A tax shelter is “a financial arrangement made to avoid or minimize taxes.”

There are illegal tax shelters out there, that try to use complicated schemes to swindle you out of your money. Before signing with a tax shelter that could be questionable, it might be good to get a second opinion from an independent tax adviser who is trustworthy.

Slide 4/8 – Phishing Scams
(Photo: iStock)

“Phishing” scams are something frequently talked about, but many still don’t understand what they are.

A phishing scam is essentially just when you get an email, or are contacted in some way, with the scammer intending on convincing you to give up personal information that they can use to steal from you.

One phishing scam that has been happening lately is scammers deposit money into someone’s bank account and then contact them pretending to be the IRS and demanding the money back, saying ti was deposited in error.

Slide 5/8 – Fake Charity Scams

Fake charity scams are maybe just as old as phone scams, and much harder to pinpoint as invalid.

If a charity group is reaching out for donations, it might be a good idea to ask for the group’s Employer Identification Number and enter it into the IRS Exempt Organizations Select Check.

Any pushback from the group will almost certainly reveal they are fraudulent.

Slide 6/8 – False Tax Arguments

Have you ever heard about how the First Amendment allows you to avoid paying taxes if you have a moral or religious cause?

Nope, you haven’t. Because that is not true.

Anyone who engages in arguments using logic such as this is probably looking to scam some money out of unsuspecting tax payers.

Slide 7/8 – Hidden Offshore Money

There is absolutely nothing wrong with having money in banks overseas or in other countries. It is, however, illegal to not report those accounts to the IRS each year and pay taxes on them.

Anyone who says that it is okay to not reports offshore finances is very likely a scammer.

Slide 8/8 – Identity Theft

Identity theft is no laughing matter. Every single day it affects people in terrible ways and causes them numerous problems.

On the plus side, it has been reported that identity theft cases related to tax preparation has been on the decline.

It is still better to be safe than sorry and never give out things like social security numbers or bank information.

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